TODAY’S STUDY: OCEAN ENERGY IN THE WORLD
Rising tide; Global trends in the emerging ocean energy market
July 2014 (EY)
An emerging market
Ocean energies can be extracted with a large variety of technologies that exploit the composition of the water or the power obtained from the kinetic energy of large bodies of moving water. These include tidal range, wave and tidal current technologies, thermal and salinity gradient technologies, and floating wind turbines.
To date, ocean energies represent only 0.01% of electricity production from renewable sources. Except for the tidal range technology, no technology is widely deployed as most of them are still at an early stage of development. According to Ocean Energy Systems (OES), the international technology collaboration initiative on ocean energy under the International Energy Agency (IEA), total worldwide installed ocean power was about 530 MW in 2012, of which 517 MW from tidal range power plants. Technologies to exploit tidal range power are today the only ones to have reached commercialization stages in the ocean energy group although they also involve high investment costs and considerable environmental impacts. Only four tidal range power plants exist in the world: two major plants, one in South Korea (254 MW) and one in France (240 MW), and two smaller plants, one in Canada (20 MW) and one in China (3.9 MW). This technology could also undergo further developments as several projects are under development in the UK (Severn tidal) and especially in South Korea.
The development of other forms of ocean energy (tidal current, wave, thermal, salinity gradient and floating wind technologies) has accelerated in the past five years, and some of them could reach commercial maturity by 2020. Wave power devices are currently being demonstrated, and underwater tidal turbines driven by currents are close to commercialization. Overall, 22 MW of wave and tidal current devices were installed in 2012. OES estimates a worldwide potential of up to 337 GW of wave and tidal energy capacity by 2050, and possibly a similar contribution from ocean thermal energy conversion. The European Ocean Energy Association estimates a European potential of 188 GW by 2050, which would satisfy 15% of European electricity demand and, in some countries, up to 20% of national demand.
Several countries have recently developed national strategies to support the ocean energy sector. For instance, after various supporting programs, such as the Marine Energy Accelerator of the Carbon Trust, the UK Government established a new marine energy program in 2011 that is focusing on enhancing the UK marine energy sector’s ability to develop and deploy wave and tidal energy devices on a commercial scale. In June 2011, the UK Department of Energy and Climate Change (DECC) announced it was investing up to £20m in wave and tidal power to help develop marine energy technologies to support the Marine Energy Array Demonstrator (MEAD) Scheme. The DECC also supports these developments through feed-in tariffs: the UK and Scottish Governments confirmed in July 2012 the incentives for wave and tidal energy at 5 ROCs per MWh for projects up to 30 MW capacity that are installed and operational prior to 1 April 2017. In 2012, Scotland also produced its Marine Energy Action Plan detailing key elements around which it would further develop and support the marine renewables industry.
The last two years also saw other countries launch various initiatives aimed at developing the ocean energy sector: a new Danish strategy for development of wave energy was initiated in 2011; Japan established its Ocean Energy Technological Development Research Center, which aims to promote ocean renewable energy; and the Spanish Government officially approved the Renewable Energy Plan 2011–2020. In 2012, the French Government presented a roadmap for the development of tidal energy. Canada is also investing in the sector, especially the Nova Scotia region, which put in place a demonstrator site for tidal energy in the Bay of Fundy and released its Marine Renewable Energy Strategy in 2012. The US, China and Korea have also developed specific strategies targeting marine energy.
Private actors are also investing in marine energy technologies. Investments have become more sustained in recent years with the positioning of multinational companies in this sector. Since 2011, an increasing number of acquisitions have taken place. This is the case in France, with Alstom’s acquisition of shares in AWS Ocean Energy Ltd. in May 2011 and of Rolls-Royce Tidal Generation Limited in January 2013, as well as the finalization of DCNS’s acquisition of Open Hydro Group Ltd., to be finalized in 2013. Siemens AG also reinforced its participation in Marine Current Turbines Ltd. by acquiring a 55% additional stake in this Bristol-based tidal stream technology developer in February 2012. In March 2012, Andritz Hydro GmbH acquired a 22.1% stake in Hammerfest Strom AS, a Norway-based developer of marine current turbines. Investments in the ocean energy sector also involve fund-raising. For instance, in December 2012, Scotrenewables Tidal Power Ltd., an Orkney Island-based renewable energy research company for the wind, wave and tidal energy sectors, raised £7.6m (US$12.3m) in a private equity funding round. ABB, the global power and automation technology group, also led a US$12m investment in this company in March 2013 through its venture capital unit, ABB Technology Ventures (ATV).
This recent development of marine energy should expand in coming years. Indeed, the IEA believes that ocean energy technologies could start playing a sizable role in the global electricity mix around 2030. According to the agency’s technology initiative OES, ocean energy may experience similar rates of rapid growth between 2030 and 2050 as offshore wind has achieved in the last 20 years. The IEA estimates the worldwide potential power of each type of energy as follows:
• Wave power: 29,500 TWh/year
• Tidal range power: 1,200 TWh/year
• Ocean thermal energy: 44,000 TWh/year
• Salinity gradient power: 1,650 TWh/year
Future developments could create about 1.2 million direct jobs by 2050, according to OES. For instance, tidal energy could potentially create 10 to 12 direct and indirect jobs per MW installed, and wave energy could potentially create about 8 to 9 direct and indirect jobs per MW installed. Regarding recent developments and demonstrators actually being tested, tidal and wave energy should be the first emerging ocean technologies to be commercialized in coming years.
A public consultation held in September 2012 by the European Commission showed strong consensus over the potential of ocean energy. The European Commission has identified “blue energy” as one of the five focus areas that could deliver sustainable long-term growth and jobs in the “blue economy.” The same consultation also highlighted the constraints that need to be addressed to allow further development, such as the length and complexity of authorization, certification and licensing procedures in individual Member States. A large majority of respondents also think that there should be a specific policy supporting ocean energy development at the EU level, as well as long-term visibility. Regarding technical barriers to grid connection, the lack of agreed standards and technical specifications and of construction and installation vessels were the barriers most frequently cited by stakeholders to the development of ocean energy. A large-scale deployment of ocean energy will thus depend on the sector’s ability to address these technological and economic challenges.
Floating offshore wind turbines
What are they?
Floating offshore wind turbines are mounted on a floating structure, so they are not constrained by the same depth limitations as fixed-base turbines. They can be towed into deep water well away from the shore, where winds are stronger and steadier. Undersea cables are used to take the electricity onshore. Floating wind turbines can be towed far out to sea, minimizing their impact on landscapes. In the future, they could become a growth driver for the wind power sector by adding to the potential of fixed-base turbines.
There are many different designs and concepts, suited to sites’ specificities and depth characteristics, for this rather new technology. However, none of them has reached the commercial stage yet. Many projects are under way to develop and test technical innovations (e.g., spar buoys, semi-submersible floating platforms, tension-leg platforms).
Tests on Hywind, the world’s first full-scale floating wind turbine, developed by Statoil, began off the Norwegian coast in September 2009. Statoil continued to test throughout 2011 and 2012 in order to gain further data for optimizing the next generation of Hywind. In early December 2011, Windfloat, a semisubmersible wind turbine, was moved into position off the coast of Portugal by EDP Renewables. The 2 MW offshore floating turbine has been generating power to the grid — 2.5 GWh at the end of 2012. The company that owns this prototype, Principle Power, was awarded a grant from the U.S. Department of Energy at the end of 2012 to support a 30 MW floating offshore wind farm near Oregon’s Port of Coos Bay.
In April 2012, the UK and the US agreed to collaborate on the development of floating wind technology. In the UK, the Energy Technologies Institute (ETI) plans to invest £25m in a 5–7 MW floating offshore wind demonstrator.
Tidal current energy
What are they?
Tidal turbines are designed to convert the kinetic energy of ocean and tidal currents into electricity or into a second pressurized fluid. The energy of tides is highly predictable but also highly localized, the most suitable sites being those where ocean currents are particularly strong.
Several prototypes are now being developed. The UK and France are the two European countries with the most important resources of tidal energy. Therefore, various projects are being developed in these countries. In France, EDF is testing a tidal energy farm using OpenHydro technology (acquired by DCNS as of January 2013) at Paimpol-Bréhat on the Brittany coast, with a total capacity of 2 MW to be fed into the grid by the second half of 2013. In the UK, five tidal devices totaling 4 MW were deployed in 2012 for testing by the European Marine Energy Center (EMEC), and Alstom is also currently operating a 1 MW tidal stream unit of Tidal Limited Generation at EMEC, in partnership with the ETI. Italy and Norway have also installed first prototypes (Hammerfest Strøm, Hydra Tidal) in water for testing. In Canada, the Open Hydro/DCNS technology is also being tested. These developments clearly point to an imminent market launch and commercial deployment as early as 2015.
What are they?
Waves offer a large source of energy that can be converted into electricity by a wave energy converter (WEC). There are several principles for converting wave energy using either fixed onshore devices or mobile devices at sea.
Many onshore projects are operating, such as the Pico Island plant in the Azores and the Islay plant in Scotland. In the same way as tidal technologies, various wave power projects have been implemented in the past two years. In the UK, 14 wave devices totaling 3.6 MW were deployed in 2012 for testing by EMEC. In South Korea, the Yongsoo 500 kW oscillating water column (OWC) pilot plant at Jeju Island is expected to start operation in 2013.
In Norway, the Lifesaver, a 16-meter-diameter point absorber concept developed by Fred Olsen, has been undergoing sea trials off the coast of Cornwall in the UK for six months, with a total installed capacity of 400 kW. In Denmark, Wavestar is currently testing its prototype with two floaters at DanWEC, Hanstholm.
To date, the maximum production measured is 39 kW. In Portugal, the WaveRoller prototype (300 kW) was installed in the summer of 2012 and connected to the grid. In Spain, two wave energy demonstration projects are progressing: the Mutriku OWC plant (200 MWh of energy production after one year of operation) and the WELCOME — Wave Energy Lift Converter Multiple España (150 kW prototype at 1:5 scale) developed by PIPO Systems, installed on the Canary Islands. In the US, Oregon State University and the Northwest National Marine Renewable Energy Center deployed the Wave Energy Technology-New Zealand (WET-NZ), a 1:2 scale wave energy conversion device, during August 2012. The diversity of concepts (in-stream or oscillating water column systems, floating platforms, integrated systems) and uncertainty as to those that will eventually come onto the market make it difficult to assess their costs or market schedule.
Ocean thermal energy conversion
What are they?
Ocean thermal energy conversion (OTEC) technology relies on a temperature difference of at least 20°C between warm surface water and cold deep water. This means that only tropical waters have the right conditions for its deployment. OTEC has the advantage of producing renewable energy on a continuous (non-intermittent) basis. Implementing OTEC demands systems-engineering competencies and industrial capacities that limit the number of players that can be involved in its development.
This technology has real potential to contribute to energy self-sufficiency on islands, where energy costs are very high. Today, DCNS (France) and Lockheed Martin (US) are the leading industrial players. After completing feasibility studies in La Réunion and Tahiti, DCNS signed export agreements and set up an onshore prototype on La Réunion in 2012. DCNS is also working in partnership with the regional authority of La Martinique and STX France on an OTEC 10 MW pilot, which should be commissioned in 2016.
Salinity gradient energy
What are they?
Osmotic energy technology uses the energy available from the difference in salt concentrations between seawater and freshwater. Such resources are found in large river estuaries and fjords. The system uses a semi-permeable membrane that allows the salt concentrations to equalize, thus increasing pressure in the seawater compartment.
The technology is still in the early research and development stages. Statkraft is one of the few industrial players in this sector, having set up the world’s first prototype osmotic power plant in Norway. The key to further development lies in optimizing membrane characteristics. Today, the membranes generate only a few watts per square meter. The small number of players working on this technology and the need to improve membrane performance and reduce costs therefore point to development prospects in the longer term. Research and development on osmotic power is also being carried out at the Tokyo Institute of Technology to develop new efficient membranes and by RedStack in the Netherlands.