* Britain awards 20 mln stg to two marine projects
* Investor confidence grows but financing still challenging
By Nina Chestney
LONDON, Feb 27 Britain's big first step in
developing wave and tide power will be harder to follow through
with full-scale commercialisation, speakers at a marine energy
conference said on Wednesday.
A harsh economic climate and overseas competition,
particularly from Asia, will make progress tougher.
Britain has 12 large-scale prototype devices with a capacity
of 9 megawatts (MW) generating clean electricity, more than the
rest of the world combined. It is also the first country to
lease sea beds for almost 2 gigawatts of capacity.
Marine energy is still in its infancy compared to other
sources of renewable energy like wind or solar power, with no
large-scale commercial wave or tidal facility in operation.
Britain is betting on its potential, aiming for 100 to 200
MW of wave and tidal energy installed by 2020, but making the
leap from prototype to full-scale array is a challenge.
"The UK is now the leader in marine energy but I am under no
illusion that this will be an easy win," said UK Energy and
Climate Change Minister Greg Barker.
"We are developing the sector in a tough economic climate
and securing new funding is challenging. We must ensure we
remain in the lead. There is interest in Asia in this (sector)
and they are very clear they would like to knock us off the
pedestal," he added.
As a sign of its ambitions for marine energy, government
subsidies for wave and tidal projects will more than double from
In addition on Wednesday, the government awarded 10 million
pounds ($15 million) each to two UK marine projects. One is a 10
MW array in Wales being developed by Siemens-owned Marine
Current Turbines, which should operate commercially by 2015.
The other is the MeyGen tidal stream project in Scotland,
which aims to generate enough electricity to power 40,000 homes
However, it is now up to industry to "step up to the plate,"
so technologies get off the ground, Barker told reporters.
So far, the high development costs and immaturity of the
sector have been too risky for some private investors, but there
are signs that confidence is growing as engineering firms like
Siemens and Alstom have taken controlling
stakes in number of UK manufacturers over the past year.
Financing the first arrays is still not straightforward and
there will be a period of company consolidation and more test
facilities for the industry before any full-scale arrays can
emerge, said Rob Hastings, director of energy and infrastructure
at the Crown Estate, which invests in renewables projects.
UK-based Pelamis Wave Power, which has sold two of its wave
energy converters to utilities, has so far relied on venture
capital funding but is now also seeking strategic investment and
partnerships to get ahead.
Richard Yemm, the firm's founder and commercial director,
believes the UK government cannot wash its hands of the sector
and still has to continue subsidising it after support
mechanisms expire in 2017.
"The next phase (after 2020) will be commercial operation so
we need a stable support mechanism comparable to (the current
one) in place until the end of the decade," he said.