Economic Review of Tidal Stream Energy in Scotland

The report aims to provide an outline of the potential economic benefits associated with Scotland’s Tidal Energy Sector out to 2050. It does this by looking at the potential gross value add (GVA) benefit and jobs as well as a review of the supply chain, considering where Scotland is ahead of or in line with the overall market. The report considers a number of scenarios where either the focus is on the delivery of a market in Scotland or on an international scale. 

The insights gained from the report will be used to inform and support the development of Scottish Enterprise’s activities regarding the tidal energy sector as part of the mission for Energy Transition.  

The report has been prepared for Scottish Enterprise by the Policy and Innovation Group within the School of Engineering at the University of Edinburgh. It includes: 

• An assessment of the future potential economic benefit of tidal stream energy to Scotland. This is quantified in terms of Gross Value Added (GVA) and Full Time Equivalent (FTE) jobs, considering the direct and indirect benefits, and where appropriate, also induced effects. 
• A deployment pathway for tidal stream technology in the UK and Scotland out to 2050 
• An assessment of levels of Scottish content within Scottish, UK and global projects and retention rates of different elements of the supply chain. 
• A supply chain classification system, separating its subsector components and each of these assessed based on its competitiveness across a framework of six factors. 

• Out to 2050 there is an estimated tidal stream resource in Scotland of 4.3GW, with a further 1.9GW in the rest of the UK and 114GW in the rest of the world. This presents an interesting market proposition in Scotland as well as a large export market to sell into. 
• Tidal stream deployments in Scotland and the rest of the UK have the potential to generate almost £4.5 billion in GVA to Scotland by 2050.
• Exports of tidal stream technology could have the potential to generate up to £11.4 billion in GVA to Scotland.
• Almost half the gross value added comes from manufacturing the tidal stream device with operations and maintenance accounting for nearly a quarter.  
• In the most ambitious ‘Scottish Leaders in all Markets’ scenario, Scottish companies in 2050 could see over 16,600 jobs from export markets. Combined with the 5850 jobs from domestic projects, this brings the total to over 22,500 FTE jobs.  
• Around half the jobs are associated with building the tidal stream devices. By 2050 over a quarter of all jobs are in the operation and maintenance of tidal stream devices and farms.

• The continuation of a well-funded market support mechanism, such as the CfD, is the foundational step to ensuring a market into which Scottish tidal stream developers can supply and deploy their devices. 
• Targeted and sustained research and innovation support for tidal stream technology developers is essential to ensure that Scotland builds upon and maintains the competitive edge that it has established in this sector. 
• The modernisation of Scottish supply chain capabilities, from the manufacture and utilisation of novel materials to the adoption of automation and digitalisation, should be embraced and supported at all levels of the supply chain. 
• Investment into device innovation and supply chain capability should be coupled with an equal investment into domestic workforce capacity and skills. 
• The maturity of the offshore wind sector, in terms of fabrication facilities and supply chain depth, should serve as both an inspiring template and a serious opportunity for collaboration with the tidal stream sector. Active collaboration between tidal stream developers and their supply chain, where competition allows, could also lead to the creation of innovation clusters 
• Significant grid upgrades will be required alongside the continued development of renewable energy in Scotland, to avoid transmission bottlenecks and potential curtailment of renewable output. 
• Tasking and funding existing innovation and support organisations to oversee the well-coordinated and accelerated delivery of innovation in domestic tidal stream devices and improvements in Scottish supply chain capabilities.