THE Forum for Renewable Energy Development in Scotland (FREDS) is calling for much more support to encourage the development of marine renewables.
Its Marine Energy Group (MEG) notes that it is some time since wave and tidal technologies in gestation received funding support in Scotland. MEG warns that “insufficient or misdirected” financial support is a key barrier to the pace of success of the marine renewables sector in Scotland.
It wants systematic support from the R&D phase through to commerciality, broken down into four phases. Demands include:
The Technology Strategy Board should open a funding round for marine energy technology development under its so-called “technology readiness scheme”. This could include concept R&D, feasibility studies, component testing, and scale-testing in tanks and at sea, embracing development stages one and two.
Research funding councils should continue to fund R&D in marine energy.
The European Commission should include funding for marine energy within future Work Plans under the EU’s 7th Framework programme (FP7).
The Scottish Government should consider the roles of the various public bodies, including Scottish Enterprise, Highlands and Islands Enterprise, The Carbon Trust, Scottish Government and others, providing funding for early-stage technologies.
“It is a matter of concern for developers that the Applied Research Fund from the Carbon Trust is not at present supporting Scottish marine energy projects,” says MEG.
The FREDS unit also wants the UK’s Energy Technologies Institute to award more funds for marine energy while tackling concerns over its selection process and capture of intellectual property (IP) rights. This public-private partnership has a £50million fund. Yet, since announcing a call in 2007, there has been only one successful award of funding to a marine energy project.
MEG says stage two is a key phase for the Scottish marine energy industry and recommends that the Scottish Government introduces a flexible WATES (Wave and Tidal Energy Support Scheme) style initiative as an open call, with an annual allocation which developers must use or lose within a 12-month window if they cannot demonstrate tangible effort to progress the project. The initial WATES awards, totalling about £13million, were focused on technology demonstration projects.
MEG says developers strongly recommend that the scheme be rerun with an increased budget to provide further opportunities for critical stage projects. Unutilised funds could be rolled over into the following year’s pot.
Further stage-two demands include:
DECC in London should announce urgently the criteria for the £22million Marine Renewables Proving Fund, with a call for funding proposals issued as soon as possible.
Scottish Enterprise should lift the cap on its Scottish Venture Fund from £2million to £10-15million. This would enable stage two and stage three developers to de-risk technology investment and attract inward private capital investment. This could be administered in a similar way to the WATES scheme.
The UK Treasury should include marine renewable energy devices in the Energy Technology Criteria List (ETCL; it should increase the maximum relief available for exempt investments in approved marine renewables companies under the Enterprise Incentive Scheme (EIS), and it should release funding for renewables projects, including marine energy, from the Fossil Fuel Levy account in a manner which will not impact on the Scottish Consolidated Fund.
The EC should make funds available to support commercial-scale demonstration of marine devices and arrays at stages two and three.
Stage-three support demands notably include that DECC should retain the entry criteria for the £42million Marine Renewable Deployment Fund (MRDF) and lift the capital support cap from 25% to 40% in line with the WATES model; and that Holyrood should introduce WATES-style stage-three support in recognition of the increased capital costs at this stage and of developers’ increased proximity to market.
Finally, stage four, where MEG says long-term support through market mechanisms such as the Scottish Government’s banded ROCs system is welcomed as it enables inward investment based on a well understood future renewable-energy price framework. But it wants Holyrood to review urgently the level of ROC banding for tidal stream as developer opinion is that tidal stream should attract five ROCs per megawatt-hour in line with the band for wave energy in Scotland.
