Danish wind industry provides lessons for UK's marine energy industry
20 Sep 10
We published a report today which suggests that the UK
Government should consider implementing a consistent price for
marine energy and resolve grid access issues if the UK marine
energy industry is to repeat the success of the Danish wind
A combination of an early, clear and consistent price support
for wind energy, together with favourable grid access conditions,
enabled Denmark to capitalise on its early mover advantage and
build a global export market worth nearly €6 billion in 2008.
Seizing the opportunity
According to our report 'The Danish wind industry 1980-2010:
lessons for the British marine energy industry', it was early
support for the price of wind energy, that was the critical factor
which enabled Denmark to grasp the opportunity offered by the new
technology. It created a stable market price for wind energy which
incentivized early investment and innovation.
By contrast, the UK's renewable energy support policy was less
well aligned to the fledgling industry and lagged six years behind
Denmark's regime. Our report concludes that this resulted in the
UK's early mover advantage - and the majority of economic benefit -
being lost to Denmark and Germany.
Consistent price support
Our report says that the current situation regarding marine
energy is much more positive. The UK's current regime of Renewable
Obligation Certificates, or ROCs, is well understood and offers a
clear price signal to investors - and has the potential to enable
the UK's marine energy industry to flourish.
However, the application of marine energy ROCs is applied
inconsistently - in Scotland there are five ROCs per MWh for wave
energy and three for tidal, whilst in the rest of the UK there are
only two ROCs per MWh for each technology.
Speaking about our report, Martin McAdam, our CEO said:
"The Scottish Government should be commended for putting in
place exactly the type of market mechanism which enabled Denmark's
nascent wind industry to grow. The five ROCs on offer for wave
energy are sufficient to attract inward investment and allow us to
get early-stage projects off the ground.
"The UK's vast marine energy resource and decades of marine
engineering knowledge put us at a natural advantage in the marine
energy industry. Like Denmark in the 1980s, we now have an
opportunity to capitalise on our own early mover advantage.
Financial support framework
"What is needed now is a UK-wide framework of consistent
financial support, allied to capital funding, clear consenting
procedures, timely grid access and a fair transmission charging
regime that does not act as a barrier to marine renewable projects.
Together these will create the environment to attract the
significant private investment that the marine renewable industry
requires to grow. This will give the UK a real opportunity to
become a global leader in this new technology."