Should the UK Lead or Follow?

Is the UK losing its lead in tidal energy?

The EU has made its position clear: predictable, clean ocean energy will have a valuable contribution to Net Zero and energy security.

The European Commission highlights how tidal energy is the only form of predictable renewable energy, and is complementary to wind and solar generation, reducing system costs while strengthening grid stability. Under the EU Renewable Energy Directive, member states are urged to ensure 5% of new renewables are “innovative” by 2030, explicitly naming ocean energy (15).

To harness this potential, the Commission backs ring-fenced support such as CfDs – mechanism that successfully scaled wind and solar. The UK has shown international leadership by securing a total of 121MW of tidal stream capacity through three dedicated CfD rounds, with 83MW in Scotland and 38MW in Wales. (Note: There are still no successful tidal CfD projects in England.) However, none of these CFD’s have yet reached Final Investment Decision (FID), and concerns remain about whether they will proceed to delivery (1).

One of the most critical risks facing CfD-contracted tidal stream projects is the high cost of business interruption insurance – a legacy issue from offshore wind, driven largely by cable failure risks. These premiums can undermine commercial viability. In contrast, some EU countries use cooperative insurance structures to underwrite such risk. In the UK, the Ocean Energy Accelerator – supported by ORE Catapult – has proposed a Protected Cell Company (PCC) insurance structure to address this market failure. This model enables early-stage tidal projects to access tailored insurance products that share risk across projects while keeping liabilities separate. By lowering premiums and ensuring adequate cover, the PCC approach can enable testing, demonstration, and commercial deployment – helping attract investment and accelerate scale-up of the sector (2).

International Investment in Tidal Energy

France has established the OPEN-C Foundation, now Europe’s largest offshore renewable energy test centre, with five dedicated sites for testing floating wind, tidal, wave, hydrogen, and solar technologies (3). In parallel, it has committed major public investment to two early-stage tidal stream arrays in Raz Blanchard – one of the world’s most powerful tidal sites. The FloWatt project, led by HydroQuest and Qair, has received €65 million in national funding, including revenue support and capital grants, while Normandie Hydroliennes’ NH1 project was awarded €51 million through the EU Innovation Fund (4,5). Together with the €400 million OPEN-C Foundation investment in test infrastructure, these project-level commitments reflect a coordinated national strategy to accelerate tidal deployment and secure future energy resilience. This reflects France’s recognition of tidal energy’s potential to contribute predictable baseload power – particularly important as its ageing nuclear fleet faces rising replacement costs. Hinkley Point C – widely regarded as the UK’s flagship nuclear project – has seen costs increase to £43 billion in 2024 prices, up from £25-26 billion in 2015, with completion delayed to between 2029 and 2031. Its original strike price of £92.50/MWh (in 2012 prices) is guaranteed for 35 years and inflation-linked, with some analysts estimating the real cost could exceed £140–150/MWh (6,7).

Canada is re-energising its marine energy programme after a pause caused by regulatory challenges that led Sustainable Marine Energy (SME) to enter administration (8). Nova Scotia has now launched a new competitive auction for tidal stream projects at the FORCE test centre, offering up to 13MW across two berths (9). With the world’s fastest tidal currents in the Bay of Fundy and renewed provincial backing, Canada remains one of the most promising tidal energy markets globally (10).

Japan is re-emerging as a significant player in marine and tidal energy, driven by rising electricity demand from sectors such as semiconductors and AI. Following the 2011 Fukushima disaster, Japan dramatically scaled back its nuclear power program – at one point taking all 54 reactors offline (11). However, energy policy has since shifted: by early 2025, 14 reactors had restarted, and the government now plans to raise nuclear’s share of the electricity mix from 8.5% in 2023 to 20% by 2040 (12, 13).

Despite this pivot back to nuclear, Japan remains heavily dependent on imported fossil fuels – an issue worsened by global energy price volatility and a weakening yen. In 2022 alone, the country’s trade deficit reached a record ¥20 trillion (US$140 billion), largely due to energy imports (14). While nuclear restarts are progressing, they face long lead times and high costs (12, 13). In contrast, Japan’s abundant tidal resources – such as the powerful currents in the Naruto Strait – position it as one of the most promising tidal energy markets in Asia. Experts argue that redirecting fossil fuel subsidies – over ¥11 trillion since 2022 – toward renewable energy would enhance Japan’s energy security, industrial competitiveness, and decarbonisation efforts (14).

Will the UK continue to lead — or lose its edge?

With 50% of Europe’s tidal stream resource, the UK has a unique opportunity to scale a predictable, home-grown clean energy sector. Tidal power offers dispatchable, clean electricity when the grid needs it most – while supporting coastal jobs, resilient supply chains, and national energy security.

Thanks to the tidal CfD ringfence, the UK is on track to deploy over 130MW of capacity by 2029 – a critical foundation. But international momentum is building fast. Countries like France, Canada, and Japan are backing tidal energy as a strategic pillar of their energy transition and industrial competitiveness.

To stay ahead, there are calls to expand dedicated CfD support and adopt enabling tools like the Protected Cell Company (PCC) insurance structure – essential to reduce investor risk and unlock Final Investment Decisions (FIDs).

The next five years are decisive. With the right policy, the UK can anchor tidal stream as a core part of its Net Zero strategy and clean energy leadership.

#TidalEnergy #NetZero #CleanEnergy #EnergySecurity #UKEnergy #OceanEnergy #CfD #PCC #Innovation #ClimateAction

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