Wave and tidal power: Why the delay?
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Wave and tidal power could offer a significant advantage over other renewables in that the energy they capture is predictable in advance. So why has their growth been so much slower than wind and solar?
According to the UK-based Carbon Trust, “The value of worldwide electricity revenues from wave and tidal stream projects could ultimately be between £60bn/$97.87bn per year and £190bn/$309.92bn per year.”
For potential sites for both wave and tidal power (see maps, below).
The UK has until now taken the lead in supporting the creation of a marine renewables industry, in line with its extensive resources, but other markets are catching on. “A number of countries are now recognizing that there’s a very large energy resource sitting on their doorstep, with the potential to be harnessed and deliver on the three legs of energy policy: energy security, environmental benefit and potentially socio-economic benefit,” says Max Carcas, business development director of Pelamis Wave Power, an Edinburgh-based wave energy developer, comments.
The Carbon Trust estimates that marine renewables could represent up to 20 percent of the UK’s energy needs in the long term. Industry players anticipate that the island nation could have between 1GW and 2GW installed by 2020, compared with less than 2MW currently.
For the US, where progress is slower, research body EPRI’s Ocean Energy leader Roger Bedard nevertheless predicts that marine renewables could in the long-term “provide 10 percent of electricity generation based on today’s needs.”
Marine renewable technologies are costly, and without government support, the investment community is unlikely to jump on board.
“At the moment, you get two ROCs [Renewables Obligation Certificates, the UK government’s incentive for companies developing renewable power] per megawatt for offshore wind, and two ROCs for wave and tidal,” UK-based Marine Current Turbines’ (MCT) managing director Martin Wright comments. “It’s a bit of a no brainer,” Wright says. “Are you going to apply capital to offshore wind, which is a commoditized power source, or do you go for an emerging technology? Unless the market signal properly reflects the risk, it’ll be difficult to attract capital.”
MCT has developed the SeaGen device for exploiting tidal currents, and is currently delivering power to the grid in Ireland with a 1.2MW capacity prototype machine (see picture, left). The company is looking to install a 5MW farm in late 2012 or 2013.The Scottish Executive last year introduced a system granting three ROCs per megawatt of tidal power and five per megawatt for wave energy in a bid to ensure that Scotland remains in the lead in marine renewables. “The center of the marine renewables industry is clearly in the UK,” Martin McAdam, CEO of wave-power developer Aquamarine Power, also based in Scotland, comments. “That’s a leadership that we should give up reluctantly,” he explains. If the UK stays ahead in years to come, its developers will have a significant first mover advantage in international markets as and when they develop.
Other countries are also moving ahead in marine renewables. Notably, Portugal, Ireland and France have introduced feed-in tariffs. “From a developer’s viewpoint, feed-in tariffs are a good way forward,” Ana Brito e Melo, research coordinator at the Wave Energy Centre in Portugal and secretary of the International Energy Agency’s Implementing Agreement on Ocean Energy Systems (OES-IA), comments.
In terms of energy production, the oceans are an uncharted resource, with regulators and governments unprepared for permitting such technologies and the environmental impact largely unknown.
Stung by the environmental aberrations of energy projects in the past, regulators are reticent about permitting new types of generation before their impact is known, leading to a chicken-and-egg situation; until marine renewables have been thoroughly tested in an ocean environment, the regulators will not allow them to go ahead, but permits are few and far between.
Both Portugal and the UK have taken this matter in hand, setting up centers where different technologies can be tested in the water. “Pilot farms are a good way to encourage development,” the Wave Energy Centre’s Brito e Melo tells Agrion.
The European Marine Energy Centre (EMEC) on the island of Orkney, Scotland, was the world’s first facility for testing marine renewables and was the testing ground for several of the technologies that are now nearing commercial deployment, including Pelamis Wave Power’s deep-water floating device.
In the US, however, the market is a long way behind, according to EPRI’s Roger Bedard. The US Federal Energy Regulatory Commission recently introduced a pilot licensing process to simplify the approval process, and last year the Department of Energy released funding to allow the establishment of testing facilities at leading universities. “We’re just getting started, EPRI’s Bedard says. “Hopefully the US will learn from the UK experience.”
The number of different devices being proposed for capturing energy from the sea is tremendous. How can potential backers decide between them?
A 2006 report by the OES-IA identified 81 different technologies for capturing ocean energy in various stages of research and development (see graph, right). The wealth of start-ups proposing different solutions is mindblowing. And with all the companies involved competing for financial backing, it can be difficult for potential investors to decide between them. “Very few of these technologies will emerge as cost-competitive,” Aquamarine Power’s Martin McAdam predicts. “If you want to go into the ocean, the first challenge is survivability, and the engineering challenge of designing machines is huge,” he explains. “The second challenge is operations and maintenance at sea, particularly underwater. If I were an investor, I would ask potential developers, ‘How do you solve these technical problems and arrive at cost- competitivity.’”
Research centers like the Wave Energy Centre in Portugal and the European Marine Energy Centre in Orkney, as well as those being established in the US, offer developers the occasion to test their technologies, while being connected to the grid, and provide independently tested data on the viability of their solutions. Testing at such centers is a key step on the way to commercial deployment.
Marine renewables are readying for commercial deployment in an extremely harsh investment environment.
The financial climate for all renewables is difficult right now, and marine renewables are fighting for backing with other, more established resources. For the moment, marine renewables are expensive and this, coupled with their untried nature, makes the investment environment particularly difficult for them.
Edinburgh-based Pelamis Wave Power paid the price of the recession last year when Babcock & Brown, the company for whom it had installed three of its “sea-snake” machines (left) off the coast of Portugal, went bankrupt, bringing the project to an abrupt halt. “We’ve had a lot of adverse publicity as a result, but if you look at it in the broader context, and think about the development of different technologies, from airplanes to gas turbines, you have to go through the process of feedback and experience, and that takes you on to the next stage,” Carcas says. The company has bounced back, recently signing contracts with utilities E.ON and Vattenfall for separate projects in Scotland using its second-generation P2 machine. Carcas says that costs for the company’s machine come in between offshore wind at £3.3m/$5.38m per megawatt and solar photovoltaics at £4-5m/$6.5m-$8.1m per megawatt.
Aquamarine’s Oyster hydro-electric wave energy device (right), meanwhile, is a mechanical hinged flap connected to the seabed. The company is demonstrating a 315kW installation at the EMEC in Orkney, and plans to develop a three-flap configuration at the same site next year, before the installation of a 10MW wave farm in 2012 or 2013. “We can arrive within three to four years at a cost per kilowatt hour of between 7.5 and 9.5 pence/₵12-₵16,” CEO McAdam claims.MCT is predicting a rate of £7m/$11.4m per megawatt for its 5MW tidal-stream technology demonstration plant, to be installed in UK waters in 2013, and for this price to be halved in time for full-scale deployment, according to managing director Wright.
While these companies each offer very different solutions for capturing energy from the sea, in commercial terms, they are among the very few getting close to deployment.
“We have seen, with wind energy, costs fall by 80 percent over the last 20, 30 years since the technology has gone from not being installed anywhere to gigawatts deployed today,” Pelamis’s Carcas says. “We expect the same thing to happen with wave energy.”
MCT’s Martin Wright comments: “Government and everybody would like wave and tidal technology to somehow magically be commercially competitive straight off. For this industry to take off, we are looking for the scale of investors to move it from the venture capital arena to where it can really be commercialized. That is the challenge going forward.”
Alex Wynne
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