OES Annual Report 2012 - Ocean Energy Systems

129
05 / DEVELOPMENT OF THE INTERNATIONAL
OCEAN ENERGY INDUSTRY: PERFORMANCE
IMPROVEMENTS AND COST REDUCTIONS
After A Decade Of Technology Push
Many lessons that can be applied to these future projects have been learned from what has essentially
been a push to commercialize marine renewable energy generation devices. The multi-year operation
of Siemens/MCT SeaGen in Strangford Lough, Northern Ireland, has not only demonstrated technical
feasibility but, more generally, the concept of a megawatt-scale marine renewable energy generator that
can be installed and operated for long periods. As 2012 closes, at least two wave technologies, and three
other tidal generator companies have accumulated experience with these large–scale generators.
The scale of prototype trials, the time to iterate technological developments and demands for accessing
marine sites have been challenges addressed by the creation of permitted test centres with shared
infrastructure. Despite this support, development rates have been slower than anticipated, in large measure
due to financing difficulties which has also made supply chain development challenging.
Potential tidal and wave converter customers or investors, now familiar with the “accepted” design of wind
turbines, express concern that the wide range of device designs demonstrate an immaturity in the marine
renewable energy industry. This raises concerns about how to pick a winner. Most customers need to see
the integrated system that makes the device into a power plant they could use. These customers want to
know: does it reliably supply electricity? Are the project risks understood? Is the electricity affordable? Is
this a viable hedge against long-term cost-of-fuel increases?
The interests of the integrator/manufacturers
Some of the early device demonstration successes have attracted strategic partners with a background
in manufacturing, system integration and sales in the power market. In a few cases, these early device
demonstrations have led to partnerships with utilities. These relationships extend from access to
components, access to design, testing or development experience, all the way to outright ownership by
the manufacturers or utilities.
In most cases manufacturers have had a real interest in moving to a stage where orders for series-production
units can be expected. In some cases manufacturers are deciding to focus on the core of the devices, as
closest to their existing industry experience, believing that other parts of the single device “system” needs
to be significantly developed by others with better experience and capacity.
Emergence of a market pull
Climate change action agendas have resulted in progressive targets for renewables development. In some
countries a drive for energy security has added to this an imperative for resource diversity. In others it has
been a focus on new marine industrial and economic opportunity that drove initial investment in technology
development and more recently the transition to create economic value out of the delivery of complete
clean marine electricity solutions.
These market-pull initiatives have resulted in ratepayers investing in the success of pilot projects – the
rate is only paid for what the project delivers. As experience drives down cost, these market support
mechanisms are expected to adjust so that ratepayer support for later projects can be decreased ultimately
to the point where marine renewable energy promotes will compete equally with other renewables. With
the energy densities of marine resources and ongoing reductions of lifecycle costs, these projects may
ultimately be competitive with traditional forms of energy generation.
Market pull is likely to stimulate formation of supply chains that will work together through all stages,
eventually delivering the scale at which marine renewable energy is that competitive choice.
The issue is now one of demonstrating integrated systems: how projects are sited and permitted; how they
are designed and installed, how they are operated and maintained, what their availability as a “plant” is
and how the power output meets power interconnection requirements.