Image credit: Orbital Marine Power’s O2 in Orkney Waters

What are the system benefits of tidal energy?

Published 20 December 2023

This blog was written by Molly Isaacs, Energy Economy Analyst, Analysis & Insights.

Tidal energy has the potential to provide 11.5GW to the UK energy system – 11% of the UK’s electricity demand[1]. Tidal stream projects could contribute up to £17 billion to the UK economy by 2050[2] but what are the benefits to the energy system as a whole? How does this affect the average consumer?

In 2022, ORE Catapult led a study, working with Imperial College London (ICL), to quantify the energy system cost benefit of tidal stream energy, with a whitepaper explaining the findings here.

A follow up study was completed by researchers at ICL in 2023, and these are the key takeaways.

What are System Benefits?

System benefits refer to the positive impacts derived from the efficient operation and optimisation of the energy system, focusing on the system, rather than individual components or stakeholders. These can include reliability and resilience, cost efficiency, environmental sustainability, and security.

How Much Can Tidal Stream Energy Save the Consumer?

System modelling conducted by ICL found the gross benefit of tidal stream energy (TSE) to be around £2bn/year. This means an average saving of £71 for each UK consumer, every year.- a compelling figure in the current cost of living crisis. However, the cost benefits of TSE to the energy system will depend on several factors: the deployed TSE capacity, the cost of other generation sources (wind/solar/gas/nuclear), and the cost and pace of integration of electrolysers and battery energy storage systems (BESS). ICL’s 2023 study ran sensitivity analysis to better understand the effect of these.

Figure 1: Annual Energy System Cost Benefit (£m/y) with Tidal Energy Deployment, Under different Scenarios, Relative to the system without Tidal Energy Integration.

Figure 1 shows the gross cost saving to the energy system with tidal deployment in each scenario, relative to the system without tidal. Significantly, the findings show that even with high nuclear deployment and low BESS costs, there continues to be cost benefits with tidal stream deployment. Additionally, the benefits of tidal to the energy systems was found to remain largely unaffected by uncertainties surrounding the cost of variable renewable energy sources.

How does tidal stream energy provide energy system cost savings?

It tides us over during extreme weather events

Last winter (2022/23) was a good example of challenging weather from an energy system perspective. The first weeks of December 2022 saw prolonged freezing temperatures, increasing heating demand, unusually calm weather, leading to low wind power generation, and this combination pushed the grid’s reliance on imported energy. Tidal stream improves the resilience of the energy system by diversifying renewable energy sources. Tidal currents are consistent and predictable, decades into the future. Therefore, they can ensure stable power supply during challenging weather, reducing the reliance on imported gas or electricity. In a year where there is a 1 week wind drought, the scenario with TSE has a £2.6bn benefit over a non-TSE scenario.

It provides base load energy and lowers infrastructure costs  

Tidal energy offers a valuable benefit to the energy system by providing a consistent and predictable source of base load energy. Currently gas/biomass/nuclear power stations generate the base load in the UK. However, in the case of gas, which makes up a large portion of this generation, this comes at the cost of vulnerability to global gas price fluctuations and significant greenhouse gas emissions. For nuclear, it is predicted that the cost of integrating tidal stream energy and displacing some gas generation brings down system costs by alleviating exposure to high fuel prices and increasing CAPEX savings with additional carbon offset technology such as carbon capture and storage (CCS). TSE is predicted to fall below the costs of nuclear [3], meaning savings over nuclear are a key system benefit.

It’s better for balancing

As installed capacity of offshore wind and solar panels increases, their system integration costs rise. There is an increasing need for energy storage solutions to allow energy demand and supply to match. After a certain point every GW of wind or solar capacity added to the system will require additional storage capacity and replacing this extra capacity with TSE reduces balancing costs. It increases the diversity of the energy mix, generating power based on different external factors. The optimum power generation portfolio calculated by the system modelling has at least 10 GW of tidal energy. This is true even when storage costs (such as electrolyser and BESS) are 20% lower than anticipated.

How can tidal stream benefits be fully realised?

For the benefits of tidal stream to be fully realised, we need sufficient deployment of tidal energy, and this will only happen with a fall in technology costs. Currently there are a wide range of tidal energy devices each requiring bespoke component manufacturing. Collaboration between innovators to standardise certain components would go some way to enable the supply chain to reduce manufacturing costs.

Long-term policy support from the government is another crucial factor in enabling significant tidal energy deployment. Positive steps have already been taken – the UK Government ring-fenced funding for tidal energy within the UK Government’s Contracts for Difference (CfD) scheme, including the allocation of 40.8 MW in the CfD’s Allocation Round 4 in 2022, and 53MW in the Government’s AR5 in 2023. This enhances the sector’s ability to attract private investment, which is essential to unlock cost reduction and drive further progress in the industry.

Going forward, policymakers must prioritise industry deployment targets and support scale up, continue to ring-fence funding, and streamline the consenting process to strengthen the project pipeline. These actions will boost private sector confidence, unlock new funding sources, and accelerate cost reduction. Similar reductions in the levelised cost of energy (LCOE) have been achieved in wind and solar through early-stage innovation support and market-led financial assistance for commercial deployment. Addressing these factors will enable the UK to achieve substantial tidal energy deployment and fully harness its renewable energy potential.

Development of tidal stream devices off the shores of North Devon in 2008, and at the European Marine Energy Centre (EMEC) in Orkney marked the humble beginnings of an important piece in the puzzle of a future net zero energy system. We are seeing the first commercial tidal stream arrays with MeyGen (Pentland Firth), Nova Innovation (Shetland) and Morlais in North Wales. Expertise developed here in UK waters will be a point of reference for international markets seeking to harness the ocean’s energy, paving the way for the global adoption of tidal stream devices.

* Annual costs and benefits are expressed as real value in 2020.

[1] ReEnergise-Summer-2023.pdf (

[2] Cost Reduction Pathway of Tidal Stream Energy in the UK and France – ORE (

[3] Cost Reduction Pathway of Tidal Stream Energy in the UK and France – ORE (