Winning bidders for a series of marine energy development sites off Scotland’s Pentland Firth and Orkney islands have been named in the world’s first commercial wave and tidal leasing round.

The Crown Estate – which controls the UK seabed out to 12 nautical miles – launched the Pentland Firth and Orkney Waters leasing round in November 2008 and attracted more than 40 bids for seabed leases from 20 marine energy developers and utilities.

Following its closure, in May 2009, The Crown Estate noted that the applications ranged from 10 MW demonstration sites all the way up to the highest band of 200-300 MW commercial sites. Under the terms of the bidding process, 600 MW each from wave and tidal is planned by 2020.

Roger Bright CB, CEO of The Crown Estate said: “The 1.2 GW of installed capacity proposed by the wave and tidal energy developers for 2020, shows the world that marine energy can produce meaningful amounts of electricity and offers a real alternative to conventional power production. The long-term prospects for this growing industry are exceptionally bright, with vast amounts of untapped energy in the seas all around the UK. It will create new businesses and jobs as well as attracting inward investment.”

Among those companies keen to secure access to one of the world’s most favourable locations in terms of marine energy resources are Marine Current Turbines (MCT), recently the beneficiary of a significant equity buy from Siemens.

It gained approval for a lease from The Crown Estate to deploy its SeaGen tidal current technology off Brough Ness, on the southern most tip of the Orkney Islands (South Ronaldsay) and north east of John O’Groats.

MCT is planning to install 66 SeaGen tidal turbines in three phases over a four year period in a site area of 4.3 square kilometres. The Brough Ness tidal array will have a total generating capacity of 99 MW from the 1.5 MW units. Subject to financing and final agreements with The Crown Estate, MCT is aiming to secure planning and environment consents for Brough Ness by 2015, to start construction in 2016 and the first phase of deployment in 2017. The company plans to have the whole scheme operational by 2020.

Martin Wright, MCT managing director, said: “The Pentland Firth and Orkney waters are strategically the most important marine energy areas in Western Europe.” He added, “MCT already has the valuable experience of deploying and operating SeaGen in Northern Ireland’s Strangford Lough and within the next two to three years we expect to have deployed our first tidal farm in UK waters.”

However, the company also warned that timing of construction and deployment will be dependent on the local grid infrastructure being strengthened.

In another of the leasing deals, wave energy technology company Aquamarine Power and utility group SSE Renewables have secured rights to develop a 200 MW wave farm, also at Brough Head. The proposed phased deployment of the company’s Oyster devices in small clusters over a stretch of coastline from Costa Head in the north of Orkney to Neban Point in the south-west, is due in 2013.

The proposals form part of an agreement between the two companies to develop up to 1 GW of Oyster wave farm sites in the UK and Ireland by 2020. They say they will now work closely with The Crown Estate, Orkney Islands Council and other key stakeholders to obtain necessary consents.

Martin McAdam, Aquamarine Power’s CEO said: “The Crown Estate’s leasing round is a significant milestone for the marine energy sector and is a key step towards the industry’s commercialisation, enabling it to meet its full potential to deliver clean sustainable power as well as highly skilled long-term employment.”

The developers which have signed a total of 10 agreements for lease under the Pentalnd scheme are:

Wave:

SSE Renewables Developments Ltd, 200 MW for Costa Head site

Aquamarine Power Ltd & SSE Renewables Developments Ltd, 200 MW for Brough Head site

Scottish Power Renewables UK Ltd, 50 MW for Marwick Head site

E.ON, 50 MW for West Orkney South site

E.ON, 50 MW for West Orkney Middle South site

Pelamis Wave Power Ltd, 50 MW for Armadale site.

Tidal:

SSE Renewables Developments (UK) Ltd, 200 MW for Westray South site

SSE Renewables Holdings (UK) Ltd & OpenHydro Site Development Ltd, 200 MW for Cantick Head site

Marine Current Turbines Ltd, 100 MW for Brough Ness site

Scottish Power Renewables UK Ltd, 100 MW for Ness of Duncansby site.

Bright added: “This announcement demonstrates the UK’s position as the leader in wave and tidal technologies. Through our experience and some of the best natural resources in the world we have been able to launch the first wave and tidal energy projects on a commercial scale.”

The Crown Estate says it will use option fees paid by developers and an equivalent investment from its own funds in order to reduce commercial risks associated with the technology deplyment and accelerate the development of tidal and wave energy projects in the area.

The Pentland Firth strategic area development comes only a day after the Department of Energy and Climate Change published the government’s Marine Energy Action Plan which sets out the steps necessary drive the UK’s marine energy industry to 2030. It outlines the actions required by both private and public sectors to facilitate the sector and covers wave, tidal range and tidal stream energy.

It is envisioned that marine renewable energy could play an important role in the period to 2020 as the sector begins to roll out larger arrays of devices, saying that wave and tidal stream could deliver 1-2 GW of installed capacity by then. Although aspirational and challenging, the government believes it is broadly realistic if all stakeholders are able to put in place the appropriate mechanisms to enable this level of deployment. From this it then provides a suitable platform on which to build larger scale deployment to 2030 and beyond, the government says. According to the document, estimates indicate that the practical resource level for wave energy in the UK waters is of the order 50 TWh/year, while the total UK tidal stream potential is indicated to be of the order of 17 TWh/year.

Key recommendations made in the strategy document include forming a UK-wide strategic co-ordination group to develop a planning and consenting roadmap for all types of marine renewables; consideration of support levels for marine technologies under the review of banding of the Renewables Obligation in Autumn 2010; ensuring that the appropriate levels of targeted funding are available to bridge the technology market failures that exist in this developing sector, subject to the budgets in the next public spending round; leveraging private equity, and in the longer term, project capital into the sector; establishing guidelines and best practice in the development of new technologies; and, building a UK marine energy supply chain utilising the current skills base from the offshore wind, oil and gas, and maritime industries.

The document also highlights the potential for the marine energy sector to provide up to 16,000 jobs, with a quarter of these in exports.

Commenting on the strategy, Lord Hunt of Kings Heath, Minister of State for Energy said: “This Action Plan sets out our vision for what marine energy can do for the UK and what we need to do to make it happen. I look forward to working with industry and other partners to get the most out of our waters and build a new, world-leading energy generation sector in the UK.”

Lord Hunt also announced the establishment of a Ministerial Task Force on Marine Energy, which will bring together key players to oversee future work on the Marine Energy Action Plan.

Watch the video below to hear more about the prospects for the marine energy industry from the CEO of The Crown Estate and Scotland’s First Minister