First published in Cleantech Infocus: Offshore Renewable Energy in the Isle of Man, May 2012. Copyright Cleantech Investor Ltd
Chair - Laura Hanley
During two sessions on 20 April 2012, delegates discussed what factors need to be in place for the successful deployment of marine energy projects and to what extent these factors are in place in the Isle of Man. The aim was to highlight the Isle of Man's strengths and weaknesses relative to other jurisdictions and to determine best practices for the Isle of Man to adopt as it rolls out a marine energy business; also to identify areas on which the Isle of Man Government can focus, in order to enhance the attractiveness of the island for marine energy.
Summary Conclusions – Session 1 (by Anne McIvor)
- It was noted that at least one tidal turbine manufacturer (a company from the Netherlands) has undertaken studies of the potential for tidal energy in the Isle of Man.
- It was agreed that tidal energy needs to be financially viable for investments to proceed; also that the permitting process must be quick and easy.
- It was queried whether the Isle of Man could provide a test bed scenario for developers of early stage prototypes (given the lack of ROCs). However, participants had doubts about the viability of test bedding for tidal (or wave) energy on the Isle of Man, noting that “there are more test facilities than technologies”.
- It was noted that tidal developers are at the stage where they need to bring their technologies to market, with companies looking at early stage commercial sites. Thus, if the Isle of Man were to enable demonstration projects and small first mover projects (e.g. deployment of a ‘first’ 5MW array, with Manx Government backing), then the location could prove attractive. The “step after prototyping” was identified as the point at which the Isle of Man could be of interest as a location for tidal developers.
- Participants noted that the consenting burden is the same for both small and large projects. However, the Isle of Man has advantages relative to other islands since small projects (maximum 20MW) could potentially link directly to the Isle of Man grid – which is not the case in locations such as Orkney or Alderney. It was observed by one participant that the opportunity, in terms of tidal energy, is “here already” on the Isle of Man: that the marine energy panel participants were “...here because they have access to the market, albeit if not at the right price”.
- The way in which the Isle of Man’s existing power plants are run could be changed (although this would not make sense at the moment since the largest power plant runs on gas, which is currently cheaper than offshore renewables). It was observed that 20% of the island’s electricity production is already exported, a figure which would increase with the “right” (i.e. cheap) sort of production. However, it was noted that the island cannot sell green energy at a price premium. And, since the Isle of Man has recently seen its share of the VAT pool reduced, in a renegotiation with the UK, there is an emphasis on costs – which may prove to be detrimental to the island’s ability to support renewables.
- The Isle of Man’s target, to achieve 15% of its electricity generation from renewables within three years (by 2015), effectively means that the island will need to add 12% of existing capacity in renewable energy. Realistically this is unlikely to be achieved from wind energy, since any offshore wind project would be large scale – and the energy would therefore need to be destined for export. However, the target may be achievable through a small scale marine energy project which could be connected to the island’s grid.
- A developer wishing to roll out a demonstration plant on the Isle of Man would have to go through the Territorial Seas Committee. Establishing a project can happen quickly on the Isle of Man, compared to the UK. (Scotland was mentioned as an exemplary process, with the Marine Scotland ‘one stop shop’ process taking just eight months). In a comparison with the gambling industry, it was noted that on the Isle of Man it can take as little as three months turnaround for licensing – while the time taken for booking a ship on the register in the island is as little as just two days compared to months/weeks elsewhere.
- The Manx Government was encouraged to provide more clarity on the permitting process to make it clear what the burden on a potential developer is likely to be. It was emphasised that that burden should be proportional to scale.
- In terms of environmental concerns, it was noted that, although the Isle of Man does not fall under EU law, it is subject to international treaties with respect to issues such as migratory species.
- The fact that, at some stage, marine energy will need to be deployed on a large, commercial scale was highlighted – raising the question of what the Manx Government is doing to work towards that point. Longer term, it was noted that new interconnectors will be needed – and that investors need assurance of that future scale-up so as to avoid the risk of investing in what might become a stranded asset.
- It was noted that offshore wind projects are already too big to connect to the local Isle of Man network and will be developed independently. Thus, early capacity in terms of offshore renewables would be better suited to marine renewables – but that further evolution would be required before more interconnectors become necessary.
- It appears possible that offshore wind developments by the Isle of Man will ‘pay for’ the development of the next interconnector – and therefore serve the purpose of ‘derisking’ the development of tidal energy projects.
- It was suggested that, if a ‘framework’ was in place for the development of marine energy, then developers might collaborate on the early Environmental Impact Aassessment work. A comparison was made to EMEC (European Marine Energy Centre), which provided data in order for developers to mitigate risks by choosing locations tailored to their own devices.
- In terms of comparisons with Orkney, the role of local interest groups (which were very influential there) was queried – and it was noted that the Isle of Man already has a list of interested stakeholders.
- It was also suggested that the Isle of Man has substantial volumes of data for monitoring and comparison – which was not the case in other locations, where device developers were required to carry out the testing.
- The importance of National Grid connection points was discussed. It was noted that Anglesey is potentially a strong grid point (given that any nuclear station not being reconnected is of interest), although the north west of the UK has stronger grid connection points than anywhere else within range of the Isle of Man.
Summary Conclusions – Session 2 (by Denis Gross)
- The current grid on the Isle of Man, according to the report by Mott MacDonald, has capacity for an additional 20MW. Although this would be insufficient for offshore wind generation, it would be suitable for a demonstration marine energy array. Capacity of more than 200MW would be required for a commercial tidal project.
- It was noted that a company wishing to qualify for 0% tax rate has to relocate to the Isle of Man.
- It was suggested that incentives such as those offered by EMEC could be used to attract companies to the Isle of Man. The problems perceived by participants were that it is too late to set up a new trial area and the lack of universities on the island.
- It was agreed that a way to attract marine companies to the Isle of Man could be to carry out preliminary tests such as environmental impact assesments, so that sites are pre-consented and have grid connection. It was suggested that an acceptable survey in this respect would be similar to those carried out by Natural England. Aerial bird surveys (cf UK) would also be useful if controlled by the Manx Government.
- It was noted that, of the Isle of Man’s current total generating capacity of 170MW, 90MW is consumed domestically, and 60MW is transmitted via the interconnector to the UK. Any commercial marine development, generating many hundreds of MWs, would use the island to transmit to the UK.
- It was agreed that consenting and licensing should be streamlined and made speedy, and that the pre-qualification steps discussed earlier could be useful in this respect. It was also agreed that companies would need financial pre-qualification.
- It was agreed that transparent procedures should be established and milestones put in place so that companies could be challenged over their projects and possibly lose their licences.
- It was noted that the Isle of Man has only a few really good spots suitable for the development of tidal energy.
- It was agreed that a Marine Centre of Excellence should be established to provide developers with data.
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