Tidal Energy Generation: Ringfenced Funding

Debate between Ian Blackford and Greg Hands

Thursday 25th November 2021 Commons Chamber

[Greg Hands]

I gladly accept my hon. Friend’s invitation to meet. He does a brilliant job as the chair of that APPG and he does an amazing job as the Prime Minister’s trade envoy to Indonesia. He mentioned one or two of the warm words of congratulation on the announcement yesterday. RenewableUK said it was “a major step forward” and that it

“puts us in pole position to”—

lead—

“the global market in due course.”

RenewableUK also said it would

“unlock private investment and secure green jobs”,

while Neil Kermode of the European Marine Energy Centre on Orkney said:

“This support for the marine energy industry is absolutely pivotal”.

I appreciate the right hon. Member for Ross, Skye and Lochaber having brought this topic to the House. He perhaps might have left one with the impression that just he had made representations to the Prime Minister, but I checked back and found representations from my right hon. Friends the Members for Portsmouth North (Penny Mordaunt) and for Preseli Pembrokeshire (Stephen Crabb), and from my hon. Friends the Members for Meon Valley (Mrs Drummond), for Rother Valley (Alexander Stafford), for Rugby (Mark Pawsey), for Banff and Buchan (David Duguid), for Isle of Wight (Bob Seely), for West Aberdeenshire and Kincardine (Andrew Bowie), for Moray (Douglas Ross), for Ynys Môn (Virginia Crosbie), for Truro and Falmouth (Cherilyn Mackrory), for Gloucester (Richard Graham), for Sedgefield (Paul Howell), for Blyth Valley (Ian Levy), for Workington (Mark Jenkinson), for North Cornwall (Scott Mann), for St Austell and Newquay (Steve Double), for North Devon (Selaine Saxby) and for Barrow and Furness (Simon Fell).

I heard some doubt from the right hon. Member for Ross, Skye and Lochaber as to whether the £20 million per annum is a substantial-enough sum to put the tidal stream sector on its best footing. Indeed, the right hon. Gentleman suggested that £71 million is the minimum required for the job. I am afraid I cannot agree with him on that, because £71 million would mean the awarding of a contract to virtually every developer who shows interest in the auction as long as they bid at a level just a single penny under our stated maximum price. He and I worked together in the City of London in our time. He will know from his knowledge of financial markets—I know that he has since rebranded himself as the simple crofter—that there is no way to run an auction of that sort in that way.

[Ian Blackford]

I hope that we can dispense with the silly gibes.

What I explained to the Minister was that £71 million would justify 100 MW of output. Perhaps he can explain what he expects to see from the £20 million. Crucially, I did point out that MeyGen has consent for 80 MW and that, within the envelope of that £71 million, it could have been fully exploited and ultimately ramped up to 400 MW. As things stand, MeyGen 2 cannot be fully exploited and that is the impact of not going to the £71 million.

[Greg Hands]

The right hon. Gentleman is mixing up funding with the process of an auction. It is a contract for difference auction. The idea of £20 million being available is that it allows us to have a competitive process between all of the different parties that may be interested, and then to make sure that at least £20 million goes towards these projects. It is not the same as granting funding, which is what I think he is looking for, of £71 million. It is a competitive auction process. The purpose of the CFD scheme is to support and push for—