Scotland: a new wave of optimism for marine power

Oct 05 - Datamonitor

The Scottish first minister, Alex Salmond, believes that electricity generation harnessing wave and tidal power can be fully commercialized by 2015. There are still plenty of ambiguities, however, and with the Marine Renewables Deployment Fund having been scrapped a few months ago, care must be taken not to be too optimistic. Either way, this period is now critical for the marine power industry.

The first minister's announcement has created a new wave of optimism for marine power. The Carbon Trust even expects marine power to match nuclear and onshore wind on cost by 2025. In a further sign of buoyancy, wave power developer Aquamarine Power has recently won GBP7m of new investment from its shareholders (the main players are SSE, Scottish Enterprise, and ABB) and is working on another GBP18m of funding by 2014, when its technology should be at the full commercialization stage. The fact the funding comes from such large, reputable shareholders is a very good indicator, but there are still many uncertainties to overcome.

A recent Datamonitor report, Renewable Energy in Europe: Investment Opportunities in Growth Markets (February 2011, EN00003-003), highlighted the issues facing marine power: maintenance challenges, reliability, saltwater corrosion, storm damage, and legislative and environmental limitations. These issues collectively make it one of the most challenging renewable generation sources to develop; however, offshore wind has faced many similar hurdles, and has made great progress in recent years. There are even cost-saving synergies between offshore wind and tidal generation, concerning blade innovation and the potential sharing of offshore transmission connections. Furthermore, given the perfect predictability of tides, tidal power is an excellent complement to intermittent wind power.

Alex Salmond's optimistic prediction comes only a few months after the scrapping of both the GBP42m Marine Renewables Deployment Fund and the plans for the Severn Estuary Barrage. In light of these sobering reminders of the challenges facing marine development, perhaps it is better for any new entrants wanting to grab a share of the pie to avoid the technology developer route, which carries the most risk (but probably also the most reward) and opt for the safer method of buying the technology once it is ready as an operator/owner instead.

Either way, this period is now critical for the marine power industry, as the goal of mass production draws increasingly near. According to Alex Salmond, Scotland is estimated to have a quarter of Europe's wind and tidal energy capacity and a 10th of its wave resource, so marine power is something that UK energy companies should be pursuing.