Marine Energy Developers Take Lessons From The Danish Government?s Wind Power Support

The UK Government should consider implementing a consistent price for marine energy and resolve grid access issues if the UK marine energy industry is to repeat the success of the Danish wind energy industry, according to a report published by wave energy developer Aquamarine Power today [19 September 2010].

A combination of an early, clear and consistent price support for wind turbines, together with favourable grid access conditions, enabled Denmark to capitalise on its early mover advantage and build a global export market worth nearly €6 billion in 2008.

According to the report ‘The Danish wind industry 1980-2010: lessons for the British marine energy industry’, it was early support for the price of wind energy, that was the critical factor which enabled Denmark to grasp the opportunity offered by the new technology. It created a stable market price for wind farm which incentivized early investment and innovation.

By contrast, the UK’s renewable energy support policy was less well aligned to the fledgling industry and lagged six years behind Denmark’s regime. This, the report concludes, resulted in the UK’s early mover advantage – and the majority of economic benefit – being lost to Denmark and Germany.

The current situation regarding marine energy is much more positive, the report says. The UK’s current regime of Renewable Obligation Certificates, or ROCs, is well understood and offers a clear price signal to investors – and has the potential to enable the UK’s marine energy industry to flourish.

However, the application of marine energy ROCs is applied inconsistently – in Scotland there are five ROCs per MWh for wave energy and three for tidal, whilst in the rest of the UK there are only two ROCs per MWh for each technology.

Martin McAdam, chief executive of Aquamarine Power, said:

“The Scottish Government should be commended for putting in place exactly the type of market mechanism which enabled Denmark’s nascent wind industry to grow. The five ROCs on offer for wave energy are sufficient to attract inward investment and allow us to get early-stage projects off the ground.

“The UK’s vast marine energy resource and decades of marine engineering knowledge put us at a natural advantage in the marine energy industry. Like Denmark in the 1980s, we now have an opportunity to capitalise on our own early mover advantage.

“What is needed now is a UK-wide framework of consistent financial support, allied to capital grants, clear consenting procedures, timely grid access and a fair transmission charging regime that does not act as a barrier to marine renewable projects. Together these will create the environment to attract the significant private investment that the marine renewable industry requires to grow. This will give the UK a real opportunity to become a global leader in this new technology.”