DeltaStream will be amongst the world’s first grid-connected demonstration devices to generate green, sustainable and predictable tidal power.
“DeltaStream is not just about proving a new, innovative technology – it is about proving that tidal power can make a real and lasting contribution towards the UK’s renewable energy targets and energy security," said Martin Murphy, Managing Director of TEL.
"Taking the first steps to commercialisation, by securing a buyer for the electricity generated, is essential to that. We are proud that this cutting-edge project is, once-again breaking new ground, and ensuring Wales is playing a central role in the race to develop the UK’s significant tidal resources,” Murphy said.
The device, developed by tidal stream technology company Tidal Energy Ltd (TEL), was unveiled in August at Pembroke Port by The First Minister of Wales, the Rt. Hon. Carwyn Jones AM. It will be installed in Ramsey Sound, Pembrokeshire, and is expected to begin generating electricity for Welsh homes shortly afterwards.
The Power Purchase Agreement (PPA) announced today guarantees that EDF Energy, the UK’s largest producer of low carbon electricity, will purchase electricity and renewable certificates from the device for the first year of the project at a pre-agreed price, ensuring that it will be able to generate revenue for its owners, TEL, from both the electricity market and the Government’s Renewables Obligation scheme. The Government has earmarked tidal power as a priority technology, allocating a subsidy of 5 ‘ROCs’ for each unit of electricity generated, in order to fast-track its commercial development.
Power Purchase Agreements not only provide certainty of income for projects such as DeltaStream, but also provide a clear and useful benchmark of revenue for future investors and lenders. As such, the value of the contract to the DeltaStream project will extend well beyond its first year.
Chris Williams, Development Director at TEL, said the ability of any project to generate revenue is obviously key to its long-term commercial success.
"This contract will mean that DeltaStream will have guarantees around what price it will receive for the electricity it sells to the market. At the same time, the PPA represents the beginning of a long term relationship with EDF Energy who we are delighted to be working with,” Williams said.
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