TIGER – UK GOV CfD Allocation Round 4

Megawatt Capacity Secured: 41MW
Megawatt Cost: £178MW/h

The Interreg FCE Programme and TIGER Project are delighted to announce that revenue subsidy has been allocated to four tidal stream projects through the latest round of the UK government’s competitive Contract for Difference (CfD) scheme. The CfD scheme is the government’s main mechanism for supporting low-carbon electricity generation and it is the first time that tidal stream energy has had a budget ring fence guaranteeing tidal stream technologies access. Despite this ring fence, technologies and projects must still competitively bid for the lowest levelised cost of Energy (LCoE), a comparative measure of how much it costs for different technologies to produce electricity.

The CfD revenue subsidy is used by new renewable energy projects to guarantee the price of electricity received for electricity exported to the electricity network (or grid). CfDs are important as they provide the certainty required to attract private investors to invest in new renewable energy projects by protecting them from volatile wholesale electricity prices. Without this subsidy, attracting investment is more difficult and, consequently, the CfD awards will provide a significant boost to the further development of tidal stream energy.

TIGER played a key role in providing the data and evidence used to convince UK Government why the tidal stream industry needed and justified the ring-fenced funding allocated to it in CfD allocation round 4 and indirectly has paved the way for the world’s first four tidal stream projects securing CfD support.

In addition, three of the four projects which secured CfD support are directly linked to TIGER project partners securing over 35MW of project capacity out of a total of 41MW awarded. The three successful tidal stream projects linked to TIGER are:

• MeyGen Phase 2 (28 MW) linked to TIGER partner Normandie Hydroliennes – Located in Scotland
• Orbital Marine Power’s (TIGER Partner) Eday 1 (2.4 MW) – Located in
Scotland
• Orbital Marine Power’s Eday 2 project (4.8MW) – Located in Scotland

Additionally, the fourth project (not linked with TIGER) is Magallanes Renovables Morlais GR3 (5.62 MW) – Located in Wales.

With the support of CfD funding, tidal stream energy projects will be able to continue to develop and mature their technologies and in future become competitive with the likes of nuclear and fossil fuel generated electricity. The successful projects will now aim to deliver on the £178/MWh revenue subsidy secured in this allocation round with Magallanes’s Morlais project due to commence construction on 2025 and the others in 2026.

Commenting on the CfD allocation Sue Barr, the Chair of the Marine Energy Council and TIGER partner, said that the “results represent an important first step in realising tidal stream’s potential in supporting a secure, cost-effective, and fair transition to net zero.” The Marine Energy Council would now like the UK government to back an industry wide target of 1GW worth of deployment of tidal stream energy by 2035. This is a big step forward in the implementation and deployment of tidal stream projects in the UK for the future.

One of TIGER’s next objectives is to provide further data and evidence to support the tidal stream industry’s case for further CfD support in rounds 5 (2023) and 6 (2024).

SOURCE: INTERREG VA France (Channel) England