By Dave Elliott
A report by RenewableUK says that electricity market reforms could act as a springboard for the growth of wave and tidal energy, or could undermine investor confidence in marine power at a crucial stage of the industry’s development. It also highlights challenges such as delays in getting grid connections for wave and tidal projects, and the high cost of transmission charges.
The report, Conquering Challenges, Generating Growth, lays out the progress made so far: 12 full-scale single devices with a capacity of 9 MW deployed in UK waters generating clean electricity – more than the rest of the world combined. It notes that commercialization of the tidal sector is just around the corner, with the deployment of the first arrays (multiple devices) beginning in 2014, and an expected increase to 100–200 MW of wave and tidal installed by 2020. Major engineering firms such as Siemens and Alstom are working with the UK and Scottish governments, universities and electricity companies to develop British marine power. The Crown Estate has awarded leases for more than 1.8 GW of capacity at nearly 40 sites in UK waters. The British Isles has 50% of the total European wave-energy resource and 25% of tidal-energy resource – these technologies could generate up to 20% of the UK’s electricity needs.
Based on independent research, RenewableUK estimates that wave and tidal energy could be worth £6.1bn to the UK by 2035, creating nearly 20,000 jobs – up from the 1000 employed now
However, this growth could be stifled if the government fails to get the details of electricity market reform right. The most crucial factor is the level of financial support technologies will receive. The report states that the initial strike price for the first generation of tidal arrays should be set at £280–300 per megawatt hour. For wave technology, the initial strike price should be £300–320/MWh. This will catalyse the marine energy industry, leading to economies of scale and learning through experience, which will lower the strike price for the second generation of arrays in 2018. Also, under EMR, contracts would only last for 15 years – the report argues that this must be extended to 20 years to give investors an adequate return – otherwise the strike price would have to be higher. It’s notable that there is talk of EDF being offered 40-year CfD contracts for its nuclear projects.
RenewableUK’s wave and tidal manager, David Krohn, said: “The wave and tidal energy industry has reached an exciting period as it moves from single device demonstrator projects to the first small proving arrays. The world’s leading projects are being developed in the UK waters thanks to a comprehensive package of support granted by the UK and Scottish governments, which has ensured that the UK leads the world in wave and tidal energy. However, there are significant hurdles that need to be overcome to ensure the sustained growth of the industry. It’s time to get real about the potential risks so that we can work with government and others to find the solutions as early as possible. Wave technology in particular will need tailored capital support in the coming years if we are to maintain pole position in this promising and strategically important sector. It is essential that electricity market reform provides a level of support that will allow the most cost effective projects to be taken forward.” (www.renewableuk.com/en/publications/index.cfm/wave-and-tidal-energy-in-the-uk-2013)
It is true that wave and tidal stream technology is still relatively expensive, but costs are falling, thanks to the support via the revised renewables obligation and special development grants, amounting in all to £0.25–30/kWh. By contrast, onshore wind gets £0.10/kWh or less and offshore wind £0.15–17/kWh. Max Carcas, previously a device developer with Pelamis, told the Financial Times (28/1/13), “While £0.25–30/kWh seems quite expensive it is often forgotten that there has never been a new energy technology that has been economic ‘out of the box’. The cost of generating from wind and solar energy has fallen by about 80% since the mid-1980s, The fact that the opening costs of marine energy are lower than many preceding energy technologies puts this sector in a very good position to be competitive in the longer term.”
So it is good to hear that the Crown Estate is investing up to £20m in two new wave or tidal energy projects. The funding will be used to construct arrays (multiple devices). Projects with an installed capacity of at least 3 MW are eligible to apply, as long as they are expected to reach final decision on investment by March 2014. RenewableUK said: “The funding will accelerate a crucial step forward – from successful individual devices to the deployment of full-scale arrays in the water. It will also help to attract the right level of private investment to commercialize the sector.”
In parallel, two tidal power projects in north Wales and Scotland are to receive grants worth £10m each. Sea Generation Wales, a joint venture between Siemens and RWE, will develop a 10 MW project off Anglesey, with five 2 MW MCT SeaGen generators running by 2015. Meanwhile, MyGen in a joint venture between Morgan Stanley and International Power, an independent power generation company, will develop an 86 MW project in the Pentland Firth between the northern Scottish mainland and the Orkney Islands. This is the first phase of a 400 MW array that will feature turbines developed by Atlantis Resources and Tidal Generation Ltd, the partly Rolls-Royce initiated project now owned by Alstrom. More should follow. For example, Siemens, is planning an MCT SeaGen project at Kyle Rhea in the Orkneys, expected to be operating tidal farms of 20–50 MW by 2020.
But it’s not all good news. Neptune Renewable Energy’s Proteus tidal-stream ducted vertical axis turbine has been found to be technically flawed and therefore not commercially viable. Its full-scale demonstrator was deployed in the Humber estuary in January 2012 and has been subject to much testing and a number of modifications. But it became apparent that the device would not be able to achieve a high enough level of electrical output, despite indications to the contrary resulting from earlier work done at 40th and 10th scale. The plan was to supply the Deep Marine attraction in Hull with around a third of its power.
“Since November a significant amount of work has been carried out, some independently, to establish the reasons for the technical problems and to understand whether the company was facing issues of adjustment and tuning, rather than a challenge to the overall concept of using a vertical axis turbine within a duct, in estuarine locations. This work has included looking at an alternative lift turbine, rather than drag turbine,” said the company. But having looked at the options it has decided to abandon the project and liquidate the company: www.neptunerenewableenergy.com/
More positively, Pulse Tidal has secured a site for its 1.2 MW commercial demonstration of its oscillating double hydrofoil system at the South West Marine Energy Park in Lynmouth. That’s a very novel design, so it will be interesting to see how it fares.