What opportunities for wind in tidal power?

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Ilaria Valtimora
January 16, 2017
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What opportunities for wind in tidal power?

Norway is set to be the first country to turn off its FM radio network. I'm just grateful the UK isn’t doing likewise as I’d never have heard Charles Hendry on Radio 4 talking about tidal lagoons while I was driving to work last week. This is highly relevant for wind.

The former UK energy minister was asked by the government in May 2016 to assess the case for tidal lagoons, and the role they could play in the UK’s energy mix. In particular, he had to advise the government whether to give green light to Gloucester-based firm Tidal Lagoon Power to build a scheme in Swansea Bay.

The company is in negotiations with the UK Government as it wants £1.3bn of state subsidies to help fund this 350MW trial.

And, last Thursday, Hendry published a report saying that the UK should go ahead with the project, which would be the first of its kind to be built. It would consist of a large U-shaped wall out into the bay with turbines, which would be driven by the regular rise and fall of the tide. Hendry said this would generate power for decades. But at what price?

The former minister says the best way to look at this is to spread the cost of subsidies over the lifetime of the project, which is around 120 years if the projections are to be believed. In this way, he said the cost would be “about a cost of a pint of milk a year on people’s bills”.

One pint of milk a year for every electricity bill payer in the UK for 120 years. For one project?! He's lucky I kept control of the car!

You see, that's the problem: the electricity produced by a tidal lagoon is only really competitive on price only if you assume it is going to have a really long lifespan. Hendry’s findings show that if you look at the price of electricity based on a 30-year period – the average lifetime of a renewable project – would be £120/MWh. That is uncompetitive with the price of offshore wind today.

Despite these cost concerns, the UK government is likely to back the project in Swansea Bay after Hendry's enthusiastic report. So, what are the challenges and opportunities for wind companies?

If projects of this kind are going to be supported by the government, we expect big turbine makers to seize the opportunity to enter this new sector. Offshore wind developers and manufacturers already have the technology and expertise needed for tidal lagoons.

There is also an argument that businesses should welcome any spending on renewables, given that recent analysis by think thank Green Alliance showed that government investment in renewable projects including wind could decline by 95% between 2017 and 2020. This is another reason why wind companies should look to build their expertise in one of the few renewable power sectors that the UK government is apparently be keen to invest in.

But still wonder why the government is prepared to invest in tidal. Usually, governments back schemes and technologies like this at an early stage to help get an expertise that brings the costs down.

This is not be the case here. We have already got effectively the technology to build a project like this and, for this reason, Hendry said we won’t see in these projects the same cost reduction we have seen for example in offshore wind. The only effective way to reduce costs using tidal lagoons is with economies of scale.

There is an argument that the extra spending makes sense because the tides are more reliable than the wind, but forecasting in the wind sector is already very developed; and the use of storage technology will help address those concerns. It is also galling that UK leaders still refuse to back low-cost onshore wind.

This is an interesting project and it could be a way for the UK to diversify its energy while creating a new kind of industry – but it also reinforces a perception that clean power is the expensive option. That is simply not the case anymore.

Norway is set to be the first country to turn off its FM radio network. I'm just grateful the UK isn’t doing likewise as I’d never have heard Charles Hendry on Radio 4 talking about tidal lagoons while I was driving to work last week. This is highly relevant for wind.

The former UK energy minister was asked by the government in May 2016 to assess the case for tidal lagoons, and the role they could play in the UK’s energy mix. In particular, he had to advise the government whether to give green light to Gloucester-based firm Tidal Lagoon Power to build a scheme in Swansea Bay.

The company is in negotiations with the UK Government as it wants £1.3bn of state subsidies to help fund this 350MW trial.

And, last Thursday, Hendry published a report saying that the UK should go ahead with the project, which would be the first of its kind to be built. It would consist of a large U-shaped wall out into the bay with turbines, which would be driven by the regular rise and fall of the tide. Hendry said this would generate power for decades. But at what price?

The former minister says the best way to look at this is to spread the cost of subsidies over the lifetime of the project, which is around 120 years if the projections are to be believed. In this way, he said the cost would be “about a cost of a pint of milk a year on people’s bills”.

One pint of milk a year for every electricity bill payer in the UK for 120 years. For one project?! He's lucky I kept control of the car!

You see, that's the problem: the electricity produced by a tidal lagoon is only really competitive on price only if you assume it is going to have a really long lifespan. Hendry’s findings show that if you look at the price of electricity based on a 30-year period – the average lifetime of a renewable project – would be £120/MWh. That is uncompetitive with the price of offshore wind today.

Despite these cost concerns, the UK government is likely to back the project in Swansea Bay after Hendry's enthusiastic report. So, what are the challenges and opportunities for wind companies?

If projects of this kind are going to be supported by the government, we expect big turbine makers to seize the opportunity to enter this new sector. Offshore wind developers and manufacturers already have the technology and expertise needed for tidal lagoons.

There is also an argument that businesses should welcome any spending on renewables, given that recent analysis by think thank Green Alliance showed that government investment in renewable projects including wind could decline by 95% between 2017 and 2020. This is another reason why wind companies should look to build their expertise in one of the few renewable power sectors that the UK government is apparently be keen to invest in.

But still wonder why the government is prepared to invest in tidal. Usually, governments back schemes and technologies like this at an early stage to help get an expertise that brings the costs down.

This is not be the case here. We have already got effectively the technology to build a project like this and, for this reason, Hendry said we won’t see in these projects the same cost reduction we have seen for example in offshore wind. The only effective way to reduce costs using tidal lagoons is with economies of scale.

There is an argument that the extra spending makes sense because the tides are more reliable than the wind, but forecasting in the wind sector is already very developed; and the use of storage technology will help address those concerns. It is also galling that UK leaders still refuse to back low-cost onshore wind.

This is an interesting project and it could be a way for the UK to diversify its energy while creating a new kind of industry – but it also reinforces a perception that clean power is the expensive option. That is simply not the case anymore.

Norway is set to be the first country to turn off its FM radio network. I'm just grateful the UK isn’t doing likewise as I’d never have heard Charles Hendry on Radio 4 talking about tidal lagoons while I was driving to work last week. This is highly relevant for wind.

The former UK energy minister was asked by the government in May 2016 to assess the case for tidal lagoons, and the role they could play in the UK’s energy mix. In particular, he had to advise the government whether to give green light to Gloucester-based firm Tidal Lagoon Power to build a scheme in Swansea Bay.

The company is in negotiations with the UK Government as it wants £1.3bn of state subsidies to help fund this 350MW trial.

And, last Thursday, Hendry published a report saying that the UK should go ahead with the project, which would be the first of its kind to be built. It would consist of a large U-shaped wall out into the bay with turbines, which would be driven by the regular rise and fall of the tide. Hendry said this would generate power for decades. But at what price?

The former minister says the best way to look at this is to spread the cost of subsidies over the lifetime of the project, which is around 120 years if the projections are to be believed. In this way, he said the cost would be “about a cost of a pint of milk a year on people’s bills”.

One pint of milk a year for every electricity bill payer in the UK for 120 years. For one project?! He's lucky I kept control of the car!

You see, that's the problem: the electricity produced by a tidal lagoon is only really competitive on price only if you assume it is going to have a really long lifespan. Hendry’s findings show that if you look at the price of electricity based on a 30-year period – the average lifetime of a renewable project – would be £120/MWh. That is uncompetitive with the price of offshore wind today.

Despite these cost concerns, the UK government is likely to back the project in Swansea Bay after Hendry's enthusiastic report. So, what are the challenges and opportunities for wind companies?

If projects of this kind are going to be supported by the government, we expect big turbine makers to seize the opportunity to enter this new sector. Offshore wind developers and manufacturers already have the technology and expertise needed for tidal lagoons.

There is also an argument that businesses should welcome any spending on renewables, given that recent analysis by think thank Green Alliance showed that government investment in renewable projects including wind could decline by 95% between 2017 and 2020. This is another reason why wind companies should look to build their expertise in one of the few renewable power sectors that the UK government is apparently be keen to invest in.

But still wonder why the government is prepared to invest in tidal. Usually, governments back schemes and technologies like this at an early stage to help get an expertise that brings the costs down.

This is not be the case here. We have already got effectively the technology to build a project like this and, for this reason, Hendry said we won’t see in these projects the same cost reduction we have seen for example in offshore wind. The only effective way to reduce costs using tidal lagoons is with economies of scale.

There is an argument that the extra spending makes sense because the tides are more reliable than the wind, but forecasting in the wind sector is already very developed; and the use of storage technology will help address those concerns. It is also galling that UK leaders still refuse to back low-cost onshore wind.

This is an interesting project and it could be a way for the UK to diversify its energy while creating a new kind of industry – but it also reinforces a perception that clean power is the expensive option. That is simply not the case anymore.

Norway is set to be the first country to turn off its FM radio network. I'm just grateful the UK isn’t doing likewise as I’d never have heard Charles Hendry on Radio 4 talking about tidal lagoons while I was driving to work last week. This is highly relevant for wind.

The former UK energy minister was asked by the government in May 2016 to assess the case for tidal lagoons, and the role they could play in the UK’s energy mix. In particular, he had to advise the government whether to give green light to Gloucester-based firm Tidal Lagoon Power to build a scheme in Swansea Bay.

The company is in negotiations with the UK Government as it wants £1.3bn of state subsidies to help fund this 350MW trial.

And, last Thursday, Hendry published a report saying that the UK should go ahead with the project, which would be the first of its kind to be built. It would consist of a large U-shaped wall out into the bay with turbines, which would be driven by the regular rise and fall of the tide. Hendry said this would generate power for decades. But at what price?

The former minister says the best way to look at this is to spread the cost of subsidies over the lifetime of the project, which is around 120 years if the projections are to be believed. In this way, he said the cost would be “about a cost of a pint of milk a year on people’s bills”.

One pint of milk a year for every electricity bill payer in the UK for 120 years. For one project?! He's lucky I kept control of the car!

You see, that's the problem: the electricity produced by a tidal lagoon is only really competitive on price only if you assume it is going to have a really long lifespan. Hendry’s findings show that if you look at the price of electricity based on a 30-year period – the average lifetime of a renewable project – would be £120/MWh. That is uncompetitive with the price of offshore wind today.

Despite these cost concerns, the UK government is likely to back the project in Swansea Bay after Hendry's enthusiastic report. So, what are the challenges and opportunities for wind companies?

If projects of this kind are going to be supported by the government, we expect big turbine makers to seize the opportunity to enter this new sector. Offshore wind developers and manufacturers already have the technology and expertise needed for tidal lagoons.

There is also an argument that businesses should welcome any spending on renewables, given that recent analysis by think thank Green Alliance showed that government investment in renewable projects including wind could decline by 95% between 2017 and 2020. This is another reason why wind companies should look to build their expertise in one of the few renewable power sectors that the UK government is apparently be keen to invest in.

But still wonder why the government is prepared to invest in tidal. Usually, governments back schemes and technologies like this at an early stage to help get an expertise that brings the costs down.

This is not be the case here. We have already got effectively the technology to build a project like this and, for this reason, Hendry said we won’t see in these projects the same cost reduction we have seen for example in offshore wind. The only effective way to reduce costs using tidal lagoons is with economies of scale.

There is an argument that the extra spending makes sense because the tides are more reliable than the wind, but forecasting in the wind sector is already very developed; and the use of storage technology will help address those concerns. It is also galling that UK leaders still refuse to back low-cost onshore wind.

This is an interesting project and it could be a way for the UK to diversify its energy while creating a new kind of industry – but it also reinforces a perception that clean power is the expensive option. That is simply not the case anymore.

Norway is set to be the first country to turn off its FM radio network. I'm just grateful the UK isn’t doing likewise as I’d never have heard Charles Hendry on Radio 4 talking about tidal lagoons while I was driving to work last week. This is highly relevant for wind.

The former UK energy minister was asked by the government in May 2016 to assess the case for tidal lagoons, and the role they could play in the UK’s energy mix. In particular, he had to advise the government whether to give green light to Gloucester-based firm Tidal Lagoon Power to build a scheme in Swansea Bay.

The company is in negotiations with the UK Government as it wants £1.3bn of state subsidies to help fund this 350MW trial.

And, last Thursday, Hendry published a report saying that the UK should go ahead with the project, which would be the first of its kind to be built. It would consist of a large U-shaped wall out into the bay with turbines, which would be driven by the regular rise and fall of the tide. Hendry said this would generate power for decades. But at what price?

The former minister says the best way to look at this is to spread the cost of subsidies over the lifetime of the project, which is around 120 years if the projections are to be believed. In this way, he said the cost would be “about a cost of a pint of milk a year on people’s bills”.

One pint of milk a year for every electricity bill payer in the UK for 120 years. For one project?! He's lucky I kept control of the car!

You see, that's the problem: the electricity produced by a tidal lagoon is only really competitive on price only if you assume it is going to have a really long lifespan. Hendry’s findings show that if you look at the price of electricity based on a 30-year period – the average lifetime of a renewable project – would be £120/MWh. That is uncompetitive with the price of offshore wind today.

Despite these cost concerns, the UK government is likely to back the project in Swansea Bay after Hendry's enthusiastic report. So, what are the challenges and opportunities for wind companies?

If projects of this kind are going to be supported by the government, we expect big turbine makers to seize the opportunity to enter this new sector. Offshore wind developers and manufacturers already have the technology and expertise needed for tidal lagoons.

There is also an argument that businesses should welcome any spending on renewables, given that recent analysis by think thank Green Alliance showed that government investment in renewable projects including wind could decline by 95% between 2017 and 2020. This is another reason why wind companies should look to build their expertise in one of the few renewable power sectors that the UK government is apparently be keen to invest in.

But still wonder why the government is prepared to invest in tidal. Usually, governments back schemes and technologies like this at an early stage to help get an expertise that brings the costs down.

This is not be the case here. We have already got effectively the technology to build a project like this and, for this reason, Hendry said we won’t see in these projects the same cost reduction we have seen for example in offshore wind. The only effective way to reduce costs using tidal lagoons is with economies of scale.

There is an argument that the extra spending makes sense because the tides are more reliable than the wind, but forecasting in the wind sector is already very developed; and the use of storage technology will help address those concerns. It is also galling that UK leaders still refuse to back low-cost onshore wind.

This is an interesting project and it could be a way for the UK to diversify its energy while creating a new kind of industry – but it also reinforces a perception that clean power is the expensive option. That is simply not the case anymore.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.