SI OceanSI Ocean Market Deployment Strategy

Funded by the European Commission's Intelligent Energy Europe programme, the SI Ocean project’s Market Deployment Strategy makes several high-level recommendations for commercialising the emerging wave and tidal energy sectors. The industry looks forward to taking these recommendations forward through the Ocean Energy Forum and working with decision-makers to produce a Strategic Roadmap, which we hope will lead to a European Industrial Initiative for wave and tidal energy.

Executive Summary

The potential for economic growth, energy security, job creation and global export inherent in wave and tidal energy technologies is considerable. Even in their pre-commercial state, wave and tidal technologies already draw on supply chain companies from almost all European Member States. In addition to Europe’s competitive global position in the offshore wind, oil and gas sectors, it is also the global leader when it comes to technology innovation and invention in this new industry. If managed correctly, this advantage will ensure Europe’s front-runner position abroad and will result in the production of significant amounts of renewable energy at home, along with the security, growth and employment benefits that this will bring.

Furthermore, wave and tidal energy technologies have certain advantages over other energy sources. For example, they provide an opportunity to generate energy at a wide range of locations throughout Europe. Additionally, wave and tidal power produce energy at different times, and more consistently, than other renewable energy sources, such as wind and solar. This will add to the overall stability of Europe’s energy networks. These new technologies also offer an attractive alternative in areas where the visual impact of electricity generation sources is a concern. Lastly, they can leverage extra value by exploiting synergies with sectors such as offshore oil, gas and offshore wind. Opportunities include using common components and sharing expertise on project development challenges.

However, significant risk on four main fronts is currently impeding development.

1. Financial risk – there is a shortfall in upfront capital investment for technology development and pilot array demonstration, which is compounded by the current lack of long-term clarity on revenue supports.
2. Technology risk – uncertainties relating to survivability, reliability and cost reduction potential are inherent in all new energy generation technologies, but particularly in those designed for offshore operations in harsh conditions.
3. Project consenting risk – unknown interactions between devices and marine environments make it challenging for regulators and developers to assess and mitigate potential impacts.
4. Grid-related risk – the best and most economical resources are frequently not located near accessible grid infrastructure, creating grave uncertainty over connection dates in key areas.

Over the coming decade, Europe’s ability to reduce these risks will be the deciding factor when it comes to commercialising the wave and tidal energy sectors. For these sectors, it is clear that installing the first pilot tidal arrays will be a critical milestone. The EU, its Member States and industry will need to act in a coordinated manner to ensure that a shortfall of capital and revenue support does not stall the industry’s progress by delaying financial close on these first-of-a-kind demonstrations.

These first pilot arrays – consisting of three or more devices with a maximum installed capacity of 10MW – will be the cornerstones of a successful market deployment strategy for Europe. They will, for the first time, prove the viability of generating electricity from more than one device, and in doing so they will generate vital lessons which will help developers target future innovations in array performance, reliability and cost reduction.

Successful demonstrations will not only pinpoint where further improvements are required; they will also build investor confidence. This will stimulate investment into all stages of technology development, and will help to engage the supply chain. Successful electricity generation from the first arrays will also galvanise planning for future grid connection and the devel¬opment of efficient regulatory regimes.

Agreeing a common plan to de-risk wave and tidal technology development will be an essential step towards creating a new industrial sector in Europe. This plan – or road map – should give a clear account of the exact nature and level of support that will be required for the wave and tidal energy sectors to fulfil its potential of hitting an installed capacity of up to 100GW by 20505.

Such a road map should set out clear and specific milestones for 2020, 2030 and 2050. As well as indicating the level of market push and market pull that will be needed to hit key milestones, it should set clear priorities for technology innovation aimed at delivering cost-effective, high-yield and reliable devices to the marketplace as quickly as possible. The SI Ocean project’s Market Deployment Strategy provides recommendations to tackle risk head on.


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