Tidal Energy's deal with EDF Energy marks a significant milestone in the commercial development of tidal power in the UK, in that DeltaStream will be amongst the world’s first grid-connected demonstration devices to generate green, sustainable and predictable tidal power.1 The device, which was unveiled in August at Pembroke Port by The First Minister of Wales, the Rt. Hon. Carwyn Jones AM, will be installed in Ramsey Sound, Pembrokeshire. It is expected to begin generating electricity for Welsh homes shortly afterwards.
The Power Purchase Agreement guarantees that EDF Energy, the UK’s largest producer of low-carbon electricity, will purchase electricity and renewable certificates from the device for the first year of the project at a pre-agreed price, ensuring that it will be able to generate revenue for its owners, TEL, from both the electricity market and the Government’s Renewables Obligation scheme.2
Power Purchase Agreements not only provide certainty of income for projects such as DeltaStream, but also provide a clear and useful benchmark of revenue for future investors and lenders. As such, the value of the contract to the DeltaStream project will extend well beyond its first year.
“DeltaStream is not just about proving a new, innovative technology – it is about proving that tidal power can make a real and lasting contribution towards the UK’s renewable energy targets and energy security," said
Martin Murphy, managing director of Tidal Energy Ltd (TEL). "Taking the first steps to commercialisation, by securing a buyer for the electricity generated, is essential to that. We are proud that this cutting-edge project is, once-again breaking new ground, and ensuring Wales is playing a central role in the race to develop the UK’s significant tidal resources.”
Dan Brimelow, export sales and procurement mManager at EDF Energy, concurred, adding: “The UK needs electricity generation from a range of low carbon sources. Technologies like tidal power help improve the diversity of electricity supplies and reduce our reliance on imported energy which is good for the country’s future energy security."
REFERENCES
1. Deltastream was developed by tidal stream technology company Tidal Energy Ltd (TEL).
2. The UK Government has earmarked tidal power as a priority technology, allocating a subsidy of 5 ‘ROCs’ for each unit of electricity generated, in order to fast-track its commercial development.