Wales

'Wales losing marine energy investors after subsidy change'

A Minesto kite Image copyright Minesto
Image caption The head of Minesto, which uses underwater "kites", thinks marine energy could be Wales's "new coal industry"

Marine energy projects in Wales have lost out on investment since the UK government cut financial support, according to a UK industry body.

Ring-fenced UK government subsidies for marine energy ended in 2016.

A report by the Marine Energy Council said the UK industry could be worth £76bn by 2050 and support 22,600 jobs by 2040, with Wales as a key player.

The UK government said it recognised the potential of marine technologies, and had provided funding to the sector.

The Welsh Government said it was time for the UK government to rethink its energy policy and look "seriously at the viability of marine technology projects in Wales".

Even though investment in marine energy in Wales rose overall to £68.3m in 2017, chair of the council Sue Barr said they estimated the country was missing out on millions of pounds of further private investment.

Instead investors are looking to places like Canada, Scandinavia and Spain, which provide better financial support.

Last October, Marine Energy Wales surveyed 10 companies which had either left the UK or halted their projects - nine of them said not having public financial support to commercialise their projects was the main reason.

A future industry for Wales?

Marine energy potentially includes:

  • "tidal stream" technology, which harnesses tidal currents in open sea
  • wave power, which uses the motion of surface waves to generate electricity
  • tidal lagoons, which require large barriers to hold the turbines.

Wales has strong, predictable tidal currents, providing a constant energy source, unlike solar which does not generate at all at night.

The "demonstration zone" off Anglesey gives developers somewhere to test their marine energy devices; the one off South Pembrokeshire is for wave power testing.

Wales also has an established supply chain and academic expertise at Bangor, Swansea and Cardiff universities in disciplines such blade technology, turbines and composite materials.

Marine Energy Wales, said the Welsh Government was providing "one of the most supportive marine energy landscapes in the world".

Ms Barr said the industry was trying to work with the UK government to support it as it grows.

"[The UK] had the best device developers; we were at the forefront of all the technology advancements that were being made.

"[Removing the ring-fenced funding] stifled development here in the UK and in Wales."

Ms Barr said the development of the wind sector showed why early financial support was important.

"The Danish wind industry... has dominated the global offshore wind market. They did that by proving a revenue system, so you can sell your electricity for money."

Image caption Sue Barr, chair of the Marine Energy Council, thinks early stage financial support is crucial

The wind sector also received subsidies from the UK government in the early days, and as the technology improved, more wind farms were built and costs came down.

Ms Barr thinks the same will apply for marine energy, and that it could grow into a strong industry for the UK, and Wales in particular.

A spokeswoman for the Department of Business, Energy and Industrial Strategy said over the last decade, "more than £90m has been made available to marine technologies across several UK government organisations".

She added: "Any further funding proposals must demonstrate value for money for consumers and taxpayers."

Image caption A Minesto tidal stream "kite"

The Holyhead-based marine energy company Minesto is funded by Swedish investors and EU funds distributed by the Welsh Government.

It has developed underwater "kites" and plans to submerge 120 of them around the coast off Holyhead at a cost of £160m, creating 100 jobs. They predict this would generate enough energy for all the homes in Anglesey - about 70,000 people.

The company has already won the contract to generate electricity in this way in the Faroe Islands - the kites will be assembled in Holyhead.

Its chief executive Martin Edlund agreed there should be more financial support from the UK government.

He said: "The UK is leading in this sector... so not taking advantage of that opportunity I think would be a mistake.

"If you look at the potential of tidal energy for Wales, this is the new coal industry, with the significant difference it is going to last forever."

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