Our Ocean Wealth
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Our Ocean Wealth Towards an Integrated Marine Plan for Ireland Submission by the Marine Renewables Industry Association March 2012 Background The Minister for Agriculture, Food and Marine in the Republic of Ireland, Simon Coveney TD, published a paper entitled ‘Our Ocean Wealth- Towards an Integrated Marine Plan for Ireland’ on 2 February 2012. The Minister invited views on ‘New Ways; New Approaches; New Thinking’ in regard to developing our ocean wealth. This paper is the response of the Marine Renewables Industry Association (MRIA). It provides a general background to the marine renewables industry in Ireland, sets out the Association’s concerns and suggestions and then addresses the specific questions posed in the Minister’s paper Contents 1. The Changing World of Energy ....and Our Ocean Wealth ........................ 1 2. The Prize for Ireland ..................................................................................................... 1 3. Marine Renewables Industry Association ........................................................ 2 4. Ocean Energy and Ireland .......................................................................................... 3 5. Actions to Maximise ‘Our Ocean Wealth’ ........................................................... 8 Appendix: Responses to Questions posed by Minister ................................. 15 1. The Changing World of Energy ....and Our Ocean Wealth The world faces a tectonic change in all aspects to energy over the next twenty years. The demand for electricity, transportation, etc will grow inexorably with the universal demand for improved living standards and the pressures of population growth. The rise of China and India, in particular, will impact on the supply and price of oil and gas, resources which are, in any event, being used up gradually. International agreements, including those within the EU, will place more and more demands on governments to reduce carbon emissions. Nations are, therefore, being pushed into developing new sources of energy. Ireland has the opportunity, arising from its uniquely bountiful ocean resources, to turn this burden into an opportunity by moving early to take a leadership position in ocean energy. This paper argues that the energy promise of Ireland’s sea territory makes it potentially the key contributor to maximizing our ‘Ocean Wealth’. 2. The Prize for Ireland Ireland has one-third of all of North West Europe’s renewable energy resources (source: Siemens), including the world’s most energy intensive waves and Europe’s highest wind speeds. This remarkable gift of nature is matched by some growth already in support services. We have developed a basic supply chain to support the most mature of the renewable technologies, onshore wind, including specialist engineers, operations and maintenance companies, etc; we have capable project developers ranging from small operators with just a few Mega Watts of onshore wind capacity to major utilities with an appetite to engage in all forms of renewables; Ireland is driving European initiatives to develop interconnectors across Europe which will facilitate Irish electricity exports; we have world class research and development facilities (in existence or at an advanced stage of planning) in the marine field; Eirgrid’s strategic planning for offshore energy is internationally regarded; and Ireland is the source of a number of 1 the world’s leading device developers in the emerging wave and tidal energy area. Assuming that Government creates the right environment for marine renewable energy and actively supports its development, Ireland can transform its economic position in two key areas. First, Ireland could become an energy secure and exporting country, replacing almost €6bn1 in imports with up to €10bn2 in exports with significant potential to revive our stalled economy. The initial export market is likely to be the UK, which faces a massive investment deficit in energy to 2020. Second, we could develop a supply chain or enterprise dimension - R and D, finance, legal services, education and training, operations and maintenance, high value added component design and manufacture, device assembly....the list goes on - to support world markets. The natural consequence of this development will be substantial job creation. Ireland is at a crossroads in ocean energy: much of the early lead has been taken by Scotland which has a lesser resource than Ireland. Ireland can position itself for success (e.g. job creation) if it takes the actions suggested at 5.1 and 5.2 below. These would enable us to take maximum advantage of our enormous wave resource when the technology matures, perhaps in five years time. Failure to take action will concede both the development and the exploitation phases to others, notably Scotland, with catastrophic results for job creation in Ireland. 3. Marine Renewables Industry Association The Marine Renewables Industry Association (MRIA) represents all of the main interests on the island of Ireland engaged in the wave and tidal sector of marine renewables energy, also known as ocean energy3. The 1 €5.57bn imports of energy products in 2010, CSO External Trade statistics, 31 March 2011 (http://www.cso.ie/releasespublications/documents/external_trade/2010/extrade_dec2010.pdf) 2 Minister Eamon Ryan, Joint Oireachtas Committee on Climate Change & Energy Security, 24th March 2010 (http://debates.oireachtas.ie/CLJ/2010/03/24/printall.asp) 3 Wave + tidal energy = ocean energy (+ offshore wind) = marine renewables or marine energy 2 Association includes firms engaged in device development and manufacture (e.g. Ocean Energy, Open Hydro, Aquamarine Power and others), utilities and site developers (e.g. ESBI, Bord Gais and others), professional firms and consultants (e.g. Arup, Arthur Cox Solicitors), R & D businesses (e.g. IMERC), supply chain activities (e.g. B9 Energy, Port of Cork) and academic researchers. The Association is an all-island body. The relevant government agencies on the island sit on the Association’s Council in an observer capacity. 4. Ocean Energy and Ireland 4.1 Economic Impact Ireland is going through a period of serious economic difficulty with consequent loss of employment and income throughout all communities on the island. Ocean energy- energy derived from waves and tides- has the potential to make a significant jobs and income creation impact. A study commissioned by Sustainable Energy Authority of Ireland (SEAI), through its Ocean Energy Development Unit (OEDU), and Invest Northern Ireland on the potential economic impact of ocean energy (Economic Study for Ocean Energy Development in Ireland SQW, 2010) states that: There is currently sound quantitative evidence that by 2030 a fully developed island of Ireland OE sector providing a home market and feeding a global market for Renewable Energy could produce a total Net Present Value (NPV) of around €9billion and many thousands of jobs ....It is possible that an island of Ireland wave energy industry meeting the 500MW 2020 target could produce at least 1,431 additional FTE jobs and an NPV of €0.25bn, increasing to 17,000-52,000 jobs and an NPV of around €4-10bn by 2030.....Similarly a tidal industry providing 200MW of capacity by 2020 may deliver around 600 FTE jobs and an NPV of €111m, increasing to 8,500-17,000 jobs and an NPV of between 1.5-2.75bn by 2030 -SQW Executive Summary. The enterprise benefits alluded to in the SQW report are only achievable if Ireland gets ‘early mover advantage’ and is involved in the earliest stages of research, development, demonstration and pre-commercial deployment. 3 Technical and commercial risks are highest at these stages and development will only happen if both private and public funding is provided. The national challenge is to convert our natural resource- we have the world’s most energy rich waves- in ocean energy into jobs and income particularly as doing so will give energy security in an uncertain world. The Ocean Renewable Energy Development Plan (OREDP), scheduled by Government for publication this year, will be the foundation stone in this effort and must be marked by clear, deliberate and accountable actions for delivery, particularly in the next five years or so which is the period until the first planned review of the OREDP. In addition, ocean energy could become an important source of revenue in the medium term for the Exchequer: developers will be required to pay for lease of seabed sites, VAT will arise as will corporate income tax. The opportunity in Irish Ocean Energy has three elements- ENTERPRISE, ENERGY SECURITY and ELECTRICITY EXPORT. 4.2 Enterprise...and Lessons from Scotland The ENTERPRISE element ranges from research and development and device manufacture to operations and maintenance, finance and legal support. The ‘supply chain’ faces an immediate opportunity in offshore wind in the UK- 47GW of offshore wind capacity is either in operation or, for the most part, at the development stage at present, representing over six times the total electricity generating capacity on the island of Ireland! This prospect will both give early job and income benefits to Ireland and will also build companies, their experience and their skills to capitalise on the forthcoming wave and tidal opportunity. It needs to be promoted by the development agencies in the Republic. 4 There has been a strong move to create a centre of gravity for the world ocean energy industry in Scotland, where the First Minister has made it his key economic priority: Scotland