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UTILITY WEEK | 31sT OcTObEr - 6Th NOvEmbEr 2014 | 21 Finance & Investment Analysis T idal and wave technologies could sup- ply 32 per cent of the UK's electricity requirements by 2020 – or so claim gov- ernment studies. But is that really feasible? To hear advocates of tidal power speak, it would seem that large-scale, consistent con- tributions from marine power generation are just around the corner. But are enthusiasts at risk of making tidal energy a victim of its own PR machine, raising unrealistic expecta- tions among potential investors when there are still multiple and significant hurdles for the tidal power sector to overcome? Energy secretary Ed Davey is enthusiastic about the potential of tidal power in the UK – and he is not alone. Several recent invest- ment announcements show that the technol- ogy has staunch believers. In mid-October, FTSE 100 insurance firm Prudential con- firmed that it would put £100 million behind the Swansea Bay tidal lagoon project, which will boast an installed capacity of 320MW. Over the summer, the MeyGen tidal stream project – which will provide 400MW – had several pieces of good news to air. It secured a £51 million power purchase agree- ment with Smartest Energy over a period of ten years, received a £10 million funding boost from the government and made strides in overcoming potential engineering prob- lems when it signed a £7.5 million deal with the Energy Technologies Institute to sup- port testing of a new kind of marine turbine foundation. Furthermore, the sector has voiced a col- lective will to accelerate tidal development on an international stage. Speaking to Utility Week at trade association Ocean Energy Europe's annual conference in early October, Andrew Macdonald, senior innovation man- ager, Offshore Renewable Energy Catapult, said that the overwhelming theme of the conference had been the acknowledgement that more collaboration was needed to speed up and standardise approaches. He hoped that TP Ocean, an international innovation platform set up last year, would lead on this. So far, the picture is rosy. But these posi- tive developments have all occurred against a backdrop of persistent investor doubt, as well as nagging environmental considera- tions that have not been addressed satisfac- torily for large-scale tidal power generation to proceed. A report from Bloomberg New Energy Finance in August downgraded its expecta- tions for tidal and wave technology deploy- ment by 2020, citing among its reasons "investor fatigue" on the back of project setbacks. Some of these problems have been engi- neering and technology related, but Craig McMaster, business director at wet infra- structure engineering firm MWH Global – which is involved in the Swansea Bay development – says the main factor hold- ing back tidal potential is environmental considerations. "If we can better understand the environ- mental concerns, innovate to mitigate them and communicate those actions to politi- cians, the public and regulators, then I think we could see a lot more of these schemes," he says. However, this is easier said than done. Research is relatively advanced into how to reduce the numbers of fish dying because they come into contact with marine tur- bines. But there is more uncertainty about the extent to which large-scale tidal schemes degrade wetland and intertidal habitats, or what kind of habitat is provided by sus- pended sediment. Environmental concerns have been a particular stumbling block for the pro- posed Severn Estuary barrage and many experts believe the scheme will not go ahead because of them – despite proponents of the project claiming it could meet 5 per cent of the UK's electricity needs. The environmental concerns around tidal streams are less pronounced than with bar- rages or lagoons, but worries about their impact on fish migration and shipping routes remain. Furthermore, while MeyGen's good news stories this summer have enabled important steps to be taken towards proving the world's first small-scale array, the technology is still at a stage where investors are observing from afar rather than getting closely involved, according to Dee Nunn, wave and tidal development manager at Renewable UK. "They're all waiting to see what happens with this first array. They're interested in tidal energy – but only in terms of support- ing the second or third project, not the first," she says. The words of a senior individual in the power investment group of a UK's high street bank confirmed this view. "Tidal is not even on our radar yet," the spokesperson told Utility Week. In short, despite the propaganda of tidal enthusiasts, it will be some time before tidal power yields the fruit they say is ripening on the vine. And unless some complex envi- ronmental considerations are satisfactorily resolved, then even with technology and investor confidence, the harvest may be more meagre than they would lead us to believe. Opening the flood gates? There has been a spate of good news stories recently about developers finding funding for tidal power projects, but how significant is this for large-scale deployment? Jane Gray reports. Environmental concerns relating to tidal barrage schemes • Tidal barrages have an impact on water movement and the amount of suspended sediment, resulting in loss of intertidal habitat. • It is uncertain how changes in water quality will affect biodiversity, but there is likely to be a change in the type of animals and plants that colonise estuaries. • It is uncertain whether turbines designed to lower fish mortality rates would allow for the maintenance of fish populations, because studies on their efficacy are limited. • A barrage may also increase levels of fish mortality because of predation, disease, habitat loss and disruption to movement. • There is limited evidence on the efficacy of compensatory and mitigation measures. Source: Environmental Impact of Tidal Energy Barrages, a report for the Parliamentary Office of Science and Technology, by Jonathan Wentworth (2013).