06.24.09Peter Asmus, Analyst, Pike Research

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While the total installed capacity of emerging "second generation" marine hydrokinetic resources -- a category that includes wave, tidal stream, ocean current, ocean thermal and river hydrokinetic resources -- was less than 10 MW at the end of 2008, a recent surge in interest in these new renewable options has generated a buzz, particularly in the United Kingdom, Ireland, the United States, Portugal, South Korea, Australia, New Zealand and Japan, among other countries. It is expected that within the next five to eight years, these emerging technologies will become commercialized to the point that they can begin competing for a share of the burgeoning market for carbon-free and non-polluting renewable resources.

The United Nations (UN) projects that the total "technically exploitable" potential for waterpower (including marine renewables) is 15 trillion kilowatt-hours, equal to half of the projected global electricity use in the year 2030. Of this vast resource potential, roughly 15 percent has been developed so far. The UN and World Energy Council projects 250 GW of hydropower will be developed by 2030. If marine renewables capture just 10 percent of this forecasted hydropower capacity, that figure represents 25 GW, a figure Pike Research believes is a valid possibility and the likely floor on market scope.

Literally hundreds of technology designs from more than 100 firms are competing for attention as they push a variety of emerging marine renewable options. Most are smaller upstart firms, but a few larger players -- Scottish Power, Lockheed Martin and Pacific Gas & Electric -- are engaged and seeking new business opportunities in the marine renewables space. Oil companies Chevron, BP and Shell, are also investing in the sector.

The five technologies covered in a Pike Research report released on June 1 are the following:

• Tidal stream turbines often look suspiciously like wind turbines placed underwater. Tidal projects comprise over 90 percent of today's marine kinetic capacity totals, but the vast majority of this installed capacity relies upon first generation "barrage" systems still relying upon storage dams.
• Wave energy technologies more often look more like metal snakes that can span nearly 500 feet, floating on the ocean's surface horizontally, or generators that stand erect vertically akin to a buoy. Any western coastline in the world has wave energy potential.
• River hydrokinetic technologies are also quite similar to tidal technologies, relying on the kinetic energy of moving water, which can be enhanced by tidal flows, particularly at the mouth of a river way interacting with a sea and/or ocean.
• Ocean current technologies are similar to tidal energy technologies, only they can tap into deeper ocean currents that are located offshore. Less developed than either tidal or wave energy, ocean current technologies, nevertheless, are attracting more attention since the resource is 24/7.
• Ocean thermal energy technologies take a very different approach to generating electricity, capturing energy from the differences in temperature between the ocean surface and lower depths, and can also deliver power 24/7.

The superior energy content profile of all of the marine renewables translates into a distinct advantage over popular solar and wind power technologies: far less capital cost per unit of electricity generated. The high capital costs associated with renewable energy technologies in general is largely avoided with marine kinetics. "The capital costs of marine renewable energy systems will be 50 to 100 times smaller than investments required to create the same amount of electricity from either wind or solar," said one marine renewable energy advocate. The downside for marine renewables is the unknown O&M costs. Whereas O&M represents 10 percent of total project costs for solar, and 20 percent for wind, 40 percent is a ballpark guess for marine renewables. Keeping O&M costs down to 40 percent of total project costs is the key to making these marine resources competitive.

The demand for energy worldwide will continue to grow at a dramatic clip between 2009 and 2025, with renewable energy sources overtaking natural gas as the second largest source behind coal by 2015 (IEA, 2008). By 2015, the marine renewable market share of this renewable energy growth will still be all but invisible as far as the IEA statistics are concerned, but development up to that point in time will determine whether these sources will contribute any substantial capacity by 2025.

By 2015, Pike Research shows a potential of over 22 GW of all five technologies profiled in this report could come on-line. Over half of this potential capacity is older first generation "tidal barrage" projects, the largest of which -- up to 14 GW in the U.K. -- is highly contentious. Pike Research projects a base case of only 2.7 GW of all five technologies coming on-line by 2015, unless meaningful carbon regulations are adopted in the U.S. this year and global efforts combating climate change gain traction. If effective carbon regulations are enforced, the total global capacity will be closer to 4 GW by 2015 and could reach 10 GW, this latter optimistic scenario representing a market value of in excess of $20 billion.

The European Union's (EU) Ocean Energy Agency has suggested that 10,000 MW could come on-line to meet EU demand by 2020, growing to 200,000 MW by 2050. Europe is likely to be the global leader, but these capacity totals do not include river hydrokinetics, ocean current or OTEC. The NREL has suggested that the five technologies profiled in this report could meet 2 percent of current U.S. electricity demand, providing 80 TWh/yr of power production, but has not released any data or segmentation details on this guess-estimate.

By 2025, at least 25 GW of total marine renewables will be developed globally If effective carbon regulations in the U.S. are in place by 2010, and marine renewable targets established by various European governments are met, marine renewables and river hydrokinetic technologies could provide as much as 200 GW by 2025: 115 GW wave; 57 GW tidal stream; 20 GW tidal barrage; 4 GW ocean current; 3 GW river hydrokinetic; 1 GW OTEC.

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Reader's Comments

Date	Comment
Len Gould 6.25.09	"The capital costs of marine renewable energy systems will be 50 to 100 times smaller than investments required to create the same amount of electricity from either wind or solar," -- I have a difficult time envisioning this. Take solar thermal as an example. Typical installations cost about $1,500 / kw and produce on average 4 kwhr / day / kw, (or 4/24 = 16.5% capy factor) making the capital cost per 100% capy factor $1,750 x 24/4 =~ $10,000. So even IF the system you propose were 100% reliable, at your most advantageous (to you) claimed capital ratio of 1/50th of solar thermal that leave the constructor and installers only 10,000 / 50 = $200 per kw to install their systems. For wind systems that figure is $2,000 x 24/8 = $6,000, /50 = $120. Can one even get undersea cables and onshore substations running for that price? I doubt it. Such a glaring problem so early in your article makes the remaining far less credible.
James Carson 6.25.09	I wonder how long it would take Europeans to object to generating electricity from the Gulf Stream?
Roger Bedard 6.30.09	The average annual power densiity of good wave and tidal in-stream sites are of the order of 50 times greater that that of good wind abd solar energy. Whether this translates into 50 times less capital costs remains to be seen. Mr. Gould seems to have mis understood that this comment about 50 to 100 (I would not have gone to 100 but 50 may be in the cards) is the capital cost portion only of the tofal cost of electricity and doesn not include installation (deployment) and operation and maintenance cost. The challenge to the nascent marine renewable energy industry is to avoid a deployment and O&M cost so high hat it is not cost competitive with wind and solar.
Peter Asmus 7.5.09	In regards to Len's comment, it was not my intent to suggest this quote was necessarily precise. It was to point out a key distinction between marine renewable energy sources and the more familiar wind and solar technologies. Doing hypothetical math is useful, but that misses my point. The key for these technologies is limiting O&M. Solar thermal has its own issues, mainly the need for cooling water. In California, this has now made solar PV a more attractive option, even for large-scale solar farms in the very best sites. Given the state of marine renewable technologies -- especially ocean current options -- we really don't know the answers yet. A denser fuel source implies there would be reduced capital costs. On the other hand, a big question with tidal turbines is their ability to withstand the wear-and-tear of this stop-and-go resource. The reality is that we need greater R&D investments in the full range of marine renewable options, and offer incentives for development that match what we offer for wind and solar energy choices.
Len Gould 7.8.09	"Solar thermal has its own issues, mainly the need for cooling water. " -- wrong again. IF cooling resources are a constraint at your location, you are free to select eg. the large 25 kw stirling-engine solar dish systems, which btw have recently undergone a massive cost-reduction development program resulting in 50% less steel used per kw, 50% less parts used in engine construction, metal mirrors instead of glass, and a 31.5% net solar-to-electricity efficiency. No other renewable technology can get near them right now, but just wait 'till next year.

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