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UK: Eversheds attends Marine Energy Programme Board meeting with Minister of State

UK: Eversheds attends Marine Energy Programme Board meeting with Minister of State

  • United Kingdom
  • Energy and infrastructure - Clean energy

11-03-2015

Charles Reynard, partner and member of the Eversheds clean energy and sustainability team, attended the annual Marine Energy Programme Board (MEPB) meeting with minister of State at the Department of Energy & Climate Change, Amber Rudd.

The meeting was well attended by all of the key players in the Sector including the main original equipment manufacturers (OEMs); developers and elements of the supply chain. The Minister warmly acknowledged the significant progress that had been made in the Sector to date together with the characteristics of predictability and related advantages to the balancing mechanism provided by the technology, once it had been proved on a larger scale.  

While the uncertainties of the imminent election prevented any firm commitments being made, the Minister engaged actively in the meeting and there was an informed, productive and vibrant debate. Against that background, the Minister endorsed the sentiment that the Sector had a significant potential role to play both economically and as part of the UK (and global) energy mix and in helping the UK meet its carbon reduction targets.

In relation to the Contracts for Difference (CfD) mechanism, it was noted that this was not conducive to demonstration projects. The enhanced pre-requisites required securing a CfD and, barring the first 100 MW, the related uncertainty of securing a CfD at all under the new regime added significantly to the levels of risk that Developers of demonstration projects were already being required to undertake. The Minister understood the issue and indicated that this was being reviewed by her Department. In passing, it was noted that the level being proposed for the Swansea Tidal lagoon (understood to be £167 /MWh for a period of 35 years) equated to the £305/MWh over 15 years on offer for wave and tidal projects. However, the key differentiator was that the hydro technology to be used in the Lagoon Project was mature and well understood. As a result, technology risk was substantially removed in relation to that project making the route of a negotiated CfD arrangement a commercially acceptable approach. 

The Eversheds clean Energy team are active in all renewable technologies. We see the marine Sector as having the potential to be a significant element of any UK (and global) energy mix in due course.

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