Ocean Energy Development Programme
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Ocean Energy Development Programme Annual Report 2011 Contents Contact Persons 04 This is Ocean Energy Business Development and Management Introduction and Site Development 06 The Aegir Shetland Project 08 Partnership with executive summary Veijo Huusko Jörgen Josefsson Göran Franzén the Local Community +46 70 242 80 70 +46 70 620 33 22 +46 72 245 99 83 09 Tonn and AMETS veijo.huusko jorgen.josefsson goran.franzen @vattenfall.com @vattenfall.com @vattenfall.com I am pleased to present the first annual report for Vattenfall’s Ocean Energy Development Programme (OEDP). This annual Technology Development Technology Development report describes last year’s achievements of the OEDP and 10 Pelamis 10 Technology Readiness Level additionally provides a comprehensive overview of Vattenfall’s 10 Monitoring Wave Developers positioning in the field of ocean energy. 11 Standpoint Project 2011 11 Seabased Wave Energy – Project Maren Gunilla Andrée Björn Bolund Oskar D Fängström +46 76 141 35 85 +46 72 234 24 38 +46 703 86 34 70 Since 2006, Vattenfall AB R&D Projects has been investigating gunilla.andree bjorn.bolund oskar.danielsson-fangstrom the potential for ocean energy to offer a major new renewable @vattenfall.com @vattenfall.com @poyry.com energy source, and in 2009 Vattenfall established a formal Business Development ocean energy programme. Our early work focused on reviewing 12 Country by Country Overview conversion technologies to determine when and where they could be viable. 14 Industrial Partnerships In early 2011 we completed our investigations and finalized 15 Environmental Responsibility a comprehensive business review of the ocean opportunity. Our proposed business plan was approved by the EGM in April Per Holmberg Eoghan Maguire 2011. The bottom line of the business plan is to focus our efforts +46 70 378 35 73 +44 78 25 32 94 22 on a demonstration of one of the existing leading technologies per.holmberg eoghan.maguire and also to concentrate on a leading market for ocean energy. @vattenfall.com @vattenfall.com In this report we present the status of the ocean energy oppor- tunity. You will learn why and how we have decided to focus on Scotland as the leading market for early projects. The report Site Development also introduces Pelamis – the ocean energy technology that we Veijo Huusko. Photo: Elisabeth Redlig are pursuing. You can read about our first 10MW wave farm project in Shetland, using this technology, and why we are ex- In 2012 we will continue to intensively pursue these themes. For cited by the relationship with the local community organisations the coming year, I hope we can have enough confidence in our on Shetland. technical evaluations and industrial partnerships to order our As you read this report, I hope you will see three common first 1MW machine for deployment in Orkney, Scotland in 2014. themes that we have deliberately adopted in our strategy for This would provide us with the competence and confidence to consider ordering machines for our 10MW farm in 2016, which Kristin Andersen Erik Sparrevik Colin Stewart Harvey Appelbe ocean R&D: +46 70 618 38 97 +46 70 384 47 94 +44 79 72 13 14 34 +35 38 68 22 69 92 in turn might allow us to consider more than 40MW by 2018, kristin.andersen erik.sparrevik colin.stewart harvey.appelbe when we expect several technologies to be ready and proven. @vattenfall.com @vattenfall.com @vattenfall.com @tonnenergy.ie l Value: We are working on ocean energy before it is commer- cial because we are creating measurable value for Vattenfall To summarize, I am very pleased with our first year of results in terms of competence and a credible position that can be and also excited about the potential of the ocean energy devel- realised when the commercial market opens. Working now opment programme in the near future; not least because of the Communications is more valuable than waiting and trying to buy in later. strong team of smart people we have working on it. Once you have read this report, I encourage you to contact them directly to learn more about their work. I know you will find it compelling. l Partners: We are minimising the risks and costs of accu- mulating this value by working through partnerships, where others contribute competence and cash to the work that Veijo Huusko needs to be done in a way that fits with value creation for Director, Low Emitting Generation Vattenfall. Vattenfall AB Maria Parent +46 76 807 65 50 l Companies: We accumulate the value of our investment in maria.parent @vattenfall.com ocean R&D by doing the work through purpose-built com- panies in the local market, where the value of the company © Vattenfall Photo: Pelamis Wave Power Ltd. increases as our work succeeds. Ocean Energy Annual Report 2011 3 This is Ocean Energy Ocean energy is a huge untapped renewable energy resource that represents a major growth opportunity for the coastal regions of Northern Europe. According to EU targets, this massive natural renewable energy resource off Northern Europe’s western coasts could be harvested by about 188GW installed capacity by 2050. The wave energy industry could soon how a region like Scotland is currently continue to reduce at a pace faster than become the next wind industry, with a leading this race largely due to its clearly offshore wind. Furthermore, there are similar level of economic activity and articulated political commitment. Conse- substantial benefits of having both wave decarbonisation potential, but it will not quently, Vattenfall’s investments in ocean and wind on the grid, since wave energy happen automatically. As with any new energy will happen first in Scotland, close continues to arrive from the large oceans energy source, it will take a concerted to the leading technologies, strong wave long after winds have calmed after the effort to convert this opportunity for resources and adequate feed-in supports. storm and is so much more predictable. Europe. In time there is hope that Ireland, with While the benefits of ocean energy are its massive natural ocean resources, compelling, they are far from inevitable. Among the pioneers of wave power will follow suite, although policy building A concerted effort will be required to Those communities and organisations blocks remain to be put in place. Recent overcome the remaining hurdles. that move early will have the best chance announcements from the Isles project of benefitting from the opportunities are suggesting a subsea grid will further Upcoming challenges linked to ocean energy. Consequently, unlock the marine renewables there. This By working at this early stage Vattenfall Vattenfall initiated some ocean energy will be critical to realising the export di- can carve out a valuable position by de- projects in 2006, in order to remain mension of Scotland and Ireland’s marine veloping its competence and credibility in among the leaders of sustainable energy potential, which is much larger than the time to exploit the emerging opportunity. production. The team completed an initial domestic market can accept. The British The company is motivated to work in review phase in 2010 and has concluded Isles alone should contribute some 5GW ocean energy to show the opportunity to a thorough evaluation of the ocean energy of clean ocean energy to Europe by 2035. the existing large industrial players and opportunity. They were convinced that communities so that they will pick up the the first ‘pilot’ wave farms of 10MW from Constraints that ocean energy faces 2015 should be in Shetland to the North Although the technology has been devel- of Scotland. If all goes as expected, oped since the 1970s and a few full scale Vattenfall plans to ramp up to farms of devices are in the water producing power, 50MW and then commercial scale farms the products remains in an embryonic high of >100MW after 2020. But this is still a state. The current lack of capital has medium long way to go. slowed this development. Industry as- low sociations estimate that capital required very low Adding value to Vattenfall’s production by these small companies collectively is portfolio just EUR 157 million. Still, private capital Ocean energy could make a significant is not available to them and the recent contribution to decarbonising Vattenfall’s funding announcements from the EC of power generation portfolio, because a EUR 22 million, the UK Government of large quantity of energy can be harnessed EUR 24 million and the Scottish Govern- from the ocean movement with negligible ment of EUR 43 million are welcome, but CO2 emissions. Offshore wave is consid- public funds are not sufficient. Wave resource distribution in Europe ered a relatively environmental benign en- Graphic: Vattenfall, Source: Aquaret ergy source, with limited negative impact A promising outlook on the local environment. For some spe- Like any new energy source it will take baton, bringing to bear their significant cies the impact could even be positive. time to refine the emerging wave conver- capabilities and financial capacity to However, important knowledge gaps still sion technology to survive and operate commercialise the opportunity. However, exist and Vattenfall is closely involved in viably in the violent oceans. It could take there remains a lot of difficult R&D work the ongoing research within the field. as long as 20 years before wave electri- to be done in the challenging open ocean city is at the same level as offshore wind environment, before this type of energy Suitable regions for ocean energy today. This is still compelling because could be regarded as a viable new energy Pelamis, a Scottish technology, illustrates the cost of wave energy could potentially source. ■ The launch of one machine segment at Pelamis docs in Leith, Scotland.