Clean growth – defined as growing our national income while cutting greenhouse gas emissions – is central to the Government’s Industrial Strategy. And the shift to a low carbon economy to meet national and international commitments to tackle climate change is a huge economic opportunity.
The Government predicts that the UK’s low carbon economy could grow by an estimated 11% per year between 2015 and 2030 – four times faster than the rest of the economy – and deliver up to £170 billion of export sales of goods and services by 2030.
Its Clean Growth Strategy says if the signatories to the 2015 Paris climate change agreement are to meet their targets, there will need to be around $13.5 trillion of public and private investment in the global energy sector in the same period.
And there are already more than 430,000 jobs in low carbon businesses and their supply chains in the UK.
So cleantech is a huge opportunity.
Technological innovation has driven down the costs of many low carbon technologies. Offshore wind is a good example, where costs have roughly halved in the last few years. But while wind and solar are both mature technologies, a great untapped natural resource is the power of the sea.
A recent report from the Offshore Renewable Energy Catapult (OREC), which exists to accelerate the development of the industry, says the UK has world-leading expertise in marine renewable energy and is uniquely placed to capitalise on a global opportunity. But it also risks losing it.
It says that with the right support, the tidal stream industry (which uses underwater currents to drive underwater turbines, as opposed to tidal range, which uses sea walls, dams and lagoons) could support 4,000 jobs and be worth £900m to the economy by 2030.
And assuming that wave energy follows successfully in tidal energy’s footsteps, it could support 8,100 jobs by 2040 and generate almost £2 billion, mostly from exports.
Around 50-60% of these economic benefits are expected to be generated in coastal areas, many with a need for economic regeneration like the South West.
The OREC report also shows that tidal stream and wave energy can satisfy the UK Government’s ‘triple test’ for determining support for new technologies, which are: achieving maximum carbon reduction; showing a clear cost reduction pathway, and confirming the UK can be a world-leader in a global market.
Cost is a big issue for Government because it does not want to saddle consumers with hefty bills for developing technology. Sadly this has dogged the £1.3 billion Swansea tidal lagoon project, which proposes tidal range technologies.
But the OREC report shows how revenue support for tidal stream technology now, when the industry is at getting ready for full commercialisation, and continued investment in research and development for wave energy, could yield significant long-term economic benefits.
Cornwall’s maritime sector already accounts for 8% of UK marine industry turnover, and one in seven of all marine jobs in the country
Without such support, it warns, the UK’s world-leading marine energy expertise could seep away overseas and our first-mover advantage be lost forever.
This is hugely relevant for maritime regions like the South West peninsula, and in particular Cornwall. As the OREC report points out, the development of test facilities like Wave Hub off Hayle, coupled with Cornwall’s maritime heritage, has spawned a growing number of prime contractors and supply chain companies, who are already exporting marine renewable energy expertise to other UK regions and around the world.
Although Cornwall doesn’t have a huge tidal energy resource, Cornwall-based companies have been at the forefront supporting tidal stream developers, having led on the installation of 15 of the world’s 20 or so full scale commercial turbines.
Wave energy is still at the technology development stage, but there is no doubt that the existence of test sites like Wave Hub and FabTest (in Falmouth Bay) has catalysed the marine renewable industry locally. Cornish companies have supported wave energy developers from Australia, Sweden, Finland and the USA.
This activity is underpinned by world-leading expertise in academia, with Plymouth and Exeter universities internationally recognised.
Cornwall’s maritime sector already accounts for 8% of UK marine industry turnover, and one in seven of all marine jobs in the country. It is estimated to be worth some £500 million a year to Cornwall’s economy, supporting more than 14,000 jobs.
But it could offer so much more, and I believe that marine renewables can do for the west of Britain what offshore wind has done for the east.
That’s why the Cornwall and Isles of Scilly Local Enterprise Partnership has identified marine and energy as two of its ’10 Opportunities’ for growth, and is leading on a project to create an industry ‘roadmap’ to 2030.
But crucial to this is a supportive framework from Government to give certainty to investors by providing stable revenues for marine energy.
We already know that recent changes to the way Government has operated Contracts for Difference auctions – which incentivise investment in low-carbon electricity generation – have deterred wave device developers from using Wave Hub, which remains a nationally significant, grid-connected marine renewable energy asset.
Instead these wave energy companies have taken their technologies and business elsewhere in the world, which is a loss to the UK and Cornwall’s marine energy industry.
If Government is serious about its Industrial Strategy building a Britain fit for the future, and maximising advantages for UK industry from the global shift to clean growth, it will find a ready, willing and world-leading partner in the UK’s marine renewable energy sector.
ABOUT THE AUTHOR: Steve Jermy is a board member of the Cornwall & Isles of Scilly Local Enterprise Partnership and Chairman of the Marine Offshore Renewables Group, the trade body representing the Cornwall and South West offshore renewables sector.