European ocean energy to make targets despite setbacks

Policy and Operations Director of Ocean Energy Europe Remi Gruet believes that despite recent setbacks to the industry, wave and tidal energy will still make its 100 GW target for Europe by 2050.

The trade association chief told Power Engineering International that there is always difficulty associated with a relatively new technology but if the upfront capital investment is made, the technology is more than capable of delivering a significant contribution to the EU power mix.

“It’s an early stage sector, not like the wind or solar sectors. Every single new energy on the market needs support to move away from the prototype and early demonstration stage to a full and commercial demonstration stage. That can’t happen solely based on private finance. There is a need for public support and that has been partly realized and partly not and partly the amount was enough but the design of the support wasn’t good enough.”
Remi Gruet EOEA
It’s been a difficult time for ocean energy, with Siemens pulling out of the sector and also the end of Pelamis Wave Power, at least under that name.

Pelamis called in administrators after failing to secure development funding last month, and this week administrators at KPMG said they had been encouraged by the amount of initial interest shown in the Edinburgh-based company.

Additional Support From French Government

Gruet says funding and design has to work in tandem if the industry is to flourish and while the UK and Ireland have put in a lot of revenue support, France has realized it must go further.

“France has recognized it might not be enough so they have added what they call repayable grants, which is what is being negotiated there at the moment. There are a number of projects being tendered and the tender does not just include access to a Feed-In-Tariff but also to a loan which will provide capital expenditure support and that’s really important in a sector where technology risk is still quiet present.”

Siemens also departed the sector in November and its compatriot E.ON pulled out of the ill-fated Pelamis project last year, but despite what seem grievous blows, Gruet says Siemens are pulling the plug on the market as they hadn’t been able to integrate quickly enough; its not about a lack of belief in the technology, he says.

“From our perspective it’s a related to the state of the market and the market support because they had counted on grants for some of the projects they were looking at and those grants were removed.

It’s a strategy decisions by Siemens (NYSE:à‚ SI) based on the market they had invested in, it’s sad to see a big player like that leave but it’s not a signal for the sector as a whole.”

So what’s holding up investment despite the fact that it’s a new technology? Like all renewable technologies it’s a combination of technical reliability, efficiency and cost. Machines must demonstrate they can survive in challenging conditions presented by the ocean, that they can perform consistently and efficiently and after that the tuning needed to reduce costs can take place.

“With ocean energies there is wave and tidal and you have technologies that are at different stages of development. When you look at the tidal machines for example, a number of them have been demonstrated to prototype stage and it’s pretty clear they can take it and survive. Now the stage we need to go past is the demonstration phase where you put a number of machines in the water and you have a look at how efficient they are in generating electricity and what modifications you can make etc. and start your cost reduction.”

“We are at an absolutely early stage- there are a number of machines that are ready to be put in the water in numbers but there is still a technological challenge. Because not many projects have been built yet the risk is perceived by investors as still very high. If you invest in a wind farm which you see across Europe, if you’re a banker you know that technical risk is very low ” in our industry the risks are still there. We’re moving to having a number of ocean array farms out there by 2020.”

While wind is the safe bet for investment in Europe at the moment, arguably tidal power is more predictable. It’s something the industry promotes as its major positive.

Predictability of Marine Energy Technologies

“The tides are governed by the moon. They’re not governed by climate changes, wind or anything else ” the moon as far as I can tell keeps turning in the same way so you have absolute 100 per cent predictability for these technologies. With waves ” they are a by-product of the wind “but there is a time gap between the wind and its effect on the waves so it’s also very predictable. That’s an advantage compared to other, variable renewables. As for reliability, it’s just a matter of development. Once we have produced as many machines as the wind energy sector has produced I am confident that we would have a similar stage of reliability. That’s not under question.”

Gruet also sees how the nature of the technology might appeal to member states along the Atlantic coast, as it’s very much about utilising the labour, materials and expertise of the surrounding region, rather than imported skills and equipment.
Oyster 800
It’s very much an indigenous industry, where all is built on-site, jobs are created in the region, local infrastructure and shipping are used.

“The technology is big. bulky and heavy- it’s not going to come from China in a container, its stuff you produce on site probably in a dedicated port area created especially for the industry. It’s not material that’s easily shippable so it’s got a huge advantage in terms of crisis because you’ve got to develop the supply chain where it’s happening.”

Wind power is out in front of all other renewable technologies in Europe at the moment, and while Gruet admits the ocean power industry suffered through over-ambition in the past, even its more realistic new targets are impressive.

The aim is for 100 GW to be installed by 2050 in Europe which could be powering about 66 million homes. That represents 12-15 per cent of EU electricity consumption in realistic estimation of potential.

“The interim targets we have are by 2020 to have up to 10 arrays that can demonstrate the technologies can survive and be reliable and can generate electricity in a non-variable and predictable way.

Then by 2025 there will be more machines in the water and a better understanding of where the cost reductions are. By 2030 we should have the production capacity that allows us to reach these cost reduction benefits and start commercial forms in the water, progressing to 2050 when ocean energy becomes a mainstream power generating technology.”

“The one thing we need is support for the initial stage of the industry ” without that it will be extremely difficult to go anywhere that figure. In terms of resource and technology it’s not a problem.”

90 per cent of the costs of this technology lie with the machine itself and the installation of that machine. This differs from the likes of coal and gas-fired power generation technologies where those materials must continually be found and paid for, and often imported.

“The point is once you have put your ocean energy machine in the water, then it’s there and its going to generate and the actual money you have to pay for its operation is very little,” says Gruet. “So we are taking about a technology where you need your capital investment up front and you need help with that. This is where the well-designed policy comes in in supporting first investments and getting the ball rolling.”

Brussels launches Ocean Energy Forum

While it is vital that support persists at member state level, the level of support in Brussels, through Horizon 2020 and NER 300 research programmes, continues to grow.

“Brussels has also just launched the Ocean Energy Forum, which looks at the financial, technical and regulatory barriers that are preventing the sector from moving forward more efficiently and breaking down those obstacles. It’s a two year programme launched by the Commission which puts together stakeholders and decision makers and will help the industry move forward more than it otherwise would have.”

Gruet says a ‘very positive rebound’ has come about after a black November for the industry after it emerged that the Scottish government set up Wave Energy Scotland to salvage the Pelamis project. The new body is set to pick up where the original Pelamis left off, foster collaboration, share research and take take over a lot of innovations that Pelamis put together and make them available for the industry.

Scottish energy minister Fergus Ewing said Wave Energy Scotland would bring together the sector’s best engineering and academic minds.

In a recent interview with the BBC Sian George, chief executive of trade association Ocean Energy Europe also outlined the challenges to wave and tidal energy in meeting its undoubted potential.

“Tidal energy is a slightly more straightforward energy source to harvest. Wave power is more complex, but the reason people are still trying to harvest wave power is the prize is significantly bigger on a global level.”

Ms George said that because of austerity across Europe, the private sector has less money to spend and is “drawing a line at high risk investments”.

It appears certain that the sector will eventually make the much-needed contribution the EU needs to see to its power mix.

But how soon that is remains dependent on whether the investment can be freed up to enable these technologies emerge from what has been a seemingly endless holding pattern.

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