What have we funded and What have we got?

Transcription

1 What have we funded and What have we got? A Review of all UK Public Funded Work in Marine Renewables and Comparison with other Sectors Max Carcas #RUKWT17

2 Wave power is a really, really stupid idea. That s why it s getting so much taxpayer subsidy. Civil servants think they can transform our clean energy prospects. The market doesn t agree. But you re paying for their hunch anyway. - The Spectator 2014

3 Is it time to end subsidies for wave and tidal energy? Progress in wave and tidal energy hasn t been slow its been non-existent Been in the experimental phase since the 1800s The science projects have been done for decades Scotland has been throwing hundreds of millions of dollars into testing and pre-commercial development. - GreenTechMedia 2015

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5 Database of all public spending Sources: All DECC expenditure over Previous DTI/BERR/DECC programmes Carbon Trust Scottish Government Technology Strategy Board/InnovateUK Crown Estate Highlands and Islands Enterprise Scottish Enterprise Research Councils/EPSRC ERDF/WEFO SWRDA

6 All DECC expenditure over line by line analysis since 2010 marine energy was <0.1% of the budget Sum of Amount Column Labels Grand Total Row Labels GREEN? AGENCY 29,411 4,040 61,610 72,494 15, , ,273 CONSULT 295, , ,032 22, ,104 1,000,468 3,176,625 FUEL CELL 317, , ,142 1,037,069 LEGAL 33,719 33,719 MARINE 5,506, , ,247 1,918,602 3,740,398 12,358,144 Capital Grants to Companies UK 5,506, , ,247 6,699,144 Capital Grants - Other 1,918,602 3,740,398 5,659,000 OS WIND 1,493,528 1,961,045 1,392,055 1,048,121 4,240,851 3,069,598 13,205,199 OUTSOURCED 1,355,336 1,058, ,210 2,968,338 SOLAR 271,462 33, ,009 WIND 433,173 1,830, , , ,788 3,807,748 (blank) 65,604,703 59,583,306 37,753,529 13,815,658 37,789,240 37,491, ,037,501 NUCLEAR 2,193,992,313 3,295,387,711 3,521,768,291 3,012,054,386 1,413,189, ,703,730 13,610,096,233 (blank) 407,622, ,926, ,426, ,482, ,299, ,355,987 3,163,114,493 COAL 24,103,065 61,170,804 29,975,034 64,595,467 69,324,750 32,361, ,530,167 HEAT 97,706, ,363,760 39,096,112 32,101,347 16,565, ,832,660 CCS 17,440,098 21,568,105 4,938,854 7,306, ,873 52,161,766 Grand Total 2,816,171,856 4,084,068,770 3,978,514,684 3,406,308,743 2,474,028, ,904,786 17,700,996,943 Funding for nuclear decommissioning in 2010 is unexplainably low, likely to be incorrect

7 All UK public R&D funding of marine renewables prototypes/technology All UK Grant funding of industrial technology/protoypes and testing by year (excluding academic research and infrastructure) 50m 45m 40m 35m 30m 25m 20m 15m 10m 5m On average about 5m per year for wave and tidal energy Allocated funding was about 2x this, notably the 50m Marine Renewables Deployment Fund which was never spent m

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9 20 years of energy policy in the UK Four departments within which energy has been shuffled around: DTI, BERR, DECC, BEIS 12 Secretaries of State 16 Energy Ministers, almost one every year How is policy set?

10 Technology Innovation Needs Assessments TINAs have been very useful in developing programmes, policy and strategy and in prioritising where support should go DECC/BEIS

11 So marine is the smallest? Every spent on marine has the lowest UK benefit of any energy technology? Methodology used in TINAs was not varied according to actual evidence and whether technology was imported or not as this would be too complicated We know that: historically that 7 of private funding has matched every 1 of public funding much of this investment was made from overseas and would not otherwise have been made in the UK A large proportion of this funding was spent within the UK economy with UK suppliers, staff etc quite possibly the highest proportion of any current energy technology So even at this very early stage marine has been a net contributor to UK plc

12 What have we got? We have demonstrated that electricity generation from wave and tidal energy can be done and is an option for the UK Conservative studies have shown that this could be similar in scale to the existing nuclear contribution We have the experience and tools needed to do this We have a supply chain that is experienced in servicing marine projects We have a cluster with a huge knowledge base and experience

13 What if?.marine followed the same cost reduction route as every other volume energy technology?.we prioritised it with a fraction of the support for nuclear?

14 Assumptions What subsidy would be needed for marine renewables, assuming a 15% learning rate and an opening price of 305/MWh? Base price of CFD strike Annual Total Subsidy provided Marine electricity price (per (per MWh) MWh) Length (years) Capacity in phase (MW) Capacity Factor generation (MWh) Annual average subsidy over CFD contract length Phase % ,820,000 2,562,300,000 Phase % ,260,525 3,528,907,881 Phase % ,281,268 5,089,219,025 Phase % ,944,948 7,064,174,213 Phase % ,263,649 9,633,954,736 Phase % ,292,891 9,724,393,359 Phase % ,732,916 10,120,993,740 47,723,942,954 Assumptions: Learning rate of 15%: initially 90% of marine projects in UK, 10% Rest of World, decreasing over time Cost of energy ( /MWh) Cost of Marine Generation Cost of Energy ( /MWh) Base price of CFD strike Annual Total Subsidy provided Nuclear electricity price (per (per MWh) MWh) Length (years) Capacity (MW) Capacity Factor generation (MWh) Annual average subsidy over CFD contract length Hinkley % ,098,504,000 38,447,640,000 Sizewell C % ,029,124,800 36,019,368,000 74,467,008, Cummulative MW installed in UK

15 Which has the biggest bang for buck? 100bn 90bn 80bn 70bn 60bn 50bn 40bn 30bn 20bn 10bn bn Hinkley Hinkley + Sizewell Sizewell C cummulative cummulative subsidy subsidy Hinkley cummulative subsidy Hinkley Hinkley cummulative cummulative subsidy subsidy Hinkley cummulative subsidy Hinkley cummulative subsidy Marine cummulative subsidy Marine Hinkley cummulative + Sizewell C subsidy annual subsidy generation Hinkley + Sizewell C annual generation Hinkley Sizewell annual generation Hinkley + Sizewell C annual generation Hinkley Hinkley annual annual generation generation Hinkley annual generation Hinkley Hinkley annual generation Marine annual generation Marine vs Nuclear TWh 70TWh 60TWh 50TWh 40TWh 30TWh 20TWh 10TWh TWh More carbon free electricity Less subsidy Much greater potential for benefiting UK plc, in terms of jobs and exports Better grid balancing

16 Ah... but that s just conjecture whereas nuclear is the safe option Really? None of the EPR reactors are working yet For marine it s risk mitigated - you only commit to a later phase if initial phase successful no need to commit to 38bn of subsidy from the off Not eggs in one basket Success based!

17 Conclusion We need a strategy Investment is required to produce this return To get investment there needs to be a route to market We need a strategy THANKYOU!