Abstract
Tidal stream energy (TSE) is seeing renewed interest across the world, especially in the UK, France and Canada. In 2021, the UK government committed to supporting the sector via revenue support in CfD Allocation Round 4 (AR4), to the sum of £20M per annum for 15-year CfD contracts, while in France there is talk of a power purchase agreement (PPA).
Such favourable government headwinds are promising for the sector in the short term, particularly when the security of supply has come back onto the agenda. However, to properly capitalise, the industry needs to be able to demonstrate a future pathway towards a low levelized cost of energy (LCOE).
TSE has significant benefits over other renewables, including its high predictability, regular cyclical pattern and the fact that it is completely decoupled from other renewable resources like wind and solar. This means that it can provide electricity when other renewables might not be able to, and equally reduce the curtailment that could occur in the case of extreme weather. This, however, is not enough. The industry needs to prove that it can produce energy at a competitive cost that provides benefits to the grid, and the wider economy, despite perhaps never quite reaching price comparability with offshore wind.
In this report we examine the key cost reduction drivers that will allow the industry to reach this economic competitiveness. This involved the following stages:
• We produced a list of over 50 innovations and cost reduction drivers. We narrowed this down to eight drivers, those judged to have the most significant cost reduction benefits in the short to medium term. We reviewed the literature to highlight the current state of the art and summarise the benefits in these areas.
• We created a model to examine the impacts of these drivers on annual energy production (AEP), costs and LCOE for a baseline farm. The baseline we assumed was a farm of four 2MW devices, commissioned in 2021.
• We estimated the impacts using data from TIGER partners, literature review and our knowledge of offshore wind cost reduction mechanisms.
• We compared the drivers, to understand which showed the most promise, and also discussed them in the context of tidal sites in the Channel region (between the UK and France).