Written evidence submitted by Menter Mon (CGE0002)

Menter Môn is developing the Morlais Demonstration Zone (MDZ).  The MDZ is one of several marine areas or ‘zones’ around the United Kingdom which have been leased by The Crown Estate in a bid to encourage and accelerate marine energy technology development. Each of the zones was identified because it offered appropriate wave and tidal energy potential and access to necessary infrastructure, including ports and electricity grid. The MDZ was primarily selected for its tidal resource and potential to access electricity grid.

The MDZ will eventually encompass up to 240MW, grid-connected, consented location for tidal energy developers to deploy tidal array projects.  The MDZ lies to the west of Holy Island, approximately 0.5km (at the nearest point) off South Stack, within an area encompassing a range of tidal resources, with stronger tidal regimes found towards the east of the area.

As the Third Party Manager Menter Môn will manage and sub-let areas within the Zone for test and demonstration activities alongside some of the first array scale commercial projects. Menter Môn will also seek to add value to the MDZ by undertaking consenting activities and establishing grid connection to further support sub-tenant projects. Wherever possible Menter Môn will also seek to develop and utilise local supply chains.

• How the development and deployment of technology can best be supported, and the extent to which the Government should support specific technologies or pursue a ‘technology neutral’ approach;

It is evident that there are several new technologies available that would help in two of the four areas identified. This response will concentrate on ‘Delivering clean smart flexible power’ and ‘Enhancing the benefits and value of our natural resources’. However, a change to using these technologies will also have a positive impact to the remaining two areas, as a take up of a low carbon energy will ensure that the devices required to support these will develop more expediently.

There is development in the sector for low carbon power, but this has mainly been in Solar and wind technologies. These areas alone will not allow the base load support that the energy supply sector needs to have to provision the uptake in clean energy transport, industry and home use. Tidal stream energy offers a unique approach to this issue.

There are many new technologies that could be considered able to provide a large contribution to these goals.

•              Tidal Stream

•              Wave energy

•              Tidal Lagoon

•              Floating Wind

•              Small Nuclear Reactors

Support for these industries is required to allow a positive effect on the carbon reduction budget and clean growth strategies.

Decarbonisation of heat and of transport implies a significant increase in the amount of low carbon electricity being required.

This results in significant base load which can be supplied by marine and nuclear

•              The relative priority that should be attached to developing new technologies compared to deploying existing technologies, including consideration of the costs and pollution involved in the decommissioning of technologies or infrastructure;

• progress on meeting carbon budget targets to date and areas where more progress is needed going forward;

This section aims to answer both questions above

More progress is needed going forward in supporting the Tidal Stream industry as it is better able to service the base load requirements of the energy supply industry.  At present there is support for development of individual technologies. What is required is a mechanism for ensuring that technologies develop from a Technology Readiness Level (TRL9) to a Commercial Readiness Level (CRL6). This can be achieved by mechanisms such as the previous, Contract for Difference, CfD. The CfD relies on support from the whole tax paying community whereas the newly proposed Innovation Power Purchase Agreement (IPPA) would work on a mechanism of Tax rebate. This support mechanism is required as a basis for moving a nascent industry forward to ensure that the UK is a leader in this field. It is a method of supporting this development from final idea, that is fully developed and tested, to that of an array of devices providing significant input to the Grid.

There is development in the sector for low carbon power and therefore reduction of emissions, but this has mainly been in Solar and wind technologies. These areas alone will not allow the ‘base load’ support that the energy supply sector needs to have to provision the uptake in clean energy for transport, industry and home use. Tidal stream energy offers a unique approach to this issue.

Tidal stream energy devices are available for deployment but need a level of funding to ensure support from their investors to put the significant sums of money (£4M per MW) into the deployment of the devices.

To achieve this government support is needed.   A small ring-fenced Contract for Difference (CfD) supporting utility scale deployments would reignite investment in the UK tidal stream sector. This support is needed for new technology to be able to move from a technology readiness level to a commercial readiness level. Allowing the industry to develop large scale utility magnitude projects. This is true for all new emergent technologies (e.g. tidal stream, wave, floating wind) as a more manageable route to market for innovative new energy schemes.

Also, the use of battery technology can augment the tidal stream and other low carbon generators to provide more security of supply. This would feed directly into the transport and developing a charging network ready for the growth in the electric vehicle technology.

Using the technology as described above is a method to augment other low carbon generation and head towards the reduction of greenhouse gasses by 80% for 2050. The Morlais project is calculated to save circa 16M tCO2 for a 25yr offset

The lead needs to be taken by the generating and transmission networks in the reduction in green house gasses and reduction in carbon emissions. If this industry leads and the infrastructure is available then the ability of transport, technology and industry to build on these foundations will allow the skills and jobs associated with this development to grow the economy.

In conclusion, the nascent industry requires support and as a sector we encourage UK government to set up and/or allow Welsh Government to set up a Wales specific pricing regime / tax break innovation regime to encourage tidal stream electricity development.

With the tidal stream industry, the costs of decommissioning are purely on the removal of devices from the installed area. It is likely that the infrastructure can find alternative i=uses throughout its lifetime. The use of infrastructure to allow the deployment of smart grid could be considered instead of or alongside the decommissioning.

• Examples of specific technologies whose development and deployment have been effectively supported so far, as well as those that show particular promise for meeting the Government’s carbon emissions targets or supporting the UK’s economy, or which would benefit from specific Government action, in the future;

Examples of carbon neutral energies that have been supported well in the past with respect to subsidies in the form of CfD is Offshore Wind. To maintain their development and deliver on the latest round of CfD levels larger turbines will be required. The result remains to be seen and delivery of these projects is awaited in the marketplace.

Tidal stream energy devices are available for deployment but need this level of funding to ensure support from their investors to put the significant sums of money (£4M per MW) into the deployment of the devices.

It is realistic to assume that deployment, with levels of support in line with the start of offshore wind, will be required at initial installation. After this the industry will find significant savings, with economy of scale and supply chain efficiencies, to reduce the support required to allow the industry to compete with developed technologies, such as offshore wind.

Supply chain improvements and bringing jobs to the extremities of the UK, where unemployment is higher, and prospects are lower, should be a result of investment in clean growth. Early engagement in this supply chain work is essential as development of an industry and a supply chain inside the UK would bring maximum benefit in the longer term. It must be a target of the government’s plan to maximise the supply chain within the UK. This requires early and concentrated engagement throughout development phases and continued development of the devices by the developers.

• The role of the Industrial Strategy ‘Clean Growth Grand Challenge’, and what the Government should do to ensure it contributes effectively to meeting emissions targets.

This would involve ensuring that the industries as they develop, do so within the UK. Supply chain with respect to the manufacture and operational support of the arrays would be required. In addition to this it would require continued environmental monitoring. The effect on the economy and the effect on the environment are factors that need to monitored. These will not only be restricted to the sea life a but should be extended to effects on the targets of the clean growth challenge.

Tidal stream energy devices are available for deployment but need a level of funding to ensure support from their investors to put the significant sums of money (£4M per MW) into the deployment of the devices.

To achieve this government support is needed.   A small ring-fenced Contract for Difference (CfD) supporting utility scale deployments would reignite investment in the UK tidal stream sector. This support is needed for new technology to be able to move from a technology readiness level to a commercial readiness level. Allowing the industry to develop large scale utility magnitude projects. This is true for all new emergent technologies (e.g. tidal stream, wave, floating wind) as a more manageable route to market for innovative new energy schemes.

Morlais is technology agnostic - it has been set up so that there is no preferred tidal stream technology given preference to locate in the demonstration zone; it allows the sector to evolve without selecting any technology. There are developers wanting to take matters forward and wanting to come into Morlais. It should also be noted there are limited number of potential sites for tidal stream developers in the UK where the planning permission and grid connection would be in place – thus putting Morlais in a very strong position going forward.

It should also be noted that the offshore renewable energy catapult has provided reports that support the development of tidal stream and Wave energy generation devices. It states that the current position of the industry put tidal stream energy a few years ahead of wave energy generating devices. The report goes further to inform of how the technologies will help to deliver the 2050 target for carbon reduction. The Morlais project was reviewed by the catapult as an advisor to the Welsh Government and further supported the project as a contributor to reaching emissions targets. The report stated:-

•              Tidal Stream energy is likely to be part of the UK’s 2050 energy mix, with circa 10GW of deployed capacity.

o              The Welsh and Scottish nations will lead this deployment

o              Welsh deployment is likely to be greater and quicker due to the lower-cost potential for grid connection

o              The route to commercially acceptable arrays is helped by meaningful capacity demonstration, and Morlais is large enough to likely obtain investment interest

•              Policy and financial subsidy will help accelerate deployment, and a lack will delay and reduce the size of the developer deployments power capacity

Menter Môn, Morlais an altruistic community-based leaseholder, with a 45 year benefit prospectus, unparalleled grid connectivity, identified international tech customers to rent ‘berths’ in the zone, a willing ERDF funding available to build the infrastructure, an innovative, low Carbon agenda solution. The Morlais project is calculated to save 16M tCO2 for a 25yr offset.

October 2018