Ian Blackford (Ross, Skye and Lochaber) (SNP) Thank you, Madam
Deputy Speaker, for the opportunity to bring this critical issue
before the House this evening. I have been passionate about the
tidal marine industry’s potential for some time. I am glad that
now, only a few weeks after the conference of the parties in
Glasgow, it is finally getting the focus and attention that it
deserves. Ahead of this debate, as we all know, the Prime Minister
announced at Prime...Request free trial
(Ross, Skye and Lochaber)
(SNP)
Thank you, Madam Deputy Speaker, for the opportunity to bring
this critical issue before the House this evening. I have been
passionate about the tidal marine industry’s potential for some
time. I am glad that now, only a few weeks after the conference
of the parties in Glasgow, it is finally getting the focus and
attention that it deserves.
Ahead of this debate, as we all know, the Prime Minister
announced at Prime Minister’s questions yesterday that there will
finally be some ringfenced funding for tidal energy: £20 million
in the forthcoming contracts for difference auction. I wish I had
known that securing a debate in this House is all it takes to get
some movement out of the Government and the Cabinet. I must
really start securing adjournment debates much more often.
(Kilmarnock and Loudoun)
(SNP)
It was my PMQ.
Of course—I congratulate my hon. Friend on his Prime Minister’s
question yesterday.
While my party colleagues and I were glad to see some movement
yesterday, we have also been very clear that it amounts to only a
partial U-turn. The Government have a way to go yet. Every little
may help, but if we are serious about the scale of the
opportunity, we need to go further.
In securing this debate, our ask was for a £71 million ringfenced
fund. The ask remains for £71 million, which we genuinely believe
is the level of investment that will allow the industry to fulfil
its potential to provide green baseload energy that is so
critical to our situation, and will support a sector that has
massive potential not just at home but as an export industry. The
level of investment that we put in now will ultimately determine
whether the industry will reach its potential on these shores or
we miss the chance and let it slip through our grasp.
Let me put the issue in context. The Royal Society report
published this month refers to tidal marine contributing 11.5 GW
of electricity. That is 15% of UK generation capacity.
May I go back to the pots of money? As my right hon. Friend says,
£20 million is clearly welcome compared with where we were, but
would a bigger pot of money not unlock greater investment and
create a better jobs return? A £70 million pot could unlock £140
million of private investment and create 400 jobs, whereas £20
million would unlock only £20 million and create 100 jobs. A
bigger pot would get a better return for consumers.
My hon. Friend is right. We are, essentially, at ground zero
today. This is about how we kick-start the industry. The modest
Government support for which we are asking would unlock that
private investment, and when we think about the 11.5 GW that I
talked about—that 15% of UK electricity—
17:00:00
Motion lapsed (Standing Order No. 9(3)).
Motion made, and Question proposed, That this House do now
adjourn.—(.)
That 15% is equivalent to the contribution that nuclear makes.
When we put into context the relative level of funding we are
asking for, the scale of the opportunity is huge. We are talking
about an industry in which Scotland and the UK lead the world in
terms of technology. The ability to create green baseload
electricity is there 24/7, 365 days a year, along with the
capacity to use that technology and that ingenuity to export to
Canada, Thailand, France, Japan and so on. There is a massive
opportunity for us to benefit from that first-mover advantage, to
get behind an industry where we can make sure that we control the
entire supply chain and have the potential to navigate away from
fossil fuels and create the jobs referred to by my hon. Friend
the Member for Kilmarnock and Loudoun ().
(Inverclyde) (SNP)
My right hon. Friend has talked of an opportunity. We have known
about tidal energy for a long time. We should have invested in it
20, 30 or 40 years ago; if we had done so, we would have a much
more mature industry today. If this Government do not invest now,
we will look to the future and see nothing more than
negligence.
We are where we are at the moment. My point to the Government is
this. We know that the technology is there. We know that relative
costs are already coming down dramatically; we can see that from
the MeyGen project in the Pentland Firth, for example. Here is
the opportunity to get behind something that could be
revolutionary, in terms of providing clean energy—baseload
energy, as I mentioned—but also the ability to create a
manufacturing industry. We can perhaps learn from the mistakes
that were made with wind turbines, and ensure that we are not
relying on other countries to provide the infrastructure that we
need, because we can do this ourselves. There is a responsibility
that we have here, now, today, to get behind this industry.
(Gloucester) (Con)
Will the right hon. Gentleman give way?
I will give way one more time.
I am grateful to the right hon. Gentleman, and I much appreciate
his relatively new-found enthusiasm for the marine energy sector.
I pay tribute to his colleagues, the hon. Members for Kilmarnock
and Loudoun () and for Inverclyde (), for the help that they have
given the all-party parliamentary group on marine energy, which I
founded in July 2016. The group has 25 members, two of whom are
from the Scottish National party, and their support is greatly
valued. However, this is a great British success story, which has
an impact on opportunities from the Isle of Wight, along the
coast of Cornwall, up through Wales and into Northern
Ireland.
As the right hon. Gentleman will know, this wonderful decision by
the Government has been greeted by the chair of RenewableUK as
a
“major step forward for the…tidal energy industry.”
The chair of the Marine Energy Council has said:
“The impact of this support cannot be overstated.”
Furthermore, Nova Innovation has said that this will be
“turbocharging the delivery of tidal energy”.
This is a pivotal moment, and I am sure the right hon. Gentleman
will agree that it is a huge leap forward for marine energy.
Madam Deputy Speaker ( )
Order. It is not customary to read out very long
interventions.
I must say to the hon. Gentleman that my support for this is not
just for the short term; I was at the port of Nigg when the
MeyGen project was launched many years ago, so the subject has
been dear to my heart for a long time. I do, however, agree with
him about the scale of the opportunity. Of course the £20 million
of investment that was announced yesterday is important, because
it will allow us to develop the industry, but the question at the
heart of today’s debate is about the scale of our ambition.
I respectfully ask the Minister, as I would ask the Chancellor of
the Exchequer, for a recognition of the scale of this
opportunity. Phase 2 of the MeyGen project has already been
permitted to go up to 80 MW, and in the Pentland Firth it could
ultimately reach as much as 400 MW, but the ability to expand
from the current 6 MW installed in MeyGen phase 1 is restrained
by the investment that has been put in place in this round. We
would certainly not be looking at deploying the 80 MW; it would
be a much reduced figure. I would simply say to the Minister and
to all Members: let us have that ambition. Let us have that
desire to see this green energy source get to 15% of UK
electricity production. To do that, however, we have to show more
ambition than is being shown today. I do not wish to be seen as
ungrateful for what has happened; all I am asking the Government
to do is to recognise the scale—
Will my right hon. Friend give way one more time?
Let me make a little bit of progress. At this rate, I am going to
use up all the time myself, but I want to be respectful to the
Minister.
My message to the Minister is to reassess what has been done and
to do all that he can to ensure that we develop this green
potential. The funding of £71 million that we have asked for
would have resulted in 100 MW of capacity deployed in the very
near term from what we know from planned projects. Let me ask him
this specific question. With a funding pot of £20 million, what
specific assessment of capacity deployment have the Government
made? I genuinely ask him not to duck this question, as it is
critical to revealing what assumptions the Government have made
in relation to their lower level of investment. I am sure that
they will not have made this announcement without making such an
assessment, and I look forward to the Minister addressing that
question when he responds.
It is important to set out just how obvious an opportunity
investment in the tidal marine sector is, and why it is important
for us. First and foremost, we should remind ourselves of how
deeply fortunate we are that this world-leading technology is
already located in the United Kingdom and particularly in
Scotland. We have a chance to grow this sector exponentially, but
we have to take it. It is estimated that the tidal stream
industry could generate a net cumulative benefit to the UK of
£1.4 billion and support at least 4,000 jobs by 2030.
Additionally, although wave energy is a less mature technology
than tidal stream, it could add a further net positive
contribution to the UK economy of £4 billion and support 8,100
jobs by 2040.
This industry is not alone as an emerging opportunity; there is
also emerging evidence of just how big this opportunity can be
for our present and future energy needs. A recent report for the
Royal Society, led by Daniel Coles at the University of Plymouth
in collaboration with the Universities of Aberdeen, St Andrews
and Highlands and Islands, has found that the UK can get 15% of
its electricity production from tidal stream power. That would be
a massive contribution to the work that needs to be done to get
to net zero by 2045 in Scotland and by 2050 in the rest of the
UK. Achieving this would require around 11.5 GW of tidal stream
turbine capacity to be installed.
Just to put that in context, we currently stand at 18 MW. This
takes us to the nub of the issue regarding the support required
from the Government to create the investment in the industry that
my hon. Friend the Member for Kilmarnock and Loudoun mentioned.
To meet those ambitions means installing a least a further 124 MW
by 2031. That would put tidal stream on a trajectory to install
the estimated 11.5 GW needed to generate 34 terawatt-hours a year
by 2050.
The recent research for the Royal Society also indicates that if
we build up this targeted support for the tidal industry, it will
drive down the levelised cost of energy to below £150 per
megawatt-hour. This would make tidal stream cost-competitive with
other technologies such as combined cycle gas turbines, biomass
and anaerobic digestion. So, from the current position where
there is no route to the domestic market, it is now clear that if
this sector gets the investment it needs, it will quickly become
a key component in meeting our energy needs.
Does my right hon. Friend agree that another thing the Government
could do that would not cost them or consumers any money would be
to set an interim date and target for hitting 1 GW of tidal
stream? That would send a signal to investors about how seriously
the Government are taking this.
Absolutely, because it is about that ambition. I hope the
Government share our ambition to see this sector generate the
level of electricity we believe it can generate. It is about
creating the circumstances, by kickstarting the sector with
modest Government investment, so that investors come in. We have
developed an opportunity for green energy, but let us also think
about the opportunities for manufacturing and for a global
success story, given the technology that has been developed on
these islands.
A proper level of investment will allow existing developments
such as the MeyGen project to take off. This project, the world’s
largest tidal array, is already exporting significant amounts of
electricity, and it has significant capacity to grow. This
presents a transformational opportunity for the tidal sector and
would once again demonstrate Scotland’s commitment to a green
recovery. It could also create thousands of new full-time roles
in the Scottish supply chain, helping to achieve its full
potential.
We also need to think about the opportunity for our industrial
base in Scotland, because the ability to tie in green energy to
the powering of data centres, for example, would be an enormous
opportunity throughout Scotland, particularly in my area of the
highlands and islands. From this ability to generate green
energy, we can develop a wider industrial strategy to create the
job opportunities and the wealth that we all want to see.
(Dunfermline and West
Fife) (SNP)
My right hon. Friend mentioned supply chains, and 25% of Nova’s
supply chain spend is in Shetland, with 98% of its spend being in
the UK. If the UK Government are serious about levelling up
manufacturing, is this not a golden opportunity for them to get
behind it fully, instead of the partial funding we have seen in
the last 24 hours?
My hon. Friend makes an important point. Actually, 90% of the
Nova project’s supply chain comes from the UK, but let me put
that into context. For a traditional wind turbine, the UK
contribution is some 30%. We lost the opportunity to command the
supply chain for the traditional wind industry, and here is an
opportunity to make sure we do not make the same mistake again.
It is important the Government recognise that.
We have an opportunity to have a green future driven by green
jobs, but it will happen only if the opportunity is matched by
the ambition of Government investment. In truth, the ask from the
industry is modest compared with the support offered to other
sectors. The ask is for a £71 million ringfenced fund from the UK
Government so the sector can flourish. Although the Government’s
offer of £20 million in yesterday’s contracts for difference
auction is a step in the right direction, it is not the full
stride that the sector deserves.
As my hon. Friend the Member for Kilmarnock and Loudoun has
repeatedly stated on the Floor of the House, £71 million is a
drop in the ocean compared with the billions that have been
offered to the nuclear industry. There was seemingly no problem
in finding £1.7 billion to further develop and design the
Sizewell nuclear power station. There can be no reason, no logic
and no excuse for failing to find the £71 million needed to
support this vital industry.
Let us remind ourselves of the potential. This is an industry
that can grow to 15% of the UK’s electricity production. If we
look at a typical day over the last few weeks, on 16 November
nuclear contributed 14.6% of the UK’s electricity. We do not need
nuclear in Scotland. We can provide the baseload we need from
this clean source of energy. We have the potential to deliver
safe green energy and to provide jobs and energy security for a
fraction of the cost of nuclear.
There are many other favourable comparisons, too. The
predictability and stable power output of tidal stream energy
offers additional benefits over other technologies for our future
energy supply. For instance, this predictability and stability
even compares positively with floating offshore wind, which
secured a £24 million ringfenced budget in the draft budget for
the fourth-round allocation.
The ask is modest and the picture for investment is clear. If we
do not grasp this opportunity, other countries will. Countries
including Canada and France have already put in place financial
mechanisms to capitalise on tidal energy. Canada has a feed-in
tariff equivalent to £300 per megawatt-hour, with many
multi-megawatt projects in the pipeline. Nova, based in Leith,
has an order to ship 15 turbines to Canada. The Canadians would
love to have our technology, and they are enticing companies such
as Nova to relocate. The French Government are about to announce
a feed-in tariff for tidal energy backed by the EU green deal.
Japan and Indonesia are piloting projects and negotiating power
purchasing agreements to accelerate tidal energy deployment. We
need a domestic market for the industry to grow and thrive. It is
a case of use it or lose it. It is that stark, it is that simple.
The grim reality is that if the UK Government fall short and
short-change this sector, the industry could be lost to other
countries that are willing to invest in this technology. We are
back to where we were with wind and, in many cases, where we were
on oil and gas. We must make sure that we do not lose the full
extent of this opportunity. We must make sure that tidal stream
cannot be lost to Scotland and the UK—it will certainly not be
lost to the world, and we need to make sure that we fully play
our part .In case that all sounds familiar, we should remember
exactly what happened to the wind industry in the 1980s and
1990s. As I have mentioned, only 30% of the UK supply chain for
UK wind is domestically generated.
If we are to reach net-zero and have a just transition, we simply
cannot repeat those mistakes of the past. Let us just think of
the job opportunities through developing the Scottish, UK and
global markets. There are expectations of a global market of 100
GW, an industry that will be worth £126 billion by 2050. We have
a choice: lead this emerging green energy sector or sit back and
watch our sector-leading companies move wholesale to overseas
markets. We can embrace the opportunity for green jobs, for
base-load energy and for transitioning to that green energy
future. We can lead the world in tidal marine or we can walk away
from the opportunity to develop and deepen the sector leadership
that has been developed in Scotland and the UK.
It will come as no surprise to Members from across this House
that I am not the biggest cheerleader or supporter of the UK
Government. Normally when I walk into this Chamber, I do so to
firmly oppose those on the Government Benches. Today, though, I
walked into this Chamber with a different intention, because this
is an issue where we have a chance to work together; here is an
area, an industry and an opportunity where we can genuinely work
together in our common interests. With a modest amount of support
in terms of the overall intervention in energy—of £71 million—the
industry can reach its potential and we can all benefit. I hope
the Government see it that way too, and I hope that yesterday was
only the first step and that there are bigger and better strides
to come. I hope the Government are listening, and I very much
look forward to the Minister’s response.
17:17:00
The Minister of State, Department for Business, Energy and
Industrial Strategy ()
I congratulate the right hon. Member for Ross, Skye and Lochaber
() on securing this important
debate, and I welcome his support for the UK Government. He said
that he came into the Chamber and, unusually, wanted to support
the UK Government, and I am very grateful for that. I very much
welcome that change of tack.
Marine energy, and tidal stream energy in particular, is of great
interest to the Government. Our theme today is the merits of
ringfenced funding for the deployment of tidal stream generation,
and I shall say first that I agree entirely with the right hon.
Gentleman that tidal stream is a homegrown industry of
considerable potential. We have Europe’s and probably the world’s
foremost tidal and wave energy testing centre—the European Marine
Energy Centre on Orkney. We have other exciting testing centres
and marine energy hubs burnishing their reputation on Anglesey,
the Morlais project, and on the Isle of Wight, with the Perpetuus
Tidal Energy Centre. That cropped up two weeks ago in Department
for Business, Energy and Industrial Strategy questions, when my
hon. Friend the Member for Isle of Wight () asked about it. We have a raft
of brilliant developers designing and building tidal stream
devices in the UK, notably in Edinburgh, in Leith.
The right hon. Gentleman said that the UK Government funding of
£20 million has come “only now”, but the picture is so positive,
in large part because we have under successive Governments
provided more than £175 million—not just the £20 million
announced yesterday by the Prime Minister—in innovation funding
to the marine energy industry in the past 18 years, of which more
than £80 million has come since 2010. So when he talked about 20
to 30 years ago, this is exactly what we have been doing. Thanks
to the extensive support afforded under the renewables-obligation
mechanism, we were able to build in 2018 the largest tidal stream
generating array in the world in the fast-moving waters of the
Pentland firth.
It is fair to say, then, that the Government have a sound track
record of supporting the tidal stream industry and helping to get
it into the position it is in today, on the cusp of
commercialisation and with good export potential. This week,
however, is an occasion for looking to the future. We were all
delighted to hear the Prime Minister announce yesterday at Prime
Minister’s questions that the Government will establish a
ringfenced budget of £20 million for tidal stream developments in
pot 2 of the upcoming fourth contract-for-difference allocation
round. The CfD scheme is our flagship mechanism for supporting
the cost-effective delivery of renewable energy. Our decision
this week will ensure that the nation’s tidal stream innovators
get the opportunity they need to bring their cost of energy down,
to ramp up the UK’s capture of the abundant energy flowing along
our coastlines and to learn the valuable and exportable lessons
that come with being the first in the world to deploy a
cutting-edge technology at scale. The decision has been warmly
welcomed.
The Marine Energy Council has said clearly that it is grateful to
Ministers for having listened, understood and acted, and so am I.
There is now an opportunity for the sector to make a success of
delivering on the funding that my right hon. Friend the Prime
Minister announced and then of ramping up domestic capacity. At
the same time, as the Prime Minister’s trade envoy there, I will
continue discussions with Indonesia about perusing potential
opportunities. Will my right hon. Friend accept an invitation to
come and meet members of the sector and interested colleagues at
the next meeting of the all-party parliamentary group on marine
energy before the House rises?
I gladly accept my hon. Friend’s invitation to meet. He does a
brilliant job as the chair of that APPG and he does an amazing
job as the Prime Minister’s trade envoy to Indonesia. He
mentioned one or two of the warm words of congratulation on the
announcement yesterday. RenewableUK said it was “a major step
forward” and that it
“puts us in pole position to”—
lead—
“the global market in due course.”
RenewableUK also said it would
“unlock private investment and secure green jobs”,
while Neil Kermode of the European Marine Energy Centre on Orkney
said:
“This support for the marine energy industry is absolutely
pivotal”.
I appreciate the right hon. Member for Ross, Skye and Lochaber
having brought this topic to the House. He perhaps might have
left one with the impression that just he had made
representations to the Prime Minister, but I checked back and
found representations from my right hon. Friends the Members for
Portsmouth North () and for Preseli
Pembrokeshire (), and from my hon. Friends
the Members for Meon Valley (Mrs Drummond), for Rother Valley
(), for Rugby (), for Banff and Buchan (), for Isle of Wight (), for West Aberdeenshire and
Kincardine (), for Moray (), for Ynys Môn (), for Truro and Falmouth
(), for Gloucester (), for Sedgefield (), for Blyth Valley (), for Workington (), for North Cornwall
(), for St Austell and Newquay
(), for North Devon () and for Barrow and Furness
().
I heard some doubt from the right hon. Member for Ross, Skye and
Lochaber as to whether the £20 million per annum is a
substantial-enough sum to put the tidal stream sector on its best
footing. Indeed, the right hon. Gentleman suggested that £71
million is the minimum required for the job. I am afraid I cannot
agree with him on that, because £71 million would mean the
awarding of a contract to virtually every developer who shows
interest in the auction as long as they bid at a level just a
single penny under our stated maximum price. He and I worked
together in the City of London in our time. He will know from his
knowledge of financial markets—I know that he has since rebranded
himself as the simple crofter—that there is no way to run an
auction of that sort in that way.
I hope that we can dispense with the silly gibes.
What I explained to the Minister was that £71 million would
justify 100 MW of output. Perhaps he can explain what he expects
to see from the £20 million. Crucially, I did point out that
MeyGen has consent for 80 MW and that, within the envelope of
that £71 million, it could have been fully exploited and
ultimately ramped up to 400 MW. As things stand, MeyGen 2 cannot
be fully exploited and that is the impact of not going to the £71
million.
The right hon. Gentleman is mixing up funding with the process of
an auction. It is a contract for difference auction. The idea of
£20 million being available is that it allows us to have a
competitive process between all of the different parties that may
be interested, and then to make sure that at least £20 million
goes towards these projects. It is not the same as granting
funding, which is what I think he is looking for, of £71 million.
It is a competitive auction process. The purpose of the CFD
scheme is to support and push for—
Will the Minister give way?
I will try to fit in a response to the right hon. Gentleman.
The purpose of the scheme is to support and push for only the
most promising and competitive projects in the offing. My
Department’s analysis shows that £20 million is optimal for
that purpose and that a larger ring-fenced budget would serve
neither the interests of the electricity bill payer, nor the
interests of the sector itself, which must be pushed to innovate
and find ways of bringing down its costs. So, yes, the Government
have, this week, delivered for the burgeoning tidal stream
industry and it is for the developers now to really push on and
make good on their promises and their potential to demonstrate
the value for money and the scalability that we need to see from
our renewable energy technologies as we transition to an
efficient and net zero-ready power sector.
We all remember the remarkable fall in the cost of offshore wind
energy, to which the right hon. Gentleman referred in his speech,
once it was able to take full advantage of the contracts for
difference scheme. We have, this week, given the tidal stream
sector the chance to push on and try to do the same. It will all
be to our benefit and to the benefit of our planet and
environment if the sector succeeds in this endeavour.
Question put and agreed to.
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