NATIONAL ENERGY STRATEGY
The design and implementation of energy policy in the UK reflect a complex mix of reserved, devolved and shared competencies. Responsibility is divided between the UK Government — where the research, development and implementation of energy policy at the national level sits primarily with the Department for Energy Security and Net Zero — and the devolved administrations in Scotland, Wales and Northern Ireland, each of which exercises differing degrees of autonomy over policy decision-making. While the delivery of a future clean energy system is a shared ambition across both national and devolved governments, there is some divergence in the net zero timelines adopted across the UK. For example, the Scottish Government has committed to achieving net zero by 2045, compared with a 2050 target for the rest of the United Kingdom.
Within the UK, energy policy is largely devolved to the Northern Ireland Executive. It is broadly reserved to UK Government in respect of Scotland and Wales, limiting the ability of Scottish and Welsh Governments to make decisions and policy independently of UK Government. However, the ability to enact policy which is designed to tackle climate change, through policy levers such as the promotion of renewable energy, energy efficiency, electricity generation, and transmission development is devolved to some extent. This provides each of the devolved governments with at least some powers to determine their overall domestic energy mixes.
United Kingdom
2025 marked the first full year of the current UK Government, a year in which it firmly positioned the development of the UK as a clean-energy superpower as one of its central missions while in office. This ambition has been reflected in the clearer positioning of Great British Energy (GBE) and the ongoing implementation of the Clean Power 2030 Action Plan, as well as a series of major policy announcements aimed at accelerating the transition to a Net Zero energy system. Key developments include:
Taken together, these policy developments signal a renewed national commitment not only to expanding the UK’s clean energy capacity but also to strengthening the domestic supply chains that will underpin this transition. Within this landscape, the ocean energy sector must continue to advocate for its place in the long-term plan, ensuring that tidal stream and wave energy — technologies uniquely aligned with the UK’s natural strengths — are fully recognised for the value they can bring. Delivering a sustainable, diverse and resilient energy mix, that harnesses all of the UK’s resources will be essential to achieving Net Zero in a cost-effective and secure manner. As understanding grows of the contribution that wave and tidal stream energy could make in underpinning and strengthening the national energy system, it is vital that these sectors remain integrated into the UK’s broader vision for a clean-energy future.
Scotland
Scotland continues to hold the most ambitious climate targets within the UK, with the Scottish Government committed to achieving net zero emissions of all greenhouse gases by 2045. Meeting these ambitions will be challenging, as highlighted in April 2024 when the Climate Change Committee advised that Scotland’s interim target of reducing greenhouse gas emissions by 75% by 2030 was at risk. In response, the Scottish Government adapted its delivery framework, announcing the replacement of annual emissions targets with a system of multiyear carbon budgets. This approach is supported by a statutory strategic delivery plan setting out how emissions reductions will be achieved, with updated plans to be published at least every five years. Alongside these strategic frameworks, the Scottish Government also exercises devolved powers over spatial planning, marine planning and consenting, providing important policy levers to shape the pace, scale and location of renewable energy deployment and associated supply chain development.
In November 2025, the Scottish Government published the draft version of Scotland’s Climate Change Plan (to be finalised in 2026) covering the years 2026–2040. This plan places a renewed emphasis on the development of renewable energy within Scotland, which extends to creating jobs and developing skills within this industry. The plan also emphasises a need for ongoing collaboration between national and devolved governments as 30-60% of the emissions reduction required in Scotland, Wales, and Northern Ireland will be in areas of policy that are mostly reserved to UK Government. Finally, this Plan makes clear that the renewable energy sector in Scotland will provide the foundation of the nation’s future energy system, offering a sizeable opportunity for economic growth.
While the plan makes clear that Scotland’s future renewable capacity will rely heavily on the development of offshore and onshore wind, other more nascent technologies, such as tidal stream and wave energy, can also play a role in the longer term. The Scottish Government has committed to continuing to support the development of these sectors in its Climate Change Plan. This is particularly important as Scotland’s location on the western edge of Europe and its unique geography of seaways and firths, exposes it to a combination of intense winds, powerful Atlantic waves and fast-flowing tidal currents.
Scotland has also benefited from the formation of the Offshore Wind Directorate, a Scottish Government department responsible for the development of policy related to offshore renewables, marine energy, and sectoral marine planning. Scotland has also completed the world’s largest commercial offshore wind leasing round in ScotWind. Developer commitments could see an average spend of £1.5 billion in Scotland across the ScotWind offshore wind projects. The Scottish Government has also committed to invest up to £500 million over five years to leverage private investment in ports, manufacturing and fabrication to support sector needs. Given the technological and supply chain overlaps between the Scottish offshore wind and ocean energy sectors, tidal stream and wave energy developers may also stand to benefit if their requirements are taken into consideration at an early stage.
In the last few years, Scotland’s ocean energy sector has continued to make substantial progress as wave and tidal stream developers progress on the journey towards commercial-scale deployment. Sustained success in the bidding process for CfD means that there is now nearly 84 MW of tidal stream energy set for deployment in Scotland by the end of 2029. This represents a significant proportion of the global allocated capacity for tidal stream and highlights Scotland’s position as a pioneering the development and deployment of tidal stream technologies. Finally, in addition to the CfD awards, three pilot farms at EMEC have been successful in gaining significant support through Horizon Europe funding:
Wales
Wales remains committed to its target of decarbonising the energy sector, accelerating renewable energy deployment and reaching net zero greenhouse gas emissions by 2050, with interim targets of a 63% reduction by 2030 and 89% by 2040. In 2025, the Climate Change Committee advised that the Welsh Government’s existing carbon budget and interim targets remain credible and evidenced. Alongside its emissions targets, Wales has, for nearly a decade, maintained an ambition for 70% of electricity consumption to be met from renewable sources by 2030, which was further strengthened in 2023 through a new commitment to 100% renewable electricity by 2035. While Welsh Government strategies continue to prioritise offshore wind and solar in the near term, tidal stream and wave energy are recognised as longer-term opportunities due to Wales extensive coastline, strong tidal currents, and energetic wave conditions in the Celtic Sea.
In 2025, the Welsh Government strengthened its support for ocean energy through a combination of equity investment and regional infrastructure funding. It holds an £8 million equity stake in the Morlais tidal stream demonstration zone, while a further £8.87 million has been committed through the North Wales Growth Deal to support the Cydnerth grid expansion phase, bringing total project investment to over £16 million. Completion is expected in late 2026, with the project anticipated to support up to 230 jobs and generate up to £30 million in net additional GVA for North Wales. In parallel, the Welsh Government also took a £2 million equity stake in tidal stream technology developer Inyanga Marine Energy, supporting the demonstration phase of its Hydrowing technology at Morlais.
Several additional project milestones occurred during the year. Tidal technology developer Inyanga announced UK-based contractors for manufacturing, system integration, and offshore operations on its upcoming CfD supported 20 MW HydroWing array. 2025 also saw the launch of a Welsh Government-backed R&D collaboration to develop next-generation tidal turbine blades. The project brings together the Advanced Manufacturing Research Centre Cymru, Morlais developer Menter Môn, and ORE Catapult’s Welsh team, alongside Spanish partners Magallanes Renovables and D3 Applied Technologies. Funded under the VInnovate Wales programme, the project aims to design more efficient and durable tidal stream blades, laying the groundwork for future cost reductions.
Early-stage technology testing continued at the Marine Energy Test Area in Pembrokeshire. CGEN Engineering and Swansea University’s “Tidegen” project, funded by Innovate UK, completed a series of real-sea trials of a next-generation, modular tidal generator at METAs Warrior Way site in early 2025. Separately, Innovate UK awarded £750k to Checkmate Flexible Engineering for its “Môr Neidr” (Welsh for Sea Snake) wave energy converter project.
Marine Energy Wales (MEW), the industry-led stakeholder group, continued to coordinate activity across government, industry, academia and local supply chains. In 2025, MEW’s core public remit was renewed with a further three years of Welsh Government funding, providing continuity for policy engagement, market development and supply-chain mobilisation across Wales. MEW also co-led a major cross-technology advocacy milestone, launching “Wind, Solar and Tidal Stream: Unleashing the Full Value of Welsh Renewables” in partnership with RenewableUK Cymru and Solar Energy UK. The report positions tidal stream as a meaningful contributor to Wales renewables growth and quantifies its prospective economic contribution at £696 million in gross value added between 2025 and 2035, supporting average annual employment of 700 jobs over the period.
MARKET INCENTIVES
Contracts for Difference
The Contracts for Difference (CfD) scheme is the UK government’s flagship program for supporting low-carbon electricity generation. CfDs provide long-term price stabilisation through a two-way payment mechanism that settles the difference between a market reference price and an agreed strike price. When market prices fall below the strike price, generators receive a payment; when prices exceed it, they return the difference. The CfD scheme incentivises investment in renewable energy by providing developers of renewable energy projects, normally projects with high upfront costs and long lifetimes, protection from volatile wholesale prices. To date, six allocation rounds (AR) had been completed, with a range of renewable energy technologies successfully bid for contracts through competitive auctions. In AR4, AR5, and AR6, tidal stream benefitted from a dedicated minimum budget in the auction, where support was ringfenced for tidal stream in the CfD auction round before the competition opened to other renewable technologies. From these three AR, there is now a total pipeline for 122 MW of tidal stream projects in the UK, all expected to be commissioned by 2029. While wave energy projects have not yet won CfD contracts and the sector remains at an early stage relative to tidal stream, there is ongoing technology development and industry interest in progressing devices toward a level of maturity that could make them competitive for future CfD auctions.
In July 2025, DESNZ published the results of its CfD AR7 consultation, which focused on making reforms to AR7 and the broader CfD scheme in support of the renewable deployment targets set out in the Government’s 2030 Action Plan. The most significant change outlined that AR7 would be split into two separate allocation rounds — one for offshore wind technologies (AR7) and a second for non-offshore wind technologies (AR7a) — with separate timelines being published for each. Additionally, prices are now reported in 2024 values, while all previous AR were in 2012 prices. AR7a contains two technology pots, with Pot 2 including both tidal stream and wave. Unlike previous years, Pot 2 does not currently have any ringfenced funds for specific technologies. Results from AR7a are expected February 2026.
The UK has also provided a funding boost for the CfD associated Clean Industry Bonus (CIB), increasing the overall budget to £544 million, up from £200 million the previous year. While the CIB is only available to offshore wind developers, its aim of supporting cleaner manufacturers, new and upgraded factories, port infrastructure and more support for UK or cleaner supply chains, is likely to have positive knock-on effects for the UK ocean energy sector.
PUBLIC FUNDING PROGRAMMES
UK Research and Innovation
Launched in April 2018, UK Research and Innovation (UKRI) is a non-departmental public body sponsored by the Department for Science, Innovation and Technology. UKRI is the national funding agency investing in science and research in the UK. Operating across the whole of the UK with a combined budget of more than £6 billion, UKRI brings together the seven Research Councils, Innovate UK and Research England.
Engineering and Physical Sciences Research Council
The Engineering and Physical Sciences Research Council (EPSRC) is the main funding body for engineering and physical sciences research in the UK. The EPSRC aims to create knowledge and fund innovation with the capability to benefit both society and the economy by supporting research through the provision of fellowships, studentships, research and training grants, competitive funding, and prizes. EPSRC funds and co-invests with industry, at both national and international levels, helping to deliver advanced research facilities and resources for engineering and physical sciences, including wave test facilities and tidal tank testing. EPSRC also provides technology push policy support mechanisms, such as the Industrial CDT in Offshore Renewable Energy (IDCORE), a programme designed to provide sector-specific training to bring forward the next cohort of highly skilled engineers, funding for which was renewed to run until 2032. In addition, IDCORE also provide a number of fellowships, managed activity, standard grants and programme grants and is also responsible for funding the ORE Supergen Impact Hub.
Innovate UK
Part of UKRI, Innovate UK inspires, involves, and invests in businesses developing life-changing innovations to create a better future. Providing sectors with expertise, facilities and funding, Innovate UK helps test, demonstrate and evolve ideas, driving UK productivity and economic growth. Innovate UK’s network and communities of innovators realise.
Wave Energy Scotland
Since 2014, Wave Energy Scotland (WES) has been using Scottish Government funding, alongside a competitive stage gate process, to tackle the key technical challenges of wave energy conversion, pushing innovative solutions from concept towards commercialisation. Separate funding streams have supported the development of novel wave energy devices, power take-off systems, control systems, quick connection systems and materials. Alongside this, WES is supporting further development of wave devices through the EuropeWave programme, in partnership with the European Commission, Ente Vasco de la Energía (EVE) and Ocean Energy Europe.
During 2025, WES focused on continued innovation support and promoting commercialisation pathways for the emerging technologies, including future opportunities for co-location with the growing floating wind sector. Building on a 2023 study which showed significant cost of energy reduction for wind and wave projects, WES is working to demonstrate the benefits and feasibility of multi-use marine spaces, aiming to maximise the energy generation and economic benefit from available sea areas while helping balance the energy system.
In support of more radical cost-reduction opportunities, WES continued the Direct Generation competition, funding enabling R&D and concept design projects using flexible wave energy devices based on electrostatic power conversion technologies. WES continues to collaborate widely, playing a leading role in the guidance and delivery of the innovation activity required to take wave energy towards commercial readiness and contribution to Net Zero. Echoing the positive message on the economic benefits of tidal energy, WES published a report in February exploring the potential economic benefits of deployment of wave energy technologies, highlighting the opportunities for domestic content, jobs and a strong export market. Through the companies and projects funded by the WES programme, this report further demonstrated the opportunity for emerging marine energy industries to deliver extensive economic value in domestic and export markets, while contributing value to the decarbonisation of the UK energy system.
The qualities of the WES programme have been recognised globally and can be replicated in other low-carbon sectors where the value of focused innovation, detailed evaluation and rigorous project management can steer emerging technologies towards their potential.
MARINE SPATIAL PLANNING POLICY
Marine Spatial Planning (MSP) policy exists in UK but it is used as a decision making tool currently only in the East of England Inshore and Offshore areas.
An interactive tool – the Marine Information System - explains how marine plans apply to different marine sectors and geographic areas. It highlights policies that apply to a chosen area to inform plan users (available at: http://mis.marinemanagement.org.uk/).
Eleven marine plan areas will have a marine plan with a long-term (20 years) view of activities and will be reviewed every 3 years. There will be ten marine plans as the North West will have a single plan following requests to have a single process and one plan for these areas. All marine plan areas are scheduled to have a plan by 2021.
The Crown Estate carries out periodic tendering processes for wave/tidal areas. These areas are scoped and Strategic Environmental Assessments (SEA) carried out.
AUTHORITIES INVOLVED
The authorities involved in the consenting process are:
• Marine Management Organization (MMO);
• National Resources Wales (NRW).
In English and Welsh offshore waters, marine licenses, section 36/A consents, and safety zones are determined by the MMO. In Welsh inshore waters, marine licenses are determined by the NRW and section 36/A consents and safety zones by the MMO. Decommissioning of offshore renewable energy installations is regulated by the Department of Energy and Climate Change (DECC).
CONSENTING PROCESS
Main sequential steps (licenses, consents, permits) required to get permission for project deployment is presented in the following link:
https://www.gov.uk/planning-development/marine-licences.
ENVIRONMENTAL IMPACT ASSESSMENT
An Environmental Impact Assessment (EIA) is assessed on a case-by-case basis.
Assessment is based on the size, nature, and location of each proposal as directed by Annex II of the Marine Works (Environmental Impact Assessment) Regulations 2007 or Schedule II of the Electricity Works (Environmental Impact Assessment) (England and Wales) Regulations 2000.
The Marine Management Organization (MMO) is responsible for providing a decision on whether an EIA is required or the applicant can voluntarily opt in to the process.
The Environmental Statement (ES) will be submitted at the application stage for a marine license. However, draft ES chapters may be reviewed by the MMO and its technical advisors at the pre-application stage.
LEGISLATION AND REGULATION
Legislation and regulations related solely with the consenting process for ocean energy:
• The Electricity (Offshore Generating Stations) (Applications for Consent) Regulations 2006;
• The Electricity (Offshore Generating Stations) (Safety Zones) (Application Procedures and Control of Access) Regulations 2007;
• The Electricity Act 1989 (Requirement for Consent for Offshore Wind and Water Driven Generating Stations) Order 2011.
Legislation and regulation that has been adapted to better suit ocean energy:
• Electricity Act 1989 for section 36 consents and safety zones.
CONSULTATION
Consultation process is initiated after the initial checking of the application.
This is done primarily through the online portal Marine Case Management System (MCMS) but also by email to other consultees as appropriate.
There are statutory consultees stipulated in either the Marine and Coastal Act 2009, the Marine Works (Environmental Impact Assessment) Regulations 2007 or Electricity Works (Environmental Impact Assessment) (England and Wales) Regulations 2000. Consultation in taken on a case-by-case basis.
There are no informal consultation activities implemented during the licensing process.
GUIDANCE AND ADVICE
The MMO have a Key Performance Indicator (KPI) target of 13 weeks to make a determination on a marine license application from when it is received with us. There is no such KPI for 36 consents or safety zones.
Information about what permits are required, in what order and what information must be supplied at what time is available at a dedicated web link.
TEST CENTERS
Usually deployment in designated test centers are already pre-consented so developers do not have to submit a full application comprising all the typical consents providing certain initial conditions are met. This is the approach encouraged for applicants to adopt in order to streamline the consenting process for the deployment of demonstration devices.
