Wave and tidal projects are crossing the gulf between start-ups and global businesses. Janet Wood and Brendan Coyne look at three projects that could hit the big time soon.
DeltaStream, an artist's impression
Published 1st June
A decade ago, Per Hornung Pedersen was chief executive of Repower, a German wind energy company that was expanding into the rest of Europe, including the UK. At that stage, the Renewables Obligation was beginning to drive the take-up of wind in the UK, and major equipment manufacturers were buying wind turbine manufacturers at the birth of the industry. During this period, a fleet of small companies were absorbed by a handful of major players.
Pederson thinks the wave and tidal power industry has hit a similar period of transformation. So does Richard Yemm, the inventor of the Pelamis wave energy converter that is sometimes known as the "sea snake". The two have joined forces to transform Pelamis from a series of trials and demonstration projects into to a commercial-scale business.
Pelamis has sold wave power machines to Scottish Power Renewables and Eon, and is seeking a commercial partner to help produce them in volume. When that happens, the pair suggest their technology has huge potential to move down the cost curve.
Yemm explains how it stacks up against offshore wind: "We would be on a par with the costs of offshore wind in around 2020, on a lifecycle basis. The devices would be sited at a similar distance from shore - 30-50km - so cabling costs would be similar. For offshore wind, 45 per cent of costs are for the turbine and 55 per cent are for the foundations and associated works. For Pelamis, however, 85 per cent of the cost is in the machine." Pederson adds: "We are at the top of the cost curve on the machine. And you can work on reducing that cost in the factory - you don't have to be out in the Atlantic."
In the meantime the young wave and tidal industry still needs support. Yemm says the figure is not huge - he agrees with a RenewableUK assessment that capital support of £130 million over the next five years would be enough. But he warns: "We mustn't have a gap after the first phase." Government should give clear signals about the amount of tariff support the industry will receive after 2017.
Yemm believes the right level would be the equivalent of five Renewables Obligation Certificates (Rocs) per megawatt-hour from 2017, which he says is a "defensible" level of subsidy that is "less than solar tariffs, and similar to the level where wind kicked off".
Pedersen agrees that level would encourage the "right technology in the right place". He adds: "If the stimulus is too high you are shooting yourself in the foot. PV had extreme support and that's how not to do things."
According to Yemm, the industry wants "very early signposts" on future support. He suggests support could be reduced by one Roc per megawatt-hour on a five-yearly basis, although government would be able to review more frequently if necessary.
With his experience in wind behind him, Pedersen can attest that turning a series of demonstration devices into an industry requires more than an understanding of the technology. "Other skills are needed - like manufacturing and marketing. You will be a global business, you need a global set-up. And you must have the weight to defend your intellectual property," he says. He adds: "This is the phase of the next five years. There will be a few survivors that utilities will back."
Pelamis plans to be one of them.
Triple whammy: Tidal Energy's array
Martin Murphy, managing director of Tidal Energy, predicts large commercial tidal arrays will be in the water by 2020. Like Pelamis' Yemm, he believes it will be "at least cost competitive" with offshore wind by that time.
Next summer, the firm plans to install a triangular 1.2MW triple turbine device in the Ramsey Sound off Pembrokeshire. The first unit will cost about £12 million, but the company forecasts that a 10MW array will cost £40million. By comparison, offshore windfarms, at much bigger scale, are currently being built for about £3million/MW.
One way the firm seeks to reduce costs is by avoiding anchoring the device to the seabed. The device is designed to secure it with a low profile and three small turbines rather than a large single unit. Making the device relatively light, at 350 tonnes, removes cost - Murphy says self-anchored single tidal turbines of a similar capacity can be three times as heavy.
Once the unit is proving itself in the water, Tidal Energy will seek more funds to match the £14 million it has received from private shareholders [renewable energy developer Eco2 Ltd] and the European Regional Development Fund through the Welsh Government. Murphy says the big engineering firms recognise the emerging new market - Siemens, Rolls Royce and others have recently made significant investments. The prize, according to Murphy, could be some 5,000 tidal devices in UK waters alone.
The firm needs investment from those kinds of companies to propel it into the 10MW array phase. It needs to be in the water and generating by 2017 to secure five Rocs per megawatt-hour. But Murphy is confident that the UK's "immense marine expertise" will deliver a "world-leading market and technology". And importantly, he adds, one with predictable output.
Channel tunnel: the Alderney interconnector
Alderney in the Channel Islands is a tight-knit community. "There are 2,400 people and ten of them are in the government. We can write our own laws," says Paul Clark, until recently chief executive of Alderney Renewable Energy (ARE) -the current chief is Nick Horler. That means projects can be brought to fruition startlingly fast.
ARE's first project, a pumped storage plant with an upper reservoir that is largely hidden because it is inside a fort on the cliffs, was proposed in January last year and agreed in March. By mid-year the walls of the new reservoir were already visible and a cable had been laid across the island to connect it.
From the islanders' point of view, that is a fairly straightforward project that should eventually cut costs for them all. The power needs of the islanders - just 1.5MW at peak times - are currently met by a diesel-powered generator, but that is a costly solution and the fuel has to be shipped in across the island's riptides. It can be frustrating: Clark points to a 6m tidal range around the island, and a tidal flow that makes the island's surrounding waters a testing experience for visiting boats.
So the company plans to use OpenHydro's tidal stream devices to generate electricity that will pump water up into the new reservoir when the tides are running, and use it to feed the grid at other times. "Alderney would be self-sufficient in power," says Clark, pointing out that the island, just a couple of miles long, is an ideal site to phase out fossil-fuelled vehicles and switch to electric. That, too, got a speedy response from Alderney's government. It passed renewable energy laws that would license projects and enable ARE to sell power to the island's inhabitants.
So far so good. But ARE has bigger plans under which the island would act as the hub for an interconnector that would transmit huge volumes of power and transfer it between the UK and French markets. The interconnector would transmit up to 1,800MW - and a significant amount would come from a vast array of tidal stream generators.
The Alderney government has done its part. It won the support of local groups, including the fishing fleet and environmentalists, to designate 48 square miles of seabed where renewables could be developed. But the project has to run the gamut of paperwork in both the UK and France, and a third set that arises from the island's situation.
The project was put in motion after the EU decided in 2009 that electricity from renewable sources generated outside the EU would count towards renewables targets and, crucially, that incentives could be paid for such power. However, this did not prove simple. Alderney is a crown dependency: despite its geographical proximity it is outside the jurisdiction of both the UK and the EU, and although its renewable energy was useable, it would have been impossible to connect to either grid.
The project therefore required a Memorandum of Understanding between the governments of France and the UK. With that in place, the island's government would be able to accede the right to regulate the interconnector to Ofgem and the CRE, which could then define a regulatory framework and issue a licence to the interconnector's owner and operator. That would allow it to connect to the UK and French networks. That key Memorandum of Understanding was signed in January, and the project can now move ahead. It has some large development partners on board. In March it signed an agreement with French industrial group DCNS to develop the tidal array, and a second with investment partner Transmission Capital and French grid operator RTE to develop the cable link.
It remains to be seen whether these ambitious plans will come to pass. What is clear is that wave and tidal developers want to move out of the pilot stage and step up to the big time.
This article first appeared in Utility Week's print edition of 1 June 2012.
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