Assessing the Costs of Commercialising Tidal Energy in the UK

Donald R. Noble (), Kristofer Grattan and Henry Jeffrey
Additional contact information
Donald R. Noble: School of Engineering, Institute for Energy Systems, The University of Edinburgh, Edinburgh EH9 3DW, UK
Kristofer Grattan: School of Engineering, Institute for Energy Systems, The University of Edinburgh, Edinburgh EH9 3DW, UK
Henry Jeffrey: School of Engineering, Institute for Energy Systems, The University of Edinburgh, Edinburgh EH9 3DW, UK

Energies, 2024, vol. 17, issue 9, 1-20

Abstract: There is a need for increased renewable energy to meet net-zero targets and decarbonise the economy. Harnessing the predictable power of the tides with tidal stream turbines can contribute to this. Tidal energy is a nascent technology with higher costs at present. However, cost reductions have been observed with an increased deployment in other renewable energy technologies that have received financial support, and it is postulated that similar will happen with tidal energy. The first tidal stream projects have been awarded market support in the UK through the Contracts for Difference (CfD) scheme, with almost 100 MW expected to be commissioned by 2028. This work uses learning rates to investigate how much investment in ongoing market support might be needed to achieve cost reductions through subsidised deployment alongside research and innovation. Using a range of informed ‘what if?’ scenarios, it shows sensitivity to key inputs. The results show that the support needed is most sensitive to the learning rate, reducing it from 15% to 12.5% or 10% doubles or more than quadruples the investment required, respectively. The support is also highly dependent on the starting cost from which learning occurs, taken as the CfD Strike Price in 2025. Varying this between 156 and 220 GBP/MWh results in total investment of GBP 6.7 and 22.3 bn, respectively. Most importantly, a balance is needed between subsidising deployment to drive down costs through learning and funding innovation to maintain a high learning rate.

Keywords: tidal energy; cost reduction; learning rate; market support; funding required (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1996-1073/17/9/2085/pdf (application/pdf)
https://www.mdpi.com/1996-1073/17/9/2085/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:17:y:2024:i:9:p:2085-:d:1384086

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().