Future Economic Potential of Tidal Stream & Wave Energy in Scotland

The report aims to provide an outline of the potential economic benefits associated with Scotland’s Tidal Stream and Wave Energy Sectors out to 2050. It provides is a summary of two reports, the ‘Economic Review of Tidal Stream Energy in Scotland’ commissioned by Scottish Enterprise (read the full reportopens in a new window) and ‘Economic Impact Assessment  - Value of Wave Energy Deployment to the Scottish Economy’, commissioned by Wave Energy Scotland. Both were undertaken by the Policy and Innovation Group at the University of Edinburgh. 

The report includes: 

• An assessment of the future potential economic benefit of tidal stream and wave 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 and wave 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 process, splitting the sectors into their 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;  
  • Wave energy resource in Scotland of 4.5GW, with a further 1.9GW in the rest of the UK and 174GW in the rest of the world. 
• Tidal stream and wave energy farms in Scotland and the rest of the UK have the potential to generate almost £8.7 billion in GVA to Scotland by 2050.
• The global export market could be worth up to £28 billion by 2050, if Scotland becomes World Leaders in producing devices and their subsystems.  
• Tidal stream and wave energy could generate £6 billion to £37 billion in GVA to Scotland by 2050. All scenarios require intervention, but where Scottish companies are 'Leaders in all Markets' there could be a six-fold increase in the prize.
• Almost half the gross value added comes from manufacturing the tidal stream device with operations and maintenance accounting for nearly a quarter.  
• Depending on ambition, tidal stream and wave energy could support between 12,000 and 62,000 jobs from projects in all markets in 2050. Within this, farms in the UK could support over 15,000 jobs in Scotland.  
• Around half the jobs are associated with building the devices. By 2050 over a quarter of all jobs are in the operation and maintenance of tidal stream and wave energy devices and farms.

Firstly, targeted recommendations are required to support both device developers and their supply chains, focusing on the need for:  

• Long-term market support: Discussions with both UK and devolved governments around the continuation and growth of comprehensive market pull policies. 
• Sustained technology innovation: Enabling sustained sources of both public and private innovation funding for technology developers. 
• Increased supply chain competitiveness: Delivering a step-change in the capabilities of a modernised and highly competitive supply chain. 

Secondly, recommendations are needed to develop essential sector infrastructure, focusing on: 

• Develop skills for a Just Transition: Development of soft infrastructures, such as preparing a pipeline of workers with relevant skills and training.  
• Cross-sector collaboration: Opportunities to collaborate with, and share, the supply chain and infrastructures of other established offshore sectors, including offshore wind. 
• Prioritise infrastructure upgrades: The build out of hard infrastructure, such as ports, harbours, and national grid capabilities. 

Finally, this summary report provides the following recommendation to support the smooth delivery of subsequent recommendations: 

• Delivering innovation support in Scotland: Scotland should utilise the extensive experience of its well-established enterprise and innovation support organisations, to deliver on the complex task of sustained device development and the modernisation of domestic supply chain capabilities.