Tidal technologies in the UK are closer to commercialization than wave technologies because of the similarities of tidal unit designs between companies. Together, tidal and wave resources offer the potential to generate up to 20% of the UK's electricity needs.
By Tildy Bayar
These are heady times for tidal energy, says Matthew Reed, engineering director at Marine Current Turbines (MCT). "It's all kicking off now," he said in mid-March. "There's a sense of excitement."
Reed has a lot to be excited about. The Welsh government has given consent for his Siemens-owned company to build the 10 MW Skerries Tidal Stream Array. This is Wales' first commercial tidal farm and one of the largest to be consented in the UK, which leads the global wave and tidal market. Once it is commissioned, the array will consist of five 2 MW SeaGen tidal stream turbines in an area about 1 km off the northwest coast of Anglesey in North Wales, close to the port of Holyhead, in water depth of about 20 to 40 meters.
"The entire industry is rooting for this project because it will prove the potential" of tidal arrays, said Reed, who has worked on the SeaGen turbine for four years, from design through production. SeaGen is the first proven full-scale commercial tidal turbine developed by MCT. A previous project has been operational in Northern Ireland's Strangford Lough since 2008, using 1.2 MW turbines.
Another project developer, MeyGen, which is working with Andritz Hydro Hammerfest on 1.4 MW turbines, has secured a lease agreement from the Crown Estate for the area that lies in the channel (Inner Sound) between the island of Stroma and the north-easterly tip of the Scottish mainland, encompassing about 3.5 km2 of fast-flowing water. The company's goal is to deliver a fully operational 398 MW tidal energy plant by 2020. In 2012, MeyGen secured 253 MW of grid capacity and began upgrading transmission lines to provide a 15 MW grid connection point in a new substation at Gills Bay, scheduled for commissioning in July 2014.
A study by trade body RenewableUK identifies 12 full-scale single devices with a capacity of 9 MW deployed in UK waters and generating power — more than the rest of the world combined. The Crown Estate has awarded leases for more than 1.8 GW of capacity at nearly 40 sites in UK waters.
Of the main marine energy technologies, the tidal sector is seen as further toward commercialization than wave energy because tidal technology is increasingly similar across companies. Growing standardization is lowering risks for these technologies as propositions for investors and driving down costs. Wave energy technologies, on the other hand, are still fairly diverse, leading to investor nervousness.
Ed Gill, head of external affairs at renewable energy development firm Good Energy, termed tidal energy a "potential game-changer" for renewables due to its predictability, in contrast with variable wind and solar. And, according to Reed, SeaGen's capacity factor at Strangford Lough is 67%, while that of a typical wind turbine is 30%.
Attendees at RenewableUK's Wave & Tidal 2013 event in mid-March said they expect tidal energy to make a big commercial leap fairly soon. For example, Ben Child, an engineer in GL Garrad Hassan's Wave Energy Group, predicted that it could happen as early as next year. And RenewableUK predicts that commercialization of the tidal sector is "just around the corner" and confidently expects an increase to 100 MW to 200 MW of wave and tidal capacity installed by 2020.
Challenges and risks
Many challenges remain for the sector. For example, one Wave & Tidal 2013 conference session was focused on the specialized installation vessels that many companies want to develop as soon as they have the money. But for the moment none exist, even though installation accounts for one-third of projected project costs.
MCT's Reed agrees that the industry needs to reduce costs, of which installation is "a good part." Reed says the SeaGen turbine uses off-the-shelf parts wherever possible, because "avoiding clever technology avoids extra risk." And making structures lighter will make installation easier and cheaper.
The Carbon Trust has predicted that marine energy could make a meaningful contribution to the UK's energy mix from about 2025. But the cost of the energy generated will need to be reduced by 50% to 75%, to about £100 (US$149)/MWh, within this timeline if marine energy is to compete with offshore wind and other technologies, the Trust cautions. RenewableUK highlights challenges such as delays in getting grid connections for wave and tidal projects and the high cost of transmission charges.
Rob Stevenson, vice president of Alstom Ocean, which has recently produced electricity in real conditions for the first time with its 1 MW tidal turbine, said that although tidal technology has none of the variability of solar and wind, policy uncertainty is a key risk. It has definitely hurt the sector, although the latest policy is "more stable," he added.
Nick Murphy, head of wave and tidal projects at Searoc, identified a number of risks to marine projects, including risks related to weather, mechanical failure, reputation, and health and safety, as well as human error. These risks are shared between the developer, turbine supplier, supply chain services (subsea cabling firms, for an example) and investors, and Murphy said each must be prepared to shoulder some of the risk.
Ross Fairley, partner and head of renewable energy at Burges Salmon, agreed. In developing "complicated" projects with a number of different contracts, "it's about everyone accepting that they have to take a share of the risk," he says.
James Green, renewable energy practice leader at insurer JLT Speciality Limited, said investors require 8,000 operating hours for proof of the technology, which requires significant investment. Insurers will cover accidental damage for a prototype, he said, but not an electrical fault, i.e. a problem in the technology itself. Only when the technology is commercialized will insurers cover technology problems.
Developers tend to concentrate on the big contracts, Fairley said, but he has seen examples of projects gearing up for financial close only to discover that "the basics that were put in place years ago aren't here or are wrong. How many projects get held up because of property rights — you'd be amazed." His advice was to "get the consents right. Make sure you have the rights to put in a grid connection. In the early stages, focus on getting the technology right, then look up and see the big picture." Some companies focus on the technology and assume everything else will fall into place, but they do this to the detriment of the project, Fairley cautioned.
|The 10 MW Skerries Tidal Stream Array, Wales' first commercial tidal farm, recently received consent from the Welsh government. It will feature five 2 MW SeaGen tidal stream turbines supplied by Marine Current Turbines.|
Slow and steady
The sector's excitement is tempered by caution. "Slow and steady wins the race" seems to be the dominant viewpoint. When asked in a conference session about prospects for speeding up project delivery, Barry Carruthers, marine development engineer at ScottishPower Renewables, seemed to speak for the sector when he replied, "We're in this for 20 to 30 years. We're in it not just to do it, but to do it right. I'd rather be talking about when we can do it than talking about 'Oops, we didn't do it right'."
And Michael Betschart, engineering manager at Andritz Hydro Hammerfest, asked whether speeding up project delivery is actually desirable. "We're closer than we've ever been to commercial projects," he said, "but you don't want to push your supply chain. The delivery date isn't the most important aspect."
The British Isles have 50% of the total European wave energy resource and 25% of tidal energy resource, and RenewableUK says these technologies could generate up to 20% of the UK's electricity needs, as well as being worth £1.6 billion ($2.38 billion) by 2035.
Studies have estimated the UK's total tidal range resource at 25 GW to 30 GW, enough to supply about 12% of the nation's current electricity demand. A significant chunk of this resource is in the Severn estuary (which has 8 GW to 12 GW), with the estuaries and bays of the northwest representing a similar amount and the east coast a further 5 GW to 6 GW. The Carbon Trust's 2011 Tidal Current Resource and Economics report suggests a total of 20.6 TWh/year could practically be extracted from the 30 key tidal stream sites in the UK.
Reforms could help or hinder
RenewableUK says that, depending on how it plays out, the biggest shakeup of the UK's energy sector for decades, the Electricity Market Reform (EMR) bill that is due this summer, could act as a springboard for the growth of wave and tidal energy, or it could undermine investor confidence in marine power at a crucial stage of the industry's development. EMR is meant to help the UK power network upgrade to cope with renewable energy sources.
The most crucial factor, says RenewableUK, is the level of financial support technologies will receive. The trade body recommends setting an initial strike price (also known as the exercise price of an option) for the first generation of tidal arrays at £280-£300 ($416-446)/MWh. For wave technology, the initial strike price should be £300-£320 ($446-476)/MWh. RenewableUK believes that this level of support will catalyze the marine energy industry, leading to economies of scale and learning through experience, which will lower the strike price for the second generation of arrays in 2018. Also, under EMR, contracts would last for 15 years, but RenewableUK argues that this must be extended to 20 years to give investors an adequate return, otherwise it says the strike price would have to be higher.
"There are significant hurdles that need to be overcome to ensure the sustained growth of the industry. Wave technology in particular will need tailored capital support in the coming years if we are to maintain pole position in this promising and strategically important sector," the trade body said.
Investors are taking note
In more good news for the sector's imminent boom, the UK's Crown Estate recently granted an operating license to the Solent Ocean Energy Centre (SOEC), a tidal energy testing facility to be built off the southernmost tip of the Isle of Wight.
The center will feature 20 berths for use by every kind of tidal technology, said local councillor David Pugh, and will be grid-connected. It is planned to feature a generic anchor that can anchor any device.
When asked whether the island had decided to invest now because of tidal energy's current momentum toward commercialization, Pugh answered simply, "Yes."
Tildy Bayar is associate editor of Renewable Energy World magazine, a PennWell publication.