17:00 Ian Blackford (Inverclyde) (SNP)

I respectfully ask the Minister, as I would ask the Chancellor of the Exchequer, for a recognition of the scale of this opportunity. Phase 2 of the MeyGen project has already been permitted to go up to 80 MW, and in the Pentland Firth it could ultimately reach as much as 400 MW, but the ability to expand from the current 6 MW installed in MeyGen phase 1 is restrained by the investment that has been put in place in this round. We would certainly not be looking at deploying the 80 MW; it would be a much reduced figure. I would simply say to the Minister and to all Members: let us have that ambition. Let us have that desire to see this green energy source get to 15% of UK electricity production. To do that, however, we have to show more ambition than is being shown today. I do not wish to be seen as ungrateful for what has happened; all I am asking the Government to do is to recognise the scale—

This industry is not alone as an emerging opportunity; there is also emerging evidence of just how big this opportunity can be for our present and future energy needs. A recent report for the Royal Society, led by Daniel Coles at the University of Plymouth in collaboration with the Universities of Aberdeen, St Andrews and Highlands and Islands, has found that the UK can get 15% of its electricity production from tidal stream power. That would be a massive contribution to the work that needs to be done to get to net zero by 2045 in Scotland and by 2050 in the rest of the UK. Achieving this would require around 11.5 GW of tidal stream turbine capacity to be installed.

Absolutely, because it is about that ambition. I hope the Government share our ambition to see this sector generate the level of electricity we believe it can generate. It is about creating the circumstances, by kickstarting the sector with modest Government investment, so that investors come in. We have developed an opportunity for green energy, but let us also think about the opportunities for manufacturing and for a global success story, given the technology that has been developed on these islands.

We also need to think about the opportunity for our industrial base in Scotland, because the ability to tie in green energy to the powering of data centres, for example, would be an enormous opportunity throughout Scotland, particularly in my area of the highlands and islands. From this ability to generate green energy, we can develop a wider industrial strategy to create the job opportunities and the wealth that we all want to see.

Let us remind ourselves of the potential. This is an industry that can grow to 15% of the UK’s electricity production. If we look at a typical day over the last few weeks, on 16 November nuclear contributed 14.6% of the UK’s electricity. We do not need nuclear in Scotland. We can provide the baseload we need from this clean source of energy. We have the potential to deliver safe green energy and to provide jobs and energy security for a fraction of the cost of nuclear.

If we are to reach net-zero and have a just transition, we simply cannot repeat those mistakes of the past. Let us just think of the job opportunities through developing the Scottish, UK and global markets. There are expectations of a global market of 100 GW, an industry that will be worth £126 billion by 2050. We have a choice: lead this emerging green energy sector or sit back and watch our sector-leading companies move wholesale to overseas markets. We can embrace the opportunity for green jobs, for base-load energy and for transitioning to that green energy future. We can lead the world in tidal marine or we can walk away from the opportunity to develop and deepen the sector leadership that has been developed in Scotland and the UK.

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17:17 The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)

It is fair to say, then, that the Government have a sound track record of supporting the tidal stream industry and helping to get it into the position it is in today, on the cusp of commercialisation and with good export potential. This week, however, is an occasion for looking to the future. We were all delighted to hear the Prime Minister announce yesterday at Prime Minister’s questions that the Government will establish a ringfenced budget of £20 million for tidal stream developments in pot 2 of the upcoming fourth contract-for-difference allocation round. The CfD scheme is our flagship mechanism for supporting the cost-effective delivery of renewable energy. Our decision this week will ensure that the nation’s tidal stream innovators get the opportunity they need to bring their cost of energy down, to ramp up the UK’s capture of the abundant energy flowing along our coastlines and to learn the valuable and exportable lessons that come with being the first in the world to deploy a cutting-edge technology at scale. The decision has been warmly welcomed.

The purpose of the scheme is to support and push for only the most promising and competitive projects in the offing. My Department’s analysis shows that £20 million is optimal for that purpose and that a larger ring-fenced budget would serve neither the interests of the electricity bill payer, nor the interests of the sector itself, which must be pushed to innovate and find ways of bringing down its costs. So, yes, the Government have, this week, delivered for the burgeoning tidal stream industry and it is for the developers now to really push on and make good on their promises and their potential to demonstrate the value for money and the scalability that we need to see from our renewable energy technologies as we transition to an efficient and net zero-ready power sector.

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