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Lord Truscott, Parliamentary Under Secretary of State for Energy
QEII Conference Centre, London, 15 March 2007
I am delighted to be here today to speak at this event - the largest marine energy event in the world.
This is a clear reflection of the growing interest around the world in marine energy and the potential benefits it could provide. We in the UK should be proud of the lead we have taken in developing marine energy.
The energy challenges we face were set out in the Energy White Paper of 2003. They were restated in the Energy Review last year. They will continue to be the main policy drivers in the Energy White Paper which we will publish shortly.
From the start our objective has been to put us in a better position to tackle the two major long-term challenges for UK energy policy.
First - tackling climate change. Global carbon emissions are continuing to grow. In addressing climate change, we face arguably the biggest challenge that has yet faced human civilisation.
Second - we need ensure a secure supply of clean and affordable energy.
The challenge of addressing climate change also brings with it major opportunities.
As Nick Stern made clear in his landmark report last year, action on climate change is the pro-growth strategy - with the benefits far exceeding costs over the medium to longer term.
Stern also highlighted the huge market opportunities in low carbon technologies that will be created if action is taken on the scale required - at least £500bn by 2050.
In the UK we have already come a long way in a short time.
The UK's record on greenhouse gas emissions is among the best in the developed world - we are on course for a 23% cut by 2010, nearly double our Kyoto commitment.
Between 1990 and 2003 UK greenhouse gas emissions fell by over 14% whilst our GDP rose by 36%.
We have decoupled economic growth and the growth in carbon emissions. The UK experience demonstrates that decarbonisation need not damage the economy.
Looking ahead - we must go further. We need to achieve real term and substantial cuts in emissions, to meet our own national goals and as a contribution to wider EU and international efforts.
The future framework for progress will be provided both through our own actions in the UK and by EU and international agreements.
Spring European Commission
The conclusions reached last week by the Spring European Council reflect all of the UK goals.
They build on the need we identified at Hampton Court during our Presidency. The EU has now agreed an energy policy which will underpin our ambitions on climate change - while also improving our energy security and realising the goal of a truly liberalised market.
The conclusions also set us on the right track to serious action to tackle climate change - and for discussions at the G8 and UN later this year - where we hope countries will come to an international agreement on a long term framework to prevent serious climate change.
Amongst other things - the Council underlined the central role that emissions trading must play in the EU's long-term goals to reduce green house gas emissions.
It also agreed a binding target of a 20% share of renewable energies in overall EU energy consumption by 2020.
Domestically we will continue to refine and strengthen our policies. The Climate Change Bill published on Tuesday is the first of its kind in the world.
It will make the UK the first country to set a long-term legal framework for reducing emissions over the next 45 years and beyond it will also provide the means to achieve them.
The Bill will put in place carbon budgets that we will need to meet if we are to deliver a 60% cut in CO2 by 2050. Every tonne of carbon will be counted every year over 5 year periods.
As a country we will need to live within our carbon budgets in the same way that individuals, business and government have to live within their financial budgets.
The Bill will not only help the UK meet its commitments on climate change but will help enable the transition to a low carbon economy.
The Bill not only demonstrates our decisive international leadership - but shows the UK is committed to taking its responsibility for reducing global emissions.
Our ambition is demonstrate how environmental objectives can be achieved alongside maintaining a vibrant economy and fair society.
Technological innovation is central to achievement of these objectives.
Since 2002 around £500 million has been committed to help develop low carbon technologies.
The DTI's Technology Programme provides £20 million a year for industry-led research and development of low-carbon technologies.
This is backed-up by a number of focused initiatives that support demonstration and early deployment of low-carbon technologies.
Money that has already been allocated includes:
Government will substantially increase funding for low carbon energy research and development through the new Energy Technologies Institute.
This public/private sector joint venture will have funding of up to £1bn over the next 10 years.
We have also created a new Environmental Transformation Fund that will help support renewables and other technologies through demonstration stage and beyond. Wave and tidal power stands to benefit from this boost to investment.
But it's not just large-scale energy production we need to target. Around a quarter (23%) of all emissions come from our homes.
That why we have allocated £80 million over the next three years (2006-2009) to the Low Carbon Buildings Programme to encourage both energy efficiency and micro-generation technologies in buildings.
On Tuesday the Chancellor announced further measures - that over the next decade aim to make every home low carbon.
To bring this transformation forward we will;
If we are to achieve our goals we will need renewables to make a growing contribution to meeting our energy needs.
£1 billion of new investments in renewables electricity generation - have been announced since the Energy Review.
The Renewables Obligation has been successful in bringing forward the most economic technologies like onshore-wind.
We have seen renewable generation more than double since the RO was introduced in 2002 - with the UK joining a small band of countries to have installed 2GW of wind.
But emerging technologies such as offshore wind have not been deployed as successfully and quickly as had been envisaged.
Our new proposals for amending the RO aim to bring forward further investment in the technologies that we need to develop - if renewables are to play a significant role in providing a major contribution to our future electricity generation mix.
There is however a balance to be struck between encouraging new and more expensive technologies - and the need to find ways to bring about more deployment - whilst continuing to provide an appropriate level of support to more economically viable technologies.
We believe our proposals on "Banding" provide a means of delivering that balance.
We will publish our final conclusions along with the Energy White Paper.
Now let me turn to marine.
The emerging wave and tidal technologies have - in the longer term - the potential to make a valuable contribution to the UK's energy goals - and to create significant industrial capability.
We are blessed with having one of the best marine resources available anywhere in the world. It is estimated that up to 20% of the country's demand for electricity could come from marine.
Since 1999 DTI has committed around £30 million to industry-led research and development.
The total number of ongoing marine R&D projects supported under the DTI's Technology Programme stands at 16 - with grant support totalling over £17 million.
Some of these projects have already led to full-scale demonstrations. We expect others to follow later this year.
As well support for industry-led activity we are supporting academic research. An example is the recently approved £6 million - 4 year "Supergen Marine" research programme. This brings together a consortium of UK universities that will carry out research into the fundamental science of marine energy.
We have also put in place a £50 million Marine Renewables Deployment Fund (MRDF). The MRDF was launched at last year's BWEA marine conference.
The Fund provides a package of measures - that seek to help these emerging technologies address the gap between R&D and market.
At the core is a £42 million Scheme to support the first larger-scale grid connected wave and tidal demonstration projects.
To date - the Scheme has not received any successful applications. It is disappointing and surprising - that device developers cannot provide the 3-months testing at full-scale needed to meet the qualification criteria.
However, we are working closely with developers and their representatives and are confident that successful projects will come forward over the course of the next year.
We want to help those projects happen as soon as possible and so I want to announce today that the Scheme will now move to an "open call" process - with developers able to bid into the Scheme once they have the necessary time in the water.
The Scheme is backed up by £8 million to help provide the infrastructure that can help remove much of the risk and cost to early demonstrations.
This part of the fund has already helped the European Marine Energy Centre in Orkney complete a £7 million project to build new facilities for the testing of tidal-stream devices. The Centre will also play host to the world's largest wave farm - that will be built by Scottish Power with assistance from the Scottish Executive.
The South West could also be the location of major wave projects in the future. The DTI has offered £4.5 million to support the 'Wave Hub' project that will be located off the coast of North Cornwall. This £20 million infrastructure project will provide a grid connection and simplified consents to early wave projects.
If the project receives the necessary planning approvals and commitment from industry, then it could be commissioned as early as Summer 2008.
Finally - we have set up a £2 million environmental research and monitoring programme. The programme will take advantage of demonstrations to obtain data so that environmental risks of a future commercial phase can be managed effectively.
Much of this work will feed directly into the Strategic Environmental Assessment that will be needed when the technology becomes ready.
In the short-term we will consider what steps might need to be taken now to help inform any future strategic planning for a marine industry.
Collectively these provide the most comprehensive set of measures to support the development of marine energy technologies anywhere in the world.
To conclude - I hope I have demonstrated that Government remains committed to meeting our energy challenges.
We are taking ground breaking measures to deliver on that commitment.
Renewables remains at the heart of the Government's energy policy - and we want the portfolio of technologies that will be needed to deliver the necessary growth in renewables to include marine.
I can assure you that Government is determined to provide the fullest opportunity for the development of a successful marine industry.
We now look to industry to take the next steps and bring forward the projects that will take us further towards realising the potential for marine renewables.
Thank you.
