MeyGen clears first CfD hurdle for extra 28MW of tidal power

SIMEC Atlantis Energy, the developer behind the MeyGen tidal power scheme, has achieved the first contractual milestone for the delivery of additional 28MW of tidal power capacity for the project as part of the UK’s fourth contracts for difference round.

SIMEC Atlantis secured the UK government’s support to build additional 28MW of tidal stream power at the MeyGen site through the country’s fourth round of contracts for difference (CfD) back in July 2022, deeming the achievement as a ‘significant milestone for the company’.

Now, SIMEC Atlantis has informed the first step on the project’s journey to construction and operation has been successfully made with the signing of the CfD with the Low Carbon Contracts Company (LCCC), a government-owned entity created to deliver key elements of the UK’s electricity market reform program.

Signed on July 28, 2022, MeyGen was required to satisfy a number of ‘Conditions Precedent’ to ratify the agreement with the LCCC within 20 business days of entering the agreement.

SIMEC Atlantis has just confirmed this first contractual milestone has been fulfilled, and that the company can now proceed with follow up activities related to the project’s second phase.

The secured CfD achieved in the fourth auction round guarantees £178.54 (€209.01) per MWh for 15 years for the supported tidal power projects.

At that price, tidal power is able to compete with other energy generation technologies, according to industry body Scottish Renewables.

MeyGen is already the home of the world’s largest tidal stream array – with 6MW of operational capacity, the world’s most powerful tidal stream turbines, and the world’s largest consented tidal stream site.

At the end of 2021, MeyGen accounted for 75% of the total global tidal stream output, which represents a huge achievement for this landmark project.

With the potential to expand up to almost 400MW of installed capacity, this is a site that can deliver tidal stream at scale, at a cost equivalent to nuclear, and with the only predictable renewable generation available today, SIMEC Atlantis claims.

The company also noted it is working to achieve the CFD timeline, as it aims to reach the ‘Milestone Delivery Date’ in the first quarter of 2024, as well as the financial close later in that year.

Each of the 99 contracts offered through the fourth allocation round (AR4) of the CfD scheme have now been signed and returned to LCCC, the government body informed.

A total of 93 individual projects across the UK will now proceed to work closely with LCCC to meet the contractual milestones specified in the CfD, supporting projects’ development and the delivery of almost 11GW of clean energy.

The variety of technologies supported through AR4 – including tidal stream, as well as established solar, onshore and offshore wind technologies as well as floating offshore wind for the first time – mean this round is the CfD scheme’s most diverse yet, as well as its largest.

When it comes to tidal energy, the auction round ensured the UK will see over 40MW of additional tidal power capacity added in the coming years.

Aside from SIMEC Atlantis and the MeyGen project, two contracts were awarded to Orbital Marine Power’s 7.2MW multi-turbine Eday project in Scotland, which will deploy its innovative floating technology there.

In Wales, another floating tidal project, the 5.62MW Morlais Magallanes, will be powered by Spanish tidal technology developed by Magallanes Renovables.

According to LCCC, increasing the diversity of UK’s energy mix has been a central aim of the CfD scheme, thereby supporting the development of a reliable and clean energy supply whilst maintaining price stability for both investors and consumers.

The development of new generation capacity has also brought investment in communities through the skilled jobs and infrastructure needed to support delivery of new power projects, LCCC informed.

Kwasi Kwarteng, UK’s business and energy secretary, said: “Our renewable energy auction scheme has been an outstanding success, with the latest round securing enough clean energy to power twelve million British homes and the price of clean energy plummeting even further.

“Getting contracts signed means projects can push on and deliver jobs and opportunities across the country. This will help to secure our homegrown supply of cheaper renewables and bring down the price of energy for millions of British families as we shift away from expensive fossil fuels.”

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