The Challenges of Wave Energy (7th Waveplam Newsletter Editorial)

In recent past the common perception of wave energy development has had an increasingly negative tendency, as the technologies have not yet delivered the expected advances

In recent past the common perception of wave energy development has had an increasingly negative tendency, as the technologies have not yet delivered the expected advances. Due to delays and difficulties in some projects in their prototype phase, which experienced and well-informed market actors see as inevitable stage in the process of technology development, less-informed investors and public bodies have increasingly reduced their expectations for wave energy development. The consequences can already be observed by increasing cautiousness of large potential investors, and in particular by the preliminary vision of the EC not to consider seriously Ocean Energy for the 2020 targets. On one hand, the “moderate delivery” certainly originates in over-optimistic targets of some developers and a lack of sufficiently engineered systems to withstand the complex challenges in maritime environment. On the other hand such a view is overly simplistic, mainly because technology developers have been forced to pursue their real-sea projects lacking sufficient financial backup for this step.

In particular when compared to other Renewable Energy Technologies, wave energy faces the particular challenge of having to be built and deployed in a way that even in the most violent storms they can survive and keep station. Due to the far higher density of ocean waves than air, and the complex and destructive mechanisms of wave motion and -forces, it is not at all straight-forward to design moorings and structural elements in an economic way. Whereas a wave energy technology may be designed to operate in wave heights of 2-3m (annual average), it will need to withstand forces from waves 10 times as high as this, which is in the origin of structural requirements that cannot possibly compared to other technologies with similar capital generation horizon. Whereas ships can avoid the worst situations in storms as they are not required to keep station, offshore platforms are usually built far above the water surface so that only a slender and economic structure is at water level. Furthermore, the often defended possibility of transferring know-how from offshore oil & gas technologies to wave energy applications is not as simple as often asserted. On one hand, sensors and components are often designed for an entirely different purpose and might not withstand the demand of wave power applications. On the other hand, the more problematic issue of capital expense comes into play. Wave energy devices need to be economic, as they will not generate high levels of revenue. It is speculatory to assume that offshore oil & gas technology can simply be transferred to wave energy technologies, unless being one or two orders of magnitude less costly than actual. Finally, in first prototypes such a transfer can be the best (and only) way to reduce the unknowns. However, this is one of the reasons that drive prototype costs for wave energy devices dramatically high, notwithstanding the very fast and efficient learning process to be expected once devices will have demonstrated operation over a full seasonal cycle.

Funding levels through public support mechanisms and private capital investments have been typically oriented alongside the levels for other Renewable Energy Technologies (RET), not accounting for the challenging environment in which full-scale wave energy devices have to operate and survive. This shortcoming, both on public and private decision-making level, together with inflated expectations of the maturity level of the technologies, are equally to blame for the recent hold-ups in the pace of wave energy implementation.

Based on experiences in the recent past, one could indicate very roughly the range of at least 10 M€ per MW as typical capital expense level required to test initial prototypes in the open ocean (this number not including all the basic and applied R&D required to get this far). Although this may be not higher (or even less) than for other RET, it is much harder to succeed and any failure is likely to cause a total loss. As a consequence to the insufficiencis of public and long-term private financial commitment, technology developers were forced to source the very high required capital investment for initial development in Venture Capital, which by default does not appear a very good match for undertakings involving high risk and low and long-term return. This situation fuels the overly optimistic expectations that do not help the credibility of the accruing sector.

Another risk to recent and ongoing project development is the usual lack of significant contingency funds for wave energy prototype undertakings. Neither public funds consider such provisions as eligible, nor institutional investors seem to be receptive for the logical argumentation that despite proper and careful technology development, substantial reserves for the unexpected are required in this environment, if total losses shall be avoided.

In addition, environmental consents and health & safety regulations (which are usually developed for the much higher-risk oil & gas sector) have shown to be substantial obstacles for project timing and finance, consuming large resources in the prototype and demonstration phase. As a consequence, technology developers face several fronts of challenges at the same time, far beyond the actual technological issues.

On the other hand (and possibly driven by the financial dependence),wave energy developers tend to act overly protective with respect to their IP, even though most often very few and limited parts of the developments are actually IP-relevant and worth to protect. Many devices share the same challenges that have shown to be critical for survival and installation & maintenance, but little (if not none at all) collaboration has taken place on this level. This has hindered a reasonable level of know-how transfer for vital but generic issues, both between different undertakings and by neutral organizations (Universities, Research centres, etc), which could otherwise play a more important role in assisting the developments to succeed.

With respect to some of the aspects mentioned above, the importance of dedicated test areas like e.g. EMEC cannot be overvalued: on one hand technology testing in real sea is undertaken in semi-controlled environments, or at least in areas for which substantial know-how about resource and site-specific difficulties exist. Further, an infrastructure is provided, from grid connection to marker buoys and other signalling and communication issues, as well as trained and experienced personnel and appropriate equipment enabling permanent on-site presence.

In addition to significantly improved control and reduced financial and timing uncertainties, any development passing through such test zones will gain credibility and contribute to the overall progress of the rising sector. In particular the necessity of following a proper Technology Readiness Level (TRL) schedule (see contribution of Brian Holmes in OES-IE annual report 2009, referenced in this newsletter) can be much smoother if such technical support structures exist.

Some basic (but typically not IP-relevant) data will have to be revealed for the sake of consistency and providing a critical mass of knowledge to the sector, but simultaneously the teams benefit increasingly from such a structure. Projects, such as the EU-supported EquiMar consortium and a US Department of Energy’s initiative (through NREL) are first steps to provide equitable measures for device comparison, and these initiatives depend on some data sharing in order to succeed.

An often mentioned and justified criticism targeting test sites, mainly coming from developers, is that there might be no site nearby where to continue producing if the testing is well succeeded. This and a number of other reasons, among which are limited capacity of each site and the requirement to test in the region where later deployment is intended, justify the existence of several test areas, ideally with some geographic equilibrium. To concentrate all efforts (and public funds) at one single European test centre, as advocated by some, would certainly be an unfortunate approach for the sector, and not in line with the recent developments all over Europe: several test sites with different characteristics have been or are being implemented (see Fig. 1). The result can be a valuable technical network, with the ability of implementing the established testing programmes for each Technology Readiness Level, coordinated by internationally recognised protocols.

Within the present economic context and considering the status of wave energy development, a substantial National and International support for such test centres (and the networking among them), each of which may represent capital investments of between < 10M€ to > 20M€ depending on site characteristics and equipment made available, may reveal to be a very important contribution to an early success of wave energy technologies.

Simultaneously, the main actors, i.e. the authorities, financiers and product-/project developers are required to reflect upon their role and longer term objectives, in order to take appropriate action for the present phase. The reasoning for this and some suggestions for key actions of each group are displayed in Table

Reasoning and key actions for wave energy development per stakeholder group (contribution of Brian Holmes, Hydraulic and Maritime Research Centre of the University College Cork, Ireland)

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