Where the Tidal Industry Is Now and Where It Will Be in 2013 Figure 1: Stages of Technology Development Concept Device
• Early R&D work • Often university-based • DWL have tracked over 300 concept devices
Initial Prototyping
• Laboratory-based testing • Some in-water proof- of-concept testing
• Not capital-intensive Scale Prototyping
• Temporary offshore installation at small scale
• Usually not grid connected
• Test of performance, and survivability
Full-scale Prototyping
• Sometimes grid connected
• Demonstrates installation and operation
• Financing essential • Many devices fail to reach this stage
Pre-commercial
• Often permanent, grid-connected project
• Project development still led by technology developer
• High levels of financing must be achieved
Commercial Installation
• Major project for an end client
• Most commercial scale projects will be ‘arrays’ with many devices
The main stages most devices for through from conception through to commercialisation are outlined. Note that not all technologies will go through each stage. Source: Douglas-Westwood.
Scotrenewables chose Harland and Wolff, an engineering, offshore and marine company to build a 250kW prototype and install it at the European Marine Energy Centre’s test facility.
Wales
Wales is also ready to join the bandwagon, with its most recent announcement of a £150 million tidal energy testing site concept, the Tidal Energy Storage and Release (TESAR) scheme at Llanddulas, near Colwyn Bay. Here tidal device developers such as Tidal Energy Ltd and Swanturbine can test their concepts. The project is currently undergoing a feasibility study. The site is expected to take six years to build and is estimated to be able to accommodate devices totalling 600MW.
International
Outside the UK, Swedish company Minesto is going full steam ahead with its Deep Green tidal energy device, having secured €2million in a private equity investment. The money will be used to test the prototype off the coast of Northern Ireland in 2011.
There is some movement in the development of the sector in the US, with Maine and Nova Scotia co-operating on marine energy including tidal energy projects. OpenHydro, based in Ireland, and Nova Scotia Power in Canada, are planning to re-deploy their prototype in the Bay of Fundy next year after recovering it for data analysis. In March this year, SSE Renewables, headquartered in Ireland, along with OpenHydro won the rights to develop a 200MW tidal farm in the Pentland Firth. This is the world’s first commercial wave- and tidal-energy leasing programme.
The Future of the Tidal Energy Sector
So where does this leave the tidal energy industry? There are a number of challenges that the industry faces. The device developers need financial support to take their prototypes to the commercial stage (see Figure 1). There is a reliance on public funding, the reason being that many private investors perceive:
• the technology to be high risk; •
that there is a lack of information on the best technologies given the number of devices because the sector is highly fragmented;
• an inability to scale; and • better and faster returns on investment in other sectors.
1.
The recession that has resulted in fiscal budget cuts has hit the renewable sector. In the UK, there is a debate about protecting the low-carbon technologies sector, especially emerging technologies such as marine energy in the wake of the Department of Energy and Climate Change’s £34million cut in its expenditure budget. It is especially crucial for the UK to reach its 2020 renewable energy target, according to a report by the independent adviser to the government, Committee on Climate Change.1
The Committee
also recommends a clear strategy for development of the sector until 2050.
The recession has also affected the venture capital and private equity markets, which in turn has affected the tidal energy sector. It needs to be noted that it is more difficult for companies at the early stage of developing a prototype to secure capital than for companies who have already passed that stage and have a proven full-scale model, ready to be installed in the sea. Time to market, return on investment and exit strategies are variables that are playing a huge part in the reluctance of venture capital and private equity firms to invest in devices.
Investment Needs to be Encouraged
Looking at developments over the past few years, it is clear that the government needs to encourage private investment with less emphasis on research and development and more on pushing the sector towards scaling-up and commercialisation through supportive financial incentives and funding. However, there is a chicken and egg problem here. Unless there is a market, private investors are reluctant to invest. On the other hand, there needs to be investment to create a market. The government therefore needs to intervene and speed up the process. In the midst of this financial difficulty, companies are trying to think outside the box. Many are considering looking abroad for finance or even partnering with utilities providers.
Conclusion
The tidal energy sector has a long way to go before it starts contributing substantially to electricity production. There are a number of companies vying to design and produce the leading tidal energy devices. The government needs to take another look at its strategy on how to support and develop the sector. n
The committee on climate change. Report titled ‘Building a low-carbon economy – the UK’s innovation challenge’, published July 2010.
MODERN ENERGY REVIEW – VOLUME 2 ISSUE 2
119
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124