Wave and tidal energy offer greater export potential for UK than floating wind, report finds

Emerging offshore renewable energy (ORE) technologies, including wave, tidal and floating wind, could support 160,000 jobs in the UK by 2050, according to a report.

The report from the University of Edinburgh and the Supergen ORE Hub evaluated the economic benefits of building a strong UK-based supply chain to support the development of wave, tidal and floating wind projects.

Researchers assessed both a ‘higher ambition’ and ‘lower ambition’ scenario to evaluate the benefits to the UK if the country supports and strengthens local supply chains.

The report also found that wave and tidal energy projects could provide value in terms of export opportunities for the UK compared to floating wind.

Altogether, the report estimates wave, tidal stream and floating wind could provide over 57 GW of renewable energy capacity by 2050.

According to the findings, the three emerging technologies could add anywhere between £21bn and £86bn to the UK economy.

© Supplied by Nova Innovation

Under the higher ambition scenario, the industries could support nearly 68,000 full-time jobs by 2040 and over 166,000 jobs by 2050.

UK-based projects alone could contribute anywhere between £18bn to £41bn in economic value.

In addition, exports could bring in an extra £3.3bn to £45bn, which the report said highlights the “potential opportunity from a stronger UK supply chain”.

Meanwhile, manufacturing, including floating foundations and tidal turbines, accounts for the largest share of both gross value added (GVA) and jobs for all technologies.

Export opportunities

While the Scottish and UK governments have talked up the export potential of floating wind, the report found that wave and tidal could provide far greater potential.

The researchers said wave energy could account for over half of the total GVA from ORE technologies by 2050, while tidal stream could account for nearly a third.

Export opportunities for floating wind, meanwhile, were “more limited”, according to the report, despite a potential domestic market between £12bn and £30bn.

By 2050, the report found wave and tidal stream projects offer a similar domestic opportunity of between £3bn and £6bn.

© Supplied by Tugdock

But when including international projects, in a higher ambition scenario wave energy could provide over £30bn in GVA for the UK, while tidal could deliver over £20bn.

“When including exports, tidal stream and wave together offer nearly as big an opportunity as floating offshore wind in the lower ambition scenario, and potentially significantly more in the higher ambition,” the report outlined.

Wave, tidal and floating wind support

However, the report authors stressed that the economic benefit to the UK economy is only achievable if focused investment in ORE technologies enables a reduction in the levelised cost of energy (LCOE).

To achieve this, the report made several policy recommendations, including providing effective market support and sustained innovation funding.

The report recommended long-term continuation and expansion of support mechanisms, such as the existing Contracts for Difference (CfD) scheme.

The sixth CfD allocation round (AR6) in 2024 delivered six additional tidal stream projects, across five sites in Scotland and one in Wales.

Tidal stream projects received £15 million in ringfenced funding in AR6 after Labour increased the budget for the renewables auction shortly after taking office.

© Image: Mocean Energy

And despite a push from the marine energy sector, the UK government declined to introduce ring-fence funding for wave energy projects in AR6.

Meanwhile, floating wind secured 400 MW in AR6, with Flotation Energy’s Green Volt becoming the first multi-hundred-MW project to secure a CfD.

Alongside increased innovation support, the report also recommended efforts to accelerate supply chain modernisation through increased automation and digitalisation.

‘Huge prize on offer’

The researchers said while the report presents a “compelling narrative” of the potential rewards of supporting ORE technology, it stressed that “any outcome is highly contingent on embracing significant shared responsibilities across the entirety of the supply chain”.

The report also warned against the UK being complacent about potential international competition.

“As other nations around the world begin to accelerate the development of their own ORE sectors, the UK must remain aware of the possibility of its technological lead being eroded,” the report stated.

“This situation must be avoided if the UK wishes to capitalise on GVA and jobs figures outlined within this report.

“Therefore, delivering sustained ORE innovation, development, and deployment must become the strategic priority of the UK government departments and the innovation agencies tasked with guiding the successful delivery of the ORE sector.”

There is a “huge prize on offer” should the UK government grasp the “once-in-a-generation opportunity”, the report concludes.

The findings are in line with a separate report from the London School of Economics Grantham Institute, which found the UK is more specialised in tidal stream energy than other clean energy technologies, including offshore wind, nuclear and carbon capture.