Published on September 26th, 2021 📆 | 6142 Views ⚑
0SNP’s tidal power vision under threat from technology ‘gaps’ putting off private investors
THE CHAIRMAN of the Scottish National Investment Bank has warned that crucial private sector funding needed to get tidal power and green hydrogen industries up and running is being put off by a lack of proven technology â denting the SNP-Greensâ renewable energy vision.
Westminster politicians have been told to send a clear message that they have confidence in the innovation in order to bring in funding â amid a warning the technology could be scaled up first overseas, despite Scotlandâs huge potential to grow the sectors.
The investment bank was set up by Nicola Sturgeon and tasked with leveraging in private sector cash, specifically for assisting Scotlandâs pledge to end its contribution to climate change by 2045.
The Scottish Government is aiming to generate half of the nationâs energy from renewable sources by 2030 and already, the vast majority of electricity is generated from renewables.
But in the co-operation deal forged between the SNP and Greens, there is an agreement that âthere is enormous potential to harness Scotlandâs natural resources through emerging wave, tidal and floating offshore wind technologiesâ.
Simply put, tidal power is harnessing the energy produced by tides â a very predictable form of renewable energy usually generated by underwater turbines.
The largest tidal turbine in the world, the 02 turbine, currently anchored at the European Marine Energy Centre at Orkney, will generate 2MW of energy â enough to power 2,000 homes.
The Scottish Governmentâs updated climate change plan published in December warns that tidal and wave energy âremain at an early stage of developmentâ, warning that âthe key levers required to commercialise the technologyâ are âreserved to the UK Governmentâ.
Finance Secretary Kate Forbes issued a stark warning earlier this year that Scotland will not meet its strict climate targets without âleveraging in private investmentâ.
But Willie Watt, the chairman of the Scottish National Investment Bank, has warned MSPs that the strategy is in jeopardy after insisting âthere are gapsâ in emerging technologies.
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He added: âFor example, in green hydrogen, I think there is a shortage of capital for projects in that area because the uses of that technology maybe proven on a small scale, but they are not proven on a large scale. The same might be true with regard to tidal power.
âI hope that one of the things that we can do is prove that commercial investments can be made in these sectors which will then give confidence to the private sector to come in beside us.â
Energy policy is largely reserved to the UK Government, and Scottish Green Skills Minister Lorna Slater has warned a 2015 decision by Westminster politicians that âended market support for offshore renewables such as tidal energyâ has meant that âScotland is six years behind where we could have been in building and installing tidal turbinesâ.
She has stressed that advancement âhas been held back by the UK Governmentâs lack of support.â
But earlier this month, the UK Government appeared to be finally showing support for tidal energy after opening bids for a ÂŁ265 million subsidy pot in the next round of its Contract for Difference â where tidal projects will be able to bid for a share of a ÂŁ55 million fund.
The Scottish Government had called on UK ministers to âreform the Contract for Difference mechanism to deliver specific support for wave and tidal generationâ.
Neil Kermode, managing director of the European Marine Energy Centre, said the sector is âpoisedâ to be ramped up.
Kermode told the Herald on Sunday that although there were âsome positive signsâ from the latest UK Government contract rules, he warned âthere are some shortcomingsâ â such as a lack of ring-fenced funding for tidal projects.
He added that governments âhad lost faith in marineâ leading to efforts âto re-establish that trustâ.
Kermode said that wind power has been scaled up effectively due to government support and is hopeful the same strategy can be adopted by tidal energy.
He said: âEffectively wind power had a number of years working its way through how you do this. It was  working out the best way to do it â then people standardised and settled on the right thing to do.
âThey have just perfected it and built a lot of them. By building a lot of them, the price comes down.
It was also very, very, very strongly favoured by government that thatâs what they wanted to see happen.â
He added: âWhat we do not want to do is go bust and hundreds of machines out there and we find thereâs a technical fault with the process.
âWind worked it way through systematically. We believe we could follow the same trajectory. We believe we are good to go but we are at an early stage.â
Scotland is believed to have around one quarter of Europeâs total tidal energy potential â with a strategy being drawn up to export the asset to the continent.
Kermode stressed âthere are gigawatts of energy in the water around Scotlandâ and âwe now know thereâs technology that can extract itâ.
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Pointing to Mr Wattâs comments about private sector apprehension, he said: âI understand why people are a bit nervous about it because itâs a bit different.
âA clear message of support from Government, and setting out a target, for example, would give that confidence to the market that this is worth going for. Private investment will come in to this, once they are sure thereâs money to be made â thatâs always the case.
âIf we let this potential go, we will not get it back â we will end up having to buy it back.â
Ben Miller, senior policy manager at Scottish Renewables said tidal power and green hydrogen âare examples of renewable technology with immense potential to be deployed at commercial scaleâ along with âall the economic and environment benefits that would bringâ.
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He added: âScotland has a quarter of Europeâs tidal resource and has deployed world leading technology, and green hydrogen will be essential in helping industry and heavy transport to decarbonise.
âAs with offshore wind ten years ago, both these innovative technologies need strategic financial support at a pre-commercial scale, and itâs heartening to see the bank recognise this in recent announcements. We also need to see the UK CfD (Contract for Difference) mechanism work better for less established technologies like tidal power, by ringfencing support and prioritising deployment over competition.â
But the Scottish Conservatives have claimed that the warnings over private sector confidence in the technology is another example of the SNP Government failing to take businesses with them in supporting key policies.
The partyâs net zero, energy and transport spokesperson, Liam Kerr said: âWeâve warned for years that the SNP has to bring people and businesses along with them in the fight against climate change.
âInstead, emboldened by their new Green colleagues, they have come up with unpopular and unworkable policies that has alienated business and investors when we need them most.
âIt is yet another example of how the nationalists are not doing enough to protect our environment.â
As well as scaling up tidal power over the next few years, the Scottish Government has set an aim to generate 5GW of renewable and low-carbon hydrogen by 2030 and more than 25GW by 2045.
Low-carbon or blue hydrogen is produced from reforming natural gas and preventing CO2 entering the atmosphere by carbon capture and storage technology. Green hydrogen is made through a process called electrolysis where water is split into hydrogen and oxygen â but it currently a more expensive option.
SNP Net Zero Secretary Michael Matheson has stressed that âone of the most effective ways of decarbonising domestic heatingâ would be by using hydrogen in the natural gas network and has called on the UK Government to âgive consent to decarbonising the natural gas systemâ.
A Scottish Government spokesperson said: âWith our abundant natural resources, expertise and forward-looking policy approach, Scotland is ideally-placed to harness the enormous global market for marine energy whilst helping deliver our net-zero economy. This is why the Scottish Government has long-supported marine energy and invested more than ÂŁ40 million to date in the internationally-renowned Wave Energy Scotland programme.
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âScotland has potential to produce significant quantities of green hydrogen from our offshore and onshore wind resources and our potential wave and tidal power. In addition to this, proximity to large scale offshore renewables, may allow our islands and rural locations to play a key role in the production and export of hydrogen to the rest of Scotland, UK and Europe.
âWe recognise that the development of a domestic hydrogen sector will play an important role in supporting a just transition to net zero by 2045, and presents significant long-term economic opportunities.
âHowever, many of the levers required to support the emergence of a flourishing hydrogen economy in Scotland are reserved to the UK Government. While the publication of the UK hydrogen strategy is welcome, it is critical that they continue to work with us to ensure that our collective vision for the development of the hydrogen economy is aligned, and the benefits of this developing sector are realised across the UK.â
Earlier this year, MPs on Westminsterâs Environmental Audit Committee, wrote to the UK Government Business, Energy and Industrial Strategy Secretary, Kwasi Kwarteng, insisting that âthere is substantial potential for the tidal sector to make a significant and distinct contribution to the UKâs future mix of energy generated from renewable sourcesâ.
The letter added that the committee found it âdisappointingâ that the UK Governmentâs energy white paper, published in December, âwould only commit to âconsideringâ the role of tidal energyâ.
It added: â In our view this single reference in a substantial policy document significantly undersells the UKâs potential in this field and sends the weakest of policy signals to potential investors.â
In response, Kwarteng said: âWhilst marine technologies are still at a relatively early stage of development, the present Government takes the view that they could have a role play in the UKâs long-term decarbonisation, ensuring that we meet our 2050 net zero emissions target.
âGovernment recognises the need for a diverse energy generating mix, complementing offshore wind with other renewable generation sources.â
Gloss