Britain must act fast to rule wave-power world

UK's marine energy firms will be left trailing in their rivals' wake unless ministers take more visionary approach, MPs warn

Britain's dream of leading the world in harnessing the power of the sea is in danger of being sunk by risk-averse, under-ambitious policymakers who are letting foreign rivals dominate a multibillion-pound industry. An influential Commons committee warns that without a "more visionary" approach from ministers and officials, the development of wave and tidal technology will stall and other countries will steal a march on British firms.

Experts believe that up to 20 per cent of the UK's electricity could one day come from devices deployed around the coastline. But the technology is still in its infancy, and a report today from the Energy and Climate Change Committee warns that Britain could cede its pioneering status to other countries unless ministers intervene.

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"Britannia really could rule the waves when it comes to marine renewable energy," said Tim Yeo, the Tory MP who chairs the committee. "We are extremely well placed to lead the world in wave and tidal technologies, which could bring significant benefits in manufacturing and jobs, as well an abundant supply of reliable, low-carbon electricity."

But there are fears of history repeating itself. Britain once led the world in wind-power technology, but was leapfrogged by Denmark, which offered financial backing through feed-in tariffs and saw its industry grow dramatically to become the world's leading supplier of turbines.

The Government has a target for 200-300MW of marine capacity by 2020. It is estimated that by 2050 the industry could be worth £340bn worldwide, with Britain potentially able to claim a £76bn share with the creation of 68,000 jobs. The UK has the largest wave and tidal resource in Europe. Unlike wind or solar, wave power is less variable from hour to hour and can be forecast days in advance. There is also a good match between periods of high production and seasonal electricity demand.

The committee raises doubts about the level of public funding available for marine renewables and the way it is administered. The Department for Energy and Climate Change has created a £20m fund and the Scottish Government has £18m available. London and Edinburgh are urged to work together closely to pool the cash, so developers are not forced to bid twice for small pots of money.

At present the cost of generating electricity from a wave farm is around four times that of an onshore wind farm. Stephen Wyatt, head of technology accelerator at the Carbon Trust, said: "Accelerating the pace of cost reduction further will require greater levels of innovation support for the industry."

The select committee took evidence from scientists, industry leaders, environmentalists and ministers. Its report says the absence of ambitious long-term targets for the deployment of marine renewables is hampering investor confidence, and suggests significant public sector investment will be needed. The costs of wave and tidal power schemes are expected to fall by 2020 to a level that makes it commercially viable.

Better connections to the national grid will also be needed, along with a commitment to developing the engineering skills needed to make the industry a global success.

Using the sea to generate power has long been a dream for environmentalists but the development of viable equipment has had a chequered history. In 2008, an "inverted windmill" was lowered into the mouth of Strangford Lough in Northern Ireland; it was the first device of its kind in the world, heralding hopes of a sea-power revolution. Other trials followed. Of the eight tidal and wave trials worldwide, seven are taking place in Britain. Most are around the Orkneys, where the European Marine Energy-testing Centre is located. Other key sites include Strangford Lough and north Cornwall, which is expected to become a key test bed for leading companies.

In 2010 the coalition pulled the plug on the idea of a 10-mile, £30bn barrage across the Severn estuary, arguing it was a one-off project which would not be replicated elsewhere, limiting the export opportunities. Last month ministers announced plans for the South-west to become the UK's first Marine Energy Park, placing it at the forefront of the technology's development.

It is hoped scientists, engineers and surveyors will flock to the region. Similar parks are planned for Scotland and Northern Ireland but the move from one-off tests to the deployment of large-scale, commercially viable arrays of devices could be years off.

Dr Gordon Edge, policy director of the industry body RenewableUK, said marine energy is now "on the threshold of commercial viability" and the report paves the way for it to become "a major part of our electricity generation system". But he warned: "We can't afford to have innovation and manufacturing in hi-tech industries go overseas."

The technology giant Siemens announced last week it was taking over the tidal developer Marine Current Turbines. Ted Scheidegger, head of the solar and hydro division of Siemens Energy, said: "We will continue to drive the commercialisation of this promising technology which harvests energy from highly predictable tidal streams. Our target is to secure a leading position in this future business."

The Department for Energy and Climate Change claimed to be "fully committed to spurring on the growth of this industry", but Labour's Caroline Flint claimed that since the coalition was formed, the UK has slipped from third to 13th in the world for green investment. "Marine energy can help make us less reliant on volatile fossil fuel prices and keep energy bills down, cut our carbon emissions and create new jobs and industries in the UK. But we need to move quickly to cement our advantage and stop this opportunity slipping through our fingers," she said.

The Government is under growing pressure to set out a vision for Britain's future energy use. Onshore wind farms, like nuclear power stations, continue to attract vociferous opposition, and more than 100 Tory MPs have written to David Cameron this month demanding "dramatic cuts" to the industry's £400m-a-year subsidies. The solar industry was thrown into turmoil last year when the Department for Energy and Climate Change pulled the plug on funding for generous feed-in tariffs paid to home owners and businesses who installed solar panels.

A carbon capture and storage project at a coal-fired power station at Longannet in Scotland was abandoned after its backers failed to reach a deal with power companies. It is understood ministers will shortly announce a new pilot, this time aimed at removing carbon emissions from a gas-powered plant.