Marine Energy Action Plan 2010 Executive Summary & Recommendations
Contents
Foreword 3
Executive Summary 5 1. Introduction 13 1.1 Scope 14 1.2 The Vision and Opportunity 14 1.3 The Challenges 19 2. Summary of Recommendations 23 2.1 Technology Roadmapping 24 2.2 Environment, Planning and Consenting 26 2.3 Finance and Funding 28 2.4 Infrastructure, Supply Chain & Skills 29 2.5 Tidal Range 31 3. Next Steps & Further Work 37 3.1 Immediate tasks 38 3.2 Ongoing tasks 38 Annex A 41 Members of Marine Energy Action Plan 41 Contributors to the Marine Energy Action Plan drafting and/or Members of Working groups 43 Annex B 45 Economics of Wave and Tidal Energy 45 Wave Energy 46 Tidal Stream 47 Tidal Range 48
Foreword THE ABOVE MUST STAY IN AND CONNECTED TO THIS PAGE IN ORDER TO GENERATE THE RUNNING HEAD
Foreword 3
Foreword
Our seas present a fantastic and as yet, largely untapped asset that can generate clean energy that will boost our transition to a low carbon economy. Wave and tidal energy technologies will not only make a valuable contribution to meeting our long term carbon reduction targets but increase the security of our energy supply and create jobs and export opportunities. Wave and tidal stream in the UK is at a pivotal point in its development. We are rightly seen as a world leader in the development of these technologies and the UK is a global focal point for deployment. The UK also has numerous tidal range sites that are ideal for the deployment of tidal range technologies. We have a big opportunity to embrace the wider benefits of all these technologies, and we need to capitalise on the potential of this sector and drive the industry forward. The Government is committed to meeting that objective. The UK already has world- class testing centres in NaREC, EMEC and Wave Hub. Alongside our colleagues in the Devolved Administrations, Government has put in place comprehensive support measures for research, demonstration and deployment – particularly through The Carbon Trust, the Technology Strategy Board, the Energy Technologies Institute, the Regional Development Agencies and DECC. But, there is further work to do to make large scale deployment of wave and tidal energy a reality. This Marine Energy Action Plan represents an ongoing opportunity for UK Government and industry, together, to set the agenda in a collaborative and strategic manner. This document represents the contributions of many players across the public and private sector. It flags up the main barriers to moving wave and tidal energy forward into commercial deployment and considers what each needs to do overcome them. This will be the first step on a continuing journey through which we will work together to enable wave and tidal technologies to take their rightful place in a diverse, low- carbon energy mix.
Rt Hon Lord Hunt of Kings Heath OBE Minister of State for the Department of Energy and Climate Change
Executive Summary 6 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Executive Summary
The UK is a world-leader in wave and tidal stream technologies and the global focal- point for their development due to the level of resource around our shores, whilst the UK also has numerous tidal range sites, including the world’s second highest tidal range in the Severn Estuary. There are wider benefits and opportunities to embrace in the development of all these technologies, and to capitalise on the potential of the marine energy sector, there is a need to drive forward this emerging industry. This Marine Energy Action Plan is intended to set out an agreed vision for the marine energy sector to 2030. It outlines the actions required by both private and public sectors to facilitate the development and deployment of marine energy technology and intends to fulfil the vision set out in the UK Renewable Energy Strategy and Low Carbon Industrial Strategy. Covering wave, tidal range and tidal stream energy, the Action Plan has a UK-wide focus while respecting the diversity of policy making roles under the Devolution Settlement. There are likely to be many opportunities for collaborative working and information sharing across the UK as this sector develops; the UK Government and Devolved Administrations have agreed to work together and pursue these opportunities wherever it is possible to do so. It is envisioned that marine renewable energy could play an important role in the period to 2020 as the sector begins to roll out larger arrays of devices. This will be followed by large scale deployment in the period beyond 2020 that will help to meet the Government’s policy for an 80% cut in carbon emissions by 2050 and which will create a new and successful UK industry. A potential deployment plan for wave and tidal stream technologies is indicated below in Figure 1. This document aims to encourage those already involved in the sector to engage more closely and to stimulate those that are new to the sector to act upon the opportunities which the development and growth of an innovative, new UK based industry presents. The recommendations from this Plan however focus on the actions required by the key actors in the industry including: Government and its relevant departments (e.g. DECC, BIS, Defra, DfT); Devolved Administrations (Northern Ireland Executive, Scottish Executive, Welsh Assembly Government); the Infrastructure Planning Commission, Non-Departmental Public Bodies (NDPB) (Marine Management Organisation and Marine Scotland); Regional Development Agencies); The Crown Estate; delivery partners (Carbon Trust, Energy Technologies Institute, Technology Strategy Board), UK funding councils; Statutory Agencies (Natural England (NE), Countryside Council for Wales (CCW), Joint Nature Conservation Committee (JNCC), Environment Agency (EA), Scottish Natural Heritage (SNH), Northern Ireland Environment Agency (NIEA)); marine energy technology developers; Utilities; the investment community (Angel, Venture Capital, Private Equity); manufacturers; ports & marine infrastructure organisations; higher education centres and academia. Executive Summary 7
Figure 1 Potential Deployment plan for wave and tidal stream technologies out to 20301
UK Wave and Tidal Stream Deployments
2010 2015 2020 2025 2030
FULL-SCALE DEMO
SMALL ARRAYS (2 - 10MW)
LARGE ARRAYS (10 - 100MW)
1st GENERATION SYSTEMS BUILDOUT OF PROJECTS
2nd and 3rd GENERATION SYSTEMS
Capital support for research and development projects Capital and revenue support schemes for array deployments
Long-term market support
The full sector engagement approach as used in the Marine Energy Action Plan has allowed government and industry to discuss how to address the key issues for the development of this rapidly moving sector. Over the last year the Scottish Executive2 and the Department of Enterprise, Trade and Investment in Northern Ireland3 have published their own marine energy road-mapping reports. However, the Marine Energy Action Plan has considered the issues facing the sector at a UK level. Although the Executive Summary has been produced by DECC, it has been working in consultation with all the relevant stakeholders (see Annex A: members of marine energy action plan Group) to produce a realistic, practical and pragmatic document. Work under the Action Plan was split into five working groups: Technology Roadmapping; Environment, Planning & Consenting; Finance & Funding; Infrastructure, Supply Chain & Skills; and Tidal Range (which acted as a subgroup to include all of these areas of focus). Many of the technologies involved in developing tidal range projects are very different from those used for wave and tidal stream – construction being more akin to large civil engineering infrastructure. Because there are a number of areas where the barriers and challenges facing tidal range diverge from other marine renewables, the Marine Energy
1 UKERC, ETI Roadmap (2010) 2 FREDS Marine Energy Group – Marine Energy Road Map, http://www.scotland.gov.uk/Resource/Doc/281865/0085187.pdf 3 A Draft Offshore Renewables Strategic Action Plan 2009, http://www.offshorenergyni.co.uk/EnvironmentalReport.html 8 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Action Plan has considered the specific issues relating to tidal range separately and has developed sector-specific recommendations to address these. As a result of discussions in the working groups five high level themes emerged which focus on: • the need to prove the technology, particularly to stimulate Iong-term investor confidence; • providing the appropriate regulatory frameworks; • ensuring appropriate funding is in place for the sector (public and private); • co-operation and engagement across the sector and supply chain; and • the importance of interdependency of all these themes. Proving the Technology The sector requires technology that works and that can successfully and continuously operate in the harsh conditions of the marine energy environment. Wave and tidal stream are emerging technologies which are taking steps to prove their ability to harness the energy from the seas and estuaries. With regard to wave energy technologies, there are a plethora of devices and we are yet to see a convergence of ideas and a consolidation of the market towards design consensus. These different design concepts are so numerous in part because of the various locations at which wave energy can be generated; for example, offshore, nearshore and the range of different energy conversion approaches which are possible. Conversely, tidal stream devices have seen some aspects of design consensus occurring with a trend towards horizontal axis turbines. Overall, the development of
Construction of the 650kW Pelamis Mark I wave energy converter prototype Executive Summary 9
wave and tidal stream devices require cost reduction and further step changes in technology development thereafter. Cost reduction is likely be found through fundamental changes in the engineering design of devices; anchoring; more efficient use of materials; new and innovative ways of conducting installation, operation and maintenance; and increased efficiency of components. Traditional tidal range technologies (barrages in particular) use proven high- head turbine technologies, however even Marine Current Turbines’ 1.2MW SeaGen tidal turbine in Strangford Narrows, near Portaferry, some applications of lagoon and Northern Ireland impoundment structures are yet to be finalised. Hybrid tidal range technologies face the same challenges as wave and tidal stream and more environmentally-friendly and potentially commercially attractive low head turbines require considerable development attention. The Marine Energy Action Plan key recommendation for Technology Roadmapping theme is that the UK Government delivery partners continue to provide appropriate levels of support to ensure the effective and successful technology development by funding: • first and second generation sea trials of wave and tidal stream devices; • arrays of devices; and • development of novel tidal range technologies. More detail and other recommendations can be found in Section 2.1 and Section 2.5. Appropriate Regulatory Framework The regulatory framework informs the sector as to how it will be able to operate whilst providing the sector with transparency on the strategy and plans for UK marine energy development to see the long-term gain. It also provides the necessary protections against the potential adverse effects of deploying structures in the marine environment. The framework includes provision of a marine renewables-ready grid system, clearer marine planning processes and approaches to environmental monitoring and assessment, Strategic Environmental Assessment for wave and tidal energy (recently announced in March 2010 in England and Wales, and already completed for Scotland and Northern Ireland), and the potential opportunities for further commercial leasing. These all provide signals to encourage new investors to enter the industry. The implementation of the Marine and Coastal Access Act 2009 is also a major development in the sustainable management of the UK marine area. 10 Marine Energy Action Plan 2010 Executive Summary & Recommendations
The Marine Energy Action Plan key recommendation for the Environment, Planning & Consenting theme is that the UK Government set up and participate in a representative strategic coordination group of statutory agencies and other relevant stakeholders to produce a planning consenting roadmap that explores the key issues surrounding the deployment of devices. More detail and other recommendations can be found in Section 2.2 and 2.5. Financial Support Finance and funding is imperative to this developing sector and without significant investment from both public and private sources, the opportunity to harness the full potential of this sector will not be realised in the UK. The potential market size and growth opportunity should provide investors with a clear message that there is a long-term future for this marine energy industry. Leveraging finance from the investor community, utilities and major manufacturers will ensure a continued focus on reducing costs and the commoditisation of components for wave and tidal stream technologies in particular. Appropriate public funding is also very important and Government considers, that within the constraints of public spending rounds and departmental budgets, the immediate priority is to provide targeted capital support for applied research and development through to support for demonstration and deployment, which will focus on a small number of market-leading technologies to enable the consolidation and growth of the sector. Appropriate targeted support also exists for generic technology development to ensure continued cost reductions necessary for the sector. This would be combined with the use of appropriate longer- term market signals. An example of this is the Renewables Obligation which is the Government’s main mechanism for supporting renewable energy technologies. It works by placing an obligation on licensed electricity suppliers to produce a specified number of Renewable Obligation Certificates per MWh, which then increases annually, or risk paying a penalty. The overall objective for the support to provide sufficient technology push to progress devices through to early commercial stages whilst also providing a market pull and sufficient confidence to give the levels of investment needed to move to a large scale deployment phase. The Marine Energy Action Plan key recommendations for the Finance and Funding theme are that the UK Government: • seek to ensure that the appropriate levels of targeted funding are available, to bridge the technology market failures that exist in this developing sector (subject to the budgets in the next public spending round); • take account of evidence suggesting that commercial deployment of marine technologies may not be economic at current level of support in the scheduled Renewables Obligation (RO) banding review set to take place in Autumn 2010, while recognising that support levels also need to take into account the impact on energy consumers; and • build on existing dialogue between funding bodies and others (e.g. Low Carbon Innovation Group) by setting up a strategic coordination group that Executive Summary 11
encompasses Government and Devolved Administrations, Regional Development Agencies, Carbon Trust, TSB, ETI, EPSRC Supergen Marine to ensure that a strategic overview for Government funding exists and that value from Government expenditure is maximised. More detail and other recommendations can be found in Section 2.3 and 2.5. Supply Chain Co-ordination Co-operation, engagement and the building of meaningful partnerships across the marine energy sector and supply chain is vital to the industry. This will enable the sector to ready itself for commercialisation and large scale deployment of wave and tidal stream technologies and also for the development of tidal range sites. The extensive development of the supply chain (manufacturers, ports, vessels, transport infrastructure) alongside skills and education of the sector will be required to provide the necessary workforce for an ever-expanding marine renewables industry. There is also scope for cross-sector coordination on the development of environmental baseline data of early device deployment which could form a valuable sector-wide resource. The Marine Energy Action Plan key recommendation for the Infrastructure, Supply Chain and Skills theme is that the UK Government and all relevant stakeholders in the sector capitalise on opportunities for marine energy by learning from and building on synergies related to the skills and supply chain for offshore wind. More detail and other recommendations can be found in Section 2.4 and 2.5. Overall, it is important to recognise that none of these factors can be considered individually. They are all interdependent and require full engagement and exchange across the sector to ensure the full benefits are realised for the industry. There is an immediate need for everyone to work in tandem and this Marine Energy Action Plan outlines the key actions that the sector are all tasked to deliver. Full details of these are provided in Chapter Two. 12 Marine Energy Action Plan 2010 Executive Summary & Recommendations 1. Introduction 14 Marine Energy Action Plan 2010 Executive Summary & Recommendations
1. Introduction
1.1 Scope The UK is classed as the world leader in the development of marine renewable energy technologies, due to the high level of marine energy resource, its highly skilled expertise and the world-class testing facilities that are available and planned. With the exception of traditional tidal range high head turbine technologies, the embryonic status of the wave and tidal stream energy technology creates considerable challenges for its development. This Marine Energy Action Plan focuses on wave and tidal stream and tidal range technologies – using the phrase ‘marine energy’ to denote these generation technologies. However, this does not include marine biomass or ocean thermal energy conversion, osmotic pressure or offshore wind. It also does not have any specific references to the work relating to the feasibility study for Severn Tidal Power. It does however recognise that some of the infrastructure developments for our massive offshore wind programme will provide some of the building blocks for accelerating the exploitation of all our UK maritime energy resources. 1.2 The Vision and Opportunity It is envisioned that marine renewable energy could play an important role in the period to 2020 as the sector begins to roll out larger arrays of devices. This will be followed by mass deployment in the period beyond 2020 that will help to meet the Government’s policy for an 80% cut in carbon emissions by 2050 and which will create a whole new successful UK industry. Government agrees with the sectors assessment for wave and tidal stream that 1-2GW installed capacity could be achieved by 2020. Although aspirational and challenging, it is broadly realistic if all stakeholders are able to put in place the appropriate mechanisms to enable this level of deployment. From this it then provides a suitable platform on which to build larger scale deployment to 2030 and beyond. Similarly, if a good proportion of tidal range projects that are planned (e.g. Mersey, Solway), come to fruition, it could see the deployment level of 1GW by 2020 irrespective of any decisions on the Severn Estuary. To do this, there is an immediate need to enable the sector to take advantage of the UK’s strong position by creating the opportunity for the supply chain and industry in this maritime sector. Subsequently, there is a clear case to support marine energy development because of a number of factors including: • Level of energy resource; • Benefits to the Economy, Industry & Employment; • Low Carbon Electricity; and • Energy security. 1. Introduction 15
The 650kW Pelamis wave energy converter undergoing sea trials
1.2.1 The Resource The UK leads the world in marine technology and has world-class resources in all of the three marine sectors: wave, tidal stream and tidal range. Wave and tidal energy have the potential for bulk electricity supply in the UK and work carried out by the RenewableUK (formerly BWEA) and The Carbon Trust has suggested that marine (wave and tidal stream) energy may have the potential to meet 15-20% of the UK’s current electricity demand in the first main commercial exploitation phase.4 The full extent of the wave and tidal stream resource which can be exploited for energy generation is dependent on many factors (e.g. turbine interactions, device spacing and cumulative impact) and as technologies develop, understanding of the available resource will improve. Estimates indicate that the practical resource level for wave energy in the UK waters is in the order 50 TWh/year5, (which is equivalent to the annual electricity demand of approximately 11 million UK households6) but with a higher technical potential. The total UK tidal stream potential is indicated to be in the order of 17TWh/year7,8,9 (which is equivalent to the annual electricity demand of approximately 4 million UK households10). This is derived from a method that provides the most
4 BWEA, Path to Power, 2006 5 The Carbon Trust (2006) Future Marine Energy 6 Calculated by dividing practical resource level for wave (TWh/yr) by average annual UK household electricity demand (Source: DECC, Regional and Local Authority Electricity Consumption Statistics 2005-2008, http:// www.decc.gov.uk/en/content/cms/statistics/regional/electricity/electricity.aspx) 7 SKM (2008) Quantification of Constraints on the Growth of UK Renewable Generating Capacity 8 Black & Veatch (2005) Phase II UK Tidal Stream Energy Resource Assessment, Carbon Trust 9 Sustainable Development Commission (2007) Turning the Tide, Tidal Power in the UK, 10 Calculated by dividing total tidal stream potential (TWh/yr) by average annual UK household electricity demand (Source: DECC, Regional and Local Authority Electricity Consumption Statistics 2005-2008, http://www.decc. gov.uk/en/content/cms/statistics/regional/electricity/electricity.aspx) 16 Marine Energy Action Plan 2010 Executive Summary & Recommendations
conservative estimate11 and although there are a number of methodologies to estimate the values of tidal stream resource, it is accepted by the sector as the appropriate analysis technique in some tidal energy conditions. Other methods of estimating the tidal stream resource result in higher technical potentials12,13,14,15. There are uncertainties regarding these pieces of work but the potential resource they suggest is sufficiently large to justify urgent further research by Government. Overall, the potential opportunities presented by this marine resource has led to the UK becoming a focus globally for the development and deployment of wave and tidal stream technologies. The UK also has significant tidal range resource with the world’s second highest tidal range site being located in the Severn Estuary with a benchmark energy output of 17TWh/yr from a Cardiff-Weston barrage. The other highest resource sites in the UK include the Mersey (1.4TWh/yr), Duddon (0.212TWh/yr), Wyre (0.131 TWh/yr) and Conwy (0.06TWh/yr). Through these tidal range projects and others that there is an opportunity to potentially provide up to 13% of the UK’s electricity generation from tidal range alone16. Maps of the UK’s wave, tidal stream and tidal range resource from the Marine Atlas (2008) are given in Figures 2, 3 and 417. Figures 2, 3 and 4 Mean Spring Tidal Range, Mean Spring Tidal Stream and Annual Mean Significant Wave Height17
11 Blunden, L. S., Bahaj, A.S., (2006) Tidal energy resource assessment for tidal stream generators 12 Houlsby, G.T., Oldfield, M.L.G., Draper, S., “The Betz Limit and Tidal Turbines,” Report Commissioned by Lunar Energy, 2008. 13 Taylor, G.I., “Tidal Friction in the Irish Sea,” Philosophical Transactions of the Royal Academy, 1918. 14 Salter, S.H., Taylor, J.R.M.T., (2007) Vertical-Axis Tidal-Current Generators and the Pentland Firth. Proceedings of the Institution of Mechanical Engineers, Part A: Journal of Power and Energy, 15 David J.C. MacKay (2008) “Sustainable Energy – without the hot air”. UIT Cambridge, 2008. ISBN 978‑0‑9544529-3-3. Available free online from www.withouthotair.com. 16 Sustainable Development Commission (2007) Turning the Tide, Tidal Power in the UK, 17 Department of Business, Enterprise & Regulatory Reform (BERR) (2008) Atlas of UK Marine Renewable Energy Resources http://www.renewables-atlas.info/ 1. Introduction 17
1.2.2 Benefits to the Economy, Industry & Employment The UK has a unique opportunity to capture the benefits of this new sector through the entire supply chain; from research and development through to engineering, manufacturing, installation, operation and maintenance. This builds on our maritime tradition, most recently expressed over the past 40 years in oil and gas exploration and currently with offshore wind developments. The development of marine technologies will lead not only to a substantial marine energy generation industry in the UK, but more importantly to a substantial supply chain. If the UK’s technological lead is maintained, a large part of that supply chain will be based in the UK resulting in an attractive environment for domestic or inward investment in manufacturing Aquamarine’s Oyster device being readied for deployment facilities. Development of the domestic facilities will also provide significant opportunity for exports of both technology and knowledge. With regards to employment, in the longer term the potential for jobs arising from the wave industry alone will continue to increase, peaking at 16,000 in the 2040s with about 25% of them supporting UK exports18. Many of the leading device developers are from the UK and they enjoy a comparative advantage due to the extensive domestic knowledge and experience. The UK has engineering and manufacturing expertise in the complex systems required for the power conversion systems, which are high value and can be exported globally. The UK’s offshore experience of those industries in the North Sea shows that they are clearly valuable for wave device operations and maintenance and also for science and engineering expertise. This allows the strong, already embedded UK workforce to transfer skills across to this developing sector and the ability to build on the supply chain and infrastructure being created for offshore wind.
1.2.3 Low Carbon Electricity & Energy Security If marine energy technologies can be successfully developed they have the potential to make a significant contribution towards achieving our medium and longer terms renewable energy and emissions reduction goals. A mid-level deployment projection
18 Carbon Trust Focus for Success 2009 18 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Inspection of SeaGen’s 16m turbine blades at Harland and Wolff shipyards, Belfast of 2.6GW installed capacity of wave and tidal stream by 2030 (on the basis of fairly conservative assumptions) could provide carbon abatement benefits of 17Mt of CO2, valued at £520million to 2030 (with the central projected EU-ETS carbon price). By
2050, wave and tidal stream could save 61Mt of CO2 valued at £1.1bn. With regards to tidal range the mid-level deployment projection of 950MW of non-Severn estuary tidal 19 range capacity could save a further 9Mt of CO2 by 2050 valued at £330m . The delivering of low carbon electricity through a diverse mix of renewable energy technologies is indicated in the Low Carbon Transition Plan published in 2009 to provide a mechanism that helps the UK to move to a low carbon economy. It delivers energy security by reducing the risk of problems that may arise with over-reliance on one type of technology or fuel. Marine energy technologies are seen to diversify the energy mix in a longer term strategy, as they are only expected to contribute up to 3% of renewable electricity in 2020. However, the UK annual renewable energy target of 15% by 2020 is extremely challenging and every few terawatt hours of generation will be important in trying to meet it. As referenced in section 1.3, the extent of the resource available is extensive and provides a domestic source that reduces the reliance on imported fuels, so improving the UK’s security of energy supply. Although marine energy is intermittent, the benefits of tidal energy is that it is predictably intermittent (or eminently predictable) so it can form part of the energy system’s baseload to provide bulk electricity to the grid, unlike offshore wind whose unpredictable intermittency provides a greater challenge with regard to balancing
19 Ernst & Young, Black & Veatch Economics of Wave and Tidal Energy (see Annex B for more information). 1. Introduction 19
electricity supply and demand. Wave energy, although still intermittent is much more predictable over longer periods than, for instance, wind giving more scope for short term planning of grid usage Having a diversified renewables mix with marine energy as well as wind intermittent generation will reduce the need for back-up and reserve capacity, and hence lead to fuel and CO2 savings. According to research completed by Redpoint20, the use of marine energy will allow for reduction in extra renewable capacity required to reduce wastage of when generation exceeds demand, which could potentially save up to around £900m a year in costs. However, there is still a need to strike a balance between making the most of the UK marine opportunity and finding solutions to the challenges it presents. These challenges are described below. 1.3 The Challenges To enable an ambitious and challenging deployment level for marine energy technologies there are a number of hurdles that the sector faces, which the Marine Energy Action Plan workstreams have targeted. Technology Roadmap The technical potential of wave and tidal stream devices still needs to be proven and there is still a long way to go until the sector reaches the technical potential for large scale deployment. There have been a number of technological successes with getting devices in the water and this route towards commercialisation needs to continue. There are however, a number of other factors that have a direct role to play in enabling large scale deployment which will require addressing before the creation of a potentially significant industry. These include: Environment, planning and consenting The new marine planning system will guide and direct decision-making but a continued clear process for planning and consenting frameworks is required in a timely manner to ensure the sector does not experience delays and can continue to develop. New development consenting systems under the Planning Act 2008 and Marine and Coastal Access Act 2009 provide opportunities for more streamlined processes that are more transparent, efficient and effective, and these need to be fully realised as part of the new legislative framework. The identification and development of sites for the deployment of marine energy will also give the right signals and confidence to the sector, and will encourage new investors. Finance and funding The sector requires a significant level of financial support both public and private to enable initial prototype deployment and of large-scale arrays and significant projects. The costs associated with developing marine technologies are particularly high for a number of reasons. Testing and trialling in the marine environment is expensive and the harsh sea conditions create additional risks and difficulties.
20 Redpoint, 2009, The benefits of marine technologies within a diversified renewable mix. Saving based on a renewables mix of 60:40 wind to marine generation levels (or a 40:60 ratio), compared to a 100% wind generation renewables mix. 20 Marine Energy Action Plan 2010 Executive Summary & Recommendations
A full-scale prototype test could potentially have capital costs in the range of £10million or more, so it is unlikely that without further support the sector can make the most of the opportunity that this marine energy resource presents. Providing extra support to marine and thereby inducing its subsequent deployment would require substantial resources in the medium to long term to be made available. Initially the main levels of support would be provided via targeted capital grants to develop the technology through to commercial demonstration. Later, subsidy in the commercial deployment phase would be largely through market support mechanisms (e.g. Renewables Obligation). These main costs are expected to occur as the deployment levels step up. Those initial deployments will then look to see a reduction in costs with benefits from the economies of scale and learning curves associated with large scale deployment beyond 2030. However, those actual costs will depend on a large number of factors, including how early technological and engineering barriers are overcome, the development of supply chain capacity, continued technical progress and deployment rates. One of the key challenges facing mainstream deployment of marine energy is the need to reduce costs of generation to levels comparable to other renewables in the longer term. As with any emerging technology, initial costs will be high until cost reductions through learning and economics of scale are realised. This is a model that has been followed by other technologies such as wind and solar. DECC and the Scottish Government commissioned Black & Veatch and Ernst & Young to collect data on the current generation costs of marine technologies and to model the development of these technologies from now to 2050. There is a very large amount of uncertainty surrounding such projections which go so far out into the future. The results on the levelised costs21 of wave and tidal stream and tidal range are provided in Annex B: Economics of Wave and Tidal Energy and should be regarded as illustrative. However, the results do show some encouraging figures and recognise this trend for significant reduction in costs over time. Infrastructure, supply chain and skills A marine renewables-ready UK grid system is essential for the level of deployment required to help meet climate change targets, however marine renewables also requires a significant building-up of the supply chain infrastructure and the appropriate skills to enable it. The supply chain requirements aim to build on the considerable expertise available in the UK’s historic maritime sector, promoting both domestic investment in facilities associated with the sector (including ports and vessels, manufacturing and engineering) whilst also boosting both the export of technology and knowledge worldwide. Tidal Range The nature of conventional tidal range projects, especially the construction of tidal barrages and lagoons present different challenges to those faced by wave and tidal stream. Financing, consenting and licensing are likely to be comparable across all
21 Levelised costs refer to the cost of the energy-generating system including all the costs over its lifetime, e.g. initial investment, operations and maintenance, cost of fuel, cost of capital 1. Introduction 21
the marine sectors but there are significant areas of difference. Barrage construction is more akin to large scale civil engineering infrastructure development than the deployment of wave or tidal stream arrays. Because of this supply chain restrictions on material availability (e.g. cement and aggregates) and availability of civil and maritime construction services are significant risks in these projects. The environmental risks of high-head turbine tidal range developments are also perceived as being greater than wave and tidal stream Open Hydro’s prototype tidal turbine being tested projects. In particular changes to the at the European Marine Energy Centre’s Fall of marine environment can cover a much Warness tidal testing site wider area, especially the effects on the shoreline of the impounded area arising from changes to the tidal cycle. The recommendations set out in the Marine Energy Action Plan largely apply across the marine energy sector. However, where there are issues which are unique to tidal range projects, these have been considered separately and sector specific recommendations produced for tidal range. Consequently, these hurdles and the specific challenges that the marine energy sector faces has been the subject of considerable discussion within the Marine Energy Action Plan meetings. The following summary of recommendations sets out the actions that the Government and sector will seek to deliver over the forthcoming development period. 22 Marine Energy Action Plan 2010 Executive Summary & Recommendations 2. Summary of Recommendations 24 Marine Energy Action Plan 2010 Executive Summary & Recommendations
2. Summary of Recommendations
The recommendations below are an amalgamation of requirements by the many players across the public private sector (see Annex A for Marine Energy Action Plan members), flagging up the main barriers to moving wave and tidal energy forward into commercial deployment and considers recommendations of what needs to be done to overcome them. 2.1 Technology Roadmapping for Wave and Tidal Stream At the highest level, technology development and deployment will require measures to address the underpinning generic technical challenges. These can be summarized as: predictability, manufacturability, installability, operability, scalability, survivability, reliability, and affordability. These are shown in Figure 4 below.
Figure 5 Generic Challenges involved in Marine Energy Development (source adapted from UKERC)
Predictability
Affordability Manufacturability
Reliability Challenges Installability
Survivability Operability
Scalability
In relation to this, for the effective development of marine technology there is a need to strike a balance between technology-push and market-pull mechanisms, to allow for design consensus, but at the same time avoiding ‘lock-out’ of longer-term breakthrough technologies which may allow for step-change performance and cost improvements. Policy has an important role to play in the meeting the roadmap to large scale deployments. It is vital that both the overall Marine Energy Action Plan and the technology roadmap chapter are used to inform policy development and 2. Summary of Recommendations 25
therefore provide guidance for funding bodies in terms of allocation of development funding. To ensure effective and successful device deployments and underpin efficient cost reductions for the sector, the Marine Energy Action Plan recommends that UK Government delivery partners such as UK Funding Councils, The Carbon Trust, TSB, ETI and the Devolved Administrations continue to support technology development (at both the device and enabling technology level, throughout the RD&D cycle) in the following areas • Device and system demonstrators: by funding both first and second generation sea trials as well as arrays of devices. It is also imperative that cost effective installation and recovery Construction of Aquamarine’s Oyster device methods are developed along with at Nigg, Scotland appropriate operation and maintenance techniques. • Device-components: by supporting the advancement of performance, reliability and survivability of projects through funding the development of a range of enabling components (e.g. in areas such as foundations and moorings; power take off technology and wet-mateable connectors- to ensure a cost effective coupling to grid). • Guidelines and standards: For the overall sector to progress, guidelines and best practice should be established and supported. This will lead to the UK marine sector being recognised by International Standards Bodies (e.g. International Electrotechnical Commission) that in turn will enable the efficient export of UK marine energy technology into international markets. The sector should also determine what critical standards need to be developed and to what timelines. • Tool development by exploring with industry how to develop a range of modelling tools in areas such as resource analysis tools that are essential to underpin development. This applies to both devices and projects through to design optimisation tools to facilitate the manufacturability and affordability to technology. Finally, it must be noted that significant technology development programmes are progressing internationally. The Marine Energy Action Plan recommends that Government and its delivery partners engage and collaborate with international funding bodies as appropriate to ensure a cohesive and coherent approach to technology development 26 Marine Energy Action Plan 2010 Executive Summary & Recommendations
2.2 Environment, Planning and Consenting The Marine Energy Action Plan recommends that: • The full Strategic Environmental Assessment (SEA) for Wave and Tidal Energy in English and Welsh waters as part of the UK Offshore Energy 2 SEA that the Government launched in March 2010 is delivered in a timely manner. The Marine Energy Action Plan recommends that DECC: –– treats the development of the Marine elements of the SEA as a priority and ensures that it is completed and in place within the expected Spring 2011 timetable, and –– ensures that the work undertaken in the SEA relating to environmental monitoring and effects is fed in to the Action Plan workstream on developing a pragmatic and proportionate approach to the environmental monitoring of marine energy deployment. • that all relevant stakeholders fully engage in the development of the UK Offshore Energy 2 Strategic Environmental Assessment to ensure the views of the industry are fed into the process; and In addition, the Marine Energy Action Plan endorses that subject to a marine energy SEA for the relevant areas being undertaken The Crown Estate will look at opportunities for commercial leasing opportunities in England and Wales. In the interim The Crown Estate will consider demonstration arrays up to 10MW or 20 devices on a case by case basis. The Crown Estate is initiating a programme of activities relating to commercial offshore renewable energy leasing in Northern Ireland and Scotland following the completion of relevant SEAs in these countries. The Marine Energy Action Plan also recommends that: • there is engagement between Government, Devolved Administration’s, Statutory Agencies, Academia, Technology Developers, Utilities, and the Marine Management Organisation to ensure that the needs of all are taken in to consideration in the Marine Policy Statement (see pre-consultation document paper on the draft UK Marine Policy Statement22); • the UK Government and Welsh Assembly Government should ensure that it prepares a National Policy Statement for marine energy, or updates the Renewable Energy NPS as soon as the necessary information is available to develop a plan or programme for the deployment of marine energy in the UK; • that Marine Scotland and the MMO liaise to take advantage of any experiences learnt from the Marine Scotland setting-up processes to enable the arrangements of the new marine planning system to run smoothly;
22 http://www.defra.gov.uk/environment/marine/legislation/planning.htm 2. Summary of Recommendations 27
Aquamarine’s Oyster wave energy device being tested at the European Marine Energy Centre, Orkney • the MMO seek clarity and unity with The Crown Estate regarding baseline information on wave and tidal resource areas, consents and leasing; • Government and Devolved Administrations make the preparation of guidance for project developers regarding the process for consenting and licensing a priority; • All stakeholders work with the Statutory Agencies to clarify those areas of greatest importance for future energy extraction so that there is awareness across the sector in the designation of Marine Conservation Zones and Marine Protection Areas; and • that DECC continues to explore with all relevant stakeholders how to create and maintain a sector-wide sharing of environmental data and information. To reflect the need for greater synergies across regulatory and industry bodies, Government (including DECC, DEFRA, RDAs, Devolved Administrations) and The Crown Estate should set up and participate in a representative strategic coordination group including the MMO, Marine Scotland, CCW, Natural England, Scottish Natural Heritage, Northern Ireland Environment Agency and The Environment Agency. This group would be tasked to: • produce a planning/consenting roadmap for marine renewables in all their forms; • explore with the group what options may be available to minimise costs associated with environmental monitoring; • determine what strategic environmental research could aid the industry and in doing so identify: –– appropriate environmental data collection methodologies including consideration of a ‘deploy and monitor’ approach, as well as consideration for development timescales; –– how to make better use of existing modelling and decision support tools; and 28 Marine Energy Action Plan 2010 Executive Summary & Recommendations
–– progress and encourage research scientists to actively develop predictive tools appropriate for use in the marine renewable energy sector including those to address impacts of large scale device arrays. 2.3 Finance and Funding The Marine Energy Action Plan recommends that Government and Devolved Administrations seek to: • push cost-effective and viable marine energy technologies through to commercialisation and should consider, within the constraints of the public spending rounds and Departmental budgets how best funding should be applied to facilitate the development of the marine energy sector. The Government considers that the immediate priority for public funding is believed to be the provision of targeted capital grants for applied research and development through to support for demonstration and deployment. This will help to focus on a small number of market-leading technologies to enable the consolidation and growth of the sector. • retain the current UK-wide MRDF mechanisms or similar instrument as was stated in the UK Renewable Energy Strategy published in July 2009 (subject to the budgets in the next public spending round) and to extend its operation to cover new devices reaching demonstration stage in the period 2011–2014. • ensure that the appropriate levels of targeted funding (e.g. grants for R&D and demonstration, venture capital) are available to bridge the technology market failures that exist in this developing sector, subject to the budgets in the next public spending round. • take account of evidence suggesting that commercial deployment of marine technologies may not be economic at current level of support in the scheduled Renewables Obligation (RO) banding review set to take place in Autumn 2010, while recognising that support levels also need to take into account the impact on energy consumers. • build on existing dialogue between funding bodies and others (e.g. Low Carbon Innovation Group) by setting up a strategic coordination group that encompasses Government and Devolved Administrations, Regional Development Agencies, Carbon Trust, TSB, ETI, EPSRC Supergen Marine to ensure that a strategic overview for Government funding exists and that value from Government expenditure is maximised. • continue its role to leverage venture capital and private equity funding in to the sector whilst also considering how best to manage its resources to maximise the private capital available. • highlight wave or tidal as one of the three project applications for funding under the European Commission in the New Entrants Reserve. This Reserve (€300million of 2. Summary of Recommendations 29
allowances) is available until 31 December 2015 (administered by the European Investment Bank) to help stimulate the construction and operation of up to twelve commercial demonstration projects, which although aimed at carbon capture and storage (CCS) projects it also applies to demonstration projects of innovative renewable energy technologies, of which include both wave and tidal stream. In addition to this the Marine Energy Action Plan recommends that: • Government and the marine energy industry should jointly seek to obtain maximum benefit from EU funding programmes. • technology developers and their utility partners where appropriate Aquamarine’s Oyster wave energy device being work together in the next 6 months to deployed at the European Marine Energy Centre’s Billia Croo wave testing site prepare the information which will be necessary for the scheduled RO review, in order to provide the most accurate information relating to the technologies to ensure the right level of ROCs is set. • investment community (angel, venture capital, private equity) with sufficient capital should be encouraged or continue to support technology developers during their prototype development. • major manufacturers and utilities should be encouraged or continue to invest their capital and skills to the marine energy industry throughout the next phasing of development and towards the consolidation and growth of the sector and in particular to fund initial array development. • manufacturers and relevant supply chain move in as quick as possible to take the wave and tidal technologies forward to deployment scale, for example, by helping to develop the commoditisation of components, with opportunities taken where possible to build on the UK infrastructure being created to support offshore wind developments. 30 Marine Energy Action Plan 2010 Executive Summary & Recommendations
2.4 Infrastructure, Supply Chain & Skills The Marine Energy Action Plan sets out with the following recommendations that: • although the Electricity Networks Strategy Group (a network industry group co- chaired by DECC and Ofgem) concluded in its report in 2009 that no additional reinforcements would be required on the main transmission system (beyond those already identified to meet the potential extra demand from wave and tidal), it is necessary for the relevant stakeholders to continue to outline concerns and to exchange information relating to grid systems through the existing communications channels and the Marine Energy Action Plan working groups. • Government and private sector research programmes (in particular those aimed at supporting the renewable energy sector managed by the Offshore Renewables Research Steering Group) should ensure that marine energy is comprehensively reflected within their research priorities. • the Ports Study for Offshore Wind (2009) undertaken by DECC and any continuing work on the requirements for offshore wind as part of this study would also consider marine energy, to enable the sharing of infrastructure. • developers outline their requirements for ports infrastructure (including transport considerations) to the ports associations and related companies operating in this domain in addition to the Regional Development Agencies and the Devolved Administrations. • Port operators consult with wave, tidal stream and tidal range developers regarding their needs prior to port modification or expansion. • Government, Devolved Administrations and all relevant stakeholders in the sector capitalise on opportunities for marine energy by learning from and building on synergies related to the skills and supply chain for offshore wind. • Government, Devolved Administrations, developers, other stakeholders and other sector/environmental groups actively engage in the existing marine, renewable energy and environmental and infrastructure fora (e.g. Nautical Offshore Renewable Energy Liaison Forum, Marine Industries Leadership Council) to identify critical engagement opportunities and ensure that the specific needs/plans of the marine industry are reflected in their activities/discussions. • DECC engage with DfT and other relevant departments on development of the GB National Policy Statement for ports. • Government, Devolved Administrations and Regional Development Agencies capitalise on the current skills base already established, notably from the offshore wind, oil and gas, fisheries, shipping, by continuing to employ a strategic approach to transfer skills and develop a highly experienced workforce for the emerging industry (e.g. the Centres of Excellence and Marine Skills Centres as part of initiatives by the 2. Summary of Recommendations 31
south west England RDA and through initiatives in the forthcoming Low Carbon Skills Consultation led by DECC). • all relevant stakeholders should provide collective and formalised responses to the forthcoming Low Carbon Skills Consultation led by DECC. • DECC engage with relevant departments on the further development of the forthcoming Low Carbon Skills report. • technology developers, utilities and other relevant parties share knowledge and information on vessel requirements to provide a more streamlined process with regards to vessel availability. It has also been suggested that the sector is encouraged to look at the opportunities for the reuse of decommissioned vessels. • manufacturers and relevant supply chain become more aware of the requirements of the industry, and with the knowledge that it will require some bespoke equipment, manufacturing facilities and a strong skills base from which to escalate the industry forward. • all relevant stakeholders should provide information to higher education careers advisers, allowing through-flow of an industry relevant work force. • the TSB continue to promote wave and tidal energy activities through its Knowledge Transfer Network. This will help to reflect the needs of the members and can focus on enabling innovation through the networks, which can then result in a greater number of Knowledge Transfer Partnerships (KTP). • technology developers use the KTP mechanism to gain knowledge on a variety of issues including those that they wouldn’t have an in-house capability to address. • there is seamless support provided from developers and utilities to the present and forthcoming UK test facilities including EMEC, NaREC, Wave Hub and other tank testing facilities. • EMEC, NaREC, Wave Hub and other tank testing facilities ensure that sufficient support is given to developers and utilities for project delivery at those sites through tools, advice and device ‘clinic’ support. • there is continued collaboration between technology developers, EMEC and manufacturing companies to enable a speedier commoditisation of standard sector-components which can then be used to establish consistency and to create a viable cost base. 32 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Aerial view of Port of Liverpool on the Mersey Estuary, where a feasibility study has been undertaken for a tidal range development 2.5 Tidal Range As part of the review of Renewables Obligation banding scheduled to commence in October 2010 the Action Plan recommends that Government and Devolved Administrations should also take into consideration whether there any emerging tidal technologies that have not already been captured by the definitions as set out in the current bands of the Renewables Obligation Order 2009. The full Strategic Environmental Assessment (SEA) for Wave and Tidal Energy in English and Welsh waters as part of the UK Offshore Energy 2 SEA that the Government launched in March 2010 is delivered in a timely manner. The Marine Energy Action Plan recommends that DECC: –– treats the development of the Marine elements (including tidal range) of the SEA as a priority and ensures that it is completed and in place within the expected Spring 2011 timetable, and –– ensures that the work undertaken in the SEA relating to environmental monitoring and effects is fed in to the Action Plan workstream on developing a pragmatic and proportionate approach to the environmental monitoring of marine energy deployment. 2. Summary of Recommendations 33
• all relevant stakeholders fully engage in the development of the UK Offshore Energy 2 Strategic Environmental Assessment to ensure the views of the industry are fed into the process; and • Government and Devolved Administrations include the full details and impacts of tidal range developments in the UK Offshore Energy 2 Strategic Environmental assessment that is to be carried out, including lessons learned from work carried out by DECC in relation to the Severn Tidal Power Feasibility Study. In addition, the Marine Energy Action Plan endorses that subject to a marine energy SEA for the relevant areas being undertaken The Crown Estate will look at opportunities for commercial leasing opportunities in England and Wales. In the interim The Crown Estate will consider demonstration arrays up to 10MW or 20 devices on a case by case basis. The Crown Estate is initiating a programme of activities relating to commercial offshore renewable energy leasing in Northern Ireland and Scotland following the completion of relevant SEAs in these countries. The Marine Energy Action Plan also recommends that Government and Devolved Administrations seek to: • consider the need for further grant funding of novel tidal range technologies in its upcoming spending review processes; and • promote collaborative work between Government, Devolved Administrations, project developers, statutory consultees and other stakeholders to understand current technologies and methodologies that seek to reduce environmental impacts of tidal range whilst work on future technologies and methods also continues to progress. The Action Plan recommends that DECC, relevant departments and stakeholders include the needs of the tidal range sector in any relevant initiatives aimed at addressing skills and supply chain issues in the renewables sector, including the wider construction and other issues specific to tidal range developments. The Action Plan should also ensure that the needs of the tidal range sector are fully integrated in proposals and activities arising from the recommendations in this document. In particular, those that also apply to tidal range include recommendations that: • projects identified by the private sector should have the aim of delivering maximum affordable energy with acceptable impacts on the environment whilst also clearly communicating both the costs and benefits arising from the project. This should allow potential partners, funders and regulatory authorities make more effective decisions on prioritising involvement in/approval of schemes. Information should include carbon reduction targets, calculations of carbon abatement and lifecycle costing in comparison with other forms of energy generation; balancing these against the cost (e.g. in terms of finance and funding, and environmental impact). 34 Marine Energy Action Plan 2010 Executive Summary & Recommendations
• technology developers ensure future proposals for tidal range energy projects show their clear economic, social and environmental effects through the fostering of strong relationships with national, regional and local authorities, and public/private partnership arrangements. This will ensure that project developers will give due consideration to all those relevant policies and objectives. • technology developers and their utility partners where appropriate work together in the next 6 months to prepare the information which will be necessary for the scheduled RO review, in order to provide the most accurate information relating to the technologies to ensure the right level of ROCs is set. • Government and Devolved Administrations takes into account evidence suggesting that commercial deployment of marine technologies may not be economic at current level of support in the scheduled ROC banding review set to take place in Autumn 2010, while recognising that support levels also need to take into account the impact on energy consumers. • All relevant stakeholders should provide information to higher education careers advisers, allowing through flow of an industry relevant work force. • Government, Devolved Administrations and Regional Development Agencies capitalise on the current skills base already established, notably from the offshore wind, oil and gas, fisheries, shipping, by continuing to employ a strategic approach to transfer skills and develop a highly experienced workforce for the emerging industry (e.g. the Centres of Excellence and Marine Skills Centres as part of initiatives by the South West England RDA, and through initiatives raised in the forthcoming Low Carbon Skills Consultation led by DECC). • Developers outline their requirements for ports infrastructure (including transport considerations) to the ports associations and related companies operating in this domain in addition to the Regional Development Agencies and Devolved Administrations. • Port operators consult with wave, tidal stream and tidal range developers regarding their needs prior to port modification or expansion. • DECC engage with DfT and other relevant departments on development of the national policy statement for ports. • that the UK Government and Welsh Assembly Government should ensure that it prepares a National Policy Statement (NPS) for marine energy, or updates the Renewable Energy NPS as soon as the necessary information is available to develop a plan or programme for the deployment of marine energy. • Government, Devolved Administrations and private sector research programmes (in particular those aimed at supporting the renewable energy sector managed by the Offshore Renewables Research Steering Group) should ensure that 2. Summary of Recommendations 35
the needs of the tidal range sector are comprehensively reflected within their research priorities. • that the Ports Study for Offshore Wind (2009) being undertaken by DECC and any continuing work on the requirements for offshore wind as part of this study would also consider marine energy, to enable the sharing of infrastructure when marine projects are at a stage to fully commercialise. • that Government, Devolved Administrations and all relevant stakeholders in the sector capitalise on opportunities for marine to learn from and build on synergies related to the skills and supply chain for offshore wind. • Government, developers, other stakeholders and other sector/environmental groups (e.g. NOREL) actively engage in the existing marine, renewable energy and environmental fora to identify critical engagement opportunities and ensure that the specific needs/plans of the marine industry are reflected in their activities/ discussions. • Government explore with the relevant stakeholders how to create and maintain a sector-wide sharing of environmental data and information. 36 Marine Energy Action Plan 2010 Executive Summary & Recommendations 3. Next steps & Further Work 38 Marine Energy Action Plan 2010 Executive Summary & Recommendations
3. Next steps & Further Work
From its inception the Marine Energy Action Plan was seen as the first step in an ongoing process which will continue to inform and guide the development of the marine energy sector. The recommendations listed here represent only the initial stage of this process. It will be necessary for Government and the members of the Marine Energy Action Plan (see Annex A) continue to assess how all parties are progressing against the Action Plan recommendations and to continue to revise them in the light of industry development and events. The forward process of the Action Plan will include the following: 3.1 Immediate tasks: DECC along with Action Plan members will continue to compile the findings of this initial phase of the Action Plan into a standalone document, which will expand on and provide background to the Action Plan recommendations to form the “Preliminary Findings Of The Marine Energy Action Plan 2010”. DECC anticipate releasing this document in a draft, work-in-progress form on the Marine Energy Action Plan pages of the DECC website in late March 201023. The findings document should then be completed in conjunction with Marine Energy Action Plan members and to be available in final form by Summer 2010. The Marine Energy Action Plan members will need to consider the recommendations made within this document to produce a “Prioritisation and development timeline” to determine the timescales within which the recommendations of the Action Plan will need to be implemented and carried out. This should be mapped against anticipated milestones to create a critical path for development of the sector. This task should be carried out during the six months following the publication of the Marine Energy Action Plan recommendations. 3.2 Ongoing tasks: Annual review, update and revision of the Marine Energy Action Plan: DECC, in cooperation with other public sector partners, the private sector and stakeholders should publish, annually, a review of progress against the recommendations in the Action Plan. This review will include updates to existing recommendations, proposal of new recommendations, a summary of progress in the sector throughout the year and revision of the Action Plan timeline.
23 Marine Action Plan website: http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/ renewable/explained/wave_tidal/funding/marine_action_/marine_action_.aspx 3. Next steps & Further Work 39
The first review will be published by DECC in Spring 2011 and on an annual basis thereafter. Other ad hoc and ongoing tasks: Other tasks will be added in response to need arising in the course of work on the Action Plan and events affecting the development of the sector. 40 Marine Energy Action Plan 2010 Executive Summary & Recommendations Annex A: Members of the Marine Energy Action Plan 42 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Members of the Marine Energy Action Plan Steering Group Organisation Name Aquamarine Power Neil Davidson Atlantis Resources Corporation Mike Smith Countryside Council for Wales (CCW) Andrew Hill Department for Business Innovation Janice Munday, Sunethra Mendis & Skills Energy Technologies Institute Richard Knight E.on Engineering Ltd Dr Tim Forrest Environment Agency Stephen Oates HM Treasury Jon Parker International Power Steve Riley Marine Current Turbines Peter Fraenkel Natural England Rachel Bathurst North West RDA Joe Flanagan Ocean Power Technologies Paul Jordan Peel Holdings Iain Taylor Pelamis Max Carcas Renewables Advisory Board Marine Group Andrew Mill RenewablesUK (formerly British Wind Oliver Wragg Energy Association) Renewable Energy Association Gaynor Hartnell Rolls Royce/Tidal Generation Limited Ged Heffernan Scottish and Southern Energy Will Steggals Scottish Executive Neal Rafferty Siemens Mike Rolls South West RDA Claire Gibson The Carbon Trust Matthew Spencer, Stephen Wyatt The Crown Estate Martin Simpson Technology Strategy Board Derek Allen TUC Matt Dykes UK Energy Research Centre Henry Jeffrey Welsh Assembly Government Ron Loveland Scottish Power Mandy Gloyer Annex A: Members of the Marine Energy Action Plan 43
Marine Energy Action Plan Working Group Members (including drafting contributors) Organisation Name Associated British Ports (ABP) Chris Willow, Alex Pepper, Alys Mitchell ABPmer Bill Cooper AEA James Craig Alstom Mike Griffiths, Andy Compton Aquamarine Power Sian McGrath Atkins Janette Shaw Atlantic Resource Corporation Mike Smith, Ed Rollings, Francesca Wiggins AWS Ocean Simon Grey BAE Systems Chris Skinner, Geoff Butler Bergensis Capital Frederick Mowinckle British Ports Association David Whitehead Countryside Council for Wales (CCW) Andrew Hill, John Hamer, Kate Smith, Sarah Wood Checkmate Sea Energy/Anaconda Des Crampton Centrica Energy Nick Barnett Chamber of Shipping Robert Ashdown Crown Estate Danielle Lane, David Tudor Department for Business Innovation Patricia Judd, Peter Joyce, & Skills (BIS) Alesha de-Freitas, Ann-Therese Farmer Department for Energy & Climate Trevor Raggatt, Kate Payne, Alan Morgan Change (DECC) Department for Food and Environment Sharon Wort, Amy Holmes (Defra) Department for Transport (DfT) Robert Davies, Colin Morris Department for Enterprise, Trade & Barbara Swann Investment Northern Ireland (DETI) European Marine Energy Centre (EMEC) Neil Kermode Envirolink North West Ian Sibbick Environment Agency Stephen Oates, Andrew Coleman, Antonia Scarr E. ON Engineering Ltd Marco Marijewycz, Ralph Chamberlain, Amaan Lefeyette Energy Technology Institute (ETI) Richard Knight Frazer Nash Consultancy David McNaught Hartley Anderson Ltd John Hartley Highland & Islands Enterprise Eann Sinclair HM Treasury Jon Parker, Nicolas Garcia Institute of Marine Engineering, Science Morleymor Fisher & Technology (IMaREST) International Power Joe Hulm IT Power Jamie O’ Nians 44 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Marine Current Turbines Peter Fraenkel New and Renewable Energy Centre Andrew Mill, Jamie Grimwade, (NaREC) Stephen Wilson Natural England Adrian Jowitt, Rachel Bathurst, Victoria Copley Natural Environment Research Council Sasha Leigh (NERC) NWDA Liam Fisher Ocean Electric Power Chris Bale Oceanlinx Nathan Faulks Ocean Power Technology Paul Jordan, Stuart Bower Orecon David Crisp Peel Holdings Iain Taylor Pelamis Max Carcas Pembrokeshire Coastal Forum David Jones, Tonia Forsyth Peninsula Research Institute for Marine Deborah Greaves Renewable Energy (PRiMARE) Pulse Tidal Bob Smith, Howard Nimmo, Marc Paish QinetiQ Mark Roberts Redfield Consulting John Aldersey-Williams Renewable Energy Association (REA) Gaynor Hartnell, Stephanie Merry Renewables UK (formerly BWEA) Oliver Wragg Rolls Royce/ Tidal Generation Ltd Ged Heffernan RPS Planning & Development John Stevenson RWE nPower Paul Catterall, Bill Langley Scottish and Southern Robin Burnett, Will Steggals, John Thouless Scottish Enterprise Murray Bainbridge Scottish Government Neal Rafferty, Alex Reid Scottish Power Mandy Gloyer, Alan Mortimer Scottish Renewables Morna Cannon Siemens Ed Brady, Michael Rolls Solway Energy Gateway Brian Dawes South West RDA/Wave Hub Nick Harrington, Jonny Boston, Claire Gibson Strathclyde University Alan Robertson Subsea UK Alistair Birnie The Carbon Trust Stephen Wyatt Technology Strategy Board (TSB) Filomena La Porta, Derek Allen Tidal Energy Ltd Martin Murphy UK Major Ports Richard Bird UK Energy Research Centres (UKERC)/ Henry Jeffery University of Edinburgh University of Edinburgh Stephen Salter Welsh Assembly Government Ron Loveland, Alun James, Michael Cummings, Stuart Anderson Wildlife & Countryside Link Joanna Butler Annex B: Economics of Wave and Tidal Energy 46 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Economics of Wave and Tidal Energy
DECC and the Scottish Government have commissioned Black & Veatch and Ernst & Young to collect data on the current generation costs of marine technologies and to model the development of these technologies from now to 2050. There is a very large amount of uncertainty surrounding such projections which go so far out into the future, and the results presented here should be regarded as illustrative. The graphs below show the falls in levelised generation costs over time as modelled by Ernst & Young, assuming mid-level deployment and mid-level learning rate assumptions. The percentages shown – 14%, 12%, 10%, 9%, 8% – are the discount rate used, representing the assumed required rates of return (hurdle rates). These are post-tax real rates of return; corresponding pre-tax required rates of return would be higher. Wave Energy The fall in levelised generation costs for wave energy is illustrated in Figure 1, indicating a reduction in cost of £466 to £653 per MWh for pre-demonstration projects down to £338 to £471 per MWh for demonstration projects, all the way down to £71 to £105 per MWh in 2050. These ranges are based on low, medium and high initial costs which learning rates are then applied to from the point of the first commercial projects. They therefore do not cover all of the uncertainty surrounding future costs, for which the error bands would be much larger. In particular, they do not reflect the low/high deployment scenarios nor the low/high learning rate assumptions.
Figure 1 Wave levelised costs through time 700
600
500
400
300 MWh/£ 551 200 403
100 214 118 86 0 Pre- Demonstration 2020 2035 2050 demonstration 12% 10% 9% 8% 14%
Source: Ernst & Young. Note demonstration costs are a weighted average of nearshore and offshore wave data which fall in different years. Annex B: Economics of Wave and Tidal Energy 47
Tidal Stream Tidal stream shallow costs, like wave, are estimated to fall greatly through time from £308 to £504 per MWh at pre-demonstration, through £144 to £213 per MWh at demonstration, eventually down to £100 to £150 per MWh in 2050 (See Figures 2 and 3). Similarly tidal steam deep projects are estimated to fall from £456 to £633 per MWh at pre-demonstration, through £210 to £301 per MWh at demonstration, eventually down to £74 to £117 per MWh in 2050. With reference to Figures 2 and 3 it is envisaged that the initial deployment largely to occur in shallow waters (<40-50m). Exploitation of deeper tidal stream sites would only follow-on later.
Figure 2 Tidal stream shallow levelised costs through time 600
500
400
300 MWh/£ 200 452 100 179 173 150 124 0 Pre- Demonstration 2020 2035 2050 demonstration 12% 10% 9% 8% 14% Source: Ernst &Young
Figure 3 Tidal stream deep levelised costs through time 700
600
500
400
300 MWh/£ 539 200
100 247 203 115 92 0 Pre- Demonstration 2020 2035 2050 demonstration 12% 10% 9% 8% 14%
Source: Ernst &Young 48 Marine Energy Action Plan 2010 Executive Summary & Recommendations
Tidal Range Tidal range is assumed to be a mature technology, and hence the levelised costs do not change much through time (see Figure 4), except for the artificial changing of the required rate of return, which may not fall over time for this technology. The levelised costs range from £205 to £349 per MWh in 2020, according to the low and high cost assumptions. However, a new generation of large low head turbines could in many tidal range locations considerably increase the number of effective turbines able to be installed in a structure and thus decrease significantly the electricity production costs, as well as minimising local environmental effects.
Figure 4 Non-Severn (high-head turbine) tidal range levelised costs through time 400 350 300 250 200 MWh/£ 150 279 258 100 229 50 0 2020 2035 2050 10% 9% 8% Source: Ernst &Young
Printed in the UK on recycled paper containing a minimum of 75% post consumer waste. Department of Energy and Climate Change. www.decc.gov.uk First published March 2010. 03/10/NP Crown Copyright. URN 10D/591