Interview: To help boost confidence and give clear direction for tidal energy, UK government should set 1GW target for 2035

As the head of one of the companies that was supported in the latest UK government’s contracts for difference scheme, Jeremy Smith deemed the auction’s results as ‘undoubtedly massive boost for the tidal sector’ which gave QED Naval and its subsidiary Mor Energy a real foothold in the tidal energy market. Cautioning however that the industry is still in its infancy, and that there is still a lot of work to be done, Smith has shared his thoughts on what should be done to accelerate the commercialization route for tidal energy industry in the UK.

Mor Energy, a subsidiary of QED Naval – an Edinburgh-based company working under the reins of Jeremy Smith as its CEO – is an investment vehicle company specifically designed to finance tidal energy projects that has been supported in the latest UK government’s renewables auction along with five other tidal energy companies and 11 projects total, which will add 53MW of new tidal energy capacity from 2027 onwards.

The UK government backed Mor Energy with 100% of the funding it requested, to develop a 4.5MW project at Morlais, just off the coast of Holy Island in Anglesey, North Wales, that will be able to power up to 2,500 homes with clean energy sourced from tides.

Located approximately two nautical miles north-west of the iconic South Stack lighthouse, the company’s berth covers an area of around 1 km2 and is capable of producing up to 30MW of tidal energy.

“There has been a huge amount of work in terms of the planning and consenting process carried out by the Morlais team, with support from the Welsh government, to get to this stage. For QED Naval, the auction’s results reaffirm our business plan and route to market, and provides comfort to our shareholders who have supported us over the last six years of development.

“It gives us a real foothold in the tidal market and enables us to start working with the supply chain to build and deploy our tidal technology, namely the Subhub tidal platform and Tocardo tidal turbines, into this project,” Smith said.

Quayside integration of Subhub platform with Tocardo tidal turbines (Courtesy of QED Naval)

QED Naval’s flagship product is the Subhub – submersible, gavity-based, foundation platform. The Subhub will be used for the 4.5MW scheme in Wales and will feature Tocardo’s T3 tidal energy turbines.

Using the patented submersible properties of Subhub, QED Naval has got the installation process tuned so that it can be defined as ‘self-installing’. The amazing force of buoyancy, a 2000 year-old principle of Archimedes, manages the structure’s stability during the dive and landing on the seabed.

One of the novel things about the installation process is that Subhub is very directionally stable as well, so it aligns itself with the flow, reducing the time to manage this parameter.

“What this means is that it can be fully integrated with its Tocardo’s T3 tidal turbines and power control systems at the quayside and thoroughly tested prior to deployment as a ‘plug and play’ technology.

“The submersible structure operates as a barge in its transit condition. Therefore it can be towed out to site and installed in a single, quick, offshore operation, achieving our target of, ‘tidal array in a day’,” Smith explained.

The technology is well proven, robust and efficient, according to Smith, who pointed out that Subhub has been in the water since 2018 and Tocardo has had operational turbines producing tens of gigawatt-hours since 2012, coping with seas of up to 4 meters and major storms as well.

To remind, Tocardo was acquired by QED Naval and HydroWing – another company supported in the same contracts for difference round – back in 2020. The companies committed to invest in additional turbine development, bringing together over 50 years of combined experience in marine design, development and operations experience.

“Subhub saves over 60% on marine operations and deployment costs. Its novel hydrodynamic design can also add 48% yield to turbines and sites.

“The industrial scale Subhub-ID will use the Tocardo T3 turbine which has been developed in-house and verified by our prime contractor, a specialist in generator design. Two of T3 prototypes will be built next year, one for each partner in the joint venture company. These will then be tested, both onshore in specialist test facilities like those up in Blyth, and then on their respective platforms,” Smith said.

He added that just over 40 of these T3 turbines will be produced by 2027, but QED Naval will require 12 – 15 turbines by April 2026.

Subhub also features a specific maintenance method as it can be returned to the surface so the platform towers just penetrate the surface, providing direct access to the critical electrical systems or Subsea Power Control Units (SPCUs). This is said to significantly reduce the operational and maintenance costs.

Tidal stream energy is forecast to be cheaper than new nuclear at the point of 1GW of deployment and below £55/MWh by 2050, according to the 2022 report from ORE Catapult, the UK’s research center for offshore renewable energy.

The upfront costs for tidal stream energy platforms are now about the same as offshore wind. For these reasons, as well as the job creation potential, tidal should receive more UK and Scottish government support and should have a better allocation of ringfenced support going forward, according to Smith.

Furthermore, the Policy and Innovation Group at the University of Edinburgh reports that 12.6GW of marine energy deployment would provide up to £1.03 billion per annum of system benefit through the avoidance of expensive peaking generation and improving the availability of renewables to the electricity system.

When it comes to jobs, a report from Robert Gordon University – published earlier in September 2023 – stated that UK could double its offshore workforce by 2030 should it commit substantial resources and investments into new renewable energy projects – otherwise it stands to lose up to 95,000 offshore energy jobs.

Commenting on tidal energy and its potential to maintain jobs in the offshore energy sector, Smith said: “Tidal most definitely has a significant role to play to support offshore jobs. However, given the advantages of Subhub’s deployment and maintenance system, most of our roles are quayside based since it is relatively quick and easy to install and retrieve our Subhub platforms.

“We have already started building our data center which aggregates all the data from our platforms, turbines and environment and stores it on a database on our servers in the office or the cloud. Most of the work will be associated with remote monitoring but this will promote contractors going out to the site to carry out IRM (inspection, repair, maintenance) tasks.”

Development of the supply chain, with appropriate government support, will enable businesses to have confidence to invest in the sector and this should ultimately create a virtuous circle, Smith argues.

“We should be developing the technology, manufacturing turbines and handling all support systems here in the UK, with highly skilled jobs for British workers, and contributing to the British economy.

“While support for onshore and offshore wind is undoubtedly good for Scotland and the UK as a whole, there has been a missed opportunity, with too many jobs created in Germany, Spain and Denmark and too few in the UK.

“We know the tidal sector can benefit the UK primarily. Tidal projects are being delivered with 90% UK supply chain content. The global wave and tidal energy market will reach $1.54 billion by 2030, according to market forecasts, with the potential to offer huge return on investment. This is a huge opportunity and untapped market,” Smith said.

With the right support, marine energy will create 4,000 jobs by 2030 and over 22,000 jobs by 2040, according to Smith, who added that 50-60% of the economic benefit in terms of both Gross Value Added and jobs will be generated in coastal areas, which have historically been areas with fewer skilled jobs.

“The UK could and should take the lead in this market, given the tidal resource we have here and our engineering expertise,” Smith pointed out.

Even though significant moves have been made – especially recently – to accelerate the industrialization of tidal energy, Smith has emphasized that the sector is still in its infancy and has a long way to go before reaching its commercial maturity.

Smith said: “The latest auction round is undoubtedly a massive boost for the tidal sector and we are delighted to have been awarded funding. I think the civil servants and public officials who have steered this have done an amazing job. But the success this year is also tinged with thoughts of what will happen at auction round 6 for tidal? Will there be a further carve out? Are there any sites that are available for development?”

These are only some of the questions the sector would like to get more clarity on from the UK government, especially as clearer policy outlook for the industry would bring more concrete moves from the investors and the build up of associated supply chain for the future projects.

“The government should set a 1GW marine energy target for 2035 to give the sector a clear direction of travel and help boost confidence. The supply chains needs to be built up and the infrastructure and ports too. There are significant cost reduction steps still achievable with these developing commercial markets.

“The tidal sector and its supply chain needs consistent support at a fair price, arguably under less competitive conditions than an auction, to enable it to flourish and nurture strong businesses that can then start to compete on price,” Smith said.

According to Smith, the tidal sector needs consistent support over at least a decade, similar to that offshore wind received. Also, Smith reiterated the claims from most of industry insiders and policy analysts which suggest that the funding pot reserved for tidal stream energy in the CfD auction rounds – in the amount of £10 million – needs to be increased if the sector is to receive the appropriate support from the UK government.

“Personally, I think the pot is far too small and only offers the leading three tidal developers who are already at utility scale the opportunity to flourish. That being said, they are also being constrained by how limited the pot size is for tidal energy.

“If we compare it with the US, which has invested $369 billion in renewables, including a historic level of support for tidal power, the support is very low. Europe has also committed to tidal energy, as the bloc seeks to phase out any reliance on Russian gas,” Smith said.

Aside from funding, Smith deemed the planning and consenting of sites suitable for development of tidal energy as ‘a real problem’ for the sector, as getting grid consents can take up to 10 years.

“More political support in planning applications and seabed leases would certainly help. Accelerated learning rates and support of infrastructure upgrades – including grid reinforcements where applicable – would be highly beneficial. At the moment the developers have to pay for this and when deploying in such limited MW, forced by the limited carve out, then it is extremely difficult to make these projects commercially viable,” Smith said.

In his final remarks, Smith emphasized the importance of bringing project developers and energy companies back into the sector, in order for tidal energy to meet its full commercial maturity.

“The tidal sector is made up of largely technology developers and not project developers and energy companies. The government could actually do a lot more to guide them back,” Smith concluded.

Subscribe and follow

Offshore Energy – Marine Energy LinkedIn