UK Energy Minister Kwasi Kwarteng is mulling ring-fencing capacity in next year’s Contracts for Difference round for wave and tidal energy projects.
The BEIS minister said he is “very sympathetic” to running a “pot within a pot” to support development of marine energy schemes.
“That means that within pot 2 there would be a reserved quantum for marine projects, particularly tidal projects, to be able to compete for,” Kwarteng said during a debate on the sector earlier this week.
He added that the “idea is being considered” but said “the only caveat is that it cannot come at any cost”.
“Obviously, public money must be well considered and looked after, and the challenge is very much on the industry, as I have said to industry players and champions on separate occasions,” he said.
“The challenge is for them to show how these costs can come down. If they can, then I am sure that the Government would be very willing to support the technology.”
The Conservative MP was responding to questions from Alistair Carmichael of the Liberal Democrats.
Carmichael welcomed the fact that offshore wind has been carved out into a separate pot 3 but added there is a need for “fine tuning” of the CfD, which will see marine compete with floating offshore wind and advanced conversion technologies in pot 2.
“What the industry is really looking for is a pot within a pot – in other words, an allocated amount to be competed for by tidal and wave developers at a price that will not only make their projects economically viable and able to attract investment but, importantly, will do so in a manner that does not interfere with the overall objectives of the CfD round,” he said.
“The ability to create that ring-fenced refinement exists within legislation already. It is imperative that we act now. As we know from other renewable technologies, once the process of a commercial roll-out in underway, the costs drop like a stone.”