The cost of tidal energy could be slashed dramatically once it begins to be rolled out, according to a new report from the body set up to stimulate marine energy research and development.

The study, published by the government-backed Offshore Renewable Energy (ORE) Catapult, estimates that the cost of electricity generated by tidal stream technology could drop to as low as £80/MWh once 2GW has been deployed.

The current cost of tidal stream power, generated by projects like the 6MW MeyGen off the Orkney Islands, is approximately £300 per MWh.

The study says the cost could fall in line with the roll out of the technology to £150 per MWh by 100MW installed, then £90 per MWh by 1GW and £80 per MWh by 2GW.

It says the cost of tidal stream projects could be driven down by a combination of economies of scale, technical innovations, larger turbines, better grid connections and a fall in the cost of capital as investors’ confidence grows in a maturing technology.

In addition, the report estimates that the displacement of fossil fuel generation from the grid by marine energy technologies could permanently reduce CO2 emissions by at least 1MtCO2 per year after 2030 , rising to 4MtCO2 per annum by 2040.

The tidal stream industry could also generate a net cumulative benefit to the UK by 2030 of £1.4 billion, supporting nearly 4,000 jobs by 2030 and 14,500 by 2040.

But it says that similar cost reductions are not expected to be achieved by wave power projects.

It says: “Significant cost reductions are expected in the near-term as the industry takes the step from pre-commercial arrays to commercial projects.

“The industry will benefit from cumulative global deployment and, as deployment volumes increase, cost will decrease.”

RenewableUK’s chief executive Hugh McNeal said: “This report shows that marine renewables could follow the UK’s offshore wind industry in achieving significant cost reductions. What we need now, to ensure that the UK capitalises on marine energy, is a supportive framework from government to provide certainty for investors with stable revenues.

“Developing these technologies here in the UK will secure investment and jobs in coastal communities, rather than letting our global advantage slip away to competitors.”

Responding to the report, Hannah Smith, senior policy manager at Scottish Renewables, said: “This landmark report clearly demonstrates the enormous potential of our wave and tidal energy industries – should they be able to access the right support from Government.

“Marine renewable energy is not only a valuable source of clean electricity, helping us meet our carbon targets, but can bring diverse benefits to our wider economy too.

“This report shows that with even modest global deployment the sector could rapidly reduce its costs, drive economic growth in rural communities and export around the world

“We now need government and industry to work together to enable projects to come forward, capture learning from projects and deliver the benefits of wave and tidal technologies.”