Speaking at the Tidal Energy Summit in London on Wednesday, Ed Davey said that despite “arguably the strongest policy framework of support anywhere in the world” the industry is still struggling to attract outside investment.
He told delegates: “Despite government support – for instance through the Marine Energy Array Demonstrator Fund – it remains difficult to attract risk averse funders.”
Davey added that continual government funding for the sector “will not be a sustainable model in the long-term” and that the industry needs to work with the government to attract investors.
The energy secretary stated that part of this has been achieved under the Energy Act offering tidal stream projects a contract for difference (CfD) strike price of £305/MWh and a reserved CfD allocation of 100MW.
He said: “The challenge for the industry over the next five years remains one of moving from demonstration to commercial viability.
“I believe many, if not all, the building blocks are in place.”
Davey referred to Pelamis Wave Power filing for administration last week, and Siemens decision to sell the Bristol-based Marine Current Turbines as “stark reminders of how fragile and young the industry is”.
He added that the expertise from both these companies needs to be “appropriately managed and transferred” within the industry to help benefit the sector.