A developer that is part of the large Morlais tidal project off the coast of Anglesey has agreed a "strike price" with the UK Government.
Menter Mon is developing the tidal scheme off the island - with Welsh Government, EU and Growth Deal funding.
Now Magallanes Tidal Energy has secured a guaranteed price for the power it produces from its tidal technology that will be deployed off Anglesey's west coast. The Westminster government has agreed a £178.54 per MWh price under the Contracts for Difference (CfD) scheme.
Magallanes is one of a number of developers looking to deploy emerging tidal technology as part of the Morlais scheme. In 2020 project bosses announced that three new turbine developers have signed-up to the project - French firms SABELLA and HydroQuest as well as Spanish developer Magallanes. All three companies aim to deploy their devices on a commercial scale at the Crown Estate-designated zone.
CfDs give certainty to project developers to invest in new renewable energy infrastructure by protecting them from volatile wholesale prices. For comparison it is understood Wylfa Newydd was offered a strike price of around £75 per MWh while wind farm and solar projects get around £45 per MWh.
The high price will reflect the fact tidal is in the early stage of development. The scheme is only a 5.62MW project.
Gerallt Llewelyn Jones, a director with Morlais, said: “This is a major step forward and will be the first commercial deployment of tidal stream technology in Wales. It puts our scheme here on Anglesey on a firm footing as we move into the next phase of construction. This is also good news for the sector – it gives developers like Magallanes a guaranteed revenue stream and certainty about the future of tidal energy.”
Overall, 93 projects with existing planning permission across England, Scotland and Wales have won contracts through the competitive auction process.
The greatest capacity – almost 7GW - has been secured from new offshore wind projects around the coastline of Great Britain, enough to increase the country’s overall capacity built and under construction by 35% and take a significant step towards meeting the government’s 50GW of offshore wind ambition by 2030.
The competitive nature of the scheme has continued to place downward pressure on prices - the per unit (MWh) price of offshore wind secured in this round is almost 70% less than that secured in the first allocation round, in 2015.
Onshore wind and solar energy were both included in a CfD auction for the first time since 2015. Onshore wind secured almost 0.9GW of new capacity, clearing at a per unit price that was more than 45% lower than in the first CfD round in 2015, while solar secured more than 2.2GW.
The fourth round also saw developing technologies tidal stream and floating offshore wind projects successful for the first time. Tidal stream returned a capacity of 41MW and floating offshore wind returned 32MW.
Uk Government said: "This helps solidify the UK’s role as a world-leader in renewable electricity, driving investment in new, future-proof industries, creating skilled jobs and helping reduce emissions across the country. The results also represent significant progress towards achieving ambitions set out in the British Energy Security Strategy, including for the offshore wind sector alone to support around 90,000 high-skilled jobs across Great Britain by the end of the decade."
The Magallanes project launched in 2009, in Galicia, Spain and has developed a technology capable of harnessing energy from the tidal currents which is cost effective and easy to maintain. Following the successful tests of its first commercial scale tidal platform carried on at the European Marine Energy Centre (EMEC) in the Orkney Islands, Magallanes is now aiming for larger scale deployment at Morlais.
