Britannia accused of failing to rule waves by not spending energy cash

Published Date: 04 August 2008
By Gerri Peev and Jenny Haworth

NOT a penny of a £42 million pot of cash for new wave and tidal renewable energy projects has been spent over the past four years, The Scotsman can reveal.
The entire budget for the Marine Renewables Deployment Fund – the UK government's fund for helping marine technology firms develop new projects – has remained unspent since it was set up.The Scottish Government, meanwhile, has backed marine energy with all £13.5 million of its support funding. No company has yet qualified for UK funding, which industry insiders say is because the criteria are too strict. Some accuse the government of not supporting wave and tidal energy. This is despite an urgent need for the UK to step up its efforts in order to meet EU targets of 20 per cent of energy to be provided from renewable sources by 2020.

Westminster has now agreed to review the selection process.It currently states that to qualify for the fund, a project must have been operational in the water for three months or more. Marine energy companies say this creates a "chicken and egg" situation because without money to help fund the project in the first place it is impossible to get it off the ground to qualify for the cash.

The Liberal Democrats, who obtained confirmation in written parliamentary answers that none of the funds had been spent, have accused the government of squandering time and money.Jo Swinson, the MP for East Dunbartonshire, said: "Scotland has world-leading potential when it comes to wave and tidal energy, yet the government is idly sitting on the funding which the sector so desperately needs."How can the government hope to meet its targets on renewable energy when it is not even capable of spending the modest funding it has set aside for wave and tidal technology?"This is a vital time for the development of the renewable energy industry. Instead of spending so much time pushing their nuclear energy agenda, the government should be focussing on getting funding for renewable technologies to where it's needed."A spokesman for trade body the British Wind Energy Association said the money has been too difficult to access."Everyone within the sector agrees the entry level criteria are set too high. I think that's the key problem. It's a chicken and egg situation. How do you get it to that research and development level?"He said considerable successes in marine power development in the UK have happened despite a lack of government support, and it was time this support was forthcoming."Everyone who follows renewables can see that this will be a major growth area," he said. "There's no doubt about it now. The sooner the government realises this the better."The reason why the government is not throwing in their twopence worth is because they are being overly cautious. This could slow down the potential for the industry to develop."Paul Jordan, business development director at Ocean Power Technologies, said he understands the need to separate the "wheat from the chaff" in terms of which projects the government chooses to support.Without the three-month criteria, any company could apply for cash even if the scheme was never likely to be successful. But he added that he thinks the criteria should be more flexible and he wants the government to be "bolder" in its support of marine renewables.
He said: "There is nothing else like it. There have always been windmills, but nobody has ever generated energy from the waves."After years of the funds languishing, The Scotsman has learned that the Department for Business, Enterprise and Regulatory Reform has agreed to relax the rules.A spokeswoman for the department said the government would take a more "flexible approach" to the criteria that a project has to be operational for at least three months.

For example if a company had three projects each operational for a month, it could qualify for future funds.She added: "We are now taking a more flexible approach towards the criteria and will judge each application on its merits. "We anticipate the Marine Renewables Deployment Fund's demonstration scheme will receive its first successful applications for support early next year."Scottish support for marine energy leaving rest of UK behindIN CONTRAST to Westminster, the Scottish Government is providing strong support to marine energy, enabling it to flourish in this country, say experts.Unlike the situation at Westminster, where funds remain unspent, Holyrood's Wave and Tidal Energy Support Scheme, initiated by the former Scottish Lib Dem leader Nicol Stephen, has had all its £13.5 million claimed. Some experts predict support from the Scottish Government could encourage the industry to flock to this country at the expense of other parts of the UK.
One industry insider said there was far more support from the Scottish Government than from the UK government's Department for Business, Enterprise and Regulatory Reform (Berr). "The Scottish Government definitely is leading the way in terms of wave and tidal and it would be nice to see Berr being as supportive as the Scottish Government has been," she said."Berr might lose out if they don't put in place more supportive mechanisms because otherwise the industry will focus itself in Scotland."She said she believed Westminster's determination to follow the route of nuclear energy played a part in its lack of support for renewables. "Obviously, the Scottish Government isn't interested in nuclear at all, and that means if we want to cut down on our carbon dioxide emissions we are going to have to look at renewables," she said."Combine that with the fantastic conditions for wave and tidal renewables in Scotland and they are really leading the way."Scotland has an estimated potential to generate a quarter of Europe's marine energy and nine projects have been given direct funding from the Scottish Government, compared to none by Westminster. Many are based in Orkney, at the European Marine Energy Centre.Paul Jordan, business development director at Ocean Power Technologies, agrees that the UK is at risk of losing out to other countries, including Scotland."Portugal and parts of America are waking up to the benefits of marine energy, so if we are not careful we will lose out to other countries," he said.