A new theoretical study we've produced has found that tidal energy has the potential to reduce wholesale energy prices, help balance the network and provide stable and reliable clean electricity, but concludes more work is needed to investigate financing options.
The Strategic Case for Tidal Range study, conducted in association with engineering firm Arup, seeks to theoretically evaluate the potential impact on Great Britain's future energy system of deploying tidal range generation projects in various scenarios - and the total cost to consumers of doing so.
How does tidal range energy work?
Tidal range energy works by controlling the flow of water into and out of a confined area of sea or estuary, using the tides to create a difference in height across the structure, which can then be used to generate electricity through turbines below the surface.
The potential of tidal range energy
The factual study finds that given the high tidal ranges around the UK's coastline, the technology has the potential to provide stable low-carbon energy to meet the UK's growing electricity demand, while at the same time reducing wholesale energy prices by around £120 million a year between 2037 and 2060.
Some of the other key findings from the study also include:
- When tidal range assets are deployed in locations with maximum generation potential, it could generate more than 5.1GW of power.
- Tidal has the potential to drive down wholesale market prices by replacing generation from technologies with higher running costs, such as interconnectors and gas with carbon capture and storage.
- Tidal assets that are synchronously connected to the national grid have the potential to provide important physical properties for the electricity network, including inertia, higher short circuit level and reactive power - helping it withstand and recover from disturbances.
Funding models for tidal range energy
Tidal range has so far not been deployed in Britain because of the significant cost of building the infrastructure. The study explores potential funding models, meaning further work would be needed on a funding model that reflects the high upfront cost of capital, and the low operational costs over many years.
However, it shows that a Contracts for Difference (CfD) style scheme could cost around £22bn, while a Regulated Asset Base (RAB) finance model could come in at around £5bn - with delivery and construction risks of the latter sitting with consumers.
Julian Leslie, Director of Strategic Energy Planning and Chief Engineer at NESO, said:
"The UK has the second biggest tides in the world after Canada, but tidal energy is yet to get off the ground along Britain's coastline, largely because of the significant upfront costs of doing so.
"NESO does not advocate for any particular energy type, but this factual study explores what the potential of tidal energy could be for Britain's power system, the funding options and the impact on consumer bills."
Mark Neller, Energy Business Leader for Arup in the UK, said:
"As Great Britain seeks to diversify its energy mix and decarbonise its energy system, tidal range offers an opportunity to harness predictable natural cycles for clean energy generation. It also addresses some of the challenges associated with replacing traditional thermal generation with renewable sources.
"Arup is proud to have supported the National Energy System Operator (NESO) in delivering this Strategic Outline Case for tidal range energy. This work is a crucial step towards understanding the impact of tidal range assets on the energy system, and their potential role in achieving a zero-carbon transition."
The Strategic Case for Tidal Range also found that there may be benefits to locating tidal technology at certain locations around Great Britain to offer better value to the consumer due to higher generation and lower balancing costs.
The timing of any potential future tidal range coming online would also influence how it impacts the British energy system, and the study highlights the need for a strategic approach to any future tidal range deployment. It also recommends further exploration of CfD, RAB and other funding models and their impact on British energy consumers.
