OES Annual Report 2012 - Ocean Energy Systems

115
05 / DEVELOPMENT OF THE INTERNATIONAL
OCEAN ENERGY INDUSTRY: PERFORMANCE
IMPROVEMENTS AND COST REDUCTIONS
rapid progress and reducing cost, by reducing the need for validation and testing. Where traditionally
such code development was the domain of national laboratories and universities with supercomputing
capabilities, today desktop computers are often sufficient for these problems, enabling small companies to
contribute to this code development more rapidly and at much lower cost.
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Nurturing technological breakthroughs -- Systematic studies of novel design concepts should be
carried out to keep feeding the innovation pipeline. At this stage of wave energy industry development,
major breakthroughs are likely to come from radically different design approaches and concepts. Too much
focus on established technology could lock out potential breakthroughs that are needed to reduce the CoE
in this sector.
Conclusions
The CoE from wave energy devices deployed today is high, primarily because of the lack of any large-scale
deployments. However, careful analysis shows that the commercial opening cost of wave energy is just slightly
higher than offshore wind, which is at about 22 cents/kWh today in the US. The detailed study of innovation
pathways that can lead to a reduction in CoE furthermore shows that significant cost-reduction potential
exists, which could reduce the CoE from commercial-scale wave power plants to about 15 cents/kWh in the
near future. Nurturing this innovation potential and carefully benchmarking novel concepts and technologies
will be critically important over the coming years if substantial cost reductions are to be attained.
ESB OCEAN ENERGY PROJECTS – A UTILITY PERSPECTIVE
ON COST AND PERFORMANCE REQUIREMENTS
John Fitzgerald, Technology Manager, ESB Ocean Energy
Fergus Sharkey, Technology Integration Engineer, ESB Ocean Energy
INTRODUCTION
ESB believes Ocean Energy projects can ultimately compete with other forms of renewable energy and
that offshore wind economics is a suitable benchmark to inform ocean energy targets. Current offshore
wind costs are in the region of €4m/MW installed. ESB sees Ocean Energy cost reducing and performance
improving in progressive phases as projects are rolled out by ESB and others. This paper sets out the cost,
performance, and revenue requirements for these project phases. While there are areas of significant cost
and performance risk in the medium term, technical fundamentals suggest that forms of ocean energy have
the potential to meet this cost trajectory and contribute to meeting ESB’s renewable energy targets.
The Offshore Renewable Energy Market
In terms of large scale electricity generation market, offshore renewable energy projects must compete with
other forms of renewable energy. However, competitiveness must be considered within the context of:
a) Increasing demand for secure and low carbon forms of electricity to meet government targets.
b) Terrestrial constraints to the widespread deployment of onshore wind, hydro and other renewables that
are already close to competing with conventional generation.
This has resulted in the introduction of market incentives favouring the importing of renewable electricity
from increasingly remote locations back to more densely populated load centres that require it. These
incentives are required to overcome the increased costs as well as transmission of electricity over longer
distances. Offshore wind is currently the vanguard in this trend and is commercially viable in a number of
jurisdictions, including the UK under current incentives of 1.9 Renewable Obligation Certificates (ROCs).