Study on Lessons for Ocean Energy Development

Annexes to the Final Report

April – 2017

EUROPEAN COMMISSION Directorate-General for Research & Innovation Directorate G – Energy Unit G.3 – Renewable Energy Sources Contact: Dr. Ir. Matthijs SOEDE E-mail: [email protected]

European Commission B-1049 Brussels

EUROPEAN COMMISSION

Study on Lessons for Ocean Energy Development Annexes to the Final Report

Directorate-General for Research & Innovation Study on Lessons for Energy Development 2017 EUR 27984 EN Study on Lessons for Ocean Energy Development

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Luxembourg: Publications Office of the European Union, 2017

Pdf KI-NB-27-984-EN-N ISBN 978-92-79-68866-9 ISSN 1831-9424 DOI 10.2777/241688

Study on Lessons for Ocean Energy Development

OVERVIEW

This document contains all the Annexes of the Final Report of the Study on Lessons for Ocean Energy Development:

 Annex I: Overview of stakeholders involved, showing an overview of all stakeholders who have contributed to the study;  Annex II: Technological explanations, providing details on different technological concepts in tidal stream and offshore wave;  Annex III: Overview of supply chain characteristics, discussing components of a mature supply chain for ocean energy;  Annex IV: Country-specific experiences, discussing in detail the technological developments in France, Ireland, Portugal, Spain, the United Kingdom and a few other countries;  Annex V: Bibliography;  Annex VI: Learning from other sectors, discussing what lessons can be learned from other technological sectors: Offshore Wind, Offshore Oil & Gas and Concentrated Solar Power;  Annex VII: Focus Group reports;  Annex VIII: Validation Workshop report;  Annex IX: Answers to the research questions, discussing in detail how we have answered the research questions of the study.

“The information and views set out in this report are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein.”

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Table of Contents

OVERVIEW ...... 5 ANNEX I. OVERVIEW OF STAKEHOLDERS INVOLVED ...... 7 ANNEX II. TECHNOLOGICAL EXPLANATION...... 11 ANNEX III: OVERVIEW OF SUPPLY CHAIN CHARACTERISTICS ...... 19 ANNEX IV. COUNTRY-SPECIFIC EXPERIENCES ...... 25 ANNEX V. BIBLIOGRAPHY ...... 43 ANNEX VI. LEARNING FROM OTHER SECTORS ...... 51 ANNEX VII. FOCUS GROUP REPORTS ...... 59 ANNEX VIII. VALIDATION WORKSHOP REPORT ...... 79 ANNEX IX. ANSWERS TO THE RESEARCH QUESTIONS ...... 83

Study on Lessons for Ocean Energy Development

ANNEX I. OVERVIEW OF STAKEHOLDERS INVOLVED

The study team expresses their sincere gratitude for the extensive input received by stakeholders throughout Europe, often in more than one occasion. The table below presents an overview of stakeholders involved throughout the study.

In addition, inputs have been collected from stakeholders at various industry events:

 The International Conference on Ocean Energy, Edinburgh, February 2016;  European Maritime Days, May 2016, Turku;  ERA-NET and OES TCP workshop on Ocean Policies, May 2016, Sweden;  WavEC Seminar and B2B meetings, October 2017;  Ocean Energy Europe Conference & Exhibition, Brussels in November 2016;  The Marine Renewable Energy Research Day, November 2016, Brussels;  Supergen Marine annual assembly, December 2016;  Ocean Power Innovation Workshop, December 2016;  Wave Energy Scotland Conference, December 2016.

Surname Name Organisation Charles Abbott Scotland Europa Joyce Acheson Sustainable Energy Authority of Ireland (SEAI) José Luis Aguiriano Oceantec Olatz Ajuria EVE Margarida Almodôvar DGPM- Direção Geral das Políticas do Mar Jorge Altuzarra VICINAY Marco Alves Wavec - Offshore Renewables Álvaro Amezaga SENER Julia Anceah AROP John Armstrong TidalStream / Schottel Toby Bailey RED Marine Stuart Bradley Energy Technologies Institute (ETI) Carla Branco PBBR John Breslin SmartBay, Ireland Stuart Brown FloWave Hannah Buckland Black & Veatch Eamon Cahill Dept Jobs, Enterprise and Innovation Christophe Chabert DCNS/Open Hydro José Chambel Leitão Hidromod Simon Cheeseman ORE Catapult Joyce Cheson Sustainable Energy Authority of Ireland (SEAI) Bernie Comey Dept of Energy Conor Cooney ESB Peter Coyle Marine Renewables Industry Association Mike Crosby RED Marine Jean François DAVIAU SABELLA Yann-Hervé De Roeck France Energies Marines Ventura de Sousa Associação das Industrias Navais Antoine DECOUT Syndicat des Energies Renouvelables (SER) Julien DELANOË ADEME Jean-Paul Delattre ICE-France(RaL) Dana Dutianu Innovation and Networks Executive Agency

Study on Lessons for Ocean Energy Development

Surname Name Organisation Elisabeth Fernández DITREL Karen Fraser Scottish Enterprise Sylvain Gaignard EDF-EN Berry Gareth Whitford Luis Gavela WEDGE Phil Gilmour Marine Scotland Janete Gonç Wavec - Offshore Renewables Rémi Gruet Ocean Energy Europe Raúl Guanche IHCANTABRIA João Henriques Instituto Superior Técnico Peter Holland ORDP José Ignacio Hormaeche Cluster Vasco de la Energía Tim Hurst Wave Energy Scotland Joe Hussey IT Power Holger Ihssen Helmholtz Association Arantza Iturrioz Environmental Hydraulics Institute of Cantabria Henry Jeffrey University of Edinburgh Lars Johanning University of Exeter Janine Kellett Scottish Government Marlène KIERSNOWSKI SYNDICAT EM Arnaud Lambert NFIE Lab Laborelec Site Ibon Larrea DITREL Roberto Legaz APPA Tony Lewis Ocean Energy Ltd and University College Cork Andrew MacDonald Offshore Renewable Energy Catapult Laurent Marquis WaveStar Paul M'Livoy TFC Jacopo Moccia Ocean Energy Europe Helene Morin Bretagne Developpement Innovation Joe Murtagh Seapower Frank Neumann IMIEU Kieran O'Brien Carnegie Maria Olsson Swedish Energy Agency Bram Pek BlueWater Andrew Perish Sound and Sea Ltd Ronnie Quinn Crown Estate Antoine RABAIN Indicta Steven Rice Plymouth University Lindsay Roberts Scottish Renewables Álvaro Rodríguez CTC Pablo Ruiz-Minguela TECNALIA James Ryan Aquavision António Sá da Costa APREN Carlos Sánchez Lafuente CDTI Beatriz Sancristobal CTC Centro Tecnológico de Componentes

Study on Lessons for Ocean Energy Development

Surname Name Organisation Luis Sansegundo DEGIMA Estibaliz Sanvicente Cluster Energia Basque Country António Sarmento Wavec - Offshore Renewables Federico Sgarbi Permanent delegation of Brittany Clym Stock-Williams ECN Eoin Sweeney ITO Consult Ltd Yago Torre Enciso BIMEP Hans van Breugel Tocardo José Varandas Kymaner Louis Verdegem Bosch Rexroth Florent Vince WeAMEC Sebastian Ybert IFREMER Antonio Ynat NAVACEL Iñaki Zabala SENER Gonçalo Zagalo Pereira FCT - Fundação para a Ciência e a Tecnologia Ana Novak Zdravkovic NFIE Lab Laborelec Site

Study on Lessons for Ocean Energy Development

ANNEX II. TECHNOLOGICAL EXPLANATION

Tidal Stream Technologies Types of turbines There are a number of turbine technologies that have been proposed and that at some stage have been tested. Although there is a convergence towards horizontal axis turbines, below we describe the main types:

A) Horizontal axis turbine Horizontal axis turbines extract energy from moving water in much the same way as wind turbines extract energy from moving air. The tidal stream causes the rotors to rotate around the horizontal axis and generate power. There has been a convergence around this technology, based on an overview of existing tidal current projects, 76% of all turbines are horizontal axis turbines and 12% are vertical axis turbines (International Renewable Energy Agency (IRENA), 2014). In 2011, 76% of all research and development (R&D) investments into tidal current technologies went into horizontal axis turbines, 4% into enclosed turbines, and 2% into vertical axis turbines1.

B) Vertical axis turbine Vertical axis turbines extract energy from the tides in a similar manner to that above, however the turbine is mounted on a vertical axis. The tidal stream causes the rotors to rotate around the vertical axis and generate power.

C) Oscillating Hydrofoil A hydrofoil is attached to an oscillating arm. The tidal current flowing either side of a wing results in lift. This motion then drives fluid in a hydraulic system to be converted into electricity.

D) Enclosed Tips (Venturi) Venturi Effect devices house the device in a duct which concentrates the tidal flow passing through the turbine. The funnel-like collecting device sits submerged in the tidal current. The flow of water can drive a turbine directly or the induced.

1 Magagna & Uihlein (2015).

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E) Archimedes Screw The Archimedes Screw is a helical corkscrew-shaped device (a helical surface surrounding a central cylindrical shaft). The device draws power from the tidal stream as the water moves up/through the spiral turning the turbines.

F) Tidal Kite A tidal kite is tethered to the sea bed and carries a turbine below the wing. The kite ‘flies’ in the tidal stream, swooping in a figure-of-eight shape to increase the speed of the water flowing through the turbine.

G) Other Designs This covers those devices with a unique and very different design to the more well-established types of technology or if information on the device’s characteristics could not be determined.

Methods to fix the TEC to the seabed Although there seems to be a convergence in tidal current technologies towards horizontal axis designs, there is still quite a variety in mooring technologies used. Of the different tidal current concepts and projects developed so far, 56% uses rigid connection (mostly seabed), 36% uses mooring, and 4% monopoles2. For example, Marine Current Turbines (MCT)/Siemens’ SeaGen changed from a monopole support structure to a new tripod design. Alstom, on the other hand, is working on turbines with individual components that can be mounted on different kinds of mooring structures. i) Seabed mounted / gravity base This is physically attached to the seabed or is fixed by virtue of its massive weight. In some cases there may be additional fixing to the seabed. ii) Pile mounted This principle is analogous to that used to mount most large wind turbines, whereby the device is attached to a pole penetrating the ocean floor. Horizontal axis devices will often be able to yaw about this structure. This may also allow the turbine to be raised above the water level for maintenance. iii) Floating (with three sub-divisions) Flexible mooring: The device is tethered via a cable/chain to the seabed allowing considerable freedom of movement. This allows a device to swing as the tidal current direction changes with the tide.

Rigid mooring: The device is secured into position using a fixed mooring system, allowing minimal leeway.

Floating structure: This allows several turbines to be mounted to a single platform, which can move in relation to changes in sea level.

2 (IRENA 2014) “Tidal Energy, technology brief”, June 2014 IRENA (2014).

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iv) Hydrofoil inducing downforce This device uses a number of fixed hydrofoils mounted on a frame to induce a downforce from the tidal current flow. Provided that the ratio of surface areas is such that the downforce generated exceeds the overturning moment, then the device will remain in position.

In deep water hydrofoils can also be used to generate a lift that will support the mooring system and buoyant floaters to maintain the vertical position of the rotor in the water column.

Types of blades The concept of a wind turbine like free stream horizontal axis rotor had very early been identified as a suitable means of extracting energy from water currents. Unlike wind the water resource is vertically constrained between the bottom of the sea and the water surface as well as horizontally by the near shoreline. These constraints also cause the typical two directional flow regimes during the tidal cycle which leads to different technical solutions for the necessary alignment of the horizontal axis rotor than the azimuth systems in the case of wind turbines.

The rotor and blade designs differ from any other application but design experience from hydropower, ship propellers and wind turbines have been applied in the development of tidal blades and rotor concepts. Despite the much lower current velocities compared to wind the density of water leads to a significantly higher thrust and thus bending moments than in wind turbine blades. For typical tidal rotor designs the resulting bending moments are around 5 to 10 times higher than for wind turbine blades. In addition water currents in the ocean are superimposed by wave induced velocities which can cause very high and frequent load cycles for the rotor and the structure.

At many tidal current sites high turbulence intensities are found caused e.g. from a rough seabed topology or other topographical obstacles upstream which generate large eddies that travel long distances downstream and create a very dynamic flow field. The combined velocity variations in time and space introduce further dynamic loads into the blades and the structure.

One constraint in the blade design of tidal turbines is the fact similar to water pumps or conventional hydro turbines too high velocities in particular at the blade tip can create cavitation which would damage the blade very quickly. The design has to ensure that conditions leading to cavitation are avoided reliably. One parameter to achieve is the rotor speed which is limited by cavitation effects to a tip speed ratio of typically 5-6 – this in return leads to a rapidly increasing design torque with increasing rotor diameters which then drives the cost of the PTO system.

Another aspect of the operation under water is the high ambient water pressure which does oscillate as the blade travels around the centre shaft. Filling the blades with water to compensate for that has the disadvantage of introducing centrifugal forces inside the blade.

The characterization of such site specific combined effects of tidal currents wave and turbulence require highly sophisticated measurement systems and data processing algorithms for the flow field characterization. This input is however necessary to calculate e.g. the damage equivalent load as one major design parameter for the rotor blades. The uncertainty in the load calculations combined with a variety of site specific conditions turn the cost optimised and reliable generic blade design into a very complicated challenge. This can lead to either unreliable blade designs sometimes based on a too simplified transfer of wind turbine experience causing blade failures as they have been reported repeatedly or to very sturdy over engineered designs that are far from an economic optimum.

In many tidal turbine rotor designs a higher solidity compared to wind turbine rotors is used to generate a higher starting torque and reduce load balancing issues3.

Large wind turbine blades are made out of glass fibre reinforced polymers (GFRP). Due to the rapidly increasing loads with increasing rotor diameters carbon fibres are considered and used due to their higher strength if the higher cost compared to glass fibre can be justified. With a high specific strength such compound materials are also suitable for the application in tidal blades with the additional benefit that they do not show corrosion. However composite materials show degradation due to the exposure to sweater. In addition compound materials do take up moisture if

3 (Grogan, Leen, Kennedy, & Brádaigh, 2013).

Study on Lessons for Ocean Energy Development

used under water. A water saturated compound material has reduced strength with a range of around 80-90% of the initial dry value4.

Compared to wind turbine blades the thickness of the laminate is much higher in tidal blades to accomplish the higher bending forces. Despite the much shorter span a tidal blade therefor requires more compound material than a blade of a wind turbine with a similar power rating. This also has implications on the transition from the circular shape where the blade root is fixed to the lift generating geometry further out.

This fact also provides a limitation to scale tidal turbine rotors. For large tidal turbine blades with a length of 10 and more meters GFRP is not sufficiently strong and needs to be supported e.g. by mixing in carbon fibres or additional structural support e.g. by a solid spar in the blade centre.

Types of grid connection Turbines far offshore, need to be connected to each other through array cables (typically 33 kilovolt (kV)). The array is then typically connected to an offshore substation, which is connected through an export cable (typically 150 kV) to an onshore substation and eventually to the grid. With the development of wind parks off shore, there is now considerable experience in developing both offshore alternating current (AC) and direct current (DC) grid infrastructures. Yet, grid connection remains one of the critical aspects for tidal energy deployment as delays and the costs for grid connection could put many projects at risk.

However, the vast majority of current installations occur in intermediate waters and straights, relatively near the shore. This reduces the need for sub-stations, yet given that the current is very powerful, fixing of cables and/or burying the cables needs to be considered.

Optimal spacing Another technical aspect for tidal current technologies is their deployment in the form of farms or arrays. Individual generator units are limited in capacity, so multi-row arrays of tidal turbines need to be built to capture the full potential of tidal currents. However, turbines have an impact on the current flows, so the configuration in which they are placed is a critical factor to determine their potential yield and output5.

Offshore Wave Technologies Attenuator Principle as used by Pelamis Principle Two or more floating bodies are connected with joints and, therefore, can perform relative movement (see figures below). The movement will be attenuated by hydraulic piston/cylinder, which generates hydraulic pressure in a reservoir. The pressurised medium expands over oil driven motor. The motor drives a rotating electrical generator for power generation. The power is transferred to shore via an umbilical, which operates also as a mooring line. For maintenance, the whole assembly will be remotely released from the submerged umbilical connection point, e. g. by a working class ROV, and will be towed back to shore.

4 (McEwen, Evans, & Meunier, 2013). 5 (SI Ocean 2012) SI Ocean Technology Status Report SI Ocean (2012).

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Source: www.aquaret.com (left figure), Pelamis-Website (no longer available) (right figure).

The chronology of the Pelamis development deserves specific attention. It provides insight into the complexity of moving a technology from idea to reality through the TRLs while the company evolves from a start-up to a wave device manufacturer. In addition, it shows interaction with the funding conditions at EU and Member State level, private investments, the test centres and the project development towards arrays. While the Pelamis success made it the forerunner of the sector for a long time, the company has not survived economically.

Point Absorber as used by WaveBob Principle: Point absorbers use the relative motion between a sea bed fixed (using mooring lines of gravity anchors) element and a moving element, which elevates with the waves. This generates a linear motion, which can be directly converted into electrical energy using a linear generator. In an intermediate conversion step, the linear motion can be transformed in a rotation by use of a rack/pinion.

Source: Aquaret (2008).

Point absorber Seabased WEC Principle: The device uses the relative motion between a sea bed fixed (using a gravity foundation) element and a moving element, which elevates with the waves. This generates a linear motion, which is directly converted into electrical energy using a linear generator.

Study on Lessons for Ocean Energy Development

Source: Seabed (2013).

Floating OWC as used by OE Buoy Principle: When exposed to waves, the water level in a pressure chamber “oscillates” and moves air through a tube shaped outlet in both directions. An air turbine is driven by the streaming air and drives a rotational electrical generator.

Source: HMRC/MaREI.

Overtopping as used by Wavedragon Principle6: The Wave Dragon absorbs large wave fronts by use of widely spread collector arms. This concentrates the waves to a ramp in the mid of the structure and causes the water to overtop the ramp edge and to fill a water basin. This generates a height difference between the water level in the basin and the surrounding sea level. This height difference is converted into electricity using standard low-head hydraulic turbines and rotating electrical generators.

6 Source: Wave Dragon (2017).

Study on Lessons for Ocean Energy Development

Source: Wave Dragon (2017).

Rotating PTO as used by Penguin Principle: The roll, pitch and yaw motions of the floating excited by the waves cause an exocentric mass inside the floater to rotate (red body in figure below7). This rotation will be directly converted into electrical power by a generator.

Wave Surge device Oyster by Aquamarine Power Principle: Hydraulic circuit connecting all units in an array and driving a land based rotating electrical generator in a common hydroelectric power conversion plant (see below).

7 Source: Wello (2017).

Study on Lessons for Ocean Energy Development

Wave Surge device Waveroller by AW-Energy Oy Principle: Hydraulic circuit in each individual device drives a rotating electrical generator, which feeds power to the electrical grid

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ANNEX III: OVERVIEW OF SUPPLY CHAIN CHARACTERISTICS

It is apparent that tidal and wave energy require specialised supply chains. Partially through the operation of test sites like EMEC, the number of installations has increased to the level, where supply companies become increasingly focused. However, a large part of components as well as installation capacity remains more general – and both are drawn from adjacent sectors such as offshore oil and gas or offshore wind, as well as hydro.

The scope of the supply chain of this study exceeds beyond a components and a material supply chain and extends to the offshore logistics which – in the same way as for offshore wind farms - contribute significantly to the overall project cost. The figure below shows how this also holds for offshore wave projects.

Figure 1 Capital cost breakdown for installation of a particular wave energy device in a wave farm

Source: Carbon trust.

Project development phase In this first stage of the life cycle of the project several companies are already specialised in different supply chain categories.

Table 1 Development phase supply chain categories ocean energy

Supply chain Capability required categories Physical surveys Geophysical and geotechnical services. Divers, ROV and special purpose vessels. Resource surveying Advanced measurement and analysis of resources (SAR, Satellite imaging). Environmental Estimation of the expected environmental impact of a certain OET surveying with respect to sea flora and fauna during installation and operation phase. Planning and Special consultancy support required to analyse country depending consenting regulatory issues, e.g. H&S, transport permissions, grid codes, financing, taxes/insurances, etc. Array design Array planning using specialised tools as WaveFarmer (DNV-GL), NOWIcob (Sintef), DTOcean array optimisation tool (DTOcean FP7 project consortium, currently under development), etc.

Study on Lessons for Ocean Energy Development

The physical surveys component is very well developed as a result of all the offshore oil & gas activities. Given that the techniques are not that dissimilar these specialised companies/experts would be contracted by the lead partner to conduct geological surveys using already operational assets and staff. Equally with all the other categories of this part of the supply chain, specialists and specialised companies are most likely to be contracted in order to supply the necessary information for the planning and setting up of the project by the lead partner/owner.

The capabilities as mentioned in the above shown table are well established in other fields of the offshore energy sector (oil & gas, offshore wind), meaning that at least a minimum TRL of 8 can be assigned to each of the individual chain elements.

Manufacturing phase This phase involves the core activity of the marine energy deployment, namely designing, building and installing of the physical assets. This phase has the highest value added and market value and is therefore where international competition is the fiercest, as well as shaped by international technical and commercial innovation8.

Table 2 Manufacturing phase supply chain categories ocean energy

Supply chain Capability required categories Hydrodynamic Technology specific solutions for the swap from the actual single piece converters (“prime production to a serial production is required; process technology for mover”) serial production (metal working, composite structure manufacturing, welding, etc.) are well established and can be adapted from other offshore technologies (oil & gas, wind, ship building). Power-Take-Off There are of the shelf solutions available for almost all PTO concepts (mech./elec.) The main challenge here is the “marinisation” of such components (i.e. protection against sea water spray, humidity, etc.) and the adaption of components to extreme loads and/or high number of load cycles. Moorings and Mooring and anchoring technologies are well established in all fields of Foundations offshore technologies. The main challenge here is to reduce the costs for the hardware itself (e. g. by use of polymer material rather than steel chains) and the installation costs (anchor handling ships). Fixed foundations are currently in the optimising phase in the offshore wind sector. Main challenges here are the costs (material, installation) and the minimisation of environmental impact (seabed, chemicals, noise during installation and operation, etc.). Control System The control system can significantly contribution to reduce loads on the whole tidal stream device (or can make the situation even worse, when not carefully engineered and tested!). Tailored controller solutions are required for each specific type and conversion principle. Offshore Substation In addition to the specific device technologies, the “balance of plant”, and grid (“balance of i.e. the underlying infra structure of a device array, sets specific plant”) requirements for ocean energy technologies. Depending on the overall power output of the array, the voltage level of the grid connection has to be increased, using transformers and/or high voltage direct current (HVDC) transmission via an export cable. This requires sea based substations and/or wet mate connectors, which can be designed on surface piercing platform constructions as well as fully submerged solutions. The later ones require less effort for foundation/mooring

8 Scottisch enterprise (2016).

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Supply chain Capability required categories system, but need special procedures and equipment to connect/disconnect devices. Maintenance of inside components requires lifting up of the substation. For floating solutions, the umbilical is a critical issue with respect to life span and costs.

The structure of the supply chain is of a number of dedicated Original Equipment Manufacturers (OEMs), who will research, develop, test certain technologies, before manufacturing the components (such as blades/hydraulics/ generators/control systems). These will typically be engineering institutes/companies (both small and large) with a rather specific focus. In more complex components (such as generators), larger companies such as Siemens, or Lockheed Martin, will function as compilers to produce fully operational generators to sell to the project owners.

Although this part of the supply chain has a background of experience from other renewable energy technologies and other off-shore sectors, tailored solutions are necessary for ocean energy. It is widely accepted in the literature that although, much progress has been made in this regard (with for example dedicated technologies being tested at EMEC), this part of the supply chain is not yet mature. Testing and improving the different components to be more reliable and cheaper would be required.

Installation phase This part of the supply chain is highly developed given the decades of off-shore oil & gas experience. These are therefore dominated by well established players, who (especially during the low oil price that prevents oil exploration) are looking to diversify into other similar activities.

One major challenge is the cost reduction for device installation. Compared to oil & gas with few operations but very large units (e. g. exploration platform at a several 1000 tons), the challenge is to serve installation with relatively small units at high numbers. This might require a change of the equipment to more cost effective vessel solutions with reduced capacities, e. g. with respect to craning or bollard pull capacities. In addition, the operational conditions of the vessels for installation need to be extended to be able to extend weather windows for transportation and installation of devices/components (maximum allowed wave height Hs or wave period Ts, maximum allowed wind speed, etc.). Special requirements for logistics during installation phase are summarised in the table below.

Table 3 Installation phase supply chain categories ocean energy

Supply chain Capability required categories Land based logistics Transport of large devices and/or components require special demands for harbours (streets, bridge loads, gate opening distances, etc.). Dockside operations Craning capacity and key side loads, wet/dry docks for final assembly, minimum water depth for handling of floating devices, etc. Transport logistics For floating devices, one or more tug boats are required, depending on the size of the device (manoeuvrability) and distance from the service harbour to the installation site (travel time, number of travels); For non-floating devices/components, transport and/or feeder vessels with enough deck space are required. Offshore operations Offshore construction vessels with craning capacities matched with the devices/operations, Cable laying ships, specialist (e.g. diver or ROV operators) need to be available for offshore final assembly and commissioning of devices and the entire array.

Study on Lessons for Ocean Energy Development

All the above mentioned services or equipment items are available off the shelf. The main problem is the concurrent situation with other offshore technology installation activities. When the oil & gas or offshore wind demand is low, vessels and personnel is available at reasonable rates; If the oil/gas exploration activities increase this industry sector will absorb most of the capacity, since they can afford to pay high rates.

Another problem is the matching of the size, operational abilities and number of available ships. There can be seen shift of philosophy at the vessel/equipment/service providers to provide tailored solutions for the installation and O&M of offshore renewable devices.

Operation & Maintenance (O&M) phase The O&M phase is long term, with 25 year operations during the typical design lifespan of a project. Given that there have been no large scale installations, and if so only recently, this part of the value chain is the least developed. There can be made only limited use from offshore oil & gas with respect to O&M activities. As already pointed out for the installation, O&M activities require smaller vessels, doing more frequent operations.

There are no experiences available yet with phases close to the mentioned 25 operational years. Since O&M can become a major cost driver if not well planned, engineered and organised, this field is still under continuous research and development. This applies to the equipment as well as to the processes.

The principle demands for O&M for ocean energy array projects are summarised in the table below. It is quite similar to the respective table for installation. For O&M one needs to deal with a lower size/weight of components, but with a significantly higher number of actions. Most actions during installation happen only once. O&M actions will need to be performed repeatedly for each device with a certain time interval during the array life span. Therefore, optimisation of the O&M process is an important issue.

In general, the main measure to reduce O&M costs is to reduce the number of travels to the array site. Condition monitoring equipment can reduce optimise these costs. Such systems are state of the art in the wind industry and can be applied to most of the components of tidal stream devices and for wave devices with rotating parts in the PTO without major modifications.

For larger components, regular inspections might be valuable. This will be done mainly by technicians in the near future. With gaining more experiences, automated inspection systems using sensors like cameras (normal and IR for temperature measurement), microphones, etc., will take over more and more.

Although the above mentioned measures generates additional costs in the beginning, it might save a lot of cost when it contributes to well prepared O&M activities, i.e. when coming to the array with the required specialists, tools/equipment and spare parts. Access systems, which allow transfer from at a broader range of sea states, are also supporting O&M cost reduction.

Table 4 Installation phase supply chain categories ocean energy

Supply chain Capability required categories Dockside operations Facilities to repair large floating devices (dry/wet docks, craning, water depth, etc.), key side load. Transport logistics For floating devices, one or more tug boats are required, depending on the size of the device (manoeuvrability) and distance from the service harbour to the installation site (travel time, number of travels); For non-floating devices/components, transport and/or feeder vessels with enough deck space are required. Offshore operations “Fit for purpose” vessels are required, which combine several functionalities (transportation capacities, craning equipment, ROV operation facilities, etc.) at a broader range of environmental conditions (“weather windows”); On site accommodation for crews/specialists are useful to reduce traveling time.

Study on Lessons for Ocean Energy Development

Supply chain Capability required categories Device condition Application of Condition Monitoring Systems (CMS) to tidal stream monitoring devices; Most components can be monitored with existing solutions from the wind industry, some tidal stream device components might need further research and development for CMS application. Device inspection Inspection class and working class ROVs are required to perform the inspections of submerged components and allow direct performance of minor repair or replacement actions.

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ANNEX IV. COUNTRY-SPECIFIC EXPERIENCES

The roll-out of ocean energy technologies in Europe is highly specific to Member State situations, due to widely diverging resource potential, capacity of industry, as well as national and regional policy support. The research has focused on five countries:

 France – with a strong focus on tidal energy;  Ireland – with a focus on wave;  Portugal – with a focus on wave (section in progress);  Spain – with a focus on wave;  United Kingdom – with a focus on both tidal and wave;  Other experiences – currently including tidal energy in the Netherlands (section in progress).

The sections below are based on specific country write-ups prepared by national experts, complemented with central desk-top research and validated by interviews.

1.1. Experiences in France Policy framework The French Government is strongly committed to the development of ocean energies. The “Programmation Pluriannuelle de l’Energie” (PPE, Multiyear Energy Plan) published by the Ministère de l’Environnement, de l’Energie et de la Mer (Ministry for the Environment, Energy and the Ocean) establishes the national framework for renewable energy development. The targets for RE over the period 2016-2023 have been fixed in April 20169 and are combined for floating wind, tidal, wave and OTEC together at 100MW (installed capacity in 2023). In comparison, the objective for bottom- mounted offshore wind is 3,000MW in 2023. In practice, policy support focuses on floating wind and tidal, whilst confidence in wave energy at national level is currently very low.

Research and development of ocean energies are supported through grants, refundable grants and loans provided by two public agencies, the Agence Nationale de la Recherche (ANR, National Agency for Research) and the Agence de l’Environnement et de la Maîtrise de l’Energie (ADEME, Agency for the Environment and Energy Conservation). Over the period 2009-2017, the total support to ocean energies (tidal, wave, OTEC and floating wind) provided by both agencies will be in the range of €200 million, mostly through calls for proposal.

Infrastructure France’s ocean energy developments are strongly rooted in local economies, mostly at the Municipality and Region10 level. From the local perspective, ocean energies are clearly seen as a way of complementing the local shipbuilding industry. Major ports make significant investments to adapt the infrastructure to the needs of the ocean energy sector.

The two major spots for tidal energy having been identified in Bretagne (Fromveur) and Normandie (Raz Blanchard), these two Regions are quite active in the field. Pays de la Loire and to a lesser extent Aquitaine, Provence Alpes Cote d’Azur and La Réunion are also in. Regions bring meaningful financial contributions to some ocean energy projects. Regional economic agencies of Normandie, Bretagne, Pays de la Loire have allocated dedicated resources (staff, websites, brochures) to attract ocean energies investments.

For example, port infrastructures are undergoing upgrades to offer adapted facilities for the manufacturing, assembly and installation of ocean energy infrastructures11: €220 million have been announced in Brest (Bretagne) over 2016-2020, €57 million for Cherbourg (Normandie), €180 million for Nantes/Saint Nazaire (Pays de la Loire).

Initiatives, players and developments Two utilities, EDF and ENGIE, each develop their own Raz Blanchard pilot farm, in response to a call for proposals issued by the French Environment and Energy Management Agency (ADEME). Both teamed up with industry players, respectively DCNS/OpenHydro and Alstom (later GE

9 Arrêté du 24 avril 2016 relatif aux objectifs de développement des énergies renouvelables. 10 Regions in France are undergoing a major restructuring process since 2016. The number of Region will decrease from 22 to 14 by merging neighbouring Regions. We use the pre-reform names here. 11 Including bottom-mounted wind.

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Alstom). The demonstrators that are, or will soon be, connected to the grid, are of low capacity (2 MW or lower). Connection could therefore be made directly to the distribution grid. The larger pilot farms planned for 2018-19 will have to be connected to the transmission grid: the required facilities are yet to be built, but the experience that will be gained in the meantime with the connection of off-shore wind farms will hopefully pave the way for a smooth connection of tidal farms.

EDF is collaborating with DCNS, a major French government-owned naval defence and shipbuilding company, which has a sustained strategy to develop ocean energies. The cooperation concerns the Normandie Hydro project, The Raz Blanchard site was identified as another major potential site for tidal energy. ADEME’s 2013 call selected two pilot farms for that site, Normandie Hydro is one of them. The project is the next logical step after Paimpol-Brehat’s demonstrators: project promoters DCNS/OpenHydro and EDF plan to install seven 2 MW OpenHydro turbines in 2017-2018, that will start operating in 2019. Total project costs are €112 million (investment and operation over 20 years), out of which €52 million come as public subsidies from ADEME.

DCNS is active in wind, tidal, thermal, and wave converters. Its management expects a €1 billion turnover in marine energies in 2025. DCNS’s facilities in Brest supported the construction of an OpenHydro turbine now immersed at Paimpol Bréhat as well as Sabella’s D10 Fromveur turbine. OpenHydro turbines are also being installed in Bay of Fundy (Canada), and will equip the pilot Normandie Hydro Farm in Raz Blanchard (see below).12 In 2005 Open Hydro was founded in Ireland to commercialise an open centre tidal turbine concept which had been developed in the US in the 1990s. In 2006 the company became the first tidal device developer to install and test a tidal turbine at EMEC. In 2008 the device began to feed electricity into the grid. Due to the significant tidal resource in France with around 15 TWh – the 2nd largest in Europe - EDF showed an increasing interest in the sector. In 2011 EDF installed first 1 MW device from Open Hydro off the Brittany coast near Paimpol-Bréhat. The initial plan had been to install an array of 4 and later up to 10 devices. However the device was decommissioned in 2012 and after some modification reinstalled in 2013. In 2011, DCNS acquired 8% of Open Hydro shares, followed by an increase of its holding to around 60% in 2013, thus basing its tidal development in France and abroad on OpenHydro technology. In December 2014, Open Hydro DCNS in partnership with EDF Energies Nouvelles were awarded for a 14 MW project off the Normandy coast near Raz Blanchard by the French Environment and Energy Management Agency (ADEME). The project plan is to install 7 machines of 2 MW each until 2018. Further projects are in the pipeline in Canada, Northern Ireland and Alderney off the French coast.

Engie (previously GDF Suez) built a consortium with GE Alsthom – a consortium which has been awarded end 2014 by the ADEME call for proposals as well. The cooperation concerns the Netphyd project, located in Raz Blanchard too, and the second winner of ADEME’s 2013 call. Similar to Normandie Hydro, it is promoted by a major industry player (ALSTOM/GE Power) and a major utility (ENGIE, formerly GDF SUEZ), and will follow a similar time frame. Four Oceade 18, 1.4 MW turbines will be deployed for a total cost of €101M (investment and operation over 20 years), out of which €51 million from ADEME. The Oceade technology isn’t in use in France yet, but has been tested at EMEC since 2010.

The French engineering group Alstom got involved into tidal energy in 2009 by signing a licence agreement with the Canadian company clean Current power systems that had installed and operated a tidal device to power a small island off the British Columbia coast since 2006. In 2010, Alstom announced the establishment of their ocean energy business in Nantes, France where the Beluga 9 tidal device had been developed with a plan to install a 1 MW prototype in the Bay of Fundy, Canada in 2012. The Beluga concept was later abandoned. Apparently, it was intended to be tested at Paimpol Brehat but that attempt failed as the technology did not work as well in practice as suggested on paper. The reliability could have improved however this would have made the machines more heavy and therefore more complex. Thus, the viability of this technology was not considered good enough. The partnership was terminated late 2012. In 2011 Alstom also got involved into wave energy by acquiring a 40% stake in the Scottish company AWS ocean energy.13

12 For wave energy, DCNS struck in 2013 a partnership with Fortum (Finland) to develop a MW-sized farm using the AW Energy/WaveRoller technology in Bretagne (the feasibility and impact studies are ongoing). Wattmor is a proposed 1.5MW demonstrator wave farm in the Audierne Bay. The project is promoted by the Finnish utility Fortum in partnership with DCNS and using the WaveRoller concept developed by AW Energy. The project benefitted from a €0.5M subsidy from Region Bretagne for the feasibility studies, which total costs is estimated at €2M. Results of the feasibility study are not yet disclosed; construction could start in 2017. 13 Interviews inform us that Alsthom has abandoned further investments in wave energy. Alsthom has decided to terminate the activities in wave power as the technology appeared too immature and as the potential for coming to such technologies was seen too distant.

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In 2013 Alstom acquired Bristol based Tidal Generation Ltd from Rolls Royce followed by the installation of a 1MW device at EMEC. In 2005 Bristol based Tidal Generation Limited was founded by former MCT staff. Building on their experience from Seaflow and Seagen they developed the 500 kW tidal turbine Deepgen. Sea trials began in September 2010 at EMEC. In March 2012 the device had generated over 200MWh. In 2008 Rolls-Royce invested into TGL before acquiring the company completely in 2009. In 2013 TGL was acquired by Alstom. In the framework of the ETI funded ReDAPT project, a 1MW turbine End of 2014, Alstom announced the improved turbine design called Oceade with an 18 m rotor and a capacity of 1.4 MW. In the same year, Alstom as part of a GDF Suez led consortium had been awarded as the 2nd supplier to install four 1.4 MW Oceade turbines as well as the electrical subsea hub for the Raz Blanchard site in the Normandy. In November 2015 Alstom completed the sale of its energy business to GE with the consequence that the tidal turbine development is now continued under GE’s renewable energy business was installed reusing the existing tripod support structure in the same year.

Engie and Alstom could have made some other choices than TGL too, as cooperation was going on with the Germany hydro power manufacturer Voith Hydro OCT. In 2008, Voith Hydro Ocean Current Technologies, a subsidiary of the German hydro power manufacturer Voith Hydro, started the development of a tidal turbine. A first 110 kW pilot installation had been installed within 2011 at a site off the coast of South Korea near the island of Jindo. This test facility was built as a 1:3 scale model to demonstrate the technology under real operating conditions. The turbine had a rotor diameter of 5.3 m and used a gravity foundation. A second device with 1 MW capacity was installed at the European Marine Energy Centre (EMEC) for testing with funding from the UK Marine Renewables Proving Fund (MRPF). This turbine was basically an up-scaled version of the system in Jindo but mounted on to a monopole drilled into the seabed. The 1 MW horizontal axis turbine HyTide, which is 13 m in diameter and weighs 200 tons, was successfully installed in 2013.14 In 2012 GDF SUEZ (later Engie) had announced that they had selected Voith’s HyTide technology for a tidal power project at Raz Blanchard in Lower Normandy with a plan to install up to 100 turbines at this site. In 2013 an industrial partnership agreement involving further partners had been signed to develop the pilot site at Raz Blanchard starting in 2016. The project was expected to have a capacity between 3 and 12 MW. However, toward the end of 2014 tests at EMEC were stopped and the turbine was decommissioned. The company Voith OCT was terminated end of 2015, and there is no information on the transfer of knowledge acquired since. Despite the good testing results, it has been suggested by some interviewees that the ending of the cooperation may have been linked to Voith OCT’s reluctance to consider the establishment of turbine production facilities in France - a strategic element in the bidding competition.

Table 5 Overview of technologies developed in France

Technology Comment Sabella D10 6-blade, horizontal axis, 10m. diameter, bidirectional, no-anchoring seabed tidal turbine. One 1MW demonstrator grid- connected since 2015.

Hydroquest Lightweight barge-mounted vertical axis hydrokinetic turbines. One 40kW demonstrator grid-connected since 2015.

14 EMEC Orkney (2017b).

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Technology Comment OpenHydro (DCNS) Open-centre, bidirectional, no-anchoring seabed tidal turbine. 16 m diameter. Four 1MW demonstrators immersed (two in France, two in Canada), grid connection expected Spring/Summer 2016.

(developed by OpenHydro, an originally Irish startup).

Oceade 18 (GE Power / Alstom) Horizontal axis, 3-blade, seabed-anchored tidal turbine. Rotating nacelle to face the oncoming flow. 18 m diameter. 500kW & 1MW demonstrators tested at EMEC since 2013.

(developed by Tidal Generation Limited, in Bristol, UK).

In addition to the above two consortia, two a smaller contenders in French tidal energy have surfaced, the first of which is Sabella. The French engineering and project development company Sabella installed a first 1:3 scale tidal stream turbine in an estuary in Benodet, Brittany, France in 2008 and tested the device for a whole year. On this basis, a series of turbine solutions has been developed with rotor diameters from 10 to 15 m and a power range from 0.3 to 2.5 MW. A first prototype of the new turbine design, the D10 with a capacity of 500 kW was installed off the French Island Ushant and started to produce electricity in November 2015. End of 2015 Sabella signed a memorandum of agreement on the Philippines with developer H&WB Asia Pacific to develop a 5 MW proof of concept tidal power project. Sabella has a technological basis from the offshore oil industry and not offshore wind. It is stated to be simpler than other technologies and better adapted to the deepsea water conditions. Allegedly, the company did not bid for the major Raz Blanchard calls as it had not acquired the required critical mass, hence its focus on market niches. It is also important to recognise that Sabella is the only purely French engineering initiative – as the main consortia have acquires Irish and British turbine companies – thus shaping up a European value chain.

The second smaller French contender is Hydroquest, a company which is specialised in hydro - river tidal projects rather than ocean energy. It proposes lightweight, barge-mounted, vertical axis hydrokinetic turbines that could be used in both river and marine15 environment. A 40kW demonstrator, installed on the Loire river in central France, is connected to the distribution grid (ERDF) since 2015; another one followed in Guyane. Hydroquest has recently concluded a partnership with Constructions mécaniques de Normandie (CMN) for the manufacturing of its turbines. And, indeed, it is a small world as CMN was already involved in tidal energy with the manufacturing of Voith Hydro’s HyTide 1MW demonstrator in 2013. Interviews have informed us that Hydroquest has received an important capital injection from foreign shareholders as of late.

1.2 Experiences in Ireland Policy framework An important policy development in ocean energy was the publication of the Offshore Renewable Energy Development Plan (OREDP) in February, 2014. The OREDP contains a number of new initiatives including extra financial support, and an initial market support tariff for wave and tidal energy. It is being implemented by a Steering Group of officials representing all relevant Departments and agencies. Financial support for ocean energy by Government has increased in the past three years and policy work continues e.g. the recent consultation on tariff supports.

15 Hydroquest’s proposed ocean farm in Raz Blanchard wasn’t selected in ADEME’s 2014 call, but another proposal in Paimpol Bréhat could benefit from the ongoing 2016-17 call.

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The overall Vision for the OREDP is that Ireland’s offshore renewable energy resource should contribute to the country’s economic development and sustainable growth, generating jobs and supported by coherent policy, planning and regulation, managed in an integrated manner.

The most significant recent energy policy event was the publication in December 2015 of the Energy White Paper which is explicit in its view that ocean energy has a place in the national energy supply framework, stating that ‘Other ocean technologies (e.g. wave and tidal) are at the pre-commercial stage. Given the current state of readiness of these technologies, it is not anticipated that they will make a large contribution in the short term. However, ocean energy technologies are expected to play a part in Ireland’s energy transition in the medium to long term’.

Ocean energy policy in Ireland is aimed at two goals:

1. To enable the development of an ocean energy supply option in the overall generation mix of long-term national energy policy which includes export–the work underway on consenting legislation, the ISLES project etc. all contribute to this goal; 2. The development of an ocean energy industry for global markets with a particular emphasis on the energy conversion device portion (plus sub-systems and components) of the supply chain.

It has been acknowledged for some time that the planning framework for the development of OE, among other activities, requires very significant updating. This is now proposed under the Maritime Area and Foreshore (Amendment) Bill 2013, which has been awaiting enactment for some time. Under the Bill An Bord Pleanála (the Planning Board) is assigned responsibility for the development consent of developments in the nearshore area, on the foreshore or in the wider maritime area which are deemed to be strategic infrastructure or which are of a class that require environmental impact assessment or appropriate assessment. In addition, the Board is also assigned responsibility for consenting to developments which are beyond the nearshore area. In considering such applications, the Board will be obliged to carry out an environmental impact assessment and/or appropriate assessment of the proposals, as appropriate.

Objectives specifically related to ‘development in the nearshore area’ might include:

 supporting the objectives of government strategies, policies and plans such as Harnessing Our Ocean Wealth, the Offshore Renewable Energy Development Plan, the National Ports Policy, the Action Plan for Jobs, the National Biodiversity Plan, and Our Sustainable Future;  other plans which may be prescribed in future, such as a National Maritime Spatial Plan.

Technology development Marine Renewable Energy Ireland (MaREI) MaREI is a centre of excellence for marine renewable energy, supported by Science Foundation Ireland. The Centre combines the expertise of a wide range of research groups and industry partners, with the shared mission of solving the main scientific, technical and socio-economic challenges across the marine and renewable energy spaces. In addition to facilitating fundamental research activities, the MaREI research programme is closely aligned to the requirements of its industry partners and the marine and renewable energy sectors as a whole, providing innovative solutions that reduce the time to market, and reduce costs to a competitive level.

MaREI’s research capabilities draw upon the excellent track record of well-established marine and renewable energy-based research groups across each of its academic partners, covering a wide range of cross-cutting topics such as device design and testing, novel materials, offshore operations, coastal and marine management, marine robotics, observation and monitoring, energy storage, aquaculture and green gas. The research team comprises internationally recognised experts in these fields from UCC, NUIG, UL, MU, UCD, and CIT, who have complementary research backgrounds key to providing the underpinning research necessary for Ireland to achieve commercially successful marine and renewable energy industries.

By the end of 2015, MaREI had approximately 90 researchers in place working on a variety of fundamental and applied research projects across its six academic partner institutions. These included targeted projects with 45 industry partners, comprising a range of SMEs and MNCs across the marine and renewable energy spaces, €5 million in cash and BIK.

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MaREI secured over €4 million in additional funding from the SFI Infrastructure Fund in late 2015, which will allow the addition of an ‘Open Ocean Emulator’ at Lir-NOTF to accurately replicate real ocean wave conditions, and the development of an MRE Remotely Operated Vehicle by the University of Limerick to address issues experienced by conventional equipment in challenging high-energy offshore conditions.

To date, MaREI has secured a total of over €6 million in EU funding, and has implemented academic collaborations with 67 other institutions across 19 countries, resulting in 149 journal publications and 133 conference proceedings.

Figure 2 Ireland’s Research Infrastructure and Test Sites

Source: Sustainable Energy Authority of Ireland (2017).

LIR is a UCC testing facility with a dedicated staff of 12 people. It is part of the MaREI Centre and supports its research activities. It consists of a 2,600m2 tank hall which houses four test tanks (Ocean Wave Basin (25x18x1m); Deep Ocean Basin (35x12x3m); Wave & Current Flume (28x3x1m); Wave Watch Flume (15x0.75x0.75m), dedicated workshops and a range of electrical test infrastructure.

It is the Republic of Ireland’s only infrastructure for small to medium scale laboratory testing of ocean and maritime systems including:

 Offshore Wind (fixed and floating platforms);  Hybrid Platforms (wave and wind);  Coastal Engineering (coastal defence structures, beach evolution, breakwaters);  Oil & Gas;  Aquaculture;  Shipping (towing and stability, O&M vessels).

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Figure 3 Galway Test Site/SmartBay

Source: Sustainable Energy Authority of Ireland (2017).

Ireland’s ¼ scale ocean energy test site is located within the Galway Bay Marine and Renewable Energy Test Site and is situated 1.5km offshore in water depths ranging from 20m – 23m. The site has provided test and validation facilities for a number of wave energy devices and components to date. The facility is a partnership between the Marine Institute, the Sustainable Energy Authority of Ireland, SmartBay & key universities. The total investment to date is €3,649,831m. Which includes €2,299,831 from Science Foundation Ireland, €700,000 cash contributions from the MI and SEAI, €650,000 from the National Development Plan and substantial BIK contributions from partners.

2015 saw the installation of a subsea observatory at the site, with a four kilometre cable providing a physical link to the shore at Spiddal, Co. Galway. The ocean observatory enables the use of cameras, probes and sensors to permit continuous and remote live underwater monitoring. The cable supplies power to the site and allows unlimited data transfer from the site for researchers testing innovative marine technology including renewable ocean energy devices. The installation of this infrastructure was the result of the combined efforts of the Marine Institute, SEAI, the Commissioners of Irish Lights, Smartbay Ireland and the Marine Renewable Energy Ireland (MaREI) Centre. The project was part funded under the Science Foundation Ireland (SFI) “Research Infrastructure Call” in 2012.

Separately, SEAI announced a Memorandum of Understanding with Apple in November 2015 to promote the development of ocean energy in Ireland. Apple has committed a €1 million fund that will help developers who receive an SEAI grant to test their ocean energy prototypes in the Galway Bay Ocean Energy Test Site.

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Figure 4 AMETS test site

Source: Sustainable Energy Authority of Ireland (2017).

The Atlantic Marine Energy Test Site (AMETS) is being developed by SEAI to facilitate testing of full scale wave energy converters in an open and energetic ocean environment. AMETS will be located off Annagh Head, west of Belmullet in County Mayo and will be connected to the national grid.

It is currently envisaged that the site will provide two separate test locations at water depths of 50m and 100m to allow for a range of devices to be tested, though the potential to facilitate testing at shallower depths or the testing of other technologies such as floating wind is being investigated.

The Irish Maritime and Energy Research Cluster (IMERC) IMERC is a collaborative initiative of the National Maritime College of Ireland, University College Cork and the Cork Institute of Technology. It is also co-located with the Irish Naval Service, with the test tanks and facilities of the LIR facility and with MAREI. The ambitions of IMERC are that by 2025, there will be:

1. A dynamic, high-tech maritime sector filled with innovation built upon collaboration, business growth and partnership; 3. A diverse mix of office, R&D, training, military and visitor activities; 4. Up to 3,000 jobs – addressing global market opportunities in maritime security & safety; marine energy; shipping, logistics & transport; boating products & services.

In October 2015, IMERC launched a Maritime & Energy Touch Down & Incubator Space.

WaveBob Table 6 Time Line of the WaveBob project

Year Description 1999 Wavebob principle is patented. 2006 Installation of the Wavebob prototype in the Galway bay test site (Ireland)16. 2007 WaveBob starts generating energy at the Galway test site17. 2008 Wavebob announces to belong to the top 3 technologies in the world and reports to have €5m of private capital invested. Subsidiaries have been founded in key‐markets namely

16 Marine Institute (2006). 17 Marine Institute (2007).

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Year Description Ireland, UK and US18. 2013 Liquidation of the WaveBob Ltd. after they had failed to identify a strategic partner with the financial capacity required in order to provide around €10m to move the technology further towards demonstration.19 At the same time also a proposal for public funding from the Irish Government was rejected. Source: see references provides within the table.

Point absorber Seabased WEC Table 7 Time Line of the Seabased WEC technology

Year Description 2001 Start of development of the technology20. 2006 First prototype WEC placed into the waters off Lysekil in Uppsala Universities test site in March 2006, still operational21. 2011 Contracts signed for a 10MW demonstration plant off Sotenäs on the west coast of Sweden22. 2012 Start of construction of the Sotenäs plant; Meanwhile, 1MW capacity is installed. 2014 Building of the commercial “Ada Foah” project at Ghana, Western Africa23. 2016 Second commercial order to further develop the Ada Foah Project. Source: see references provides within the table.

1.3 Experiences in Portugal Policy framework The National Ocean Strategy (NOS) 2013-2020 is the public policy instrument in Portugal for the sustainable development of the economic sectors related to the ocean, including the energy sector. The three key pillars of the maritime economy are: Knowledge, Spatial Planning, and Promotion of National Interests.

FCT (The Foundation for Science & Technology) is the main funding agency for research covering all fields of science, including ocean energy. FCT is part of OCEANERA-NET, a network of 16 European national and regional funders and managers of research and innovation programmes, from 9 countries, in the field of ocean energy, funded by the European Commission.

Portugal had in place a Feed-in Tariff for wave energy: 260 EUR/MWh for the first 20 MW (decreasing for additional installed capacity, Decree-law 225/2007). It was one of the highest Feed-in Tariffs for wave energy demonstration projects. However this tariff has been suspended by the Portuguese Government in 2012.

The Ministerial Order no. 202/2015, of 13 July, approved the remuneration regime applicable for wave energy and offshore wind projects, at an experimental or pre-commercial stage. A basic Feed-In Tariff of €80/MWh is set for these projects, applicable to the first 20 years of the project. This value can be increased by €20/MWh if the projects have received incentives from the Portuguese Fund Carbon (FPC).

Key players and initiatives

The OWC pilot plant on the island of Pico - the Pico Plant - in the Azores is a bottom-mounted structure built in 1995-1999 with a rated power of 400 kW, operational since 2005, after several setbacks of the original project. The Pico plant is a shore mounted oscillating water column type of

18 Wavebob (2008). 19 Bloomberg (2013). 20 Sea Based (2013). 21 Sea Based (2013). 22 Sea Based (2013). 23 TC's Energy (2013).

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wave energy device. The plant has a chamber with a submerged opening to incident waves. The oscillation of the water surface from wave action acts as a piston to compress and expand air in the chamber, creating a bi-directional flow through a duct driving a Wells turbine connected to a generator. The original project was financed largely by the European Commission; estimated total costs are €2- 3M. The recovery project (DEMTEC national funding, EDP & Efacec) had a total cost of approximately €1M, with the second refurbishment phase financed by EDP. Since the recovery project WavEC has performed several small refurbishments to the plant.

The plant is operational and being operated remotely most of the time. In 2015 it has produced 31 MWh, reaching 100 MWh of production since 2007.

The Archimedes Wave Swing (AWS) BV Company tested a 2 MW prototype of its Archimedes Wave Swing device, from 2001 and 2004, off the Aguçadoura site in Portugal. The prototype was completed in 2001 but was only deployed in the end of the summer of 2004. The Archimedes Wave Swing was a submerged device that used a linear electrical generator to produce energy directly from the vertical motion of the structure. The prototype was completed in 2001 but only in the end of the 2004 summer it could be deployed and tested for a few weeks before removal. The delay was a result of overconfidence in the submersion of the device, an operation that was thought as a standard operation that could easily be accomplished by expert companies from the oil & gas industry. However the operational requirements (weather windows) where extremely demanding for the Portuguese west coast and the submergence procedure proposed by the company was not appropriate due to resonance behaviour between the AWS prototype and the support vessels used in the operation. After two years and two very expensive trials AWS BV decided to develop their own submergence procedure that was indeed successful and much cheaper in 2004. However after the submergence there was a leak in the container with two parallel control circuits one of which intended to be a backup control system. This was due to a useless duplication of the control system – both were installed on the same mini container that became flooded after submersion.

The WaveRoller device is a flap anchored to the seabed at its base. The back and forth movement of the wave surge moves the flap, transferring the kinetic energy to piston pumps, which feed into an onshore generator system. The plant construction is modular; therefore, it offers a high level of scalability. The 300 kW WaveRoller unit (3 x 100 kW) has been deployed, near Peniche, since 2012. Two other devices, of 10 and 15kW were previously tested in the same location, as part of the technology development of the Waveroller concept. The 300kW WaveRoller project was funded in 5M€ by the European Commission, under the project Surge. The device has successfully completed its two-year demonstration project, and was towed to harbour in 2014.

After successful trials of the P1 technology in EMEC, Scotland, in 2004, Pelamis Wave Power announced with the Portuguese company Enersis a project of three 750 kW Pelamis P1 units off the west coast of Portugal at Aguçadoura. The project was intended to be launched in 2006 but only in 2008 the farm was deployed. Although the project was planned for 20 years of operation, the devices were in the water only some months, between 1 and 6, depending on the machines. Around November 2008 the three machines were brought to the harbour and were not deployed again.

The project was operational only some months. The public reasons for not redeploying the devices are not well known but they seem to be related to the following:

 Problems with reliability of the hydraulic circuit that was simultaneously used for energy production and end-stop control of the articulated joints;  Risk that the machines could not survive the winter due to the limitations in controlling the maximum angular displacement and end-stop activation related to the reliability of the hydraulic circuit referred above and maximum angular excursion allowed by the design of the joints;  Maritime safety issues related to the possibility of significant damage in the Pelamis machines during winter as a result of the end-stop problem.

1.4 Experiences in Spain Wave and (floating) offshore wind energy are among the more promising renewable resources in Spain. Big Spanish companies such as IBERDROLA, SENER or ABENGOA and research centres such as TECNALIA continue to be active in the ocean energy sector.

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Policy framework Despite above initiatives, ocean energy does not take part in the national energy mix, and a proper regulatory framework for the marine energy sector is currently missing.24

In the past, the regulatory framework was aimed at being oriented to support the development of marine energies. Specifically, the consenting process in Spain established a hypothetical FIT scheme for both tidal and wave energy. In theory, the FIT values are quite high, if compared to those associated with the offshore wind energy, however, they have not been officially established due to the context of economic crisis and increasing electricity tariff deficit. Indeed, the latest Spanish laws are oriented to reducing the cost of these new technologies to the system. The Centre for the Development of Industrial Technology (CDTI) is a Public Business Entity, answering to the Ministry of Economy and Competitiveness, which fosters the technological development and innovation of Spanish companies. IDAE, the Institute for the Diversification and Energy Saving, is an organism answering to the Ministry of Industry, Energy and Tourism, through the Secretary of State for Energy.

However, dedicated support has been provided at a regional level, the regional governments of the Basque Country, Canary Islands, Cantabria and Galicia are the ones that promote marine renewables more actively. The open sea test facilities of the Basque Country and Canarias, Bimep and PLOCAN, are now fully prepared to install and test wave energy devices. Other regions such as Andalucía and Galicia show a growing interest in the marine energy sector (OES Annual report 2014, Spain) and Cantabria with a large scale basin is a significant regional player as well.

The Basque Government first created its own energy agency in 1982, the Ente Vasco de la Energía to lay the foundations for an energy policy that has been grounded, to different degrees at different stages, on energy efficiency, diversification of energy sources and promotion of renewables. Since then EVE has been in charge of developing projects and initiatives in line with Basque government policies. Other, comparable initiatives have been taken in the neighbouring regions of Asturias (FAEN – Foundation for Energy) and Cantabria (SODERCAN – focusing on industrial development).

APPA (Asociación de Empresas de Energías Renovables) is a Spanish group of enterprises working on the renewable energy sector. It has a section dedicated to marine energies: APPA Marina - composed of 20 enterprises and it works with the aim of creating the suitable basis to develop the marine energies in Spain. The Cluster Marítimo Español (CME) groups into a single organisation all related to the sea industries, services and economic activities of Spain.

Infrastructure Spain has a large number of relevant test infrastructures for ocean energy devices. These include:

 The Cantabria Coastal and Ocean Basin (CCOB), funded by the Spanish Government and the regional Government of Cantabria and is managed by IH Cantabria;  CEHIPAR: Canal de Experiencias Hidrodinámicas de el Pardo; a large-scale wave-wind flume and wave tanks;  CEHINAV: Canal de Ensayos Hidrodinámicos – a wave basin;  CIEMLAB: Canal d’Investigació I Experimentació Marítima (Universitat Politècnica de Catalunya (UPC), Currently, the CIEMLAB main facilities are the large-scale wave tank CIEM (Canal d’Investigació i Experimentació Marítima) and the small-scale tank CIEMito;  Laboratorio de Dinámica de Flujos Ambientales – UGR (Universidad de Granada);  Laboratorios de Puertos y Costas, Universidade da Coruña.

Main recent milestones have been the development of sea test sites, starting with the Mutriku Wave Power Plant, which can host testings related to new concepts of air turbines, electrical generators or control systems. More recently, the Biscay Marine Energy Platform (bimep) is an open sea test facility promoted by the EVE Regional Energy Company in the Basque Country – now in its final implementation phase.

PLOCAN (Canary Islands) offers a marine test site for ocean energy converter prototypes, including submarine electrical infrastructure. Once ready, it will offer the required grid connection. The initial capacity is set at 15 MW with a future extension planned up to 50 MW by 2020. Main technologies

24 Vásquez, Astariz, & Iglesias (2014).

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under testing will be related with waves and offshore wind conversion. The test site is extended over 23 km2 from coast to 600 m depth25.

Initiatives and key players The first initiatives in Spain were taken by Iberdrola and the later project NEREA (AWS system) developed by EVE in the Mutriku platform. They have been at the origin for the interest in Spain for marine energy. A large number of wave-related initiatives have taken place since, many of which concentrating in the North of Spain and in the Canarias, however they have been somewhat disjointed at least until recently.

Tecnalia, headquartered in Bilbao, is the largest Spanish private research organisation, and leading the R&D activities on ocean energy in Spain, aiming at creating and developing business opportunities for different agents of the ocean energy supply chain. Tecnalia has invested in several spin-off companies, such as Oceantec and Nautilus (the latter focusing on floating wind).

Iberdrola and Tecnalia have invested in Oceantec with the aim to progress in wave energy generation in Basque country. In 2014, OCEANTEC made a second programme of tank testing at CEHIPAR and then designed a low power prototype (40 kW) of its OWC floating device. The prototype has the main elements of the actual device with possibilities to optimize their performance in later designs. OCEANTEC plans to conduct sea trials in the years 2016-2017 (at the bimep site) to ensure the validity of the selected concept and optimize its design before having a full scale prototype (500 kW) to be tested at sea in the years 2018-2019. The current round of investment amounts to €3.5 million, of which €2.5 million was invested by EVE – the public support from Basque energy agency - and the remaining 1 million by the owners. Oceantec has good cooperation with Irish/Scottish players as well as Ecole Centrale de Nantes.

Abengoa Seapower is present in various national and international organisations that carry out a range of activities for developing ocean power, including the following: the national subcommittee on standardization of wave and current converters (Aenor AEN/CTN/206/SC114); the ocean power association of the European Union (European Ocean Energy); the technology and innovation platform for ocean power (TP Ocean); ocean power group of the national association of electricity producers (APPA Marina); and Chile’s ocean power association (Ademar).

The CENIT-E OCEAN LÍDER project is an ambitious technology initiative promoted by a consortium of companies with a strong research capability which addresses the challenge of developing the necessary technologies to set up integrated installations that can harness marine renewable energies, such as waves and tidal currents, and by combining them with more mature energy sources, such as offshore wind power. The budget was of €30 million and €15 million grant. The consortium was formed by 20 entities, led by IBERDROLA INGENIERÍA & CONSTRUCCIÓN, with the collaboration of 25 Research Organisations and Universities.

UNDIENERGÍA (demostración experimental de un parque marino de generación undimotriz) was funded by the program Innpacto 2012 (IPT-2012-0421-120000) and it was developed between 2012 and 2015. It was oriented to study an experimental wave energy conversion park. Consortium leader was MECÁNICA INDUSTRIAL BUELNA, and CODELSE, CONCEPTUAL KLT, XEREDIA, ASCAMM, CT INNOVA and IHCantabria were the rest of the partners.

SAEMar (Sistemas de Anclaje para Plataformas Marinas de Energías Renovables) was funded by the National Plan (ENE2010-20680-C03) and was developed between 2010 and 2013. The project was aimed at the development of anchoring systems for marine renewable platforms. For this aim, a multi-disciplinary approach was developed integrating mechanics, materials, geotechnics, naval and oceanic knowledge. The partners were the University of Cantabria, the University of Coruña and CTC (Centro Tecnológico de Componentes).

IISIS (Investigación Integrada Sobre Islas Sostenibles) was funded by the program Innpronta 2011 (Ministry of Economy and Competitiveness) and was developed between 2011 and 2013. Different structures were analysed in order to optimize it for the integration of wave energy conversion systems. The wave energy conversion technology chosen was the oscillating water column (OWC).

TRL+ is a consortium between a research centre (IHCantabria) and a test site (bimep), which offers unique facilities for marine energy development.

25 OES (2014).

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LifeDemoWave (Demonstration of the efficiency & environmental impact of wave energy converters (WEC) in high energy coasts wants to raise awareness in society, proving that this is a way to reach clean energy The partners, all based in Galicia (Spain).

Rotary Wave is a Spanish company working on the development of different marine energy conversion devices. Among other projects, the sea testing developed for the Butterfly device can be highlighted.

Mutriku Oscillating Water Column (MOWC) plant - an onshore testing facility. The power plant consists of 16 air chambers and 16 sets of “Wells turbines plus generator” of 18,5 kW each. Mutriku Wave Power Plant, promoted by EVE, is integrated within the breakwater of Mutriku (Basque Country) and started its operation in July 2011. Since then, it has produced more than 650 MWh.

Wedge Global is leading the UNDIGEN Project based on the industrial scale W1 device. The W1 system is an axisymmetric resonant point absorber with direct drive (linear generator) power take- off and incorporates nine years of technology development and testing. During 2014, the W1 system has been under open ocean test for five months in the Atlantic Ocean at PLOCAN site and additional 6 months testing at the harbour on the Canary Islands. Collaborators are FCC, CIEMAT and PLOCAN. After completion of the planned tests during 2014, and due to the outstanding performance of the system, additional tests were planned.

WELCOME (Wave Energy Lift Converter Multiple España) is a 1:5 scale wave energy converter prototype based on APC-PYSIS technology (Supplemented Point Absorber). It was installed in April 2011 around 4 nautical miles from Las Palmas harbour (PLOCAN, Canary Islands). The developer was PIPO systems.

Waveport, the 4-year European funded project for demonstration of the Powerbuoy device from North American company, Ocean Power Technologies, was concluded in October 2014 but the device has not been tested as planned. It was built by the Spanish company Degima and shipped to USA.

1.5 Experiences in the United Kingdom Policy framework The United Kingdom (UK) National Strategy used a variety of policy measures to influence investment in ocean energy, aiming to balance between technology push and market pull mechanisms. Figure 5 provides an overview of the UK’s strategy which includes a variety of funding agencies and activities.

Figure 5 Overview of financial support mechanisms and activities in the UK

Past programmes On a national level, several policy mechanisms have been implemented in the past. These included the Marine Renewable Deployment Fund (MRDF, a £42 million scheme launched in 2006 that however failed to receive suitable applications, and was criticised for its too strict qualification criteria), the Marine Renewable Proving Fund (MRPF, which provided £22 mln in funding for 6 tidal and wave devices – see under key players and initiatives below), and Regional Development Agencies (RDA). In addition to these national funding schemes, Scotland developed their own policy mechanisms to help progress the development of the marine energy sector. These include: Marine Supply Obligation (MSO, a market pull mechanism) Wave and Tidal Energy Support scheme (WATES, a £13 million scheme focused on technology demonstration projects), Wave and Tidal

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Energy: Research, Development and Demonstration Support (WATERS, a fund of nearly £17 million in support to the marine energy industry. In the latest round three projects were awarded) and the Marine Renewable Commercialisation Fund (MRCF, a technology push mechanism that provided £18 million in funding from the Scottish Government which ran from 2012 to 2015).

The current policy framework On a national level, work is ongoing to meet objectives set in the DECC 2013 Renewable Energy Roadmap which has set out renewable energy targets for 2020. The focus within marine energy has included working with industry to overcome barriers to deploy and move towards the first multi-turbine demonstration tidal array project deployment. The SuperGen Marine consortium (the UK Research Councils’ flagship investment in tidal and wave energy research). With the continued divergence of progress between wave and tidal development, DECC’s Energy Innovation Policy team is currently overseeing the delivery of an updated Technology Innovation Needs Assessment (TINA) for marine energy, which has been split into two different documents – Wave Energy and Tidal Stream TINAs. Due to be published in 2016, these documents will enable DECC and other government innovation funders to make effective decisions on how to support the future of wave and tidal sectors. Neither TINAs have yet been released.

The Scottish Government continues to be committed to the development of the marine energy industry. The Renewable Energy Investment Fund (REIF) was created to help marine projects become commercial viable and has invested £37.1 million to date. However this funding was not just for marine energy but also targeted other developing technologies such as community energy and district heating. Further, the Scottish public sector has invested around £23 million in the MeyGen Phase 1A project targeting tidal energy, while wave energy, following the establishment of Wave Energy Scotland, 2015 saw the commitment of over £10 million until 2017 through a series of strategically targeted innovation projects and research activities. Similar funding is expected for the years to come.

In 2009, wave and tidal stream were delivered the most attractive revenue support schemes in the world with the Renewable Obligations Credits (ROCS) banded at 3 ROCs/MWh for tidal stream and 5 ROCs/MWh for wave. In 2012, this was reviewed to increase tidal stream and wave less than 30 MW to 5 ROCs/MWh and wave and tidal more than 30 MW to 2 ROCs/MWh through 2017.

The implementation of the UK Government’s Electricity Market Reform programme, wave and tidal stream technologies were granted a reserved allocation of 100 MW across both the Renewable Obligations and the Contract for Difference (CfD) schemes with a strike price of £305/MWh. This programme is currently being revaluated by DECC.

Two main agencies play a pivotal role in the current leasing and planning framework:

 The Crown Estate, who grants rights to organisations to operate on the UK seabed. To date the Crown Estate has leased over 40 sites for tidal current and wave projects. In addition, they are undertaking ‘enabling actions’ work (research and technical studies) to support the project development process, and have invested in a first-of-a-kind array project (MeyGen tidal array);  Marine Scotland, a Directorate of the Scottish Government. In April 2011, a one-stop-shop for offshore wind, wave and tidal developers to obtain consents/licences for marine renewable developments in Scottish waters was developed. It creates a simpler, more streamlined process to handle marine/offshore energy development applications and aims to reduce some of the burden for applicants and regulators alike. The resulting Wave Energy Scotland programme, established in 2015, is widely seen as a suitable structure to encourage technology transfer and supporting suitable technologies. The current programme includes 17 power take off projects and 8 novel wave energy converter projects, in addition to four research projects in related fields. It is intended that the programme will allow developers to take projects from the earliest stage of demonstration through to ready for commercialisation stage.

Infrastructure The UK is home to some of the world’s most state-of-the art test facilities, including some of the most experienced personnel. The UK is home to the European Marine Energy Centre (EMEC), WaveHub, the National Renewable Energy Centre (NaREC), and several test tanks including the Plymouth University Coastal, Ocean and Sediment Transport (COAST) laboratory and FloWave at the University of Edinburgh.

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EMEC EMEC was established in 2003 in Orkney, Scotland off the North coast of mainland Scotland. The facility is the only centre in the world to provide accredited open-sea testing facilities for both wave and tidal technologies. The centre operates 14 grid-connected test berths for larger scale wave and tidal devices and 2 scale test sites for smaller scale devices so they gain open-ocean experience in less challenging conditions.

To date, approximately £34 million of public funding has been invested into EMEC by the Carbon Trust, Highlands and Island Enterprise, Scottish Government, UK Government, the European Union and Orkney Islands Council. Ranges of wave and tidal clients have tested their devices at EMEC.

WaveHub WaveHub is a purpose built test site for full-scale testing of renewable energy technologies. The facility is the world’s largest test site with four berths located 16km offshore in the Atlantic Ocean. The site is fully consented, with a 25 year lease and purpose built, pre-installed, grid connected infrastructure with a 30MW export capacity. The £15 million project was funded by the UK Government and the European Regional Development Fund Convergence Programme.

Other In addition to these, in various locations other infrastructure and facilities can be found. We mention:

 The Coastal, Ocean and Sediment Transport (COAST) laboratory, located at Plymouth University and providing physical model testing with combined wave, current and wind. The facility is able to generate short and long-crested waves in combination with currents at any relative direction, sediment dynamics, tidal effects and wind. The facility consists of two basins and two flumes;  FloWave TT, commissioned in 2013, which offers a state-of-the-art 25m diameter wave circular wave and current tank which includes 168 absorbing wave makers and 28 submerged flow-drive units. The tank is suited for 1:20 scale testing which helps to advance the device development between prototype testing and full-scale.

Key players and initiatives The UK hosts the largest number of companies, developers and manufacturers actively engaged in ocean energy in Europe. The list of clients who have worked or are working with the EMEC test centre gives a picture of the diversity of technologies as well as the time line of involvement. For wave, these include:

 AW Energy – tested components for their WaveRoller device in 2005;  Aquamarine Power – deployed and tested two full-scale Oyster (Oyster 1 and Oyster 800). Oyster 800 was grid connected from June 2012 – 2015;  Pelamis Wave Power – demonstrated their full-scale P1 device in 2004;  E.On – Started a three-year testing programme of the Pelamis Wave Power P2-001 device in October 2010 at the Billia Croo demonstration test site;  ScottishPower Renewables – in May 2012 the Pelamis Wave Power P2-002 device was deployed in the adjacent test berth to the P2-001 device in order to progress learning about operation and maintenance of multiple devices;  Seatricity – First deployed their point absorber device in 2013 at the Billia Croo site;  CorPower Ocean – Preparing to test a half-scale prototype of their wave energy converter at the Scapa Flow scale test site;  Laminaria - Full-scale device will undergo performance testing at EMEC in 2016 on their surge operated attenuator device;  Wello Oy – The gyroscoptic, Penguin device, first tested at EMEC in 2011 and after some updates in 2013 is back in Orkney.

For tidal, tests at EMEC have included:

 Flumill – Tested their ocean/tidal stream helix screw based device at EMEC’s non-grid connected tidal test site at Shapinsay Sound in 2011;  Magallanes – Deployed their 1:10 scale model floating turbine at EMEC in November 2014;  Voith Hydro - The HyTide 1000 1MW horizontal axis turbine was installed at the Fall of Warness site at the end of 2013;

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 Alstom – the 1MW tidal turbine was deployed in 2013 for an 18 month test period with an aim to collect and publish significant data in order to further the tidal energy industry;  Andritz Hydro Hammerfest – The HS1000 turbine was deployed at the tidal test site in 2011 and has operated for more than 17,000 hours, delivering 1.5 GWh to the grid.

At the Wavehub test centre, tests have so far been done by:

 Carnegie Wave Energy Limited – CETO Wave Energy UK were awarded the final berth to support a 3MW grid connected demonstration of their CETO 6 commercial generation technology;  Fortum – Signed a leasing agreement with WaveHub to test wave power solutions, providing the opportunity to rapidly deploy advanced, full-scale wave power converters;  Seatricity – Install the Oceanus 2 demonstration device to prove the survivability;  Simply Blue Energy – aiming to install approximately 200 Seabased generators, providing 10 MW installed generating capacity. The main challenge they aim to prove is survivability.

Below, we elaborate several key activities in more detail.

Pelamis Wave Power has been at the forefront of wave energy developing activities in the UK and Europe. It went into administration in 2015 which has had a blowing impact on wave energy sentiments among investors and other players across Europe. Further details on the Pelamis experiences are presented in section 0 about Portugal.

Marine Current Turbines (MCT) was founded in 2000 as a developer of tidal stream generators. The turbines developed by MCT extract energy from tidal flows and are attached to a surface piercing monopole which allows the turbines to be lifted clear of the water surface for maintenance purposes. In deeper waters the technology is fully submerged whilst still allowing for maintenance at the surface when the turbines are lifted. In 2003 MCT installed the Seaflow device, a 300 kW prototype tidal energy device Lynmouth on the Devon coast, UK.

Figure 6 SeaGen tidal energy device

Source: Siemens (2015).

Further to the installation and operation of the Seaflow device, MCT developed and installed the SeaGen device in Strangford Lough, Northern Ireland. The SeaGen device has a patented feature whereby the rotor blades can be pitched through 180 degrees, allowing for optimised energy capture on both the ebb and flow tide. Turbine rotors are positioned in the top third of the water column where tidal flows are strongest, thus maximising energy capture.

The device was installed in March 2008 after extensive design modifications to allow the use of a crane barge rather than a jackup barge (as was initially intended for installation in 2007 as was originally planned). SeaGen was the first full-scale tidal energy generator which produced electricity to the grid. The device began generating electricity in 2008 and in December of that year it delivered its full rated power of 1.2 MW. Three years of an Environmental Monitoring Programme concluded that the device did not have a significant impact on marine life in the area.

In 2011 an environmental consent application was submitted to the Welsh Government regarding the proposed installation of 7 of the SeaGen generators off the Skerries in North West Wales. The proposed array was a joint production with RWE Npower Renewables and was intended to generate approximately 10 MW at its peak.

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In 2012 a majority share in MCT was acquired by Siemens, leading to the device developer being wholly owned by Siemens before it was divested to Atlantis Resources.

The Meygen project started in 2010 when the Crown Estate awarded a lease area for a tidal energy array in the Pentland Firth off the north Scotland mainland coast, UK to a consortium led by Atlantis Resources. The development site encompasses almost 3.5 km2 of tidal flows which reach up to 5m/s and has good access to the grid and has a suitable water depth for development and deployment.

The Scottish Investment Bank’s Renewable Energy Investment Fund (REIF) has enabled the first phase (Phase 1a) of the MeyGen project to begin construction. The fund has committed £19.6 million as part of an overall funding package worth a total of £51.3 million to progress the project. The funding syndicate includes The Crown Estate, the Scottish Executive, the Department of Energy & Climate Change, and Highlands and Islands Enterprise.

The array is anticipated to start producing power in 2016 and the site will eventually include the installation of 269 turbines at the site, producing up to 398 MW. Phase 1a has a capacity of 6 MW, with 4 x 1.5 MW turbines, consisting of 1 x Atlantis and 3 x Andritz Hydro Hammerfest turbines. All turbines are 3 bladed horizontal axis with an 18 meter diameter rotor and are fully submerged.

Tidal Power Scotland Limited (TPSL) has been established by tidal energy developer Atlantis Resources and Scottish utility Scottish Power Renewables (SPR) as a Scottish tidal project development vehicle, with 640 MW of tidal power capacity set to be installed in Scotland by 2022. These tidal projects include SPR’s 100 MW portfolio of tidal projects in Ness of Duncansby, Pentland Firth and 10 MW project at the Sound of Islay (all Scotland), in exchange for a 6% shareholding in TPSL for SPR. These projects sit alongside the 85% TPSL owned MeyGen project.

1.6 Other experiences – the Netherlands Key players/initiatives Texel Tidal Project / BlueWater A small scale floating platform able to hold different arrays of different types of turbines was installed in the Marsdiep between Texel and Den Helder, where the current is about 2-3 m/s, significantly lower than at EMEC and some other sites. The strategy of the consortium led by Bluewater is to use this as a start small, learn and upscale approach. As of early 2016 it has a 200 kW Schottel turbine installed, and the consortium aims to step by step expand this to 2.5 MW. One of the claimed successes of this project is its fast deployment, stating that it went ‘from the drawing board to installation’ in only 6 months. Besides technology providers, the consortium is composed of a number of large and renowned offshore service suppliers like Damen shipyards, Van Oord marine contractors and Bluewater, parties that have worked together for many years in other offshore activities.

Den Oever demonstrator / Tocardo The installation of the first turbines of Tocardo in the Afsluitdijk in the Netherlands, in 2008, acted for them as a turning point in promoting tidal energy in the Netherlands. The installation is in operation for eight years now. Typical for this demonstrator is the choice for small turbines installed in an array. The site has been used for testing blade length hand composition and has helped developer Schottel to optimise its design for the lower current application.

The currents in the Afsluitdijk are fairly limited compared to sites further offshore (below 2 m/s) but since the Afsluitdijk infrastructure was already there, installation was also less complex and less costly. The findings are used for the Oosterschelde project (see below).

Eastern Scheldt (Oosterschelde) storm surge barrier The Eastern Scheldt surge barrier was built in the early 1980s as the final masterpiece of the post 1953 civil engineering and coastal protection works in the Netherlands. In 2016, a 1.2 MW array of 5 small turbines will be installed in the gates of one of the access channels of the Eastern Scheldt, where the narrow gates of the surge barrier generate high current velocity.

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ANNEX VI. LEARNING FROM OTHER SECTORS

The development of other relevant sectors contain important lessons and inspiration for Ocean Energy. In particular this applies to offshore wind, which is seen as having gone, successfully, through a similar development process as Ocean Energy. For the other two sectors (offshore oil & gas and CSP) main opportunities for Ocean Energy are presented.

Offshore wind Development and trend of the installed capacity of Offshore Wind Energy (OWE) in MW for the European Union as well as the main Offshore Wind markets Great Britain (incl. Scotland, Northern Ireland and Wales), Germany and Denmark is displayed in Figure 7 Key milestones which lead to this development and an indicator of the emphasized upscaling level are stated below.

1 2

Figure 7 European market overview and Levelised Cost of Energy (LCoE) development forecast26,27,28,29,30

1 1991 First Offshore Wind Park (OWP) Vindeby (DK) installed31: 11 WTG – 4.95 MW

1998 UK decides to execute their OWE development in Rounds (Round I, II and III)

2000 German Renewable Energy Act (EEG) defines Germanys feed in tariff model32

26 Roland Berger (2013) “OFFSHORE WIND TOWARDS 2020” available at: https://www.rolandberger.com/media/pdf/Roland_Berger_Offshore_Wind_Study_20130506.pdf. 27 4coffshore.com (2015) “Global Offshorefshore Wind Farms Database”, available at: http://www.4coffshore.com/windfarms/. 28 Danish Energy Agency (2015), “Nearshore wind tender” available at: http://www.ens.dk/en/supply/renewable- energy/wind-power/offshore-wind-power/nearshore-wind-tenders. 29 Danish Energy Agency (2015a), “Large-scale offshore wind tenders”, available at: http://www.ens.dk/en/supply/renewable-energy/wind-power/offshore-wind-power/large-scale-offshore-wind-tenders. 30 Renewable UK (2015), 'Offshore Wind Project Timelines 2015”, available at: http://www.renewableuk.com/en/publications/index.cfm/Offshore-Wind-Project-Timelines. 31 energie-winde.de (2014), “Die Revolution von Vindeby”, available at: http://www.energie-winde.de/faszination-und- technik/details/vindeby-erster-offshore-windpark-in-daenemark.html.

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2000 GB Round I33 starts – goal 1.5 GW

2002 Horns Rev 1 (DK) installed: 80 WTG – 160 MW

2 2003 GB Round II34 starts; first Offshore Wind Farm North Hoyle installed– goal 7 GW

2004 Energy Act, UK

2004 Siemens takes over Bonus Energy A/S35

2007 Areva takes over Multibrid

36 3 2010 GB Round III starts – goal 13 GW

2011 Fukushima Nuclear Power Plant Melt down / Declaration of “Energiewende” in Germany

2012 EEG (comp. for electricity fed into the grid) amendment simplifies grid connection for Germany

2013 London Array37 (GB) installed 175 WTG – 630 MW

2015 10GW offshore exceeded with 75438 new installed offshore turbines in 2015 – offshore total 4 11 GW

In the beginning, the offshore wind market has profited from synergies of the onshore wind market. It took years to establish an acceptance within the public for onshore wind energy as an alternative to other conventional energy sources. Here onshore wind stakeholders have used lobbies as well as public discussions in several European markets to strengthen wind power39.

“The development of wind power in Denmark has been characterised by strong public involvement. It was small machinery manufacturers that created the established wind turbine industry, and only after the consolidation of the industry through the 1990s did it become dominated by large, partly internationally owned and listed companies.”40

One of the next big drivers for the upscaling of the Offshore Wind energy market was the feed in tariff introduced in Germanys “EEG” in 2000. It “(…) has been adopted by more than two thirds of the EU member states. The Act determines that every kilowatt-hour generated from renewable energy receives a fixed feed-in tariff and that network operators must feed in this electricity into

32 Sühlsen & Hisschemöller (2014) „Lobbying the ‚Energiewende‘. Assessing the effectiveness of strategies to promote the renewable energy business in Germany,“ available at: http://ac.els-cdn.com/S0301421514001074/1-s2.0- S0301421514001074-main.pdf?_tid=078cb27c-da0d-11e5-9c36- 00000aab0f6c&acdnat=1456218700_5416bc9cea61bc83b2628e6143c79191. 33 Crown Estate (2015) “Leasing rounds”, available at: http://www.thecrownestate.co.uk/energy-and-infrastructure/offshore- wind-energy/working-with-us/leasing-rounds/. 34 Ibid. 35 Innovations-report.de (2004) “Siemens übernimmt dänische Bonus Energy A/S – Einstieg in Windenergie-Geschäft” available at: http://www.innovations-report.de/html/berichte/energie-elektrotechnik/bericht-35131.html. 36 Renewableuk.com (2015a), “Offshore Wind”, available at: http://www.renewableuk.com/en/renewable-energy/wind- energy/offshore-wind/. 37 Powermag (2014) “Top Plant: London Array Offshore Wind Farm, Outer Thames Estuary”, available at: http://www.powermag.com/london-array-offshore-wind-farm-outer-thames-estuary-uk/. 38 EWEA (2016) “EWEA-Annual Statistics 2015”, availabe at: http://www.ewea.org/fileadmin/files/library/publications/statistics/EWEA-Annual-Statistics-2015.pdf. 39 http://www.wordhippo.com/what-is/the-plural-of/lobby.html. 40 Danish Energy Agency (2015b) “Danish Experiences from Offshore Wind development”, available at: http://www.ens.dk/sites/ens.dk/files/climate-co2/Global-Cooperation/Publications/offshore_wind_development.pdf.

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the grid preferentially to the electricity generated by conventional sources.”41 The “EEG” is continuously updated and adjusted on a nearly yearly basis. Sühlsen describes the influence on these adjustments by Lobby from the so called “‘Big Four’ “which control close to 90% of the electricity market for Germany: E.ON SE, RWE AG, ENBW AG and Vattenfall.”42 According to the study the ‘Big Four’ had a major impact on political decisions concerning the positive development of Offshore Wind in Germany. Interviews with representatives of the ‘Big Four’ mentioned 36 different lobbying strategies. The three most relevant lobbying activities according to the ‘Big Four’ where (1) “Regular & personal contact to politicans”, (2) “Knowledge development with correct information” (3) “Lobbying with association”. The study concludes that the most efficient way of lobbying the regular personal contact with politicians can only be afforded by companies with high financial resources. Sühlsen finished with a statement about the offshore wind market: “through political support and continuous lobby activities, the sector of renewable energy does no longer represent a niche, but is incorporated in the German energy regime”43. The same ‘Big Four’ are still playing an important role in developing Offshore Wind internationally, together with other big stakeholders in the market like DONG Energy, MHI Vestas or Siemens Wind Power.

As the consequences of the reactor catastrophe in Fukushima 2011, the politics across Europe start to be more focussed on renewable energies. The German Chancellor Angela Merkel declared the “Energiewende” (Change to renewable energies) which defined the development from nuclear power plants to renewables in the same year. The UK meanwhile kept nuclear power plants active while revealing plans to step back from coal power plants in the end of 2015.The focus was und reducing subsidies for onshore wind while focussing on nuclear, gas power and subsidies for the development of offshore renewables.

For the UK market, Catapult states in its “Economic Impact Study of the offshore renewable energy Industry in the UK” that “at 15GW, a tipping point will have been surpassed. This tipping point is where economic value to the UK begins to increase at a much greater rate and we begin to see relatively more substantial returns on our investment. Catapult believes that this tipping point will be reached at a capacity of between 10 and 15GW.”44 Hence the positive impact on the UK economy will be highest between 10 and 15 GW installed capacity for offshore wind. This was supported by the Department for Energy and Climate Change (DECC) in 2014: “The DECC has outlined that of the £300m, £65m will go towards more ingrained renewable sources, such as onshore wind and solar, with more nascent and underdeveloped technologies, the likes of offshore wind and tidal, competing for £235m.”45 Renewable UK. The lobby group for the UK’s wind and marine sector welcomed the decision of the DECC.

The ‘Big Four’ are represented in Renewable UK, as well as big Offshore Wind players like DONG Energy, MHI Vestas and Siemens Wind Power. Renewable UK on the other hand just represents a collection of tidal and wave energy sector manufacturers like Andritz, Sustainable Marine Energy (Schottel) or Alstom (which are represented due to their Wind activities). Lessons learned are that the lobby work and lobby strength can be important for policies and thus subsidies to push the respective technology. For Offshore Wind structures from the onshore Wind market could be used. Lobbies have been active in the market before the installation of huge offshore wind farms started. OET should use the leverage and available lobby and audience of offshore wind to increase their market potential.

With the support of the ‘Big Four’ and other big players, the amount of newly installed wind turbines in Germany has increased continuously., while the global Levelized Cost of Energy(LCoE) for Offshore Wind went down and could reach as little as 9 ct/kWh by 2020 (from the current 13ct/kWh), as calculated by Roland Berger46. This development was due to the subsidies pushed by the strong lobby as well as a market centralisation which lead to increased expert knowledge as well as the decrease of the time and costs for completion for example: OWF BARD Offshore 1 (+24 Month), OWP Global Tech I (+12 Month), OWP DanTysk (+6 Month).

41 Sühlsen et al. (2014) „Lobbying the ‚Energiewende‘. Assessing the effectiveness of strategies to promote the renewable energy business in Germany,“ available at: http://ac.els-cdn.com/S0301421514001074/1-s2.0-S0301421514001074- main.pdf?_tid=078cb27c-da0d-11e5-9c36-00000aab0f6c&acdnat=1456218700_5416bc9cea61bc83b2628e6143c79191. 42 Ibid. 43 Ibid. 44 Catapult (2014), „Generating energy and prosperity: Economic Impact Study of the offshore renewable energy Industry in the UK“ available at: https://ore.catapult.org.uk/documents/10619/116053/pdf/15b55f52-5a1f-4e5a-aa32-ee0dba297bce. 45 Ibtimes.co.uk (2014) UK Renewable Energy Sector Divided Over Government's New Subsidies“ available at: http://www.ibtimes.co.uk/uk-renewable-energy-sector-divided-over-governments-new-subsidies-1468391. 46 Roland Berger (2013) OFFSHORE WIND TOWARDS 2020 available at: https://www.rolandberger.com/media/pdf/Roland_Berger_Offshore_Wind_Study_20130506.pdf.

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The same development exists for the reliability of cost prognosis: OWF alpha ventus (+32 % costs), OWF Bard Offshore 1 (+93 %), OWP Global Tech I (+13 %), OWP DanTysk (+0 %).47 With the realisation of big scale OWF in Germany and the Round 2 in GB the number of installed turbines increased rapidly since 2012. First offshore installed turbines used onshore designs which lead to higher corrosion issues on the first installations. Newer turbines where specially designed to withstand the offshore environment. Together with the improvement of the technology (e.g. gearless design of new direct drive turbines from Siemens Wind Power) the market centralisation started, e.g. Turbine suppliers and foundations as well as offshore installation companies where consolidated. The market of turbine manufacturers was consolidated based on the experience: Siemens (59,4 %), MHI Vestas (19,0 %), Adwen (15,6 %), Senvion (6,0 %). Other players like Nordex, Samsung or GE stopped their efforts to enter the offshore wind market. With increasing numbers of produced turbines serial production could be implemented to reduce costs even further. Foundation suppliers as another part of the offshore market went through comparable processes, the suppliers centralised to a few experienced ones: Bladt (43,7 %), Sif (24,9 %) und EEW (17,9 %) combine the highest market share.48

Seen from the operator’s point of view, Offshore Wind as emphasized and stated by RWE 201249, reached the level of maturity after increasing the installed capacity in 2015.

Nevertheless big scale Offshore Wind Projects with 80 turbines and more have not experienced the whole O&M phase over the full project live cycle of 20 years yet. Knowledge transfer from first OWPs can be neglected as most of the earlier wind farms (OWF) have been near shore and comprised fewer turbines. Therefore the TRL9 for T&I can be rated as a big scale of Offshore Wind Turbines are in operation. Regarding the O&M phase, TRL8 is used, as long term O&M experience from big scale deep shore wind parks still needs to be gathered.

Supply Chain Analysis of Offshore Wind The development in Offshore Wind from the first onshore wind turbines used in near shore waters to far offshore wind farms with dedicated offshore technology shows the need to look at the whole supply chain starting with the design phase.

Design phase As A. Brun stated in 2013: “Bringing DM (Demand Management) and SCM (Supply Chain Management) into front-end idea management processes could bring two kinds of benefits: firstly being aware of SC processes (and constraints) during the early concept development stages will help in avoiding risks of unfeasibility as well as costly and time-consuming design revisions and secondly, the adoption of SCM tools and techniques in DM practices could help support the generation of new ideas.”50

Brun points out general issues in the supply chain arising by wrong decisions in the design phase. Starting with turbines designed for onshore environment which were put offshore without special treatment to withstand the offshore environment. New logistical processes needed to be defined, due to unavailability of special vessels; old fishing boats where used to service the first Offshore Wind Projects51.According to Sea Energy PLC, synergies can be used as the fishing industry in Scotland decreased their fleet by 12%since 2004. This decrease was due to changes in fishing policies and other influencing factors which put a lot of pressure on the fishing market. Therefore the study suggested converting parts of the fishing fleet to service vessels for offshore wind. The study also pointed out that the feasibility needs to be further assessed. Since 2013 new vessel types specially designed for offshore wind entered the market and are still dominating. How much of the offshore wind or fishing vessel design can be used for tidal or wave energy needs to be assessed in future studies.

Analog to the vessels and the turbine itself, parallels to OET can be found on the component level, where electrical and hydraulic components designed for Onshore are used as no specific offshore requirements and components were available from suppliers. With the growth of the Offshore Wind market, more suppliers with robust solutions are filling this gap. For OET this would mean that especially in the design phase lessons learned from marine industries e.g. fishing, offshore wind or oil and gas should be used and carefully assessed regarding their transferability.

47 Anzinger, N. & Kostka, G. (2015). 48 EWEA (2015, 2016) The European offshore wind industry – key trends and statistics 2014 (2015). 49 RWE (2012): http://docplayer.org/4643972-Offshore-wind-windkraft-als-teil-der-energiewende.html, 50 A. Brun et al. (2013) “Benefits of aligning design and supply chain management” available at: http://www.ajol.info. 51 Sea Energy PLC, (2013) “Fishing Vessels Conversion Study” available at: www.scottish-enterprise.com.

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Figure 8 Product life cycles of typical Offshore Wind turbines52,53,54

Even though the supplier market increases capabilities to cope with the special offshore demand, the pressure from other market participants in offshore wind lead to shorter product life cycles as shown in Figure 1 and decreased testing phase. Thus knowledge from product developments in the past cannot always be transferred correctly. In contrast for OET the time in between different design phases of the projects are often reduced, which makes knowledge transfer between these stages challenging. This happens especially in OET as no standards have been set by a preceding technology. In offshore Wind, onshore has set preceding standards which could be used to improve the wind turbines. Lessons learned could be that OET would need to establish certain standards to allow technological development to develop faster. The centralization in the OET market will most likely cause the industry to standardize technology as happened in the early stages of onshore wind, where for example the number of blades wasn’t defined and turbines with two to more then four blades where erected. Three blades later on proved to be the most economical solution for the market.

Trends for the design phase include the incorporation of CMS systems to prepare for the market development from corrective to preventive maintenance approaches. In regard to OET it is important to mention, that service intervals for OET are 5 year while offshore wind turbines need service every year. Keeping this in mind, lessons learned from CMS approaches in Offshore Wind could become a great asset for OET development. Besides the focus on maintenance friendly design, the reduction of moving parts can be seen as analogue to OET with longer service intervals where critical components should be eliminated by design when possible. Since 2013 more than 3 GW of newly installed turbines have been erected, meanwhile Siemens as one of the mentioned suppliers in the study reached a type certification of the 7MW turbine prior to entering the market.55 In offshore wind the market went through a big learning curve, from onshore technology used for offshore environment, up to specially designed components.

52 Energie-winde.de (2014) “Die Revolution von Vindeby” available at: http://www.energie-winde.de/faszination-und- technik/details/vindeby-erster-offshore-windpark-in-daenemark.html. 53 Powermag.com (2014) “Top Plant: London Array Offshore Wind Farm, Outer Thames Estuary, UK” available at: http://www.powermag.com/london-array-offshore-wind-farm-outer-thames-estuary-uk/. 54 4coffshore.com (2015), 'Global Offshore shore Wind Farms Database', http://www.4coffshore.com/windfarms/, 55 DNVGL.com (2016) “DNV GL issues Type Certificate for Siemens new flagship 7MW offshore wind turbine”, available at: https://www.dnvgl.com/news/dnv-gl-issues-type-certificate-for-siemens-new-flagship-7mw-offshore-wind-turbine--54081.

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T&I phase Everything in T&I starts with the site survey, where important risks for the transportation and installation phase can be identified. German projects had big problems with UXO (Unexploded Ordnance) from the Second World War, the OWP project Meerwind and DanTysk experienced massive delays in the grid connection due to UXO cleaning works at the cable trench for the OFTO (Offshore Transmission Owner) grid connection. 56 The delayed grid leads to delayed completion of the wind farm and revenue losses for the windfarm developers. Delayed grid is even worse when the turbines are already installed and need to be maintained during these periods, for the OWF Riffgat, one delayed month costed around 6.000.000 €/month.57

Besides external factor like UXO, the quality of design is really put to test when T&I starts. Experiences in Offshore Wind show that more and more offshore activities tend to be transferred to the onshore harbour. While first towers for turbines have been installed in sections modern wind farms usually use a full tower set up to install the turbines, which leads to decreased costly offshore works. New research projects like DEMOGRAVi358 aim to install the full WTG onshore on swimming foundations, so that the offshore work can be reduced to towing the construction to site and lowering the foundation to the seabed. Analogies can be found in OET where the power generating station is installed in one step.

Another big factor in T&I for Offshore Wind used to be the lack of experienced staff with the right offshore qualifications, as the amount of new installed turbines is going down, the market peak seems to be reached in 2015 for new installed offshore turbines. With the reduced demand for offshore technicians for installation processes, OET might have an advantage in the amount of available staff with the right offshore trainings and experiences in offshore installation.

Beside the new development of installation vessels, which could potentially be used by OET and in Offshore Wind, new installation technologies can be exchanged and developed further as well. One example is ROVs (Remote Operated Vehicles). As OET normally are installed in deeper water with higher current, the use of ROVs saves human diver time, which reduces the risk of injury and could potentially save costs in the future, when ROVs are more commonly used for example in foundation services in Offshore Wind.

As some of the main improvements in the T&I phase seen from the German offshore market, grid connection processes and available infrastructure could be highly improved thanks to the offshore wind projects of the past years. Increased grid logistic and available experiences in offshore cable installation will be invaluable for OET. Additionally the quality of site surveys has increased so that better forecasts can be performed in order to plan for site specific risks, e.g. UXO. Analog to this development the availability of installation vessels and other key resources like trained staff increased due to the peak of projects in 2015.

O&M As experiences in the O&M phase for Offshore Wind rise, and more and more experienced staff is available, ISPs (Independent Service Provider) start to offer their services, which will finally lead to decreased O&M costs, after warranty periods have ended. Typical warranty periods with OEM- (Original Equipment Manufacturer) Service are 5 years but can be project specific up to 15 years. This development could as well happen in the future of OET and help to reduce the LCoE for this sustainable energy source. Due to the consolidation of market participants in Offshore Wind, a ‘natural’ exchange of employees leads to knowledge sharing between different companies of the value chain. This transfer of knowledge can be used to improve the planning of the O&M phase as well as the design of new technologies, as the different corporate cultures incorporate different strategies for problem solving dependent on their main focus e.g. cost savings, best technological solution, time savings etc. Also tidal and wave energy will be able to use this synergies from offshore wind, when an exchange of offshore experts between offshore wind and tidal and wave energy starts.

56 zeit.de (2013), 'Geschosse auf Grund' (vom 18.07.2013), http://www.zeit.de/2013/30/offshore-windpark-riffgat-nordsee, Zugriffsdatum: 30.09.2015. 57 Ibid. 58 Edp (2015) “Demogravi3 is EDP’s new offshore wind project” available at: https://www.edp.pt/en/media/noticias/2015/Pages/Demogravi3.aspx.

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Conclusions Main driver for the market development of Offshore Wind was the influence of stakeholders with high financial resources. With combined strategies to develop large scale OWP the ‘Big Four’ and other big players, evened out oppositions. The same mechanisms could be used by OET, if the technology succeeds in attracting the companies with the right financial resources to politically support the development of OET. Seen from a technological point of view, similar learnings and resources can be used, e.g. Comparable models for MET-ocean analysis and similar environmental conditions lead to possible synergistic effects by using equivalent technologies for site surveys and the measuring of data. Besides site assessment, increased availability of resources like offshore qualified staff, suppliers and material, help to create designs which fit the Offshore environment for OET and Offshore Wind.

Synergies for Tidal Stream:  Use of the same harbour logistics;  Use of safety and rescue procedures from Offshore Wind;  Possible use of Offshore platforms for service activities;  Use of comparable foundation structures;  Use of the same Offshore qualification;  Load calculation and simulation methods can be used and adapted;  Offshore cabling.

Synergies for Offshore Wave:  Use of the same harbour logistics;  Use of safety and rescue procedures from Offshore Wind;  Analog to swimming foundation wind turbines.

Synergies for Shoreline Wave:  Use of the same harbour logistics;  Use of the same onshore logistic.

Offshore Oil & Gas Several aspects pose an opportunity for OE:

 The drive towards greater precision in surveying and geological planning has not only provided a wealth of information for OE about potential sites, but has also provided the necessary expertise to conduct OE specific research;  Technological improvements in the name of efficiency (such as ROVs, smart systems, mooring techniques, advanced ocean resistant materials) can be also used in OE directly or as basis for further OE specific development;  With a withering supply of traditional easily accessible and cheap to refine oil & gas (in the North Sea), the industry is looking at OE as potential complementary activity for additional income, rather than as direct competition. This also implies benefits in terms of shared infrastructure including sharing port infrastructure, research and supply ships, cables etc. .;  At the end of the productive life span of a rig (or other production asset), regulation mandates the owner to dispose of it in a sound and safe manner. This not only poses a high expense, however, if adapted the asset can serve as base or marine space for OEs to also huge efficiency gains for OEs (see special box below).

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Re-use of decommissioned platforms

An alternative to the complete removal of steel structures in shallow waters, as is the case with the Adriatic Sea, is to build artificial reefs. This means using cleaned offshore platforms to create reefs for marine life. Experiments with the redeployment of platforms as artificial reefs have been carried out in the Gulf of Mexico, where they now function as fish-aggregating areas that support recreational fishing and diving.

An offshore rig may also be redesigned to support wind or wave energy installations. In other words it could function as the anchor, supply hub and operations/reparation centre of a wind, wave farm, or both. Additionally the use of existing connections to the rig could exploit the submarine network of oil pipelines to transport the energy to (dry) land and supply channels to the rig (for example large delivery of materials and people).

Source: Hexicon.eu.

Fish farming is another way of re-using off-shore platforms. In this case, the platform would be used as a logistic support for caged fish-feeding, management, and monitoring.

Concentrated Solar Power (CSP) CSP is an interesting comparison to Ocean Energy, due to its successful scale up into a big and very nearly established industry. Some of the challenges during up-scaling to full commercial scale were the following:

 Site conditions may be different than at the test site and different than expected, e.g. more frequent sand storms, higher wind speed, more extreme ambient temperatures, higher salinity of the soil;  Long-term reliability cannot be assessed for all components and materials;  Components selected by sub-suppliers for the test-collector may not be representative of the average production quality;  Maintaining controllability while reducing the cost of instrumentation;  Interaction of the high number of components cannot be tested in the small pilot plant.

Ocean Energy also has high upfront costs, but lower O&M costs (although probably higher than CSP due to more corrosive and harsh environment). This means that measures reducing these costs or the perceived riskiness of the investment are important. For CSP these measures included:

 Regarding LCOE reduction: - Scaling-up of individual plants: higher capacity factor, relative differences in investment per MW, impact of O&M costs, all reduce LCOE; - Adding storage capabilities: higher capacity factors and hence lower LCOE.

 Regarding lowering of the perceived riskiness of the investment: - Implement or update incentives and support mechanisms that provide sufficient confidence to investors; - Create stable, predictable financing environment to lower costs for financing (f.ex. by FIT’s and auctions for long-term PPA’s); - Introducing standards for key components.

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ANNEX VII. FOCUS GROUP REPORTS

Focus group Spain, Bilbao, 20 October 2016 Hotel Mercure Jardines de Albia C/San Vicente 6, Bilbao

NB. The views expressed in these notes are those from the Focus Group participants.

Introduction Round After presentation of the study objectives, approach and context, a number of key findings were presented by the study team, including the intervention logic. It was then agreed with all participants to address all four themes of the agenda, and to focus the discussion on wave energy (and not tidal) as this is the area where the participants active.

Each stakeholder then introduced him/herself and was invited to raise first comments on the challenges and issues the sector if facing. From this introductory round the following main concerns were taken:

 How can we reduce costs through better use of experiences from existing developed sectors like using shipbuilding technologies or knowledge relevant to the marine renewable sector;  How the future marine renewable market will look like is still an uncertainty, and this is concern among all participants: we are developing technology for a market for which the winning technology is not yet known, and nor is the size of the market it will serve;  Lack of convergence is a problem for developing and specializing the supply chain, as well as for focusing research efforts. Given the stage of development of the sector it may be too early to converge yet, and the current problem therefore mainly relates to the competition for (scarce) R&D funds;  Having said that, smart use of the supply chain may help to reduce costs: this may be through new components or specialized solutions for wave energy systems (moorings, connectors,…), but also allowing time savings for installation and secure marine operations;  Independently of the winning concept, a range of developments of horizontal nature is needed to achieve successful deployment. In particular durability (materials, coating, mooring systems, connectors …) will be one of the main concerns of future devices. Research efforts may therefore be joined in this field;  Using standardized procedures and already existing common practices may help reduce costs. However it remains an open question whether the wave energy sector needs to be adapted to standards based on existing sectors (oil & gas, shipbuilding), or rather whether those standards and procedures need to be adapted to better fit the wave energy needs? The answer today very much depends on the perspective, where e.g. developers will claim to maintain the uniqueness of the wave energy segment whereas for instance metal- workshops may advocate a stronger role for applying already proven standards;  Real operation trials are is needed in order to gain experience, collect data, grow knowledge and improve already existing methods, in order to reduce risks and increase performance. The Oceantec 30 kW prototype that was installed at Bimep on 12 October is a fresh example;  An interesting point of view put forward was that rather than aiming for cost reduction, the current stage of development of the wave energy sector demands to focus on proving the technology potential. Only once that is set, efforts towards cost reduction will be useful. In other words: the wave energy sector simply is not at the stage of reducing costs yet. Currently, the two priorities are: 1) survivability and 2) proving its basic performance (in terms of reasonable energy production). Only after these have been achieved, the learning curve will begin and a path of cost reduction can be pursued. Successful trials are also considered key to convince investors to step in for the next stage of development;  Following that, future business models may be identified, and the cost reduction requirements defined. A call for patience is raised, with reference to offshore wind technology where cost reductions are significant from the past five years or so, some 20 years after the first device was installed. In Bimep just last week the first device was installed, and even at EMEC over the past decade only as handful of different devices has been tested;59

59 EMEC Orkney (2017c).

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 Currently, Investment, Operating and Maintenance costs are important mainly from a testing point of view, not from a market perspective yet.

A key concern playing out on all four subsequent themes is the uncertainty of a future market, a key condition for private investors to take part.

The discussion then shifted to the four themes as highlighted in the agenda.

Theme 1: Procurement of Technological Innovation a. What are impacts (positive and negative) of existing public and private support schemes? Participants state that due to the level of development of the wave energy sector, the role of private support schemes is virtually absent. This may relate to the low TRL levels that the sector is still at, but also the aforementioned notion of the absence of a clear outlook of a future market.

On the public side, effectively, the Spanish national government has no R&D programme to support ocean energy. In the past there was, but since budget shortage increased these programmes have been abandoned. Apart from that, more general R&D public procurement initiatives are very complex due to administrative rules, and therefore used with only limited success. Currently offshore floating wind is generating increased (public) interest, reducing the chances for wave energy to benefit from the (limited) R&D budget.

At regional level, the support schemes of EVE (Basque Energy Agency) as well as the Basque Development Agency are important funding sources. In their programming (see also theme 3 clusters), they try to target wave energy separately from other (offshore) energy segments.

Since there are no funding mechanisms fitting the whole TRL development line, continuity of funding is a real problem for developers. b. How can procurement schemes promote innovation and contribute to technological progress? The participants are of the opinion that procurement schemes alone are not the solution for technological progress. More public R&D money alone will in any case be insufficient to cover for the lack of private funds. Therefore, what is needed is generating the interest of private companies, which can only succeed if there is a clear view on a future market, which is not the case for wave energy at the moment.

Therefore, rather than developing procurement schemes, the need for providing an outlook of a market to serve is highlighted. It is noted that Spain does not apply Feed-in-tariffs (FIT) for wave energy and this would be a prime driver for investors to procure further innovation steps. Obviously, the level of such FIT should be sufficiently high to deliver feasible business cases (reference is made to the solar sector where only 8 years ago, feed-in-tariffs in the range of €400/MWh were paid, which have since then helped growing the sector and which have gone down to around €40/MWh.60 c. To what extent do such models depend on the maturity of the technology? d. Which good practices can be identified? (e.g. Wave Energy Scotland, France). The Basque Country has had some experience closely related to Wave Energy Scotland through Bimep. The process has been really complex. The public scheme makes everything more complex even if there is only one technology over the table.

In fact, the pre-commercial public procurement (PPP) scheme was promoted by EVE. It was conceived in two phases. A first phase to select a restricted number of bidders and a second phase for them to submit a full technical and economic proposal. This PPP fund targeted a single stage (TRL range), whereas Wave Energy Scotland (WES) involves a stage-gate procedure with

60 Statement/figures to be checked.

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allows bidders to move to other stages if some target indicators are met. WES funds a diversity of bidders at each stage; EVE aimed at funding just a single bidder at the award of this PPP.

See also theme 4 on IPR.

NER300 was also briefly commented. This scheme intends to attract private funds for innovative technology pilot projects. Financial support was given to cover the extra costs of energy generated, but only for 5 years of the project lifetime resulting in a funding gap which has impeded the few projects awarded to be implemented. e. With regard to wave energy, what can be done from the procurement perspective to trigger technological convergence, and how can this be done best? How can the public procurement be more efficient for the technology development? May be this is not the question. The creation of the market depends not only in one sell (PPI). There might be other schemes that may be more attractive to private companies. Public funding is scarce and only covers a limited amount of the needs. Private funds need to be attracted to the wave energy sector through other mechanisms more efficient from the practical point of view (i.e. feed-in-tariff is a good way to combine public/private efforts). In Spain, a feed-in-tariff for all renewables was discontinued, and only mature technologies like PV and onshore wind will receive support through auctions. For, the wave energy sector such support is not available, there is only specific finance for development purposes, which is not enough. Alternatively, certain consented locations could benefit from relevant incentives for technology demonstration (a kind of localised FIT). This approach can put a cap on the maximum public investment. f. How can synergy between EU-wide (notably H2020) and Member State-specific schemes be obtained? The differences between EU countries become clearly visible here. Whereas France has a strong national programme for (tidal) ocean energy, the Spanish national government does not support the sector at all. At regional level, the Basque Region is very supportive, as well as the Canaries, and several other regions in the North (Galicia, Cantabria, Asturias) are also becoming active. So far, each region focuses on R&D within its own region, for instance demanding that tests are done within their region or that certain research centres are to be involved. However, as the cooperation with neighbouring regions increases, such requirements may become more relaxed (that however remains to be seen and also depends on factors such as politics).

It is argued that the current EU funding scheme Horizon2020 mainly promotes international collaboration rather than inter-regional (“we already have a Spanish partner”) with the result that, as part of H2020 consortia, things that could be done locally (e.g. testing at a test tank) are done 1000km away.

Confronted with the example project of FORESEA (Interreg North Sea) in which various test centres cooperate, it was asked whether this programme would become more open to research activities now, as traditionally INTERREG was viewed to not to include R&D activities.

Therefore, if there were EU mechanisms that could support the inter-regional cooperation within Spain, that might further advance cooperation model and create synergies. Such task is currently not taken by the Spanish national government, or at least not sufficiently according to the participants.

Theme 2: Smart approaches for reducing offshore installation and maintenance costs a. What can be done to strengthen existing supply chains? Part of the participants believes that within the Basque country and neighbouring regions, the entire supply chain can be covered. The Cluster Energia (see theme 3 hereafter) is a powerful tool to promote cooperation across the supply chain.

An improvement that would help reducing O&M costs, and raise durability is to involve stakeholders from across the supply chain from the very beginning of the design process. Typically this is not done, as developers often keep the development process in their hands and only involve others at a more advanced stage, where it is more difficult to modify designs. Two other aspects hampering supply chain cooperation relate to this:

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 Who carries the risk? In most cases this is the developer, where other suppliers merely (prefer to) act as subcontractors who ‘only’ provide a small component or installation aspect. On the other hand, the risk taker is also getting the reward if the concept turns out successful;  How to protect IP (see theme 4 hereafter): sharing IP may provide the necessary basis for jointly addressing cost reductions.

The experience gained on test sites such as Bimep is considered crucial, yet limited. It is not enough to extract conclusions about O&M cost reduction. Collaboration is key factor for the cost reduction in O&M. Sharing IP may be a way to reduce costs in installation and maintenance, but there is a contradiction there. It is difficult to achieve this particular objective between competitors even if it is a win – win process. The collation inside of the supply chain may be easy since potential contracts may arise between the stakeholders. However, the knowhow would not be exchanged between them if there is not monetary exchange. b. Where is the largest scope and highest efficiency to reduce costs? As stated in the introduction, participants believe that before focusing on costs reduction, first focus should be on technology survival and performance. Still, as also raised in the introductory round, areas of cost reduction can be found, in particular through involving broader parts of the supply chain at early stages of the development process, including workshops and installation experts. However the lack of experience limits the expectations on what can be gained, and participants hence have conservative views here. c. What cost reduction approaches are most promising and most easily transferred throughout the sector? Gains are most needed in the areas of commissioning and O&M. Participants believe that potential of cost reduction in these areas is very promising, but it needs demonstration to find out. To achieve this, better knowledge exchange between developers is the real challenge, it needs to be somehow promoted. EVE is already trying to do this by facilitating consortia. d. What are the corresponding design and supply chain development implications of these approaches? The role of the manufacturing companies may need to be changed. Nowadays they have a passive role, waiting for a technology to be developed, and a more proactive attitude from the supply chain may be positive for the technology development. Clusters can be useful vehicles for this (see theme 3 hereafter), as they are trying to align the interest of complementary companies and institutions. However there is a lack of practical initiatives (who takes the risks). Early supply chain involvement however raises the question of who carries the project risk. From the public (funder) side, there is a feeling that a lot of companies want to be sub- contracted, to avoid carrying risk. As a result, the developers that build a prototype and go to the sea effectively carry the main risk, which for SME companies is not easy to bear, and is not considered fair either by several participants.

The public sector is trying to solve the risk problem through public money. The innovation risk of components is limited. The developers are the ones that take all the O&M risks as well as the technological ones. The developers take huge risks at each step of a step by step process. e. What can be achieved with process optimisation (installation, O&M) and training of personnel? As stated before, for wave energy it may be too early for this question to be answered. Even with high levels of optimization, wave energy is still far from competitive to wind energy or photovoltaic. First, a clear market outlook needs to be sent. In some places (for example the Basque Country), artificial markets may be created, in order to contribute to technology development and create knowledge that afterwards can be sold.

Theme 3: Ocean Energy Clusters, a tool for information knowledge sharing a. What is the overall potential of the cluster concept for overcoming barriers in ocean energy development? In Basque Country, the creation of the Energy cluster has been a major help for getting to know each other within the supply chain. The Cluster Energia has set up working groups, one of which is specifically focused on wave energy. It organises meetings every 3 months or so, in which participants present their activities and progress, as well as their future plans, and

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where contacts are established and refreshed. Furthermore the cluster has organised knowledge exchange trips to other countries, notably Scotland and Ireland. Participants confirm that this clustering has helped them to optimize the use of the locally available supply chain, simply by bringing them in contact with people from different sectors behind the wave energy initiative. So far, there is a common feeling of complementarity, rather than competition. b. What are the key drivers for clustering ocean energy activities? An important notion to the previous, however, is the development stage in which the sector currently is. The role of a cluster organisation is considered different from that in a mature energy sector. An immature sector like the wave energy sector, where most of the companies are investing money but not (yet) earning any, the role of the cluster is focused on the exchange of information and knowledge among all the stakeholders in order to facilitate the creation of a market place. The market creation strategy is one of the targets of the cluster through the promotion of new projects and consortia. Part of the success of the cluster is due to a collaborative atmosphere enhanced by the complementarity between all the members.

The private companies (developers) are also highly benefited by clustering, since it makes the whole supply chain easily available for them.

For the public sector, clusters are a direct and accessible interlocutor that realistically represents the sector. It contributes to communication. They help understand that the sector grows slowly, communicating step-by-step results my help to guarantee continuity of funding schemes. c. What barriers can effectively be tackled through cluster development? Besides creating stronger ties among stakeholders across the wave energy supply chain present in the region, the cluster organisation, acting as a liaison between industry and funding agencies, has also been supportive to maintaining public commitment, and raising understanding of the required patience among public authorities. More in particular, the funding agencies in Basque Country participate in working group sessions and take account of the suggestions of the cluster on how to design their funding schemes and their administrative requirements. This is seen as an important contribution since the availability (and stability over time) of public support schemes is crucial in the stage of development in which wave energy currently is. Essentially, the cluster helps to convince governments of the necessary patience. d. How can informal knowledge sharing be promoted through cluster development? Although participants agree that knowledge sharing is important, the actual sharing of knowledge within the cluster is typically limited to the core business of its members. It has turned out to remain difficult to help complementary/friend companies by sharing knowledge without compromising the core business of the companies (see also theme 4 IPR).

On the other hand, as no company earns money from wave energy yet, the joint need for moving up the TRL level is considered an incentive to share knowledge, more than if the sector was in a more mature stage. Clustering has helped to feed the belief that a future market is possible because a large number of stakeholders are working together for it.

Regarding informal knowledge sharing, such as technical advice and so on, cooperation between friend/clustered companies is much more fluid and beneficial for all. Various Cluster members take part in European (OEE, OEF) and International groups (OES-IA, IEC-TC114), accelerating the exchange of information. e. What concrete experiences exist in various places that can be taken as best practices? So far, the Cluster Energia is based in, and focused on, the Basque region. It has been identified that inter-regional cooperation with stakeholders in neighbouring regions can bring added value. However as funding is organised by region, often demanding that funds are spent supporting the regional activities, cross-regional cooperation is not incentivised from public funds. Still, at the level of companies and research institutions, a long record of

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cooperation exists. Support funds at national and EU level typically do not support inter- regional cooperation within Spain. The Basque energy cluster is considering extending its clustering efforts to a wider area in the north of Spain. Currently, there are some interesting collaborations and projects between regions, but they are not promoted from the institutions. As there is currently not a national energy strategy or energy R&D support in Spain, collaboration is mainly pursued via European regions funds. Further to this, participants mention examples of interregional cooperation partnerships established without any public supports schemes, simply because these inter-regional links were considered more convenient than seeking international partners.

At a national level, reference is made to APPA Marina, which plays a national role in coordinating activities in the wave energy sector, but they only have limited resources available. At a European level, Spanish parties are believed to have been relatively successful in mobilizing resources and getting FP7 and H2020 funding secured. The perceived success level may however be less from SME perspective than form the viewpoint of larger research centres.

Theme 4: Intellectual property, knowledge sharing and testing centres a. What different knowledge sharing schemes are currently in place and what is their level of IP protection? Participants state that in reality, there are no specific schemes for knowledge sharing. The only reference made is the fact that, officially, 100% funding R&D schemes, whether regional or EU level, demand full sharing of research findings. In reality, the exchange in this kind of projects is superficial and important issues are not commented nor shared. The real knowledge is in the heads of the people involved.

In general, all the stakeholders are pessimistic with regard to the sharing processes. The experiences from the stakeholders have been not successful from this point of view. A typical barrier is that knowledge sharing is nowadays restricted to monetary exchanges (i.e. buying knowhow at research institutes). Generally, knowledge is being protected just in case it may be useful in the future, even if the wave energy market is currently inexistent.

b. What are the key areas that would benefit most from knowledge sharing? The lack of knowledge sharing provokes the repetition of errors and consequently an important inefficiency in the use of public funds. All participants agree that there may be strong benefits in IP sharing, but there are no mechanisms to ensure the exchange of information.

Apart from IP, test sites could strongly benefit from previous experiences in other tests sites, but this exchange does not exist, according to the interviewees concerned. Bimep indicates that while at the preparation of the site, they expected testing demands from international developers, but until date their main activities have been for Spanish/Basque clients. As a result, everyone learns just from its own experiences and errors. An inefficient use of (scarce) public resources is the result of this.

c. Can any knowledge sharing model be recommended, that on one hand takes into account IP issues, but on the other hand encourages cooperation, especially in the testing centres? Some of the attendees participated in a WES project about lessons learnt, which from its set- up appeared to be a smart way of promoting knowledge capture and knowledge exchange, using the Pelamis, Aquamarine and AWS cases. Those that participated, however, experienced that actual knowledge exchange was at a high level of aggregation, and the real knowledge was protected. Effectively, as one participant stated, WES paid Pelamis to write good reports, which however lacked real details and learning.

In conferences and other exchanges, developers and testing centres typically present what they have done but do not disclose the real reasons why something failed. Bimep believes to have been rather open on presenting the problems with the Mutriku site. Aquamarine is identified as another exception to this, although mostly when they were near the end of their business (i.e. without the fear of scaring potential investors).

Study on Lessons for Ocean Energy Development

Maybe the only knowledge exchange may happen between test sites and developers that come to test their device. Between developers, there is no exchange, even when the devices fail and companies disappear. However, between non competitors’ agents sharing schemes may have been more common, in the form of bilateral talks with the aim of finding solutions for problems faced. The cluster also promotes this kind of cooperation.

It is remarked that there are degrees of failure and it is not a black or white issue. In actual development, you may not know what kind of failures to look for and the only solution is testing and more testing.

Concluding reflections From the final round of remarks and a wrap up of the discussion, the following conclusions are drawn:

 First and foremost, the sector needs to work on the technology to survive in open water for longer periods and time, while generating significant amounts of electricity output. Only when this is achieved, work on reducing costs and increasing capacity makes sense;  To do this, the sector needs four things: funding, experience, patience, and results;  As the sector cannot raise the TRL level without significant public financial support, it is important that public institutions understand what is needed, and what outputs can be realistically achieved. Good understanding is the basis for designing funding schemes tailored to the what, where and how, in order to contribute to the sector development;  Experience in the sector has shown that a primary focus on technology maturity can lead to huge investments which cannot meet customer needs. Technology developers need to have a way to demonstrate progress in an objective and traceable manner. Performance metrics can be part of this common language;  More generally, the sector needs stability, strategy, and continuous effort and support, in particular for SME developers, who carry the largest risks;  Finally, the sector needs a long term vision, with a clear and realistic outlook on as future market. A feed-in-tariff for wave energy would help, but a stable commitment from national governments is also important.

Participants list:  ENER: Álvaro Amezaga, Iñaki Zabala;  CTC: Álvaro Rodríguez;  DEGIMA: Luis Sansegundo, Juan Manuel Colina;  VICINAY: Jorge Altuzarra;  DITREL: Elisabeth Fernández;  OCEANTEC: José Luis Aguiriano;  NAVACEL: Antonio Ynat;  TECNALIA: Pablo Ruiz Minguela;  CLUSTER VÁSCO DE LA ENERGÍA: José Ignacio Hormaeche;  BIMEP: Yago Torre-Enciso, Dorleta Marina;  EVE: Olatz Ajuria;  IH Cantabria: Arantza Iturrioz, Raúl Guanche;  ECORYS: Johan Gille.

Study on Lessons for Ocean Energy Development

Focus group France, Paris, 5 October 2016 Cluster Maritime Français, salle Jean Bart 47 rue de Monceau, 75008 Paris Minutes (translated from French)61

NB. The views expressed in these notes are those from the Focus Group participants.

Introduction Round After presentation of the objectives, approach and context of the study, a number of key findings to date were presented by the study team: 1) There appears a divergence of views amongst the actors, especially with regard to the importance of technological barriers; 2) Tidal has made considerable progress as of late and it is worth sharing these experiences more broadly; 3) There have been cases where developments have been too fast, which has led to investments in technologies that were not proven yet; 4) A need for an integrated approach is underlined. Furthermore, the key findings point to the need to focus support and investment, to keep an element of competition, to value the role of test centres, to test whether the synergy with other sectors really works, and to acknowledge the importance of (geographic) clusters.

Participants recognised these interim conclusions and considered them a valuable basis for further discussion and work. The following additional reflections were provided by the participants:

 A need to fully recognise the importance of operating costs, and not only focusing on CAPEX. Maintenance and operating costs are certainly a key element as well;  The importance of risks in calculating CAPEX, OPEX and LCOE is enormous;  A lot has been learnt recently about the maritime risks, the weather and tidal conditions; the current challenges are comparable to those from moving wind energy from land to offshore;  Will the ocean energy market in general and tidal market volume in particular be sufficient to justify the costs? It is also important to consider niche markets (e.g. islands and non grid-connected).Ocean energy in France is driven not only by the need for an energy transition but also by industrial development and export considerations;  Need to distinguish areas and their relative attractiveness to MRE development, considering: - The quality of their MRE resources (impacts on the level of LCOE); - Their need for the energy mix diversification towards non-carbon sectors (dependence on fossil energies as part of an electricity mix); - Their willingness to invest in the energy transition through MRE in light of potential & competitiveness of other more mature non-carbon sectors (more competitive for the moment) and specific Industrial policy for MRE deployment.  A need to capitalise on the experiences gained – currently not yet sufficiently done;  A number of research areas remain to be covered, including hydrodynamics and upstream work (testing of material characterisation) as well as environmental impact assessments;  A recognition that there are still many start-ups (more so in wave than in tidal) which are unaware of previous experiences, unable to draw up a business plan and therefore not having access to finance;  It is very difficult for the sector in general and for SMEs in particular to provide certification of components and systems. In this respect, Bureau Veritas and others have recently stepped up their efforts in the industry;  Confirmation of the role of clusters – those regions with ocean energy potential have worked on this;  There are some parts in France (Aquitaine, close to the Spanish border) where wave is currently still considered, but there is only regional and not national support for it right now;  A need to find a good balance between focus on existing technologies (and upscaling investments) versus the need to support potentially disruptive technologies (basic research);  With regard to the chronology (presented to participants), not all actors have been included in the mapping exercise (e.g. OpenHydro, Sabella, Hydroquest are missing);  With regard to the chronology, participants felt that the wave energy TRL’s were set too high compared to tidal (which was not consistent with the conclusion that tidal was more mature than wave).

61 Order of the minutes follows that of the Agenda and not necessarily the order of discussions held.

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The discussion then shifted to the four themes as highlighted in the agenda. Participants agreed to prioritise the themes 1 and 4, and to only discuss the other themes if time would allow.

Theme 1: Procurement of Technological Innovation a. What are impacts (positive and negative) of existing public and private support schemes? Participants exchanged about the importance to have a national support strategy, which is considered positive in France – and secured until 2020. Substantial funds are foreseen in the context of the Commissariat Général a l’Investissement (CGI) - which include renewable energy, particularly tidal energy and (floating) offshore wind. 62 The 2013 calls for projects (selecting the Normandie Hydro and Nepthyd projects) have provided a substantial push to the industry. It is not only the investment support but also support to operating costs which have made the difference – this leads to a very different perception of risks. Of course there is a need to find a balance between public and private investments, and public investments can never give a ‘carte blanche’ without appropriate co-investments. As part of such a deal, experiences in the development need to be shared as well – even though the dilemma with intellectual property rights is real (see Theme 4).

b. How can procurement schemes promote innovation and contribute to technological progress? Public support needs to digress with TRL levels increasing. It is only from TRL 9 onwards that a sector is expected to ‘stand on its own feet’. A related problem however is that the sector has a tendency to inflate the TRL levels, both at EU and at national level. (authors question: why would one still do so if public support is digressive with TRL? Or is this tendency only related to access to private finance, as witnessed in the UK?). A need for standardisation and certifying, and to bring these as requirements into the procurement schemes.

When it comes to setting targets, such as a certain LCOE by 2020 or 2025 (as done in the SET Plan63), participants agreed that this is a useful concept for comparing mature technologies and sectors. However in less mature sectors, there are quite a number of unknowns or ‘forks’: In the end, the LCOE will therefore be quite different from what was anticipated.

Participants agreed that public support can be justified, as long as a sector continues to make (technological) progress and as market perspectives exist (whether in France, Europe or outside). In this respect, more could be done to promote the deployment and testing of European technologies globally (e.g. through European development aid mechanisms as has been done for CCS). This could be also a way to overcome the market potential barrier.

In this context, the French state has recently introduced the ‘competitive dialogue’ as an alternative to calls for proposals for offshore windpark developments. This alternative public procurement form (in line with the EU Public Procurement Directive) allows the state to remain in dialogue with a limited number of pre-selected bidders simultaneously. The renewable industry association (SER) welcomed this procedure for offshore wind as it addressed a number of issues related to tendering, with a reduced risk premium amongst its prime advantages. 64 c/d. To what extent do such models depend on the maturity of the technology? Which good practices can be identified? (E.g. Wave Energy Scotland, France) Both the French and the Scottish experiences have their merits, but they are catering towards different sectors (tidal versus wave) with different Technological Readiness Levels. The French support is more investment support, whilst the Scottish model appears more appropriate to lower TRL levels.

62 Gouvernement.fr (2017).Note that this is a major French investment programme with an allocation of 47 billion euros of which 37 have already been committed in 2500 projects. 63 European Commission (2017b). 64 See Actu Environment (2016).

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e. With regard to wave energy, what can be done from the procurement perspective to trigger technological convergence, and how can this be done best? Wave is not a priority in France, but the Wave Energy Scotland model (staged funding) is considered an interesting model. However, it is not clear whether it is able to attract private finance as well – should the wave sector reach higher TRL levels.

f. How can synergy between EU-wide (notably H2020) and Member State-specific schemes be obtained? H2020 is still a complex programme from an administrative perspective, and competition for the funds is severe. It is important to justify the support requested in the best possible way. However rewards are substantial as it allows research and innovation staff to be fully dedicated to concentrate on their projects for a longer period of time, and to do so in the context of larger European networks. But admittedly, national funding is – at least from an administrative perspective - easier to obtain, at least in France.

When approving the French support to the two consortia (considered state aid), severe hurdles occurred in obtaining clearance from DG COMP. The problem emerged as DG COMP looked at this support as state aid to renewable energy in a broad sense. Both utility companies concerned (EDF and ENGIE) have strong positions on this market. However, the specificity of tidal energy, its experimental nature and the competition with other forms of renewable energy seem not to have been sufficiently recognised (e.g. do not apply the same rules as, for example, in the automobile industry). In this respect, intra-EC coordination is called for, for example by informing DG COMP of the specificities of this renewable energy sector. The state aid clearance was one reason for delay in the implementation, and required additional (legal) costs as well.

Building on the principle of staged funding, a subsidiarity between regional, national and EU funding could be imagined. In advancing every TRL-step, a 10-fold budget increase is required. Regional authorities could focus on the lower TRL’s, national governments on the middle tier, and the EU could focus on the highest TRL’s – e.g. through schemes such as NER 300 and/or the EFSI Investment Package. However, a possible downside of such a scheme would be that many countries or regions could engage and support projects which are not sufficiently promising from the start. Another complexity exists when national and EU priorities are not the same. For example, confidence in wave technology is currently low and public support provided is limited. Therefore, French actors in wave are drawn by default to EU programmes.

Therefore, alignment could be better obtained by introducing co-finance (similar to the European Structural Funds); this could be applied by linking the French Programme for Future Investment to the EFSI Juncker Investment Plan (to be investigated by the study team).

Along the same lines, there are already existing initiatives notably the OCEANERA-NET – which is working towards joint calls for collaborative research 65 It includes a number of key actors from Scotland, Ireland and the French regions of Bretagne and Pays de la Loire. From the start, several regions participate and the EC tops this up. It would be good to include knowledge sharing as an element as well.

Theme 2: Smart approaches for reducing offshore installation and maintenance costs a. What can be done to strengthen existing supply chains? Reference was made that both consortia make use of an estimated 300 suppliers, whether first-tier (directly working with the OEM), second-tier or third tier (working indirectly with the OEM). Several of these suppliers are working for more than one consortium. Following the Marine South East (UK) example, SMEs in the region could be helped to enter the supply chain – perhaps not at first tier but at least as second-tier or third-tier providers. This is typical work for a cluster organisation. Having said this, there is an understanding of the need to build European-level supply chains – if the industry wishes to stay competitive in the future.

65 http://www.oceaneranet.eu.

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b. Where is the largest scope and highest efficiency (in the sense of LCOE reduction per investment, e. g. in additional condition monitoring equipment) to reduce costs? It is important to be aware of the ‘fork’ and that a large number of variables are at stake here: CAPEX variables (e.g. port logistics), OPEX variables (e.g. robustness, insurance costs), variables linked to the performance of the technology as well as financial engineering (e.g. the EIB as a tool to bring interest rates down through guarantees, etc.). Adding to this, grid connectivity costs need to be taken into account as well.

c. What cost reduction approaches are most promising and most easily transferred throughout the sector? An interesting discussion followed regarding the opportunities offered by standardisation of components. The EU is currently leading in the area of ocean energy, which makes it well- placed to set standards which can subsequently be rolled out globally. However, these need to be set in this sector by the IEC (the International Electrotechnical Commission), which works with national members and where the EU is not playing a key role. It would be very useful for the EC to support Member States in their efforts to contribute to the definition of standards.

d. What are the corresponding design and supply chain development implications of these approaches? These were not explicitly discussed.

e. What can be achieved with process optimisation (installation, O&M) and training of personnel? Training of personnel is key, and here synergies with other sectors (notably offshore wind, but also offshore oil and gas) are an important opportunity, but also shipbuilding.

Theme 3: Ocean Energy Clusters, a tool for information knowledge sharing This theme was not discussed explicitly, however several remarks were made in support of clustering:

 Knowledge and experience is much easier shared at local level through clusters, where trust amongst actors is higher;  The example of Open Hydro, which reinforces the industrial capacities of Cherbourg or the ADEME investment in a St. Nazaire factory;  A need for local ambitions to embrace the sector – as again seen in Cherbourg.

Theme 4: Intellectual property, knowledge sharing and testing centres a. What different knowledge sharing schemes are currently in place and what is their level of IP protection? France Energies Marines (FEM) is active in sharing of experiences between very different actors (regions, clusters, other actors in the system) and has also presented a roadmap including the R&I subjects that lean themselves for cooperation. To this end, FEM has set up a Technology Platform that can stimulate the market. This experience would be worth sharing internationally.66

Knowledge sharing also takes place within companies at multiple sites, e.g. OpenHydro has multiple operations in different countries and they are sharing knowledge on a daily basis.

b. What are the key areas that would benefit most from knowledge sharing? It is fair to say that the willingness to share knowledge decreases with TRL’s increasing. This is logical and justified, as the stakes are higher, and as the concern that ideas are being copied increases exponentially. Therefore, it is not correct to ask the most advanced players to ‘put al their cards on the table’. In this respect, universities have a stronger willingness to share – and this goes with their involvement in international research networks.

66 Author’s note: compare with the existing Technology Platform Ocean as well as the Ocean Energy Forum.

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Topics that are considered appropriate for knowledge sharing, following largely the FEM Roadmpa include 1) Site characterisation; 2) Social acceptance; 3) Environmental impacts; 4) Grids; 5) Installation and maintenance. 67However key areas that do not lean themselves much to cooperation are optimisation of converters and turbine – power take-off (PTO).

c. Can any knowledge sharing model be recommended, that on one hand takes into account IP issues, but on the other hand encourages cooperation, especially in the testing centres? One can distinguish several levels of access. For example, when it comes to site characterisation, one can distinguish several levels of refinement. E.g. the more general information would be shared in the public domain, whilst more specific and refined data would remain private and confidential.

A consortium-wide approach is also a form of sharing. Consortia agreements often contain clauses on intellectual property that define the terms and conditions for dividing and sharing these as part of the cooperation.

Within the context of H2020, return of experience is strong above all for the project leader, but can be considered weaker for the broader sector. So far, French actors have been relatively less successful in winning such projects. Thus, one can question as to whether H2020 is the best tool for knowledge sharing nowadays.

With regard to test centres, these are also bound by intellectual property and confidentiality, which limits their ability to share. There is however an obligation to publish and to share. In this context it is worth exploring further the role of MARINET. 68

An idea emerging during the discussion was the development of systematic and impartial monitoring of ocean energy projects, allowing the sector as a whole (including public funders) to track progress and to capitalise on investments and experiences already made69.

Concluding reflections Taken together, what are the key messages to retain from the discussion?

 There is not one tool that can address the challenges, but it is a whole architecture that needs to address the needs of the sector;  Within this spectrum it is project finance and funding for new technologies and concepts that can be disruptive, ‘hybrid’ support schemes and a continuation of the ‘Investments for the Future’ scheme;  Public finance is important to guarantee a ‘step-by-step approach’ and not to have the need to overstep oneself;  Ensure a better knowledge sharing, by requiring to do so as part of funding;  Need to provide more support to SME’s involved in the supply chain to improve their competiveness, innovation capacity and international coverage (to dispatch and valorise their experience).

Participants:  EDF-EN: Sylvain Gaignard;  FEM: Yann-Herve de Roeck;  IFREMER: Sebastien Ybert;  INDICTA: Antoine Rabain;  SER: Marlène Kiersnowski;  ECORYS: Jan Maarten de Vet;  ECORYS: Elodie Salle;  RAL: Jean-Paul Delattre.

67 For a list of topics and actors: http://www.france-energies-marines.org/R-D/Projets-R-D. 68 MariNet (2017). 69 In the meeting the role of FEM was mentioned, e.g. in context of broader European Technological Platforms.

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Ireland, Dublin, 09 June 2016 The views expressed in these notes are those from the Focus Group participants.

Morning session (barriers):  There are several technologies that work in labs, but the environment where they are supposed to operate is one of the most hostile on the planet;  Oil & gas has the money to tackle these issues, but mainly because it can be so big and there is a mature and plentiful market for their products;  Engineers can resolve most problems given unlimited finance like the oil & gas industry;  Offshore aquaculture is emerging as a potential client for ocean energy with increasing automation and need for energy;  Norway is currently researching fully robotised offshore aquaculture in systems. Possibly operating around a service platform with offshore renewables (wind and wave) providing the power;  Financing the transitions along the TRL scale is the problem (note: referring to wave). The return periods are very long and getting the necessary returns is difficult;  The issue in the sector has a “do it alone” approach, where there is not enough sharing, or open source research. This means that the same mistakes are being done and developments in isolation are slower;  Crowdfunding is not a suitable way of financing. Projects are a too big. IPO or commercial financing troublesome since the technology is not ready;  There are issues around state aid rules that make it difficult to support the development of new technologies;  in the last 10 years there have been 10 different devices in the water testing. There is a need to converge around a smaller number of technologies;  Japan and Korea form large consortiums with big private players and big state companies and then channel large amounts of money;  Establishing standards to focus the industry is ok, but would stifle innovation;  In comparison in Nuclear energy there are guaranteed prices and clear ambitions that allow the technology to function;  There is a separation between the set plan / energy forum targets and RTD ambitions;  Offshore wind has uncertain price and supply, yet has policy support and good grid connection: - this competing technology has implication on ocean energy; - there is a need to have clear overall plan; - there is a need to invest a lot more into (grid) infrastructure.  In order to build technology and educate the sector, you need demonstrations to see how things really work. At the same time, investors want to see proof of concept and LCOE data. LCOE is the bottom line and be-all or end-all in ocean energy;  The question is then why are there still so few devices in water? It should be argues that there should be not only free access to testing sites (paid for by gov.), guiding of investors (to understand the industry);  A way could be to give short early stage funding to test and attach subsequent and bigger funding on successful early test. Phased approach;  The above concept came under scrutiny due to state aid rules and in Ireland these were not resolved, while in Scotland and France they appear to have been;  WES has bypassed the state-aid issues and allow initial testing;  - WES’s main motivation is to not re-invent the wheel and rather spend the money wisely on making things work first;  In new technologies there is a need for bold aims (CERN);  the danger is that otherwise Asia will overtake the EU given its recent huge developments;  Failures and their reasons are not shared enough;  Utilities are clients, not developers. And although they support and sometimes get involved, this is not their primary objectives;  Complex or mature financing (such as NER 300) is not appropriate for wave. It assumes that the technology is ready, wave is not;  there should not be an LCOE target until the technology is ready. Wave is not there. It puts too much pressure, where focus should be on making it work;  first get the technology working, only then look at installed capacity and then at LCOE;  the industry is experiencing a lack of investors with the necessary time horizon and risk appetite for wave;  few people will commit large investments without clear gov. support/subsidy;

Study on Lessons for Ocean Energy Development

 a way to also do this is to have a grand policy vision “we want x & we will do everything to get there”;  Nasa has an interesting pre-commercial procurement that works well;  WES procurement model means that failure is also an outcome and ok;  Building big consortiums is another way;  Ocean eranet is trying to force such cooperation;  Ocean eranet is experiencing difficulties to fully realise its potential;  the current fleet of service vessels is designed for the huge operations of oil&gas and therefore not suited to more delicate and much smaller scale ocean energy operations;  there is a general move of the public towards environment and increasingly a resistance starting to build against onshore win;  North Seas Countries Offshore Grid Initiative (NSCOGI) is an interesting initiative to be observed;  long terms investors (institutional) are not ready to invest in ocean energy, due to its risk level. Nor will Junker plan with EIB securitisation change this;  In comparison the EIB funds big projects key thing missing and where there is scope for policy initiative is to ensure performance guarantees and with an insurance scheme / fund (note: by this is meant that although solar is able to acquire even weather insurance for when it is cloudy to smooth out its revenue scheme. Ocean energy is not only not able to access this, but cannot even access more traditional insurance products to cover when a machine breaks down.);  At this early stage it is more about enterprise development, not yet so much about energy and basically no longer about technology. Should this not fall more logically under DG Grow, rather than RTD, or ENV, or ENER;  the ocean energy lobby was weak and ill organised. Things are picking up, but still a way to go.

Afternoon session (solutions):  Maranet = free access to tanks; all results must be published + funding for models and analytics;  Modelling = sites available with a large number of monitoring buoys; Copernicus not ready, but potentially interesting; Westwave Science foundation funds PhD students studying wave climate;  SFI (research institute) = all uni 1/3 PhD funded by industry;  Spinoffs = in general works well in Ireland; need small enterprise mechanism to be introduced (in the US industry pays and if it fails its ok);  OPT (ocean power technologies) = developers need to focus on not only the pure technology, but also on deployment, scrapping, maintenance etc.; There is a need for more consulting/external expertise;  In the Canary islands, the need for electricity is higher and therefore the price is also higher. Focus on proving the technology in such environments, where it is also financially interesting;  Same for offshore automated aquaculture;  Work on trans-EU grid;  WES = very good example of pre-commercial procurement and knowledge sharin;  ADEME+ = call for marine tech with capital + feed in tariffs. Requires peak time provision of energy (pushes industry to be more reliable and innovate);  Insurance and warranty fund = to facilitate access to finance, smooth finances and enable suppliers to also provide guarantees;  Focus on creating IP, not patents = since the money is not there to defend it in court anyway;  For wave to early to involve VC = the technology is simply not ready. The ambitions should be scaled back from aiming at commercialisation to getting the technology working;  Deployment and servicing is very costly = possibility to pool resources and purchase capital (ship) to serve a number of people;  In EU projects enforce transparency = report the reasons why they failed/make analysis;  Make TRL scale more tailored and specific, then use TRL scale as targets;  Currency fluctuations are a risk = public bodies can’t hedge or buy futures! for SMEs it is expensive, can the EIB get involved;  H2020 either targets TRL 2 or >7, not the middle, meaning that projects are pushed too fast to attain that level and the funding;  Pre-commercial procurement would be valuable.

Study on Lessons for Ocean Energy Development

Participants:  Peter Coyle: Marine Renewables Industry Association (lobby);  Niamh Kenny: DP Energy (tech developer);  Tony Lewis: Ocean Energy Ltd (tech developer) + professor at EIMA (test facility);  Julia Anceah: AROP (marine engineers);  Conor Cooney: ESB (Utility);  Paul M’Livoy: TFC (moorings developer);  Bernie Comey: Department of Energy (gov.);  Joe Murtagh: Seapower (new startup in ocean energy);  John Breslin: Smartbay (test site);  Andrew Parish: Sound and Sea Ltd (tech developer, before CEO of Seabob, project that failed);  Eamon Cahill: Department of jobs and enterprise (gov.);  James Ryan: Aquavision (???);  Eoin Sweenie.

Study on Lessons for Ocean Energy Development

Focus Group Portugal, Lisboa, 28 October 2016 NB. The views expressed in these notes are those from the Focus Group participants.

Introduction round After outlining of the study objectives, approach and context, an introductory round was done amongst the participants. A subsequent round was done to brainstorm about challenges and barriers for ocean energy development in Portugal. Afterwards, the study team presented the main findings of the study to date.

The principle area of expertise of the participants was on wave energy, which was therefore the main focus of the focus group. Tidal energy was not discussed in particular.

The introductory round and brainstorming provided the following reflections on ocean energy development on Portugal.

 Although Portugal has promising resource conditions and a strong manufacturing supply chain (in particular ship yards, steel construction suppliers and ports looking for new markets), the overall picture is that wave energy developments are held back. Major barriers are unclear national government financial and non-financial support, a supply chain with engineering limitations in some areas, no offshore supply chain, limitations regarding grid connection in the Pilot Zone, while with relatively easy connections possible along the west coast and the competition with other renewable energy technologies in particular floating wind. In general the investor confidence is limited, since the winning device concept has not yet been identified. The private sector (e.g. EDP) therefore prefers investment e.g. into floating wind. For wind a supply chain exists. Wave energy will have to develop its supply chain and cannot build on offshore oil&gas solutions, which are in general too expensive;  On the point of competition with other renewable energy technologies, it is frequently reiterated that it needs to be recognised that wave energy is not as mature as other technologies. It requires time and funding to reach similar levels of maturity. All participants feel that it is unfair that wave energy projects are assessed by identical criteria and KPI’s, when they need to compete with e.g. offshore or floating wind. In principle, an optimal renewable energy mix requires multiple technologies with different and preferably predictable production profiles, suggesting that not all eggs should be put in one basket;  The discussions breathed a certain concern about the developments in the Portuguese wave energy sector. With the lack of specific national funding70 as well as a limited appetite of private investors and a limited grid-connected pilot zone, it will be challenging to avoid a decrease in critical mass on relevant expertise. Promising resource and weather conditions and the existing manufacturing supply chain (e.g. ship yards) support Portugal’s wave energy potential, but a major challenge is considered to be to attract foreign investments to keep technology development activities within the country. For that an operational pilot zone, a regulatory framework (such as MSP which is currently under development) and e.g. a FIT or an equivalent scheme would be required. However due to drawbacks in the past (Pelamis etc.), the political will to provide this is at National level was very limited but there are positive signs more recently;  Instead of focussing on immediate cost effectiveness (LCOE), wave energy development efforts should address reliability and survivability. Wave Roller is considered a success story in this respect, as it has a track record of long operating hours. The rationale is that first the sector needs to arrive at a more or less frozen and commonly agreed design, with reference to the convergence of tidal stream technology. Challenges in this respect are the aggressive and, more importantly, volatile environments in which wave energy devices need to operate;  From a technological perspective, it was raised by one participant that it is easier to focus on wave energy concepts which operate in milder environments. More specifically, the participant was sceptical about the attenuator principle and hydraulic PTOs;  As an outlook towards decreasing the LCOE of wave energy, participants identify several avenues: - Material choice is mentioned, especially to move away from using steel, and experimenting with for example composites or concrete;

70 Note that there COMPETE is a national program to support Portuguese supply chain development and innovation and this can be used in wave energy projects. What is missing is a dedicated program. COMPETE is a several billion euros program with support measures that can be non-refundable up to 85%.

Study on Lessons for Ocean Energy Development

- The cost for logistics, which currently make up a lot of the total costs (and for which cluster development is potentially a way forward, see below); - Niche markets (e.g. islands) can serve as a stepping stone to develop the technology; - Synergies with other sectors are identified, where wave energy can benefit from the development of an offshore supply chain.  For achieving these development, the participants point to a general lack of experience with innovation would need to be addressed: - Failure is not perceived as a learning process, but as something negative; - Failure is not utilised as a learning process, as lessons are insufficiently shared; - We tend not be able to deliver the proper strategy to manage innovation; - We tend to see innovation as a case by case approach, and not on a structured way.  All in all, successful wave energy development will require patience. Reference is made to how long it took offshore wind to develop. A crucial element is management of expectations, both from the technology developer to investors, but also vice-versa and between developers and governments;  International collaboration with e.g. technology developers as in the case of Finland (Waveroller, Welo) is an important strategy for Portugal. However, H2020 projects have long planning horizons (plus delays), a high level of bureaucracy, absence of negotiations in evaluation phase and limited success rates. This requires special consultancies, which is particularly a problem for young companies and SMEs;  The private sector should be involved better by encouraging a collaboration of international utilities rather than trying to involve the small base of supply chain companies and ship yards, who do not have sufficient finance to support R&D for wave energy devices. Utilities can also cope with the long time to market much better than the supply chain.

Theme 1. Procurement of Technological Innovation a. Impacts of support schemes The participants indicated that successful procurement depends not on the type of support instrument, but more so on how a support instruments is implemented. In general, support instruments can be too generous, risking losing societal support. An important element in this respect is communication on innovation outcomes, which ca strongly influences public perception. Specifically for Feed in Tariffs, too generous instruments also remove the incentive for developers to strive for cost reductions.

b. How can procurement schemes promote innovation and contribute to technological progress? This question was not answered directly by the group. The question was then altered to the question if e.g. public investment into demonstration and pilot scheme (similar to the EVE investment into the Mutriku breakwater OWC) does trigger innovation and progress at all. This then lead to the KPI discussion summarised below. One participant did identify an opportunity to promote e.g. R&D for OWC by always including OWC-eligible caissons when constructing new breakwaters, which can be done at limited or no additional cost.

c. To what extent do such models depend on the maturity of the technology? A recurring comment was that for wave energy, as an immature technology, it is difficult to directly compete for R&D funding with more mature technologies. If wave energy is to be taken seriously, it cannot be assessed by the same criteria other renewables are assessed by. Advantages of spreading support which were mentioned are spreading of risks and diversifying production profiles in the renewable energy mix.

This implies that for procurement of innovation support, one size does not fit all. One needs KPIs, but they need to be adapted to the technology at hand. Importantly, especially LCOE is currently not yet an appropriate KPI for wave energy. It should be reliability and survivability. One participant put it that immediate cost effectiveness is not the KPI to go for. Of course, it is needed to convincingly show the route to lower LCOE, but not as a direct KPI.

d. Which good practices can be identified in this domain? (e.g. WES, France) WES is a very good example. One reason is that it focusses on components of the technologies, rather than entire concepts. In contrast the Saltire prize was mentioned as a negative example of a too ambitious target and it was not in-line with the existing company

Study on Lessons for Ocean Energy Development

milestones of the potential candidates. Nobody ever applied for the prize, because nobody qualified.

The participants indicated that both private and public focus of technological innovation support needs to be integral, where the role of the public is to provide stability and getting it to work. Further down the road it needs to be made efficient and cost effective.

Support can deviate the attention by applying the wrong KPIs. The main risk is that projects are forced to make advances too fast.

e. With regard to wave energy, what can be done from the procurement perspective to trigger technological convergence, and how can this be done best? The participants identified the utilities as an important player down the road of technological development, in their role as end-user of the technologies. The advantage of involving utilities, compared to the supply chain, is that they are not focussed on selling their product (components), but rather producing the final product (electricity). One challenge in this respect is to make sure that utilities work together rather than compete to develop technological concepts, for which a strategy is needed.

Specifically regarding triggering of convergence, the participants identified that forcing convergence is highly risky, at different levels. In general, a broad starting point was considered key, to not rule out potential breakthrough technologies or block creativity (although interestingly, one participant raised that the wave energy sector has too much creativity). Moreover, the participants are sceptical on whether the decision makers would have the right expertise to make this type of choices. The participants broadly agreed that technological convergence should be an organic process.

In that sense, public support should apply a funnel of restrictiveness, becoming stricter when a concept reaches a higher TRL. Convergence can then be realised by searching for common elements in competing concepts, and concentrating on the essential common elements. The right set of KPI’s should narrow down alternatives as technologies progress. The main challenge is to find the right set of KPI’s, where it was again stressed that LCOE is too inaccurate to serve as a KPI for low TRL technologies.

In addition to the above, it is choosing the right people, who have appropriate experience in large projects, which is considered crucial. Projects or companies sometimes fail, more often than not because of managerial issues.

f. How can synergy between EU-wide (notably Horizon2020) and Member State-specific schemes be obtained? This question was not specifically answered. The structure funds were mentioned as a means to geographically differentiate / spread support. It was explained that these funds would be sufficient as an instrument, but they were typically too broad with regard to valid applications so that again Wave energy was in a difficult competition. Instead, dedicated calls for wave energy should be implemented.

Theme 2. Smart approaches for reducing offshore installation and maintenance costs It was agreed to not focus on this theme, because the focus of most participants was on wave energy, for which this theme is still somewhat premature. In addition Portugal currently does not have an offshore supply chain due to a lack of offshore activities in general. Pilot and demo projects are currently relying on importing such service from e.g. the Netherlands or Scotland.

One of the participants did stress the importance of maintenance costs, indicating that if one ends up depending on big maintenance vessels which are not present locally, you will not reduce costs. In most projects, the cost of mobilisation of vessels makes up a large part of the total costs.

Study on Lessons for Ocean Energy Development

Theme 3. Ocean Energy Clusters, a tool for information and knowledge sharing a. What is the overall potential of the cluster concept for overcoming barriers in ocean energy development? The participants regarded the cluster concept as a promising approach towards addressing critical mass and informal knowledge sharing barriers in the sector, and as a way to foster and attract employment. The following additional opportunities were raised:

 Clusters can/should extend beyond ocean energy. There are services and components which can be extended to other sectors (aquaculture, offshore wind energy, …);  Opportunity to collect and protect IP at a cluster level?

b. What are the key drivers for clustering ocean energy activities? Cluster development can be stimulated by linking it with other maritime sectors. Moreover, you need a strong relation / cohesion at a national level. European collaboration is important, but this is too spread out for a real cluster to develop.

c. What barriers can effectively be tackled through cluster development? This question was not specifically discussed. Implicitly, the following aspects were discussed: Lack of critical mass Lack of knowledge sharing Sharing of supply chain skills with related maritime sectors

d. How can informal knowledge sharing be promoted through cluster development? Clusters should also be active transnational, in a European perspective. Additionally, it was raised that sharing of information and IP issues are sometimes conflicting. This would need to be addressed to improve informal knowledge sharing.

e. What concrete experiences exist in various places that can be taken as best practices? This question was not specifically discussed. A reference was mad e to the Finish maritime cluster, but such experience or approach does not exists in Portugal to date.

Theme 4. IP, knowledge sharing and testing centres a. What different knowledge sharing schemes are currently in place and what is their level of IP protection? This question was not specifically discussed, the discussion moved towards the general concept and added value of IP protection (see below).

b. What are the key areas that would benefit most from knowledge sharing? This question was not specifically discussed, the discussion moved towards the general concept and added value of IP protection (see below).

c. Can any knowledge sharing model be recommended, that on the one hand takes into account IP issues, but on the other hand encourages cooperation, especially in the testing centres? Several suggestions were made:

 Introducing financial support where IP goes to the developer, but for a much shorter period of time;  Specifically introducing time slots for discussing failures in ocean energy conferences;  A prize model with a condition that IP is given up when collecting the prize. This was done in the UK e.g. for offshore wind platforms. To still provide sufficient incentive for technology development, this can possibly be combined with cost-based support for basic research;

Study on Lessons for Ocean Energy Development

 An open source wave energy device development scheme, where everybody can contribute. It is noted that open source development is especially suitable for developing software, although wave energy may still have some potential;  Sharing of information, even within research consortia, is very limited due to confidentiality issues. The European Commission can increase its efforts to enforce this.

Why bother with patents?  It was raised that obtaining, maintaining and especially enforcing patents is very costly, both in terms of time and funds. Instead of investing in patents, it may be better to invest in creating more knowledge and maintaining ones lead position;  It is recognized that this is difficult for investors. However: - Historically, the original patent holder is never the person who capitalises on the patent; - Amounts of money spent to take over IP in mergers are quite marginal. The value of the company is more in the staff, skills, experience, etc.; - IP is only valuable if a technology ends up being utilised; - Some participants shared the observation that some device developers were producing very large numbers of patents, which does not seem to correspond with the level of technological progress.

Attendees:  António, Sá da Costa, APREN;  Margarida Almodôvar, Agência Portuguesa do Ambiente;  Canena Santos Enondas, OceanPlug;  José Chambel Leitão, Hidromod;  José Varandas, Kymaner;  António Sarmento, WavEC;  Ventura de Sousa, Associação das Industrias Navais;  Marco Alves, Janete Gonç, WavEC;  João, Henriques, IST.

Moderators: Jochen Bard, Fraunhofer; Karel van Hussen, Ecorys

Study on Lessons for Ocean Energy Development

ANNEX VIII. VALIDATION WORKSHOP REPORT

23-01-2017, 14:30 – 18.00 hours, Brussels

The study “Lessons for Ocean Energy Development” has been launched at the initiative of DG Research and Innovation in 2015. It is implemented by Ecorys and Fraunhofer and it focuses on tidal and wave energy. A workshop was held to validate the key findings of the study. The findings were presented in three blocks: barriers and lessons learnt, collaboration and knowledge management and good practices and ways forward. In each block, short presentations of the findings were followed by reflections of key commentators and plenary group discussions.

The workshop was opened by Piotr Tulej, head of unit DG Research’s G.3, who stressed the great potential of the ocean energy sector, and that the study on lessons will help to secure and shape future investments in the sector. The study team subsequently outlined the aims of the meeting and, as an introduction, presented the state of play of technology development. This included a chronology of tidal and wave energy developments (see the main study report).

Figure 9 Chronology of tidal and wave energy developments (They are shown in higher resolution in the main study report.)

Block 1: Barriers and lessons leant The study team presented an analytical review of how interviewees have viewed barriers to sector development, and how these barriers are interrelated (see Annex B). Participants noted that technological development had been too fragmented, especially in the case of wave energy, clearly stressing that wave energy should be viewed separately from tidal stream. In the discussion on specific failures in technology development, however, it proved difficult to isolate one critical barrier as a root cause. Each technology development trajectory always has a myriad of stories behind it, and the critical barriers are all closely interlinked, most notably technology development and project finance barriers. Various participants also pointed to the role of framework conditions, with an emphasis on the necessity of long term stability of public support (including the political and societal need for OE).

Figure 10 Intervention logic and weighting of barriers

(They are shown in higher resolution in the main study report. )

While drawing lessons from these developments, it was raised that both private and public investments in technology developments were insufficiently subjected to reliable and robust assessment criteria. An important lesson is that the sector needs to be able to answer the question when to say no to a certain technology, instead of just continuing support until a company is unable to continue. Yes, investments were easily made in before 2008, when the entire renewable energy technology sector was less restricted in its optimism, and (public) financiers were more generous. Also, to what extent is it realistic to expect from especially SME-scale developers to stop technology development? Larger companies may be better able to make ‘pull-the-plug’ decisions

Study on Lessons for Ocean Energy Development

based on their longer experience and broader portfolio (and several examples have been seen). Nevertheless, the view emerged that the sector needs to introduce cold industrial reality checks to make hard choices on investments. These reality checks, in turn, require an assessment of performance related to technological maturity. What are the milestones? A stage-gate approach on the basis of well defined assessments is advocated (including possibly mechanisms for reallocating funds in the case of no-go decisions).

Block 2: Collaboration and knowledge management The study team presented on overview of mechanisms for knowledge exchange and cooperation, where it was confirmed that the informal mechanisms were deemed the most important. Moreover, four angles towards strengthening knowledge exchange and cooperation mechanisms were discussed: procurement schemes for innovation, clusters, offshore operations and IP and testing centres.

Participants recognised that measures to promote sectorial cooperation are important, but that the main question is to what extent this already happens. The subsequent discussion focused on distilling transferable elements within these approaches, and what needs to be taken into account when operationalizing such approaches in practice.

Regarding Procurement of innovation, it was noted that an important impact of the Wave Energy Scotland approach has been the change of attitude of developers. Furthermore, it was pointed out that these more forceful procurement schemes will not function well when developers are given a high level challenge. You need to have a specific idea on what solutions you want, to set calls for proposals with clear criteria, and to get the sector to work on these challenges. Therefore, the more forceful procurement schemes require a thorough understanding of the sector and technological concepts at the public procurement side, e.g. a specialised centralised technology assessment committee). Additionally, the management capabilities at WES had to be strengthened in order to keep close control of the projects. It is noted that as the WES approach is rather new, it is too early to judge its effectiveness. Dependent on the level of procurement interventions at national or regional level, the relevance of Horizon2020 support differs significantly between parts of Europe.

Related to this is the issue on how to handle IPR and conditionalities for public support. Setting requirements should always be to some extent coordinated with envisaged users of such schemes and preferably be technology-agnostic. Within this context, it was noted that most notably small developers are inclined put unrealistic value to their IP. It is also suggested that, as SME (developer) companies have limited capacity and skills, government could advance the framework conditions by taking responsibility for aspects such as environmental background work or the development of the certification process. Some other framework conditions, like testing facilities, are already in good shape.

Regarding clusters, participants identified that various activities are already taking place. Furthermore, clusters are expected to form naturally, and they may not have to be forced at the current stage. It was also raised that a joint cluster with for example maritime activities including offshore wind, may cause the ocean energy sector to be crowded out. In terms of cross-sector cooperation, there are pros and cons of linking up to broader maritime or energy clusters (e.g. scale advantages and facilities versus visibility, priorities and focus).

Finally, data warehousing was identified as an opportunity for stimulating knowledge sharing. An existing approach was mentioned where all performance data was automatically collected, where external use was put under a moratorium for a few years. Interesting elements could be to

Study on Lessons for Ocean Energy Development

introduce a sort of certification process, where databases eventually become clearing houses in a commercial IP sharing system.

Block 3: Good practices and ways forward Recognizing the variation and interrelation of barriers, the study team presented an integrated approach for technology development. The analogy was made with mountaineering expeditions, where you can climb different peaks, take different paths, and where a successful expedition requires the right team, a range of equipment and the right weather conditions to make it. And when climbing difficult peaks, a good guide knows when to turn back to a base camp, and try another day.

Figure 10 The mountaineering expedition and an integrated framework

Both the study team and various participants stressed the need for a phased/staged approach, to distinguish between the different readiness levels of tidal and wave. But as well to allow support and industry requirements to be targeted and tailored based on the stage. It was mentioned that the industry and other stakeholders are slowly moving to accepting this idea and that this approach therefore will fall on fertile ground.

In order to operationalize the integrated approach, a monitoring framework was proposed. This builds a set of principles:

 Differentiation by technology;  Need for an integrated approach: never just one issue;  Public/private alignment;  Focus on performance;  Performance requires measurement;  Transparency and accountability: progress needs to be monitored;  Staged development based on milestones.

The participants recognized that it is important to link the assessment criteria. It should furthermore be more than just monitoring or ticking boxes, qualification and reasoning and required. An exercise needs to be undertaken to have agreed assessment criteria. The most fundamental is that we need to arrive on agreement on how we assess criteria within these different phases.

Matthijs Soede from DG Research closed the workshop, sharing several take home messages:

 Ocean energy really is a complicating technology, while it faces competition from other renewable energy technologies – (renewable) energy, however, is ‘just’ a commodity;  These challenges stress the importance of sharing lessons learnt. The sector as a whole really needs to think better about how knowledge transfer can be improved;  The sector is starting to accept the stage gate procedure. It is a procedure which is interesting for the European Commission as well, as it offers a lot of clarity for participants. But it will be through discussions, and exchange of views, to set the needed steps forward. We need to focus on what we can take home with us, to see what we can do to improve our own processes.

Study on Lessons for Ocean Energy Development

List of attendants

SURNAME NAME ORGANISATION Abbott Charles Scotland Europa Cheson Joyce Sustainable Energy Authority of Ireland (SEAI) Bard Jochen Fraunhofer IWES Branco Carla PBBR Chartier Olivier Ecorys Costiuc Anna European Commission - DG MARE De Roeck Yann-Hervé France Energies Marines De Vet Jan Maarten Ecorys Delattre Jean-Paul ICE-France(RaL) Dutianu Dana Innovation and Networks Executive Agency Gille Johannes Ecorys Gruet Rémi Ocean Energy Europe Ihssen Holger Helmholtz Association Iturrioz Arantza Environmental Hydraulics Institute of Cantabria Jeffrey Henry University of Edinburgh Lewis Tony Ocean Energy Ltd. Moccia Jacopo Ocean Energy Europe Morin Helene Bretagne Developpement Innovation Neumann Frank IMIEU Olsson Maria Swedish Energy Agency Rodríguez Álvaro CTC Sánchez Lafuente Carlos CDTI Soede Matthijs European Commission - DG RTD Sweeney Eoin ITO Consult Ltd Van Hussen Karel Ecorys Vince Florent WeAMEC Zagalo Pereira Gonçalo FCT - Fundação para a Ciência e a Tecnologia Gloser Jakub Ecorys Xavier Guillau European Commission – DG MARE Galloni Susanne European Commission – DG RTD

Study on Lessons for Ocean Energy Development

ANNEX IX. ANSWERS TO THE RESEARCH QUESTIONS

State of play of OET development a. What has been the chronological development of various ocean energy technologies? The review implemented in the study demonstrates that both tidal stream and offshore wave technologies have been developed since the 1990s. The chronologies show that for both wave and tidal a shake-out of companies has taken place. Several companies have entered and subsequently left the sector or closed their operations altogether.

b. Which initiatives, technologies and past pathways have been abandoned? The main report presents schematic overviews of the past initiatives, technologies and pathways. It can be noted that about half of the operations mapped for wave and tidal energy have been closed down, whilst the other half is still active. However, and in contrary to tidal energy, for wave energy only few of the actions closed down have managed to transfer the knowledge in part or in full – either through mergers & acquisitions or through staff mobility.

c. Have failures been similar or different across various tidal and wave technologies? At first sight it would appear that wave energy technology matured more quickly, having attempted to reach higher technological readiness levels and attracting the involvement of large players early in the process. Wave energy development indeed appeared to be more fast-paced, although the relevant actors in the end either did not pursue the concept or went into administration.

However, with time elapsing, the development of wave energy technology shows hardly any convergence. Due to the diverse nature of the wave resource in deep water and shallow water as well as the complexity of extracting energy from waves, there has always been a wide range of technical solutions under development focusing on different parts of the resource and using a range of different solutions. The evolution of wave energy technology is therefore rather fragmented and indications of collaboration and sharing of experience and knowledge are less obvious.

In the case of tidal energy, it can be observed from the chronology that significant convergence has taken place. Several (un)successful attempts towards higher technological readiness have been made. Importantly, the amount of transfers of components, staff and technologies/components indicate that a certain degree of knowledge transfer occurred in the sector.

Review of critical barriers encountered and lessons learnt a. What have been the root causes behind successes and failures? Were they technological or non-technological in nature? The table below provides and overview of root causes for success and failure of 11 projects analysed.

Study on Lessons for Ocean Energy Development

Table 8 Overview of root causes for success and failure

Project Exogenous Research Technological Critical Mass and Project Finance Framework and Performance & factors support barriers Innovation & supply chain barriers regulatory Market barriers Development barriers conditions barriers barriers Pelamis Technical problems limited co-funding too limited cost during /private investor reduction potential commissioning; capital 2nd gen. scaled too fast Aquamarine Challenging technical problems limited co-funding shallow water/ during /private investor near shore commissioning capital resource Wave Designed for low Limited technical No co-funding too limited cost Dragon to medium wave progress /private investor reduction potential climates Wave Bob Problems in Limited technical limited co-funding Uncertain market too limited cost achieving Irish progress /private investor future incentives reduction funding (ROCs, FITs,…) Wavestar Technical problems limited co-funding too limited cost with control and /private investor reduction potential PTO; capital Structural optimization Wavegen Limited market Challenging Niche market too limited cost expectations; caisson and valve technology reduction potential Problems with design storm conditions near shore MCT/ Limited market High cost of Uncertain market too limited cost

Study on Lessons for Ocean Energy Development

Project Exogenous Research Technological Critical Mass and Project Finance Framework and Performance & factors support barriers Innovation & supply chain barriers regulatory Market barriers Development barriers conditions barriers barriers Siemens expectations offshore supply future incentives reduction potential chain & installation (ROCs, FITs,…) TGL/ Limited market limited co-funding Uncertain market too limited cost RollsRoyce expectations /private investor future incentives reduction potential (ROCs, FITs,…) Pulse Tidal Demo grant Very challenging Limited availability No co-funding requires matching innovations of components /private investor funds required; very big single step towards demo PDA – Limited market Limited public limited co-funding too limited cost Kobold expectations support /private investor reduction potential Voith Limited market High cost of limited co-funding Uncertain market too limited cost Ocean expectations offshore supply /private investor future incentives reduction potential Current chain, installation (ROCs, FITs,…) Technology and maintenance

Study on Lessons for Ocean Energy Development

In the context of this study, the term “failure” has been used to characterise situations in which:

 Technical problems were encountered, e.g. the device failed partially or completely due to components' issues (e.g. rotor blades), structural problems, station keeping (mooring lines or anchors), survivability problems during storms (extreme loads), rapid wearing or corrosion due to fatigue or inadequate designs/materials;  Financial problems occurred, e.g. providing the matching funds for public grants at demo scale or having to increase the shareholder contribution from private equity due to not meeting milestones.

In practice, the term ‘failure’ illustrates the fact that a planned deployment and/or timeline, a cost reduction target or a financial framework has not been met or not in time to continue with technology development. A technical failure typically results in higher cost, a delay or not achieving a milestone. This has often led to the termination of a project or development, although this can also depend on competition for support with other (more mature) ocean energy or renewable energy technologies. Put in other words, failure can be seen as a lack of competitiveness: unique selling points are no longer applicable or convincing and market pull mechanisms have become inactive.

Admittedly, ‘failures’ and subsequent ‘shake-outs’ are inherent to any emerging industry and should not always be perceived negatively: a failure often provides significant learning experiences for the sector, and this knowledge is captured by the supply chain. Furthermore, an abandoned technological development will help to narrow down future options or to identify financial or technological preconditions for developments. What defines a success or failure is thus the extent to which the sector, as a whole, has been able to draw learning from such experiences.

b. Have failures been similar or different across various tidal and wave technologies? Wave technology development suffers above all from a divergence of technologies and concepts, and that it requires access to public research funding and testing infrastructure (as well as appropriate procurement mechanisms) to funnel these. It is essential to arrive at robust and performing devices and installations that withstand the open-sea tests. Only then will it be possible to come further and optimise devices, scale up, come to a degree of standardisation needed to build out a supply chain and build investor confidence. Although LCOE should be part and parcel of all design choices, bringing down the actual LCOE of prototypes – essential in the longer run – will come only after that.

Currently, tidal technology is more advanced. However, that advantage is rather fragile as a range of barriers are to be overcome yet. The starting point lies rather in the testing of pilot farms (2016 being a critical year for this), followed by the need to further build out the supply chain and drive costs down – thus allowing for more private funding to come in, required for next level roll-out. A longer term barrier, however, may arise from the exogenous factors – namely the resource potential: will there be enough sites (in Europe and globally) to justify the investments not only in devices and components but also in support infrastructure including dedicated vessels – that in their turn are needed to drive down costs? Especially for large tidal stream devices, the number of sites with the right resource characteristics, availability and accessibility appears limited. These barriers – including the stability of framework conditions including continued support – will need to be addressed in order to keep OEM manufacturers and utility companies on board. It is too early to tell what the long term perspectives are, as much depends on the success of the current generation of demonstration and pilot projects.

c. Why have initiatives, technologies and past pathways been abandoned? In 2009, the UK published the NREAP including a 1300 MW target for wave and tidal deployments. In total EU member states had planned to install up to 1800 MW of ocean energy systems. These plans however were never substantiated with an actual project pipeline. More realistic recent estimates about the expected installation in 2020 are presented above. The NREAP targets for OE were not given up or abandoned in principal – the Renewable Energy Directive (2009/28/EC) as the related legislation is still valid. However the implementation of these targets has not been followed up with the necessary actions, e.g. the EU tracking roadmap from 2014 provides barriers by country but no information specific to the NREAP targets. As can be identified from the wave and tidal chronology and the country reports above, the OE industry is not ready for the ambitious NREAP targets yet. First array

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projects are just about to begin operations, but long term experience that would justify large scale installations is still widely missing.

Most of the array projects planned in the past are significantly delayed as e.g. in the UK leasing rounds, or have been abandoned as the wave energy projects in NER 300. In the case of the Portuguese pilot zone, there is no visible activity ongoing for years without any formal decision or communication in place that this initiative has been abandoned. A number of tidal array projects in France, and UK have been modified and/or postponed. There are only a few technologies which are currently no longer being investigated such as oscillating hydrofoils or vertical axis rotors for tidal energy and shoreline OWCs and a number of point absorber and attenuator (Pelamis) designs in wave energy. Ideas about niche markets such as island communities have been around for many years, but commercial projects have not yet been realised.

Like many other renewable energy sectors, OE has also suffered from the financial and economic crisis in Europe and some of its impacts in Energy policy e.g. the Fits in Spain. In addition, investors’ appetite has been reduced compared to previous due to a range of reasons discussed in the barrier sections and has often moved towards more secure investment in e.g. wind and solar energy or energy storage. This leads to the situation, that a number of OE projects and device developers are struggling to find private equity to match public funds. Examples are provided in the sections above.

Although there has not been a principle pullback from OE at political or industrial level a number of setbacks has been identified e.g. in context of involvement of large utilities and OEMs. In most cases a combination of barriers seems to have slowed down or hindered the planned technology and project developments. Looking at it from another angle this can on the other hand be seen as lack of consolidation and focus within and towards the OE sector. d. Have such failures led to the evolution and adjustment of existing technologies and/or applications? There are many examples where projects or technologies which are considered a failure in the context above have provided very significant learning experiences to the wave and tidal device development. OEMs and the supply chain industry will have gained a lot of experience from their involvement into the deployment of projects. Even an abandoned technological development will help to narrow down the future options to be considered for commercialization or to identify financial or technological conditions under which it might become rewarding in the future to reconsider wave or tidal developments. e. What have been the root causes behind barriers? Were they technological or non-technological in nature? A key conclusion that can be drawn from this review is that a range of barriers hold the sector back: starting from exogenous factors to research support/framework conditions, technological innovation, critical mass and project finance. It is important to acknowledge that all these factors play their role. Simultaneously, it is equally important to discern symptoms from root causes. This is most prevalent when ‘lack of funding’ is raised as a barrier, which, more often than not, may be a symptom rather than a root cause.

While developers are improving technological performance and explore the scope for LCOE reduction, the shake-out moves beyond technological barriers. The failure of both Pelamis and Aquamarine serve as examples, where a mix of technological barriers and non-technological barriers put a strong brake on the project’s advancement. Importantly, at this stage we do not see a shake-out of concepts, but rather of companies. Yes, there can still be concerns about the technological performance and LCOE potential, but these type of failures do not prove that the concept has failed. This is the stage where we place the wave sector, where a convergence towards a (more or less) frozen design still needs to take place.

When the concept has arrived at a frozen design with sufficient scope for LCOE reduction, the weight of the barriers moves towards Critical Mass and Project Finance (upscaling of projects). In other words, the challenge becomes the development of an industry, which is where the tidal sector can currently be placed. Concepts can still fail at this stage, of which the OWC concept is a good example. Despite the mature design and performance levels, the resource- LCOE potential for this concept is currently not considered sufficient.

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f. To which extent is there consensus about these barriers? And if not, what are the reasons for the existence of diverging perspectives? A surprising outcome is that stakeholders have been hesitant in pointing to technological barriers as the overriding barrier, and even less so for wave than for tidal. Developers and industry representatives point rather to non-technological reasons, including framework and regulatory conditions, research and finance support as the main hurdles. Public sector representatives see technological barriers as a more important barrier. An interesting observation in this context is that many interviews have taken place with business leaders, CEO’s etc. We have noticed that lower management and expert level stakeholders tend to give more prominence to technological barriers.

Some possible explanations why technological reasons do not surface as strongly as expected could be that such barriers are:

 Partly ‘overcome’; especially in tidal stream, important technological progress has been booked and this has allowed stakeholders to focus on next generation barriers;  Partly ‘written-off’ or forgotten; some technological barriers have simply led to concepts, projects, stakeholders or companies having abandoned the scene. It has allowed actors to ‘turn a page’ and to start with fresh energy, and to march into new ventures – either within the sector or in other sectors. Looking back into the rear-view mirror is not necessarily the preferred mind-set;  Not helping to restore investor confidence. Business stakeholders (and notably developers) are particularly reluctant to highlight the technological barriers – as this could be considered ‘shooting in one’s own foot’;  Frequently recurring under other headings; e.g. lack of finance due to technological risks; lack of involvement of OEM due to divergence of technological concepts; lack of framework conditions as there is no specific support provided to a sector with so many risks.

Promoting innovation, collaboration and knowledge sharing a. What are the patterns and mechanisms for knowledge and cooperation in the sector? The different knowledge sharing techniques should be related to the type of project and the stage of the development (of both the project as well as the industry). More specifically in the early stages of concept and technological development sharing of approaches that did not work should be actively encouraged by financially rewarding the sharing of knowledge, Either through competitions, or through WES like approach. In addition frontline research by universities should be actively shared within the community. The aim here is to be very careful on IP protection, while acknowledging, that it is in everybody’s benefit to learn form past mistakes and approaches.

In more developed projects in the testing phase, access to testing infrastructure and centres should be a priority. These will then form a core group where sharing of implementation of ideas is key, rather than specific solutions that are extremely IP sensitive and are not in anyone’s commercial interest to share.

Finally in pre-commercial and commercial stages knowledge sharing marketplaces, competitions and platforms are the most appropriate to share unsuccessful or not used solutions/IP. Especially if financial benefit can be gained from the sharing of such “unnecessary” knowhow, while such knowledge can be key in allowing future projects/improvements to occur.

b. What is the overall capacity and track record of learning within the sector? Although the sector is regularly networking and meeting at national, EU and internal level, It is difficult to deny that there has been a certain amount of fragmentation in the development of OET’s, particularly so in the wave segment. Nevertheless, there appears to be a strong geographic component in the overall capacity to learn and develop. The concentrated development of the sector in a confined number of Member States and regions is a proof of that. The establishment of clusters and cluster networks is a promising tool to enhance capacity and promote the learning and sharing on the basis of trust. Clusters also allow for active collaboration not only within industry (large companies as well as suppliers and SME) but also between industry, academia and government – again the ‘triple helix’ at work.

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c. What is the importance of Intellectual Property Rights (IPR) and underlying business models? IPR is a very important hurdle to sharing of classified knowledge. Unconditional sharing of such information appears to be not compatible with the functioning of a market economy. However, public actors – especially when contributing to equity, grants, loans – can put in an element of conditionality, and agree with the sector to share knowledge in a number of predefined domains.

d. To what extent do changes in the actors (businesses coming and leaving the stage) affect continuity? As identified in Chapter 2, the evolution of wave energy technology has been rather fragmented and indications of collaboration and sharing of experience and knowledge are less obvious. In the case of tidal energy, it can be observed from the chronology that significant convergence has taken place. Several (un)successful attempts towards higher technological readiness have been made. Importantly, the amount of transfers of components, staff and technologies/components indicate that a certain degree of knowledge transfer occurred in the sector, which has contributed to continuity and advancement.

e. Which are functioning knowledge and cooperation exchange mechanisms? Are they part of past and current research cooperation initiatives? The following functioning mechanisms have been identified:

 Academics and public research institutions work together in research consortia across Europe;  Industrial actors, both developers, OEM’s, utilities and suppliers work together and share information within the context of consortia;  Business, academia and government actors share together in geographically confined spaces, notably through clusters;  In addition (not studied here), industrial actors and developers as well as academia exchange at the level of industry associations (e.g. Ocean Energy Europe).

f. What is the role of EU and national funding mechanisms? In the area of public procurement, there is need for clarification about the relation between EU (H2020, NER300, Structural Funds, Juncker investment funds), Member State funds as well as regional funds (including again Structural Funds). The question needs to be addressed as to whether such funds can be mutually supportive, and jointly promote particular ocean energy technologies in specific places? Several principles can thereto be applied: technological readiness or co-finance.

In the area of supply chain optimisation, the EU as well as Member States can promote technical standards It would be very useful for the EC to support Member States in their efforts to contribute to the definition of standards, notably through IEA mirror groups.

In the area of knowledge sharing and IP, the EU as well as national funding mechanisms can:

1. Introduce time slots for discussing failures and best practices in ocean energy conferences; 2. A significant prize award for knowledge sharing reports that are detailed and “provide insights for the development of the industry”. With a condition that IP is given up when collecting the prize, thus encouraging entry and reserving giving up IP with the cash prize. This was done in the UK e.g. for offshore wind platforms; 3. Consider a similar system as WES, where there is remuneration to the person disseminating knowledge and experiences. Having said that the execution of the WES model, with the detail of the reports and the licencing implications, should be closely scrutinised and potentially made more open sourced and detailed; 4. Encourage a “secondary market for knowledge”, whereby knowledge and experiences can be bought and sold between companies. This possible initiative would make a commercial case for knowledge sharing from the companies point of view (essentially they would get paid to share

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their experiences, often of what did not work), while at the same time distributing knowledge across the industry allowing others not to make similar mistakes, or get inspired by certain steps; 5. The EU could provide the initial investment in setting up a privately run (for profit) e-commerce platform (like e-bay), where such knowledge/findings could be bought and sold and subsequently to help with the publicity; 6. With regard to test centres, these are also bound by intellectual property and confidentiality, which limits their ability to share. There should however be an obligation to publish and to share. In this context it is worth following the development of the FORESEA project as well as exploring further the role of MARINET; 7. An idea emerging during the discussion was the development of systematic and impartial monitoring of ocean energy projects, allowing the sector as a whole (including public funders) to track progress and to capitalise on investments and experiences already made.

In the area of clusters, the EU as well as national funding mechanisms can:

 (co-)fund cluster organisations, at EU level as well as, perhaps, through project-based cooperation between various regional cluster organisations;  Promote the support of clusters among member states, perhaps through existing DG GROW & DG MARE cluster support mechanisms;  Apply Interreg as a tool for blue economy (/ocean energy) cooperation support;  Expand the Blue growth and Smart Specialisation strategy policies to include a focus on ocean energy and links between this and other blue growth sectors.

Ways forward: Embracing good practices and monitoring OET development a. Building on the survey of failures above, what are the areas in which to look for good practices? Good practices have been identified in a range of areas, both technological and non- technological, including technological innovation and development, supply chains, research support, project finance and framework and regulatory conditions. b. What do these good practices consist of? These have been presented in section 5.2 of the main report. c. How do these practices impact the feasibility and costs for specific technologies? No specific relation with feasibility or costs has been made, rather with the time dimension: it is essential to develop Ocean Energy Technologies in a step-by-step manner. This can lead to higher costs, however reduces risks of failure. d. Can these good practices be replicated to other ocean energy technologies? Many of the good practices can be replicated as they are rather generic, and a main point of the study is that the sector needs to embrace good practices much more so. e. What are the similarities/differences between various ocean technologies when it comes to generating good practices? The main difference is that tidal has seen a consolidation of technologies, and a stronger learning curve, whilst wave remains more fragmented with a higher tendency to ‘reinvent the wheel’. f. What sectors and activities lean themselves towards comparison? And for what type of ocean energy technology are they most relevant? Annex VI presents a summary of learning from other sectors, namely Offshore wind, Offshore Oil & Gas and Concentrated Solar Power. Most learning can be derived from Offshore wind. In particular the recent developments in Floating offshore wind are important to take into account.

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g. What scope for synergies with these sectors/activities can be identified along the supply chain and how? The potential for synergies with Offshore Oil & Gas exists, especially now that much equipment and supplies can be obtained at competitive prices – as the sector is performing sluggish at the moment. However, much of this equipment (e.g. vessels) tend to be over dimensioned when it for application in Ocean Energy. In practice, Offshore wind appears to offer more supply chain synergies. h. What good (knowledge exchange) practices and lessons can be learnt from these sectors and activities? Main driver for the market development of Offshore Wind was the influence of stakeholders with high financial resources. The same mechanisms could be used by OET, if the technology succeeds in attracting the companies with the right financial resources to politically support the development of OET. Seen from a technological point of view, similar learnings and resources can be used, e.g. comparable models for MET-ocean analysis and similar environmental conditions lead to possible synergistic effects by using equivalent technologies for site surveys and the measuring of data. Besides site assessment, increased availability of resources like offshore qualified staff, suppliers and material, help to create designs which fit the Offshore environment for OET and Offshore Wind. i. Under what circumstances can these lessons be replicated/used? Framework conditions and market conditions need to be favourable. The resource potential needs to be sufficient and there needs to be a perspective that LCOE will go down significantly over time, and becoming competitive vis-à-vis other RE sources. j. What mechanisms and initiatives can help to improve the exchange of such experiences across sectoral boundaries? (e.g. fora, platforms, networks, clusters, value chains and webs) Chapter 4 provides an extensive overview of the knowledge exchange mechanisms that are considered promising. The following functioning exchange mechanisms have been identified:

 Academics, public research institutions and test centres work together in research consortia across Europe;  Industrial actors, both developers, OEM’s, utilities and suppliers work together and share information within the context of consortia;  Business, academia and government actors share together in geographically confined spaces, notably through clusters;  In addition, industrial actors and developers as well as academia exchange at the level of industry associations (e.g. Ocean Energy Europe).

Both formal and Informal exchange mechanisms are key, and this should be acknowledged also in public support schemes. An example is to incentivise that technology is developed by consortia, rather than by individual developers, to promote exchange and mitigate the risk that knowledge is lost if developments are discontinued. Another example is provided by Wave Energy Scotland, where dissemination of knowledge and experiences are remunerated.

Furthermore, it is important to tailor knowledge exchange mechanisms to the situation and to promote the development of Ocean Energy Clusters – they provide a promising angle for promoting collaboration and exchange. Whilst many actors in the sector promote the idea of specialised Ocean Energy Clusters, our research on maritime clusters suggests that critical mass and synergy often require engagement with other Blue Growth sectors (e.g. offshore oil/gas, offshore wind). k. Which wave and tidal technologies appear to be most promising in terms of potential and ability to overcome barriers? The current project pipeline for wave and tidal projects in Europe shows around 30 MW of wave and tidal projects under construction and another around 100 MW of permitted projects.71 Another 330 MW of capacity is represented by array projects for which an application has been

71 Fraunhofer IWES, database with project data analysis.

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submitted. The tidal array projects are almost exclusively realised by HATs. The wave project pipeline involves a variety of concepts including wave surge devices, point absorbers, wind- wave hybrids and others. With regard to the announced and expected deployment figure, tidal array appears to be most promising in the short term. Several wave technology concepts (e.g. oscillating wave converters) have potential in the medium- to longer term still. l. When can these technologies expect to be investment ready? A key conclusion from the study is that the sector has been ‘rushing’ too fast in the past, and not always tested technologies before rolling out. Thus, it would not be consistent to put clear timelines on future development. However, as an indication, tidal array could be in the industrial roll-out stage in 3-5 years, whilst this is currently not expected for wave within the next 10 years. m. Which key actors are needed to accelerate/boost these technologies? Especially larger industrial players and component are needed in the sector, which have experience in certification, performance guarantees, standardisation and accreditation. n. What can be the role of EU and national public initiatives in this? The report states clearly that EU and national public initiatives are essential – they are part of the ‘covenant’ with industry and instrumental to further development of the sector. However there is a strong need to align framework conditions, and coordination between and within governments at all levels is thereto required. o. Are there any possible implications for future Horizon 2020 and/or other EU funding? An important implication of applying above measures is that public support to wave and tidal development activities in the future could be made conditional upon meeting certain performance criteria: it is proposed to include the ‘ex ante conditionality’ (as used in European Structural and Investment Funds) into the selection criteria for evaluating research proposals in the field of ocean energy. Criteria for fulfilment of the ex ante conditionality could be included in the description of future calls for proposals to guarantee that the projects supported under the next EU research programme (FP9) are targeted to the most promising projects.

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doi: 10.2777/241688 ISBN 978-92-79-68866-9