Tidal stream energy is set to make waves

Tidal stream energy, in which electricity is generated by making use of the natural movements of coastal waters, is considered to have potential as a more efficient and predictable method of generation than offshore wind, and one which may cause less disruption to the marine environment due to the slower movement of the subsea turbines.

Although it is expected to remain a smaller sector than the highly commercialised offshore wind sector, to date tidal stream energy has lingered in the pre-commercial stage. It has suffered from higher costs than more mature renewable technologies and currently operates without a targeted regulatory framework to incentivise the development of commercial-scale projects as has benefited other renewable technologies.

Although the UK Marine Energy Council (MEC) predicts that the UK's practical tidal resource is equivalent to 11 per cent of total electricity demand, wave and tidal have contributed less than 1 per cent to the annual UK electricity generation mix since 2014.

The Stoer Lighthouse at Lairg in the Highlands. Scotland is well placed to benefit from tidal stream energy with its significant coastline resource

However, the UK and Scottish governments have repeatedly affirmed support for the developing marine energy industry as part of the transition to net zero, including ring-fencing funds for tidal stream projects in the Contracts for Difference (CfD) scheme across Allocation Rounds (ARs) 4 to 6 – although there is notably no ring-fenced amount for tidal projects in the upcoming AR 7a.

This year, the MEC has also announced the launch of the Marine Energy Taskforce, a 12-month initiative which seeks to develop a roadmap to realise the UK's marine energy potential and which will focus on site development, financing, innovation and supply chain growth for UK marine energy projects. This follows a report by the University of Edinburgh in April 2025, highlighting the potential to deploy more than 6GW of UK tidal stream projects by 2030, with £3 billion to £6bn gross value added (GVA) to the UK economy by 2050.

The UK, and Scotland in particular, can in fact be considered a “first mover” in the tidal energy sector with its significant coastal resource and, currently, more test and demonstration sites than any other country.

Beyond tidal energy alone, projects such as FORWARD2030 are exploring co-locating tidal energy with other sources – FORWARD2030 seeks to develop tidal stream generation co-located with wind, green hydrogen production and battery storage (BESS) at the European Marine Energy Centre (EMEC) in Orkney. Although the tidal stream energy market does remain in relative infancy, there is clearly both industry appetite and technological potential for the tidal sector to mature. As this comes to pass, cost reductions are likely to come from economies of scale, economies of volume from larger farms and accelerated learning, meaning that tidal stream could well become part of a cost-effective decarbonisation pathway.

​Jessica Sutherland is a Practice Development Lawyer, Dentons

Underpinning the successful commercialisation of tidal energy projects will be a complex legal framework spanning environmental protection, evolving regulatory requirements, marine rights, planning and consents, and the potential for projects to make use of government support schemes, including CfDs. Where projects are co-located with other renewable generation or production, these requirements are likely to become more complex, in particular as projects move from demonstration to grid-connected commercial scale.

Developers of tidal stream projects, and others with interests in the maturing tidal supply chain, will need to navigate the complexities of this dynamic legal environment in order to successfully capitalise on the significant potential that tidal energy represents in the renewables space.

Jessica Sutherland is a Practice Development Lawyer, Dentons