1. SYSTEMS AND ENGINEERING TECHNOLOGY Tidal Energy

2. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Introduction  Tides and tidal energy  How can we capture it?  Why would we want to?  Where is the market today?  Why is the UK the world-leader?  Where are the challenges?  What is the opportunity?

3. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Tides 101  Rising and falling of the ocean’s surface  Caused by gravitational effect of moon and sun on the seas  Highly predictable (28-day cycle).

4. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY E = ½ mv 2 and all that…  Tides cause significant volumes of water to flow around the world.  The moving body of water contains energy.  Power of the water is proportional to (current speed) 3.  But, good tidal spots can be a little rough…

5. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY How much energy? Where?  Raw, incoming tide from Atlantic:  250 GW average  2190 TWh / yr  Total UK electricity consumption:  400 TWh / yr  “Hot Spots” not near centres of population or grid infrastructure. 190 GW 60 GW

6. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY But we can hardly dam the (whole) North Sea…  1.6 mile wide / 40m deep channel  Average power through channel:  350MW  i.e. domestic electricity consumption of Glasgow.

7. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY You keep saying “Average…”

8. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Comparison: Wind Farm

9. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Recap  The resource is:  Large  Free  Predictable  But:  Varies with time  In the wrong place

10. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY So, how can we capture it?  Romans used tide mills in London.  Historically, c. 750 mills installed around the Atlantic  Better ways of milling flour now exist…

11. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Tidal Barrage (Tidal Range)  First, dam an estuary…  Principle:  Tide allowed to flow through barrage into estuary pool  Barrage closes, water held in pool until tide falls  Water released through turbines to generate power.  Severn barrage under feasibility study  Led by Ed Milliband  5 options at public consultation  Reports end 2009. La Rance, 1966

12. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Tidal Stream  Find a good location  Fast-flowing  Close to shore  Close to grid  Good seabed conditions  Not too exposed…  Put a “farm” of underwater windmills there.

13. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Current Approaches

14. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Typical Development Process Basic Technology Development Full Scale Prototype Commercial Array £1M£20-40M£100M+ 3-10yrs~3 yrs Hammerfest Strom Marine Current Turbines OpenHydro  Over 100 active device developers  All pre-revenue technology development companies  Usually single-product

15. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY The UK Top 20 Basic Science Modelling & Tank Testing Large Prototypes Commercial Machines

16. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY The Way Forwards  JVs emerging to develop first projects  Technology Developer + Utility

17. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY UK Support Mechanisms  Revenue Support through the Renewables Obligation  2 ROCs / MWh (England & Wales)  3 ROCs / MWh (Scotland)  Targeted Revenue Support  Marine Renewables Deployment Fund  Saltire Prize  Capital Support  Marine Renewables Proving Fund  Energy Technologies Institute

18. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY UK Support Mechanisms

19. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Current Hot Topics  First commercial projects underway  Islay Array (Scottish Power / Hammerfest Strom UK)  Anglesey Array (NPower Renewables / MCT)  Internationalisation  OpenHydro: - Canadian projects  Lunar: - 500MW Korean farm.  Policy & Infrastructure  Crown Estates Leasing Process  Grid Issues  OFTO

20. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY The Pentland Firth Process  Crown Estates Process  Marine spatial planning exercise  700MW of renewable power from Pentland Firth by 2020  Closed 15 May 09  42 applications received  Projects 10MW-300MW

21. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Grid Reinforcement  National Grid:  Connects few power stations to many consumers  New Paradigm  Generation at grid extremities  Major upgrade projects  Beauly – Denny rebuild  Dounreay – Beauly upgrade

22. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Taking the Grid Offshore Energy Act (2004)  Licence needed to operate offshore transmission network  Offshore Transmission Owners (OFTOs) introduced:  Own the “Offshore grid.”  Appointed by Ofgem  Tendering process triggered by tidal developer applying for grid connection.  Remuneration from “locational” (tidal developer) & “non-locational” (other users).  First OFTO tender process April 09 (offshore wind farms)  Developers watching with interest

23. © Frazer-Nash Consultancy Ltd 2009. All rights reserved. Confidential and proprietary document. SYSTEMS AND ENGINEERING TECHNOLOGY Conclusions  Tidal energy promising, but developmental  25-50% of European tidal stream resource in UK waters  UK will see world’s first commercial projects  High on political agenda  Especially Scotland  Sustained support needed to retain impetus in UK.  Rapidly changing industry:  Impact of OFTO?  Impact of grid upgrades?  Will it work?

24. SYSTEMS AND ENGINEERING TECHNOLOGY www.fnc.co.uk/renewables Ian Watson +44 (0)1306 885050 i.watson@fnc.co.uk