MPs call for targets to help Britain rule the world's waves again

Marine Current Turbines' commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland. The shrimp MCT has just been swallowed by the Siemens' whale.

The UK could become a leading exporter of wave and tidal power equipment and expertise if the Government adopts a more visionary approach to developing marine renewables, according to a new report by the Energy and Climate Change Select Committee.

The MPs suggest giving targets to set the pace of development and show commitment, and suggest a cost target for marine energy of 14p/kWh by 2020.

Tim Yeo MP, Chair of the Committee, said that "We are extremely well placed to lead the world in wave and tidal technologies, which could potentially bring significant benefits in manufacturing and jobs, as well an abundant supply of reliable low-carbon electricity".

He called for "a more visionary approach from the Department of Energy and Climate Change" which "could help to boost confidence and drive the pace of development".

The UK is currently the world leader in the development of wave and tidal energy technologies. Of the eight full-scale prototype devices installed worldwide, seven are in the UK.

The country is lucky to have an abundant natural resource, along with Canada, France and East Asia, with the added advantage of a long history of academic research, world-class testing facilities and a strong skills base in other maritime industries.

The worldwide potential for power generated by tidal power plants is estimated at 800TWh a year, or about 3-4% of global power consumption.

Don't repeat mistakes

The MPs urge the Government not to repeat the mistakes that allowed the UK to lose its lead in the development of wind power. In the 1970s, it was a leader in the research and testing of wind turbines, but failed to establish a domestic manufacturing industry and missed out on many economic benefits.

By contrast, Denmark supported its wind power industry through the early adoption of Feed-in Tariffs and is now hosts the world’s largest supplier of wind turbines.

Those MPs with long memories may also have in mind a 1970s pioneering British wave power invention, Salter's Duck, whose development was allegedly sabotaged by Government officials prejudiced against renewable energy, by falsifying research results concerning its efficiency, leading to the cancellation of a ￡1m research project. This set marine power development back at least ten years.

"An overly cautious approach to developing the sector may allow other less risk-averse countries to steal the UK's lead," MPs warn.

The report recommends ways to maintain crucial investor confidence by maintaining policy certainty and sharing risk.

MPs also note the need to address other barriers to commercialisation such as grid connection, the consenting process, the need for better data on marine wildlife and public attitudes.

At the moment the industry is required to underwrite the cost of new grid connections. The committee report says that this places "an excessive burden on individual developers", as the cost is disproportionately borne, and suggest that either the Marine Energy Programme Board set up consortia that would shoulder this responsibility, or that the Government should underwrite some of the cost.

They also call for a simplification of a "complicated funding landscape" for marine renewables which leads to "overlaps and inefficiencies in the way the programmes are funded".

"The ￡20 million provided by DECC to underpin a world-leading industry is not large", they say, and so must be spent wisely.

They stop short of calling for more funding.

They also note a shortage of skilled scientists and engineers and want the Government to encourage more students into these disciplines now to take advantage of future opportunities.

On the investment issue, Martin McAdam of Aquamarin Power observed that "private sector investors can see the support available via Renewable Obligation Certificates until 2017, when they will be phased ou, but beyond that, the view is unclear.

"The critical enabler for our industry will be the long-term signal of a suitable marine energy feed in tariff (FIT).

"The shift from ROCs to FITs has already unsettled potential investors, and what we need now is a stable tariff that will stay in place, and not be tinkered with for a number of years."

Ready for launch

A spokesman from DECC responded by saying that the Government is "fully committed to spurring on the growth of this industry", as the launch last month by Change Minister Greg Barker of the South West Marine Energy Park shows. He said there are plans to create similar parks in Scotland and Northern Ireland.

It's a time of exciting activity in the sector, but it is experiencing difficulty in finding investment partners in this country to help it take off.

Last week, Scottish tidal developer Marine Current Turbines (MCT) handed over boardroom control to German company Siemens, which bought a controlling stake in the company.

This world leader is already providing power to approximately 1500 households in a commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland, and has further projects at the planning stage, including the 8MW Kyle Rhea project in Scotland and the 10MW Anglesey Skerries project in Wales.

MCT needs investment and expertise to take it to the next stage of growth, and it evidently could not find a suitable British buyer.

Also north of the border, Alex Salmond is pinning hopes for Scotland's independence on success in the marine, and offshore wind, industry, which he believes will eventually let Scotland become an exporter of renewable energy and expertise, and he is securing partnerships in China and Abu Dhabi to help achieve this.

Wind developer Ecotricity has recently begun investing in a new kind of wave energy device called Searaser, which it believes will reach commercial stage before 2020, but both the developer and the investor in this case are British.

￡56 million for next gen offshore renewable energy

The marine and tidal energy sector in Scotland is being offered ￡6 million to push out new wave and tidal power devices, on top of a ￡50 million R&D fund for all offshore energy.

The ￡6 million is from Scottish Enterprise, which is launching a second round of funding from its WATERS ￡13 million fund to help reduce the cost of bringing wave and tidal technologies to commercial application.

First Minister Alex Salmond said the programme will continue to work with “enterprise agencies, SDI and the European Marine Energy Centre in Orkney" to "help generate ￡4 billion for Scotland’s economy by 2020".

The fund will be open to businesses that are legal entities registered or planning to register in Scotland, including Scottish subsidiaries of overseas companies.

Leading developers Aquamarine Power (with its Oyster wave power device), Open Hydro (tidal current devices), AWS Ocean Energy (which has a doughnut-shaped wave energy converter in Loch Ness and the Cromarty Firth) and Ocean Flow Energy (another marine energy device) have already benefited from funding in a previous round.

Today's news follows last Friday's announcement from the UK Technology Strategy Board that it will base its ‘Offshore Renewable Energy Catapult’ innovation centre for offshore renewables (wind, wave and tidal) in Glasgow’s International Technology & Renewable Energy Zone (ITREZ).

This is a UK-wide consortium comprising the Carbon Trust, National Renewable Energy Centre (Narec), and Ocean Energy Innovation. It will receive up to ￡10m per annum over five years (￡50 million) from the Technology Strategy Board.

Marine power will match nuclear and offshore wind for cost in 14 years

The best marine energy sites could be cost-competitive with nuclear and onshore wind by 2025 with accelerated and targeted innovation, according to a new report from the Carbon Trust.

The report is based on an evaluation of the Carbon Trust's £3.5 million Marine Energy Accelerator (MEA) programme of support for technology innovation.

It calculates that there is enough practically harvestable marine energy to provide for around 20% of the UK’s electricity consumption in 2025.

With sufficient effort on innovation, costs of will come down to around 28p/KWh for wave and 16p/kWh for tidal stream by the time the industry is half way through developing its most energetic sites.

These costs, particularly of wave power, could fall even faster if other countries install significant capacity as they are planning.

The report analyses the latest evidence on the practical marine energy resource and puts the wave resource at 50 tera-watt-hours per year (TWh/yr) and tidal (stream and flow) at 20.6 TWh/yr. This is broadly the same as previous studies.

Costs are very site-specific, though; for example energy would be cheapest at Pentland Firth Deep - the biggest and the most energetic site - with over 6 TWh/yr of potential.

Estimating the future costs is also complex because of the many competing different emerging technologies with many components, such as cables, moorings and turbine blades, very few of which have been proven over significant periods of time in these harsh environments.

However, the first generation machines that have been tested in real conditions under the MEA do provide sufficient experience to give a reasonable estimate.

The report makes recommendations about what should happen over the first, second and third generations of implemented plants, each generation representing about five years of development.

It finds that installation costs can be lowered, as can the ability to tackle deeper sites. Marine Current Turbines (MCT)'s first-generation tidal device, currently being tested in Strangford Lough, is only suitable for shallow and relatively low wave sites.

But future iterations of the device will be able to deploy many more rotors in a single operation and access depths of over 40 metres and a more extreme tidal range. Significantly, version two will have a 20% lower capital cost per megawatt.

By the 2020s, third generation tidal flow machines will be able to generate electricity economically from sites with velocities too low to have been included in the main resource study.

As technology companies move towards 5MW projects - likely to require investments in the region of £30m-£50m - they will be working with developers to find equity investments in projects while also looking for continued investment at the company level. It is anticipated that it is utilities and project developers who will take the biggest stakes in marine energy farms.

A number of consortia have already formed with a view to developing commercial farms sites in the Orkney Waters Strategic Area identified by The Crown Estate.

These companies will have to install pre-commercial farms of around 5MW at these sites before technology is sufficiently developed for the 100MW+ farms they are planning.

To make this happen the Carbon Trust says that the government needs to create a stable framework for revenue support as well as capital support to enable developers to build the first tens and hundreds of megawatts of early commercial farms.

There also needs to be a clear position on planning for marine energy, with a streamlined consenting process and Strategic Environmental Assessments completed for some regions.

The Crown Estate, as owner of the seabed, must set out a roadmap for the wave and tidal industry.

The industry also needs to make a big push the technology innovation.

The stakes are high, but the rewards are fabulous, not only for the UK but for exporting the technology around the world, because already the UK is a world leader in this field.

£20m promised for marine energy

The Government has promised up to £20 million later in the year to develop a pre-commercial demonstration of wave and tidal energy devices.

Climate Change Minister Greg Barker made the announcement yesterday while visiting marine power developer Pelamis Wave Power at Leith Docks in Edinburgh.

Pelamis is planning a wave farm project off Shetland using its snakelike 'P2' device, which will follow successful trials by E.ON at the European Marine Energy Centre off the west coast of the Orkney mainland. These have shown a very good conversion efficiency of around 70% in small seas.

Subject to state aid approval, the cash will come from DECC’s budget of over £200 million that is set aside to fund low carbon technologies and was announced in the Spending Review.

It will complement several other sources of support which together will help to progress the development of marine devices from the current large scale prototypes to larger arrays in the ocean.

Greg Barker spoke of the ability of Britain to be a world leader in marine power and support "thousands of jobs in a sector worth a potential £15 billion to the economy to 2050."

Barker is also in Scotland to chair the second meeting of the UK Marine Energy Programme Board at Edinburgh University. The meeting will discuss the setting up of Marine Energy Parks.

Scotland and the South West host the hubs where the main innovative development work in these technologies is already being carried out.

The funding will be in addition to money which the UK hopes to secure from the EU New Entrant’s Reserve 300 (NER300) fund. Of the five UK renewables energy projects submitted to the NER300, three were for tidal stream arrays and one was for wave energy arrays.

Hartlepool lobbies for offshore renewables

Barker's colleague at DECC, Charles Hendry, was yesterday at the Port of Hartlepool visiting other energy industries associated with offshore work: a leading cable manufacturer for renewable energy projects, JDR Cable Systems, and Heerema Fabrication Group, which specialises in the engineering and fabrication of large and complex structures, mainly for the offshore oil & gas and energy industry.

The local MP, Iain Wright, is working hard to attract companies in the renewable energy sector to the area via an initiative called Chain Reaction.

This group represents a cluster of companies including NOF Energy, EIC, JDR Cables, Narec, CTC Marine, TATA, The Crown Estate and the Port Authority, PD Ports Group, who all support Teesside’s ambition to become a centre of excellence for the UK wind energy market.

Both Wright and PD Ports told Hendry that it is imperative that the Government has a direct, clear and positive view of the renewables sector, including Renewables Obligation Certificates (ROCs), funding and planning.

“There is a major reluctance to invest in this sector until the Government sets the level for ROCs which will determine what proportion of their power that UK electricity suppliers must generate from renewable sources,” said David Robinson, CEO, PD Ports Group.

A banding review is underway for ROC levels in the UK, and the result is expected later this year. Currently, for example, under the banded Renewables Obligation, wave and tidal technologies receive an enhanced level of ROCs for each MWh of eligible generation produced.

“As long as the Government delays specifying the ROC level, it causes great uncertainly in the market and gives international companies no clear incentive to invest in UK facilities,” Robinson told Hendry.

A review by ARUP conducted for the review published earlier this month made some ambitious projections for marine power:

• For wave power, there could be between 186MW and 279MW installed capacity by 2020 and 500MW and 2,520MW by 2030.
• For tidal stream (marine current turbines) there could be 241MW - 406MW worth of installations by 2020 and 500MW - 2,160MW by 2030.
• Tidal range deployment (barrages and lagoons) would only begin in 2021 and could entail 250MW - 1,000MW of power by 2030.

For comparison, offshore wind is expected to provide about eight times as much energy by 2030.

Marine power set to surge forward

The UK could capture up to a quarter of the global market in marine energy, worth about £76 billion, creating over 68,000 jobs in the UK by 2050, according to new analysis from the Carbon Trust and the EC.

The UK is currently the global leader in terms of marine renewable development. Its level of innovation activity has significant capabilities compared to elsewhere.

Partly because of its significant natural resources, the UK could therefore become the 'natural owner" of these technologies, and leave the commercialisation process for the rest of the world.

But given the relative early-stage of the technology, a few years of careful, concerted demonstration and development is required.

Because of its coastline and geographical location, the British Isles is blessed with almost half of Europe's wave and over a quarter of its tidal resources, representing about 2-3% of global wave resources and around 10% of global tidal resources.

Marine technologies include wave machines such as the Pelamis, used in a 2.5 MW British installation off Portugal, tidal barrages and lagoons, only currently implemented in one place in Europe - La Rance, and marine current turbines, such as Marine Current Turbines Ltd's (MCT) SeaGen machine.

The Carbon Trust report does not cover tidal barrages and lagoons, only marine current turbines.

Capturing the potential

Countries which now lead the way in other renewable technologies, such as Denmark and Germany with wind power, have done so by consistently and carefully supporting the companies involved, from the early stage through to maturity with technical and financial help.

As a result, tens of thousands of jobs have been created in the wind industry in Denmark, with most products being exported.

By contrast, in America and Britain, support for wind power was sporadic and short-term in the 1970s and 1980s, so they fell behind.

The report argues that we should not make the same mistake again with marine energy.

The industry, eagerly anticipating its 2011 Conference next month in Brussels, is in a similar stage that the wind industry was in in the 1970s. However, unlike them, there is already a ready market in China, Korea, America and European countries with Atlantic coasts, so the conference will focus on steps to commercialisation.

And unlike wind and solar energy, tidal energy is predictable.

The report says that the total market for marine energy in a high scenario is worth up to around ｣460 billion in the period until 2050, with the market reaching up to ｣40 billion per year by that date.

In the UK alone, the report considers that up to 1 GW of marine technologies could be installed by 2020, rising to 27.5 GW by 2050. Of this, 18.5 GW is wave energy and 9 GW is tidal stream.

Globally, deployment of wave energy capturing machines could be 189 GW by 2050. However, this depends on significant technological developments, giving rise to considerable uncertainty.

The Carbon Trust says that up to 52 GW of tidal energy could be deployed globally by 2050.

Competition

Britain faces competition from the US, Spain and Portugal particularly. The Basque Government, through the Basque Energy Agency (EVE), recently awarded a 10.4 million euro contract for supply of power and communication lines for the Biscay Marine Energy Platform (bimep), a wave energy research project, to Spanish company Elecnor.

Around the world there are around 80 device developers in wave energy technology. 80% of these are at early research stage. The leading developers are Pelamis (UK), Aquamarine Power (UK), and Ocean Power Technology (US).

In tidal stream there are around 50 developers globally. About eight building devices at full-scale. Many are being developed at smaller scale, but second-generation designs which could overtake. Leaders include Marine: Turbines, Atlantis, Hammerfest Strom, Voith Hydro, Puse Tidal, Tidal Generation and Open Hydro. The UK leads with around 15 devices. Canada has around seven and United States around five.

Of around 40 universities in the world researching the technologies, 13 are in the UK. The UK also has good testing infrastructure through NaREC MEC and WaveHub, essential for development of robust technologies.

Overcoming barriers

There are currently many competing types of wave and tidal machine. Last month, an intensive and valuable three year European project called EquiMar was completed, which attempted to evaluate them all, and the state of the industry. Several British organisations took part, including the University of Southampton, Pelamis and Wave Dragon.

EquiMar has produced comprehensive research reports including protocols for site evaluation, performance monitoring, risk assessment, and future scenarios.

It identified that the main barriers to development are:
- the supply chain of components
- planning issues
- the diversity of concepts
- lack of standards
- and, above all the small size of the sector at present.

Volume purchasing is required to combat some of these barriers, as happened in, for example, the nuclear industry in the 1960s and '70s, and the wind industry in the last 20 years. This will improve the technical performance of the chosen devices.

The Carbon Trust report also summarises what the industry needs to expand:
- technologies must be proven and ready to upscale
- they must be cost competitive with other low carbon technologies
- public acceptance and no negative environmental impact
- a drop in support for fossil fuel and nuclear power, or failure of carbon capture and storage to meet expectations.

MCT is monitoring its SeaGen turbines in Northern Island for its impact on wildlife such as seals. Results so far are good.

Both reports underline that planning issues are key so that the regime for offshore developments is quite clear. Depending on the location there are some synergies with offshore wind farm development, such as connectivity to the grid.

In the short-term, most of the supply chain will be inside the EU, but as the industry upscales the costs are driven down together with new markets expanding elsewhere, there is a strong likelihood that the supply chain will create jobs elsewhere in the world without government support in the form of tax breaks etc. as have been given to the coal, oil and gas industries.