Scotland Marine Energy

Leading engineering companies and commercial banks are putting money in marine energy projects off the coast of Scotland. The Scottish government believes the industry will be competitive with other renewable energy sources by the mid-2020s.

Tide Coming In for Scottish Marine Energy

Tidal and wave energy technologies will make an important contribution to Scotland’s goal of generating the equivalent of 100% of the country’s electricity from renewable sources by 2020, according to Scottish Government First Minister Alex Salmond.

A small investment of £7 million ($11 million) in Aquamarine Power’s Oyster wave energy technology is an important step towards the commercialization of the technology, Salmond told a low carbon investment conference in Edinburgh in September. Aquamarine’s shareholders are the engineering group ABB and a utility subsidiary, Scottish and Southern Energy Venture Capital.

A couple of weeks earlier, Barclays Bank had announced a £3.4 million loan to part-finance the completion of the 2.4MW Oyster array, located at the European Marine Energy Centre, off the Orkney Isles in the North Sea. Aquamarine’s goal, according to CEO Martin McAdam, is to start delivering the first pre-commercial marine energy array in Scotland in 2014.

Aquamarine Power is not the only company receiving fresh investment. Siemens announced at the start of November that they have increased their stake from 10% to 45% in MCT - the company that developed a 1.2MW tidal turbine in Strangford Lough, Northern Ireland.

There are more than 45 marine energy projects in the UK (around half of them are wave energy technology, the others are seeking to extract power from tidal flows). In fact, the UK (mostly Scotland) is home to around half of the world’s marine energy projects.

Open Hydro installed the first prototype tidal turbine off the Orkney Isles in 2006. A 315kW Oyster wave energy device began trials at the much the same time. The Strangford Lough turbine went into operation in 2009. In 2010, Pelamis Wave Power installed their 750kW device in Orkney. Six companies will have installed full-scale wave power devices off Orkney to prove concepts in real sea conditions by the end of 2012.

Focus on cost cutting

Marine energy development is a long-term game. Testing and research has greatly increased companies’ understanding of the costs per kWh of wave and tidal technology. That understanding has doubled the estimated cost of marine energy. According to “Accelerating Marine Energy”, a report from the UK government-sponsored Carbon Trust, the levelised cost of energy from the first 10MW small-scale wave farms will be 38-48p (60 – 77 US cents) per kWh. The first small-scale tidal farms will deliver power for slightly cheaper at 29-33p (46 – 53 US cents) per kWh.

The report sets out the innovation steps required to reducing costs from these far from commercial levels. It concludes that, with sufficient effort on innovation, costs of energy will come down to around 28 p per kWh for wave and 16p per kWh for tidal stream by the time the industry has installed capacity of around 800MW. If other countries install considerable capacity, as they have planned, then costs will fall faster.

The report identifies major areas where costs could be reduced. For tidal devices, for instance, installation accounts for around one third of the levelised cost of energy. For a wave device, the structure and its operation and maintenance account for more than half the levelised cost of energy. Other areas identified for cost reduction include power take-off and grid connections.

There are, obviously, geographic sweet spots for marine energy. The stretch of water between Orkney and the North Coast of the Scottish mainland, known as the Pentland Firth, accounts for 33% of the practical annual tidal energy potential around the UK. The UK Channel Islands, off the coast of France, represent a further 28% of that practical energy potential. In Pentland Firth Deep there are around 7 TWh per year of energy that could be exploited with current technologies for between 10p and 15p (16 -24 US cents) per kWh out of a total practical potential of 20.6 TWh per year.

The ‘Accelerating Marine Energy’ report estimates that the costs of marine energy will be competitive with other forms of renewable energy by the mid-2020s.