What type of policy instruments may be required to ensure the investability and long-term economic viability of UK tidal range schemes?

Turner, Karen ORCID: https://orcid.org/0000-0001-5278-6779, Munday, Maxim ORCID: https://orcid.org/0000-0001-9067-2481, Calvillo, Christian ORCID: https://orcid.org/0000-0002-5495-6601, Zhou, Long ORCID: https://orcid.org/0000-0001-9687-1406 and Agyeman, Stephen ORCID: https://orcid.org/0000-0003-0607-5719 2026. What type of policy instruments may be required to ensure the investability and long-term economic viability of UK tidal range schemes? Energy Journal Item availability restricted.

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Abstract

Research has examined the potential for large scale tidal range schemes (TRS) across the UK to play a role in delivering flexibility and security in low carbon energy supply. This includes research exploring the value of schemes in terms of providing additional ancillary services to the National Grid. The 2017 Hendry Review commissioned by the UK Government recognised that TRS could help address energy security and decarbonisation goals, with potential domestic supply-chain development benefits. However, TRS in the UK remain at pre-development phases. A critical barrier is ensuring investability given the very high capital requirements and long asset lifetimes. A linked issue surrounds the electricity generation costs from such schemes and how policy support might evolve in ways that give private sector developers confidence in returns set against the very significant capital requirements. Our paper reviews the means through which UK Government supports large-scale capital-intensive renewables projects. It then questions whether approaches such as the Contract for Difference (CfD), Regulated Asset Base (RAB) and Capacity Market (CM) are suitable in the case of large tidal range schemes. We find that current instruments are not well-aligned to the characteristics of TRS and similar long-duration strategic energy generation assets. Therefore key recommendations include: (i) adapting the CfD mechanism to extend contract lengths and provide greater policy certainty for long-lived assets; (ii) exploring RAB-type arrangements that can lower the cost of capital by aligning revenue streams with construction and operational timelines; and (iii) aligning these instrument reforms with ongoing electricity market reforms through the Review of Electricity Market Arrangements (REMA) to create a coherent policy framework for capital intensive low-carbon technologies.

Item Type:	Article
Status:	In Press
Schools:	Schools > Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General)
Publisher:	IAEE
ISSN:	0195-6574
Funders:	EPSRC EP/W027879/1 TARGET
Date of First Compliant Deposit:	26 October 2026
Date of Acceptance:	23 October 2026
Last Modified:	27 Oct 2026 17:00
URI:	https://orca.cardiff.ac.uk/id/eprint/190435

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