Global Market for Wave & Tidal Energy
Authors: James Quilter
Published: February, 2016
Pages: 76 | Tables: 15 | Figures: 0

Installation currently represents the biggest single cost for tidal stream, which varies significantly depending on deployment location. Innovation in installation methods and economies of scale should hopefully help lower these costs. There also needs to be significant progress made in increasing device reliability and scaling up technology, including the elements relating to associated balance of plant such as foundations and undersea cabling.

In this report, we look at the latest design concepts and innovations to do this – across wave energy as well as tidal. Optimistically, some estimates suggest overall tidal costs can be expected to fall by up to 40% in the not too distant future. Wave power, meantime, while representing far greater long-term potential, is at least 10 years behind tidal stream in terms of reaching commercial viability.

Summary

While the potential contribution to our electricity supplies from wave and tidal power is widely recognised as significant, the commercial breakthrough the industry has long hoped for remains elusive. Theoretically the sector could satisfy 16,000TWh of global electricity demand a year, according to the European Ocean Energy Association. The technology to do that at reasonable cost on a utility scale is, however, still under development or remains at the pre-commercial demonstration and testing phase.

The UK, Canada and France continue to be the industry’s key markets, although other countries, including China and South Korea, are certainly paying more attention to the potential. There are over 200 companies currently operating in the global wave and tidal energy market and there has been significant progress in terms of device performance, tested at scale in real-world conditions. And yet still, potential big investors are still hanging back, deterred by the time it takes to bring these technologies to the commercial market.

Driving down costs (including those for operations and maintenance) remains one of the key obstacles, although wave power lags far behind tidal in this regard. Indeed, tidal technology is seen as closest to commercial reality. Right now, though, there is no dominant tidal technology. That looks set to change soon. Our analysis of the current status of the market suggests that within five years tidal stream is likely to have asserted itself as the technology of choice in the sector. Although there are a large number of tidal barrage or lagoon projects in the pipeline, the cost of energy relating to these is likely to remain high and there seems little scope to lower this by much. The industry’s technical innovation has therefore been focused on tidal stream applications where there is the greatest potential to reduce costs by a significant margin in the relatively near term.

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