OES Annual Report 2012 - Ocean Energy Systems

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Although the ESB TRLs also make reference to the cost and performance of a technology within the
lifecycle readiness criteria, this is in an absolute sense relative to a particular project business case. Using
the cost and performance envelopes outlined above, it is possible to consider economic viability in terms
of target costs. These define the maturity of a technology in terms of economic competitiveness in more
detail. Table 5 proposes economic competitiveness levels for offshore renewable technology.
LEVEL ECONOMIC COMPETITIVENESS RELEVANT ESB COST TARGETS
1
Potential for incremental changes to meet key performance
requirements to enable commercial projects
Table 1(b)
2
3
4
5
Economic viability under distinctive and favourable market
and operational conditions. Limited market
Sufficiently competitive to be a “new entrant”
renewable energy of scale in general electricity generation
market (e.g. offshore wind). Tariff Supports Required.
Significant market
Sufficiently competitive to be best cost renewable
(e.g. onshore wind). Supports may still be required.
Very large market potential
Competitive in general electricity market without special
support mechanisms.
Market constrained by resource only
Table 2
Table 3
N/A
N/A
TABLE 5: Economic Competitive Level summary definition.
Weber [3] also recently published similar Technology Performance Levels (TPLs) as well as the concept
of using both TRLs and TPLs to plan and describe the progression of technology development. Such
definitions of economic competitiveness permit technology developers to consider aspects such as:
ÌÌ
Although a technology may be very well advanced in terms of prototype testing, even to full scale, it may
have poor performance and high costs. While it may be viable for pre-commercial projects under particular
financial incentives, it may not be on a trajectory towards overall competitiveness in the renewable energy
market.
ÌÌ
Experimental iterations to increase economic performance at a high readiness level may be cost
prohibitive as any design changes require repetition of large scale prototype testing. However, achieving
high economic performance at a low readiness level may also be difficult due to the limitations of laboratory
and numerical analysis and in such cases important deficiencies in technology may not be detected until it
is tested at larger scale in the ocean. By considering a combination of TRLs and economic targets, Weber
[3] describes how one can capture an optimal “trajectory” in terms of developing technology towards the
performance and readiness required by utility project developers.
In the economic competitiveness levels described in Table 5, Level 3 is a realistic ambition for offshore
renewables as it defines generation technology that is cost competitive with “best new entrant” forms
of renewable energy, required to meet government targets (currently offshore wind in the GB market).
However, there is inherent uncertainty on the future value of renewable electricity and this relates to
the demand derived from government targets as well as the potential future availability of newer, more
competitive forms of renewable energy. For now, ESB considers offshore wind to be the appropriate “new
entrant” renewable energy that ocean energy must match economically in order to access a market of
scale in Great Britain and Ireland electricity markets. As such, the cost and performance envelope defined
in Table 3 is indicative of an ESB Phase 3 project cost requirements.
Project Requirements
ESB have set required TRL and economic hurdles for each of the three project phases outlined previously,
as shown below in Table 6. This shows the developing combined technical maturity (TRL) and economic
viability which must be demonstrated before each phase of projects can be developed.
ANNUAL
REPORT 2012