Understanding opportunities for south west businesses to diversify into the marine renewable energy supply chain Submitted by Amanda Pound to the University of Exeter as a dissertation for the degree of Master of Philosophy in Renewable Energy November 2013 This dissertation is available for Library use on the understanding that it is copyright material and that no quotation from the dissertation may be published without proper acknowledgement. I certify that all material in this dissertation which is not my own work has been identified and that no material has previously been submitted and approved for the award of a degree by this or any other University. ……………………………………………………………………………… 1 Abstract In 2010 it was reported that the south west of England had an abundance of natural marine energy resources with a capacity to deliver 9.2 GW of energy, this combed with the diverse marine skills, services and facilities available in the south west supply chain, gives the south west of England a unique and significant offer to the MRE sector. This dissertation outlines the opportunities for south west companies to engage with the marine renewable energy, by defining the requirements of the sector. Potential supply chain company diversification methodology is outlined in a created model, and identification of methods of engagement with the sector was undertaken via the use of a questionnaire; with existing south west based marine renewable energy supply chain companies. The dissertation is concluded with recommendations for potential supply chain companies in the south west of England wishing to engage with the MRE sector in the following categories: diversification, initial engagement and market entry. 2 List of Contents 1. INTRODUCTION ........................................................................................................ 17 2. MAIN AIM & OBJECTIVES ........................................................................................ 19 3. LITERATURE AND CRITICAL REVIEW .................................................................... 20 3.1 STATE OF SECTOR ..................................................................................... 20 3.1.1 Global wave & tidal technology activity .............................................................. 21 3.1.2 The UK Renewable Energy Roadmap (RER) .................................................... 22 3.2 THE BUSINESS OPPORTUNITIES .................................................................. 25 3.2.1 Economic benefits .............................................................................................. 25 3.2.2 Job creation ....................................................................................................... 26 3.2.3 Business opportunities ....................................................................................... 28 3.2.4 MRE project cost breakdown ............................................................................. 29 3.3 REGULATION & POLICY .............................................................................. 32 3.3.1 Increasing energy generation ............................................................................ 32 3.3.2 Technology Development .................................................................................. 37 3.4 MRE TECHNOLOGIES................................................................................. 40 3.4.1 Offshore Wind .................................................................................................... 40 3.4.2 Wave .................................................................................................................. 42 3.4.3 Tidal ................................................................................................................... 46 3.5 MRE RESOURCE AND CURRENT ACTIVITY ................................................... 49 3.5.1 Offshore wind ..................................................................................................... 49 3.5.2 Wave .................................................................................................................. 56 3.5.3 Tidal ................................................................................................................... 60 3.6 TEST SITES ............................................................................................... 64 3.6.1 Offshore wind ..................................................................................................... 64 3.6.2 Wave .................................................................................................................. 66 3 3.6.3 Tidal ................................................................................................................... 69 3.6.4 South west ......................................................................................................... 71 3.7 MRE SUPPORT ASSOCIATIONS ................................................................... 77 3.7.1 MRE support associations in the UK .................................................................. 77 3.7.2 Supporting associations in the south west ......................................................... 79 3.8 INFRASTRUCTURE ...................................................................................... 82 3.8.1 New MRE Infrastructure developments in the UK .............................................. 82 3.8.2 New MRE Infrastructure developments in the south west .................................. 86 4. METHODOLOGY ....................................................................................................... 87 4.1 DIVERSIFICATION MODEL ............................................................................ 88 4.2 THE SOUTH WEST SUPPLY CHAIN QUESTIONNAIRE ......................................... 90 4.2.1 Consulting the supply chain ............................................................................... 90 4.2.1 Consulting support associations ........................................................................ 91 5. APPLICATION AND CASE STUDY ........................................................................... 92 5.1 THE OPPORTUNITIES ................................................................................... 92 5.1.1 Commercialisation of MRE Sector ..................................................................... 92 5.1.2 Technology Development ................................................................................ 106 5.1.3 Technology Installation .................................................................................... 125 5.1.4 South West Supply Chain ................................................................................ 138 5.2 DECISION TO DIVERSIFY ........................................................................... 140 5.2.1 The Diversification Model ................................................................................. 140 5.2.2 Recommendations ........................................................................................... 176 5.3 SUPPLY CHAIN QUESTIONNAIRE ................................................................. 177 5.3.1 Supply Chain Company Database ................................................................... 177 5.3.2 Engagement Organisations Database ............................................................. 179 5.3.3 Understanding Engagement with the MRE Sector ........................................... 180 4 6. RESULTS ................................................................................................................. 184 6.1 QUESTIONNAIRE RESULTS ........................................................................ 184 6.1.1 Results of the supply chain business questionnaire......................................... 184 6.1.2 Results of the supply chain business support tools feedback form .................. 216 6.1.3 Results of the engagement organisations questionnaire ................................. 218 6.2 RECOMMENDATIONS ................................................................................ 230 6.2.1 Recommendations for initial engagement ........................................................ 230 6.2.2 Recommendations for market entry ................................................................. 231 7. DISCUSSION ........................................................................................................... 233 7.1 SUMMARY ............................................................................................... 233 7.1.1 The Strengths .................................................................................................. 234 7.1.2 The Weaknesses ............................................................................................. 235 7.1.3 The opportunities ............................................................................................. 236 7.1.4 The threats ....................................................................................................... 238 7.2 DISCUSSION ............................................................................................. 239 8. CONCLUSION .......................................................................................................... 241 8.1 AIM & OBJECTIVE .................................................................................... 241 8.1.1 Understanding the Sector ................................................................................ 241 8.1.2 Diversification opportunities