In Depth: The marine industry poised to ‘put its foot on the gas’
Wave- and tidal-energy costs are not falling as quickly as proponents had hoped, according to a report, but the sectors can compete with other sources in the coming decades.
The tough news is that the current cost of both technologies has been revised upwards since the UK Carbon Trust last priced them in 2006.
Its latest study pegs tidal-stream energy at £0.29-0.33 ($0.46-0.52) per kWh and “far-shore” wave energy at £0.38-0.48.
But the Carbon Trust says both technologies can be cost-competitive with onshore wind and nuclear by 2025 — earlier than many previous estimates — and marine energy has much more potential for cost reduction than other renewables, given its immature state.
And, having undertaken the most in-depth study of tidal resources to date, including working with the Crown Estate to investigate looming space constraints, the report confirms that the UK’s potential marine-energy resource is vast.
Current devices, assuming no technological advances, could capture 21 terawatt hours (TWh) of tidal energy and 50TWh of wave energy a year, equivalent to 20% of the nation’s electricity demand.
Although grid issues will be a challenge, as they are for any renewable technology, the concentrated nature of the tidal resource may allow it to be tapped more easily than expected. More than 60% of Britain’s “practical tidal potential” lies in Scotland’s Pentland Firth and around the Channel Islands.
Nevertheless, getting near either generation milestone will require herculean research efforts and large amounts of money that many companies may not be able to muster.
Progress in the sectors has been fitful in recent years, laden with successes and disappointments, says Stephen Wyatt, head of the Carbon Trust’s Marine Energy Accelerator programme.
“We have a handful of prototype devices in the water, so that’s our starting point,” he tells Recharge. “The truth is, it’s taken us 30 years to get to the stage where we really have confidence the equipment will work on a commercial scale.”
The next phase will be far more exciting and fast-moving as devices are scaled up and companies move towards deploying the first multi-device arrays.
“If we do nothing else in the next five years other than getting the first farms in the water, it will be a success,” Wyatt says. “Once you reach that stage, you hit a period of accelerated learning and significant cost reduction.
“All of a sudden you’re not placing an order for one widget or component, you’re ordering five or ten at a time, so the industry becomes a lot more interesting from a supply-chain perspective.”
After that point — say, around 2016 — the industry “can really put its foot on the gas”.
Last year, the Crown Estate allocated wave and tidal leases totalling 1.2GW in the Pentland Firth and Orkney waters, with utilities Scottish and Southern Energy, E.ON and Iberdrola-owned ScottishPower leading the charge.
However, this week, the government said it expects only 300MW of that to be in the water by 2020.
Wyatt admits that the climate for financing marine companies is completely different from what it was five years ago — and not just as a result of the financial crisis.
The venture-capital market, in particular, has soured. “They got in there five or so years ago and found out it’s still really expensive and really difficult, and they haven’t had returns they wanted,” he explains.
The smartest and best-funded companies either took advantage of the last wave of hype to float on the stock exchange, like US-based Ocean Power Technology, or turned to industrial companies such as ABB or Siemens for investment.
“If I were starting a wave or tidal company today, I’d go for the industrial money,” Wyatt advises. “They tend to have a longer horizon than, say, venture capital, who want a return in three to five years.”
The tidal sector has progressed in leaps and bounds. However, Wyatt concedes that there is a dearth of companies making “far-shore” wave devices that have reached a sufficiently advanced commercial and technological state.
Last year, when the Carbon Trust disbursed the £22.5m ($35.7m) Marine Renewables Proving Fund to the six most advanced marine-energy companies, “there was only one offshore wave device we considered worth backing” — Pelamis.
The other winners were Aquamarine’s near-shore wave device and four tidal outfits: Atlantis Resources; Hammerfest Strøm; Marine Current Turbines; and Voith Hydro.