By Dave Elliott
Wind power has developed quite rapidly around the world, heading for 500GW soon, with costs falling. On-shore wind is now one to the cheapest renewables. The UK has nearly 10GW on-shore and over 5GW offshore, with the latter expanding and new technology emerging- floating wind turbines. However tidal power, although mostly at a much earlier stage in its evolution, is making a bid to compete, at least in the medium to long term. Although the Swansea tidal lagoon project will generate at a somewhat higher cost than offshore wind power, and certainly much higher than on-shore wind, it’s claimed that subsequent lagoons should be much cheaper, and tidal stream turbine developers are also confident about price reductions. Will tidal power really get cheap? That may depend on how these technologies get supported in the near future.
Although there are still some proposals for small to medium scale tidal barrages, potentially less invasive tidal lagoons are the main current focus in the tidal range area. The 320MW Swansea Lagoon is in the forefront but is still looking for a Contract for Difference (CfD) at maybe £150/MWh. That’s signifantly more than offshore wind projects are now getting. Although Charles Hendry predicted that subsequent lagoons could get costs down to £70-85/MWh for the proposed Cardiff lagoon and even as low as £66-77/MW for the Newport lagoon, that is all very speculative, and some way off- late 2020s/early 2030s: https://hendryreview.wordpress.com
By contrast, tidal stream projects are already in the water. Indeed, MCTs 1.2MW SeaGen was first installed in Strangford Lough back in 2008, feeding power to the grid and earning ROCs under the Renewable Obligation system. And much more is now to come. As the first 6MW part of the 398MW Meygen project, Atlantis Resources has installed four tidal current turbines on the seabed in Pentland Firth, between the northern Scottish mainland and the island of Stroma. They’re supported by Renewable Obligation (RO) contracts, under which it will get tradable ROCs worth about £200MWh, on top of wholesale prices of ~£45/MWh.
It plans to expand the project with 260 more turbines, to 398MW. But with the RO now closed to new projects, the new phase will have to compete with other projects, including offshore wind projects, in the next round of the CfD auction process. That will be quite a challenge: offshore wind has been given a notional CfD top price of £105/MWh in the next round. But according to the Times (6/3/17), Tim Cornelius, chief executive of Atlantis Resources, was ‘confident’ that Meygen could compete ‘on a par with offshore wind’ in the auction, when it would seek support for up to 76MW, or about 50 turbines: ‘We recognise that it’s ambitious, but it’s achievable’ since Atlantis could achieve ‘dramatic reductions’ in costs by using a different type of foundation that required less material (drilled supports rather than gravity bases) and by increasing turbine sizes- it plans to use MCT turbines, MCT now being owned by Atlantis.
Costs have certainly fallen. Its first 4 turbines cost £51m, but the second batch of 4, using MCTs design, should only cost £41m- just over £7m/MW. And with further reductions, it’s conceivable, the Times said, that it could get down to around £200m for the third phase, enabling it to operate with a CfD contract of around £105/MWh. www.thetimes.co.uk/edition/business/atlantis-has-tilt-at-underwater-windmills-dcq282gdx
However, the Times also quoted a wind industry veteran’s view that Meygen had ‘no chance’, as fierce competition among offshore wind projects could drive down costs to £90/MWh. Indeed some say they could go even lower: http://analysis.windenergyupdate.com/construction/uk-offshore-auction-prices-could-hit-80-poundsmwh-capex-plummets
A ring fenced capacity allocation that had earlier been in place for tidal stream and wave projects under the Con Dem government has has been removed, with a government spokesman telling the Times that its new subsidy system was designed to secure ‘the most efficient projects . . . at the best value for money to bill-payers’. But, the Times added, a source said it would ‘continue to consider whether introducing a ring-fenced budget for different technologies’ would help to support longer-term cost reductions.
Certainly wave and tidal projects were given notional CfD strike prices at much higher prices- £310/MWh for wave and £300 for tidal for 2021/22. That’s obviously far above what offshore wind can and has done, and wind is likely to get even cheaper rapidly. There are Danish off shore wind projects going ahead at under £60/MWh. Moreover, that is using existing technology- fixed to the sea bed with piles. Longer term it is claimed that floating wind turbines will be even cheaper- since they avoid having to build costly support foundations. However, it may take time to get to these cost reduction- the first devices will probably cost more. But the race is on to do that.
‘Buchanan Deep’, the 5 turbine 30MW Hywind Pilot Park, off the Scottish coast, should begin delivering power late this year or early in 2018. It will be the largest floating offshore wind farm, and also the first one with integrated energy storage, Batwind, a 1-MWh lithium battery system sited on the mainland, designed to smooth output. Hywind is financed by Statoil and Masdar, with a prototype tested off Norway. They say ‘from the first unit to the pilot park we have achieved cost reductions of 60-70%. Going forward, we believe a further 40-50% cost reduction is realistic by 2030, potentially making floating offshore wind competitive without support regimes. This can be realised through further conceptual enhancements, such as larger and lighter units, combined with a matured supply chain and economies of scale’. www.statoil.com/en/what-we-do/new-energy-solutions.html
Further back in the race, Dounreay Tri has wants to install two 5MW turbines attached to a floating, triangular semi-submersible rig anchored to the seabed near Thurso, using the design developed by Swedish company Hexicon: www.offshorewind.biz/tag/dounreay-tri/ . It’s been racing to get planning permission from Scottish ministers in time to qualify for the RO subsidy before that scheme finally closes: that would give about £140/MWh on top of the market price. The CfD competition by contrast was much tougher. The Times quoted Dounreay Tri’s project director as saying ‘we could not compete at this stage’, with conventional off shore wind. But it could, once developed. What was needed was ring-fenced support, ‘to close the gap, for a new technology like floating wind that’s not mature yet but has really large-scale, long-term potential, between first platforms in the water and commercial big farms’.
Clearly the race is on to get projects in the water and follow-ups agreed, so that the technology can move down it learning curve, with the latest entrant being the 50MW Kincardine Offshore Windfarm, with 8 floating turbines 15km SE of Aberdeen, which has just been given planning consent: www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-39217141
What’s the bottom line? If all the currently proposed UK tidal lagoon and stream projects get backed and fully developed, there might be almost 800MW in place in the early to mid 2020s, and more thereafter, moving into the GW range, with small tidal barrages also a possibility. However that will still be small compared with offshore wind, and, although the potential tidal resource is quite large (10s of GWs) , no barrage projects are in sight yet, lagoons are as yet untried, and progress on tidal stream technology is still uncertain. Tidal Energy Ltd has sadly gone bust, despite successful tests of its Delta Stream rotor off the coast of Wales: www.bbc.co.uk/news/uk-wales-south-west-wales-37752750
It seems likely that offshore wind will continue to win on price and volume, with floating wind opening up the huge resource in deeper water further out to sea- long term, in theory 100s of GWs. However, with luck, tidal technology may get close in cost terms, over time. How much time will depend on, amongst other things, what support is made available for it, and also for floating wind, helping them all to move down their learning curves. The Spring Budget did say that the Levy Control Framework would be revamped soon. That sets tight spending caps for the CfD and other green energy support mechanisms. Maybe more room will now be made for advanced renewables like floating wind and tidal stream and lagoon projects. They both deserve a chance to show what they can do with the CfD helping: www.gov.uk/government/publications/second-cfd-allocation-round-statutory-notices