Warning over tidal energy subsidies

By Peter Ranscombe
Published on Sunday 29 January 2012 00:00

ONE of Scotland’s highest-profile tidal energy developers has warned that the Westminster government must keep the UK competitive internationally when it sets subsidy levels or risk losing out on investment in the sector.

Cameron Johnstone, chief executive of Glasgow-based Nautricity, which has deployed a tidal energy device in the River Thames, said rival nations in the Far-East were closely monitoring the coalition’s stance on subsidies.

The UK government wants to change the support system for the tidal energy sector in 2017, moving away from renewable obligation certificates (ROCs) that renewable power companies can sell to the big utilities and instead using a form of feed-in tariff (FIT).

A FIT would guarantee a set price for the electricity produced by a tidal energy device and fed into the national grid. But Johnstone warned international rivals, such as Nova Scotia in Canada, were setting high FITs of their own to attract investment.

Johnstone said: “It’s an international marketplace. People are looking at spending hundreds of millions or billions of pounds developing sites.

“Larger companies getting involved in the industry, like Siemens, will look at where they invest on a purely economic basis.”

But Johnstone noted there were limits to what Westminster could pay. He said: “They set a high FIT for solar power, which was not sustainable. For tidal, it has to be something that’s fair to consumers too, who ultimately pay for this.”

Johanna Yates, offshore policy manager at trade body Scottish Renewables, said: “Electricity market reform has the potential to make or break progress towards the UK’s and Scotland’s renewable energy and climate change targets.

“It is imperative that UK government proposals to introduce a feed-in tariff with contracts for difference meets the needs of this growing industry.”

A spokesman for the UK government’s Department of Energy & Climate Change said: “The UK has the most comprehensive marine energy support programme in the world and is committed to encouraging a commercial wave and tidal sector.”

Logged in as:

Comment here. Start typing your comment here:

Post comment

Please adhere to our Community guidelines

Your view

Please sign in to be able to comment on this story.