Wales sees ‘significant slowdown’ in marine energy spending

Wales’ marine renewable energy sector delivered £29.9 million to the Welsh economy during the 2023 / 24 financial year, a significant slowdown in spending compared to last year’s total of £103.4 million, according to a report by Marine Energy Wales.

The decline is thought to be down to the conclusion of European grant funding and the completion of major infrastructure buildouts such as Morlais on Anglesey, which heightened last year’s spend.

Despite the retraction, 2023/24 remains Wales’ second highest spend year to date, Marine Energy Wales said.

Total cumulative spending and investment from the sector in Wales has now reached a huge £292.9 million, according to the latest State of the Sector Report.

The report collates spending and economic data from its network of members, and highlights and celebrates Wales’ progress and achievements within the industry over the past 12 months.

”Wales is well placed to be at the forefront of marine energy technologies and maximising this opportunity is an important step in our path to net zero. Our ambition for this greener future is not only centred around the just transition to a low carbon economy, but in doing so attracting investment and creating highly skilled and well-paid jobs, particularly across coastal communities,” Jeremy Miles, Cabinet Secretary for Economy, Energy and Welsh Language, said.

”Marine Energy Wales plays a key role in fostering collaboration and championing Wales as the best place to develop and test new technologies to harness the power of our natural resources. This report highlights the excellent work underway to drive the sector forward and inspire the next generation of skilled workers we will need to realise the huge potential of offshore energy to deliver a sustainable, prosperous future for Wales.”

This year’s report shows tidal stream emerges as by far the biggest contributor to date, injecting £116.1 million into the Welsh economy since 2019. Much of this has been fuelled by the infrastructure buildout at Morlais on Anglesey and the activity of tidal kite developer Minesto. It is closely followed by supply chain spend, which accounts for £63.6 million to date.

One of the UK’s fast-growing industries, the marine renewable energy sector is proving to be having a significant impact on economic development and regeneration in Wales’ coastal communities, with Anglesey and Pembrokeshire at the forefront of marine energy development in Wales, Marine Energy Wales said. Anglesey is currently leading the way, with £103.8 million invested to date, followed closely by Pembrokeshire at £97 million. Swansea is also emerging as a key hotspot, with £39.2 million spent in the region on marine energy development to date, according to the report.

The latest figures also show the sector sustains 429 full-time jobs in Wales, spanning a diverse range of roles, and an improving gender balance across the industry.

”In North Wales, the fantastic progression at Morlais is ensuring we are already a major player in the tidal energy market, and as a nation we stand poised to support the roll out of floating offshore wind. But as an industry we must not lose our momentum,” Tam Bardell, Chair of Marine Energy Wales, said.

”We have just over a decade to reach the Welsh Government’s target of meeting 100% of the country’s annual electricity needs from renewable energy by 2035, and while we have made some progress; currently generating around 59% from renewable sources according to the Energy Generation in Wales 2022 report, we still have a considerable journey ahead. Let us consider this report not just as a reflection of our achievements, but as a call to action to continue this trajectory and collectively do all we can to position Wales as a global leader in marine renewable energy generation.”

The sector’s growth prospects are said to remain promising, particularly for tidal stream and floating offshore wind (FLOW), where the pipeline of future opportunities has continued to grow. For FLOW – a projected £486 million spend is predicted over the next five years in Wales.

The report concludes that the sector is said to need continued and significant support from governmental policies, both in Wales and Westminster, and increased private sector investment to succeed and overcome the barriers it currently faces, but Wales is poised for progression.