The marine energy sector in Wales saw a ‘record-breaking’ £103.4m in investment and spending during the 22/23 financial year. The figure, published in the latest annual state of the sector report for Marine Energy Wales, was four times larger than any previous year and attributed to the recent surge in infrastructure projects around marine energy in Wales.
A breakdown of the record investment shows that tidal stream saw the largest investment, with £45.1m spent during the financial year. This was closely followed by the supply chain sector at £44.7m.
Floating offshore wind (FLOW) saw the fastest growth in the financial year, adding £11.6m into the economy in the past year with the potential to generate £1bn in economic opportunities over the next five years, the report found. Much of the spending in the tidal stream and supply chain sectors in the last year was fuelled by the Morlais tidal demonstration zone in Anglesey and the Pembroke Dock Marine project.
Read more: Wynnstay 'on track' to achieve targets for 2023 as it posts half year results
The Morlais tidal stream demonstration zone, being developed by Menter Mon, aims to attract developers to develop early-scale tidal energy projects in the Irish Sea. If successful, the projects could deliver up to 240MW of energy.
Morlais recently signed a memorandum of understanding with Marine Energy Wales as part of plans to address common challenges and encourage business and research collaboration. The first devices under the Morlais project set to be deployed in 2026.
Pembroke Dock Marine, led by the Port of Milford Haven, ORE Catapult, Marine Energy Wales and Celtic Sea Power, is a £60m project developing a renewable energy and engineering centre of excellence to support the commercialisation of tidal and wind projects, including the 4GW floating wind farm in the Celtic Sea.
The Port of Milford Haven and Morlais Tidal Stream Energy Zone were the biggest investors in the marine energy sector, while prominent manufacturers in the sector such as Minesto and Marine Power Systems also made substantial contributions.
In terms of employment, the latest figures show the sector supports 440.2 full-time jobs including technology and project developers, academia and the associated supply chain. Pembrokeshire saw the highest number of people employed in the sector at 281.25, including roles such as fabricators, engineers, technology developers and environmental consultants.
The report also highlighted the economic potential and future spending of these sectors within marine energy.
Tidal stream is expected to deliver £261m in the next five years driven by the development of electrical infrastructure in the Morlais tidal development zone. The supply chain is predicted to provide £289m as more companies diversify their offerings.
Further investment and spending is likely to follow as more supply chain companies diversify and move into providing products and services to the marine energy sector. Wave and tidal range technologies show potential growth, with estimated benefits of £118m and £69m, respectively.
The report concluded that this year’s figures underscored the vast economic potential in Wales’ marine energy sector, but to fully capitalise on the sector, strategic investment into infrastructure and development as well as a conducive business environment are vital.
Tom Hill, Marine Energy Wales programme manager, said Wales had made “tremendous progress” this year but rapid investment is now essential for deployments at scale. “Encouragingly, this report highlights a significant increase in infrastructure spend for 2023, creating a good platform for delivery and future sector growth,” he said.
“However, we cannot be complacent. Revenue support for commercial-scale projects at a realistic market price is critical. Additionally, delivering reform and investment to create a net-zero-ready electricity network is essential to the sector’s success and currently an enormous barrier to development.”
Grid capacity in Wales is significantly constrained. Figures released by RenewableUK Cymru reveal that Wales will need to double its grid capacity by 2035 if it is to meet its proposed target of 100% of electricity needs from renewable sources.
RenewableUK Cymru said there is currently 1.98GW of installed wind generating capacity, with 63% coming from onshore wind. Yet, there is a further 3.95GW of wind energy projects including onshore, fixed and floating offshore wind waiting in the pipeline and needing double the grid capacity currently available.
With an additional 4GW of floating offshore wind planned from the Celtic Sea, RenewableUK Cymru said there is an increasingly “urgent need for investment” to ensure future grid demand meets the needs of energy generation across Wales.
RenewableUK Cymru director Jessica Hooper said: “Without investment, we stand to miss out on the many positive benefits wind energy brings – from lower electricity bills, energy security, jobs, decarbonising our homes and industry, right through to community benefits and habitat restoration.”
She added: “Strong collaboration between the UK and Welsh Government is vital to overcoming this issue. We welcome the reform to Ofgem’s mandate to give the energy regulator a statutory duty to assist in the delivery of net zero, but now we need to see a clear programme of anticipatory investment in Wales.”
