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Ewing plans investment after wave energy firm goes bust

fergus ewing 4The Scottish government announced today that it is setting up a body to accelerate development of wave energy –  less than 24 hours after a struggling wave power company ran out of cash.

Business minister Fergus Ewing (left) this morning revealed plans to create Wave Energy Scotland (WES) though it was not known if the timing related directly to the collapse last night of Pelamis Wave Power which called in KPMG as administrators.

The minister, who retained his portfolio in First Minister Nicola Sturgeon’s maiden government appointments, intends WES to bring together experts in engineering and academia to collaborate in a research and development programme.

Ewing will outline his plans to parliament next week during a statement on marine energy which is also likely to spell out the challenges facing wave and tidal energy.

He said today that the government recognises that these early stage technologies can take time to flourish and have been hampered by uncertainty caused by delays to changes in electricity market reforms by Westminster.

These delays meant investors were reluctant to commit to higher risk marine technologies. In what appeared to be a reference to last night’s announcement by Pelamis, Ewing’s department said that in spite of generous support for the sector from the Scottish Government, the lack of private capital has seriously hampered the progress of both wave and tidal energy developers.

Ewing said: “With the extraordinary ocean energy resources off Scotland’s coasts, our belief in the future success of wave energy is undiminished.

“Now is the right time to consider the future of our support for wave energy in Scotland. This is a young industry and we still have a lot of learning to do in marine renewables.

“We want to encourage further innovation in wave energy development and we recognise the need for a bold new approach to supporting this emerging technology. There is also a lack of design convergence in wave energy with many different concepts in development, while tidal appears to be converging on a front-runner design.

“With Wave Energy Scotland, we are proposing a fresh and collaborative way to accelerate wave technology development. The best minds in industry and academia will work together to develop technologies that can be commercialised by the private sector.

“The Scottish Government and its enterprise bodies are absolutely committed to supporting the development of the wave and tidal sectors to unlock the potential of our seas.

“Marine energy is an important part of our renewable energy portfolio offering real economic opportunities for Scotland.”

The tidal energy sector is at a different stage from wave energy with full scale arrays already being developed. The Scottish government’s support for marine energy will shortly see the world’s largest tidal stream array deployed in Scottish waters.

The MeyGen project in the Pentland Firth is described as the largest planned tidal stream development. Currently, what is funded is the first phase (four turbines). This first phase has a development cost of £51 million, of which we have contributed £20.5 million. If this demonstration phase is successful, then there will be further phases of development, up to 398 megawatts.

Tidal energy offers significant economic potential – it is estimated that the sector could be worth a potential £4.5 billion GVA by 2030.

Ewing added: “While the tidal energy sector is ready to build array demonstration projects – the MeyGen project in the Pentland Firth is one such example – the wave energy sector must evolve further to gain the confidence of investors.”

Collapse of Pelamis:

KPMG moves in as Pelamis runs out of money

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