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New IRENA-OEE report provides financing blueprint for ocean energy

Public financing of ocean energy must be designed to create a ‘pull’ for private investment in a global market that could reach 350 Gigawatts by 2050, says a new report co-authored by the International Renewable Energy Agency (IRENA) and Ocean Energy Europe (OEE). By making sure funding instruments are adapted to meet the sector’s needs, governments around the world can leverage private financing, speed up technological development and drive down costs.

As many ocean energy developers prepare for commercialisation, revenue support that provides a fixed electricity price over the longer-term, is the best tool to give investors market visibility and secure the returns they expect.

For technologies at earlier stages, a different approach is needed. Pre-commercial demonstration projects benefit from ‘blended’ financing models, where public funding leverages private money, whilst for prototypes, R&D grants are still the most effective mechanism.

A fit-for-purpose financial framework must be complemented by a supportive policy and regulatory environment. Among the recommended policy actions, the report highlights national deployment targets as being hugely important in giving clear long-term signals to investors.

Ocean energy is one of the technologies that must be scaled up for the energy system to reach full decarbonisation and achieve energy security. The report estimates that ocean energy can create 680,000 direct jobs globally by 2050 and provide clean, local and predictable electricity to communities worldwide.

Ocean Energy Europe CEO, Rémi Gruet, said “Getting financing mix right is crucial for the success of ocean energy. Putting effective public funding in place is important twice over – firstly as a direct means of getting projects in the water, but also in sending the right signals to encourage private investors. We are delighted to collaborate once more with IRENA to make sure decision-makers are presented with the best possible recommendations to make this happen.”

Roland Roesch, Acting Director of the Innovation and Technology Center at IRENA added: “Ocean Energy technologies have the potential to significantly contribute to a just and sustainable energy transition in countries with coastal areas and island territories, while fostering a global blue economy. According to IRENA, to meet a 1.5C Paris Agreement scenario, we will need more than 70 GW and 350 GW by 2030 and 2050, respectively.

The lack of market awareness on these innovations is a key barrier that is preventing this potential from being unleashed. This brief prepared under the IRENA Collaborative Framework on Ocean Energy & Offshore Renewables, with support from IRENA and OEE provides a roadmap to decision makers on the various financing mechanisms across the ocean energy project lifecycle that can be scaled up to ensure tangible investments are made in this sector.”

Innovation is the core driver of European competitiveness – why is it missing from the Net Zero Industry Act?

Read on

Industrial planning is back. The urgency of climate change, covid-era supply disruptions and rising geopolitical tensions have triggered a renewed governmental push to shape future economies and keep clean energy industries within national borders. Brussels is at the forefront of these efforts, with a new ‘Green Deal Industrial Plan’ announced in February and the accompanying ‘Net Zero Industry Act’ expected next week. Europe’s recent ocean energy experiences make clear that innovation and tech scale-up must be central to these plans.

In spite of this, a leaked draft of the Act gives short shrift to innovation. Instead, the draft law is firmly focused on protecting the manufacture of a small number of ‘commercially available’ energy technologies.  All proposed new public funding is reserved only for technologies with a ‘Technological Readiness Level’ (TRL) of 9 – i.e. fully mature technologies. 

The draft does establish ‘Regulatory Sandboxes’, which offer targeted exemptions from national or European laws for technologies with TRLs of 5-7. However, this only applies to the commercially-available technologies listed in the Act. 

Why does all of this matter?

Weakening competitiveness in ocean energy a warning sign for Europe’s global cleantech ambitions

Europe’s industrial leadership in ocean energy is increasingly at risk, according to statistics released today by Ocean Energy Europe. Despite ambitious EU deployment targets, fewer projects hit European waters in 2022 than in any year since 2010. Meanwhile, global competitors like the US and China are catching up fast.

If the EU is determined to come out on top in this new era of global cleantech competition, it cannot let its frontrunner position slip away. How the bloc responds to this test of its leadership in wave & tidal energy will be an object lesson for its wider Green Deal industrial vision.

Back in 2020, the EU’s Offshore Renewable Energy Strategy targeted global leadership in wave & tidal energy and set ambitious deployment targets.[i] But fast-forward two years, and both tidal and wave energy capacity additions in Europe have hit a ten-year low, outstripped by increased activity in the rest of the world.

2022 tidal stream installations in Europe were limited to small-scale projects, and were dwarfed by a single state-funded, large-scale Chinese device. In wave energy, last year was the fifth in a row where the rest of the world installed more capacity than Europe. Europe still holds the lead in terms of cumulative wave capacity, but only just.  

The drivers of this new dynamic are clear – public funding and policy support. The US now commits circa US$110 million for ocean energy annually and is building the world’s largest wave energy test site. China continues to pour state funds into large projects. And both the UK and Canada are providing dedicated revenue support, among a host of other measures.

5% of new capacity from “Innovative” Renewable Energy: A necessary enhancement to the EU Renewable Energy Directive

The Association of European Renewable Energy Research Centers (EUREC) has released a new report, supporting the European Parliament’s proposed amendment to the Renewable Energy Directive (“RED III”) which calls for at least 5% of new renewable energy capacity to come from innovative renewable energy technologies. Ocean Energy Europe enthusiastically supports this target, as it will speed up the commercialisation of new, high-quality, European-made renewable energy technologies, including ocean energy. The next stage of the negotiations with EU Member States must now lock in this new target and deliver the energy future that Europe deserves.

The EUREC report demonstrates that the 5% innovation target is well-formulated and can be implemented via existing EU laws, and by building on approaches already used in some Member States. It also explains why innovative renewables are crucial to security of supply and bringing down energy prices, as they make use of indigenous resources and can provide better balancing of Europe’s electricity supply and demand.


Download the report here: “5% of new capacity from ‘Innovative’ Renewable Energy – A necessary and do-able enhancement to the Renewable Energy Directive“

The report was authored by EUREC, with support from Cleantech for Europe, Climate Strategy, European Association for Storage of Energy (EASE), European Renewable Energies Federation, and Future Cleantech Architects.

Joint Letter: Renewables displace fossil fuels – the Innovation Fund must recognise this

Renewables displace fossil fuels. And in doing so, they make a critical contribution to decarbonisation. We therefore welcome your efforts to rebalance the Innovation Fund to better include renewable energy.

The ‘clean tech manufacturing’ and ‘mid-sized & highly innovative’ windows are particularly important for renewables. These windows can deliver a wide range and depth of innovative renewable projects. Such projects will form the basis of Europe’s future energy system whilst strengthening jobs, sustainable growth, competitiveness, and the EU’s strategic energy independence.

It is therefore essential that these windows are well-resourced within the 3rd call budget.

Read the full letter

Strong support for innovative renewables must continue into next stage of RED III negotiations

Ocean Energy Europe welcomes the European Parliament’s vote for a dedicated sub-target for innovative renewables in the new EU Renewable Energy Directive (RED III). The next stage of the negotiations with the Council must now lock in this new target and deliver the energy future that Europe deserves. 

Donagh Cagney, Policy Director at Ocean Energy Europe, commented “This target creates a strong ‘market pull’ for innovative technologies, and keeps Europe competitive at a global level. It future-proofs the Directive – securing the renewables innovation needed not only for 2030, but also to hit our 2040 and 2050 targets – all the way to net zero.” 

The sub-target means that by 2030, 5% of all new renewable energy capacity installed in the EU should come from innovative renewable energy sources, including ocean energy. Adopted on Wednesday by an overwhelming cross-party majority, together with the broader 45% renewables target, this is a vital step forward for clean, affordable and ‘homegrown’ energy sources.  

The Parliament’s lead on the new Directive, Markus Pieper MEP, said “Only the expansion of renewable energy means true independence.” 

Joint Letter: Yes to 45% – or higher – Renewable Energy by 2030 For our people, security, prosperity, and climate

The IPCC warns that we are entering code red for humanity: more than 1.5 °C warming is inevitable unless we make deep reductions in greenhouse gas emissions immediately. Pressure on European fossil supplies following the Russian invasion of Ukraine tells us what we already know – renewable energy is security and fossil fuel dependency is vulnerability. Consumption of Russian fossil fuels directly funds the invasion, while gas-driven energy price hikes overwhelm European citizens. This exceptional backdrop compels us to urgently reshape national and European energy policies.

Accelerated renewable deployment is critical to our independence from Russian fossil energy and will protect our citizens and economies from rapidly rising energy prices.

We must act now to speed up the renewable energy transition. Securing a European-wide 45% renewable energy target for 2030 – or higher – in REDIII negotiations is paramount to ensure that European citizens and businesses have access to clean, secure, and affordable energy.

Read the full letter

Ocean energy can makes waves in the renewable energy sector

Our Policy Director Donagh Cagney explains why ocean energy is well-placed to be as successful as wind and solar in Europe’s renewables market on Innovation News Network.

As temperatures in Europe rise even faster than expected, the effects of climate change are getting very real. Coupled with skyrocketing energy prices that stem from an overreliance on fossil fuels, it is clearer than ever that Europe’s future depends on its transition to a 100% renewable energy system.

We need to act now to reach that goal, by developing a range of innovative renewable energy sources to complement the already well-established wind and solar sectors. One of those innovations is ocean energy – the next big thing in energy. The oceans are the world’s largest untapped source of power. Ocean energy technologies harness the power of tides and waves, as well as differences in temperature and salinity, to produce electricity.

Ocean energy is clean, renewable and has the potential to provide 10% of Europe’s current electricity needs by 2050. That is enough to power 94 million households every year. In addition, a strong ocean energy industry will yield many economic benefits for Europe, from local jobs to global export opportunities.

Read the full article

How cleantech innovation will boost the Repowering of the EU

Ocean Energy Europe signed a joint letter supporting the objectives of the REPowerEU Plan to phase out Europe’s dependency on fossil fuels faster and increase investments in climate innovation to deliver energy savings, diversification of energy supplies, and an accelerated roll-out of renewable energy.

However, we believe that bolder action can be made, and specifically that concrete strategies should be put in place to accelerate the deployment of the clean technologies we need to enable a renewable-heavy energy mix. Long-duration energy storage, innovative renewables and smart grid technologies in particular need clear and binding targets.

Read the full letter

REPowerEU offers new innovation opportunities for renewables

Ocean Energy Europe (OEE) welcomes the European Commission’s REPowerEU initiative, which at its heart has a massive and accelerated roll-out of renewables. The Commission recognises that this is Europe’s only path to escape fossil fuel dependency and to rapidly decarbonise.

Much of REPowerEU focuses on important steps to speed up permitting processes. A new law will recognise renewable energy as ‘an overriding public interest’. And renewable projects can be fast-tracked in new ‘Go To’ areas.

But REPowerEU also recognises that Europe must remain a global leader in renewable energy technology – and this is backed up with new funding later this year.

The text confirms that the Innovation Fund’s large-scale call this autumn will have a doubled budget of circa €3bn and 3 separate funding windows.

Renewable activities are particularly suited to 2 of these windows – which focus on ‘innovative clean tech manufacturing’ and ‘mid-sized pilot projects for validating, testing and optimising highly innovative solutions’.