Tidal Energy is taking off in the U.K
Two landmark power purchase deals signed in one month.
By PATRICK LEVY
Is tidal power becoming a credible source of renewable energy? EDF just signed a purchase agreement with developer Tidal Energy Ltd, for the purchase of power over a 10 year period. Although the details of the deal were not disclosed the duration of the deal represents serious commitment from EDF’s that reflects its strong interest in tidal power, and is a big step forward for tidal energy in general. EDF is one the U.K’s “big six” energy providers with more than 8 million customers in this country. This is also a big win for a new technology developed by Cranfield University called DeltaStream.
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This deal follows another one that was signed earlier this month between Independent energy provider SmartestEnergy and power generator MeyGen tidal project based in Scotland. This ten year deal worth ₤50M.
True, these deals would not have been possible without the use of Renewable Obligation Certificates; the main mechanism for the support of renewable energy in the UK. But this mechanism does not seem to be the main factor in the purchasing decision and both purchasers have taken a calculated risk in making their decision. The construction of the Meygen project is planned for a start in Q4 of 2014 only and for a start of operation in H1 of 2016.
One of the purchasers ‘motivation is diversification of energy sources, as Dan Brimelow, export sales and procurement manager at EDF Energy put it: “Technologies like tidal power help improve the diversity of electricity supplies and reduce our reliance on imported energy”. Uncertainty in power supply is growing as reflected by the recent price spikes announced in the U.S and the U.K.
Diversification is becoming a hedging technique for energy suppliers and a chance for new sources of renewable energy to shine. It is also an opportunity to develop the energy business into new directions. SmartestEnergy’s business model is based on a combination of purchases backed with ROC’s along with a diversification of energy sources. Today, the London based company purchases energy from 150 different renewable energy sources in the U.K.