(Bloomberg) -- The U.K. government is making a bid to realize the potential of its tidal power industry, by ring-fencing a pot of 20 million pounds a year ($27 million) in subsidies for new projects.
The island nation could get about a fifth of its electricity from wave and tidal renewable energy technology, according to government estimates. However, projects have struggled to get off the ground because they are more expensive than wind power and so can’t compete in government-run auctions for green energy support, where developers bid for so-called Contracts for Difference.
On Wednesday, Secretary of State for Business Kwasi Kwarteng responded to industry calls to ring-fence a pot of money in the CfD auction process to allow tidal stream projects to get built. The next CfD round opens on Dec. 13 and the government announced a further 20 million pounds of funding a year, which will be set aside for tidal stream projects.
“Ring-fenced funding for tidal stream doesn’t just unlock private investment and secure green jobs today -- it also puts us in pole position to capitalize on exports to the global market in due course,” said Dan McGrail, chief executive of the trade association RenewableUK. “That’s why we’ve been calling for this dedicated pot of funding for tidal power.”
The next CfD round aims to support 12 gigawatts of new projects. That’s more than double the 5.8 gigawatts achieved in the last round. The new funding increases the total amount available in the CfD round to 285 million pounds.
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