Economically sustainable development of wave and tidal stream energy technologies
MacGillivray, Andrew John
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The wave and tidal energy sectors have received much interest in recent years, from policy-makers attentive to the prospect that ocean energy technologies could be capable of contributing towards meeting environmental targets; from utility companies that expressed interest in developing, constructing and operating array projects to export large quantities of clean energy from ocean based resources; and from Small to Medium Enterprises (SMEs) and large multi-national Original Equipment Manufacturers (OEMs) that were interested in undertaking technological development to commercialise wave and tidal energy converters that could successfully harness the energy contained within the ocean waves and tides. Within the existing research, development and innovation environment that has largely dominated the development of wave and tidal energy to date – rapid development of large MW-scale devices capable of utility scale power generation – technology developers have failed to reach the level of deployed capacity that was initially anticipated, despite the significant level of investment that has taken place. Indeed, the expected contribution of ocean energy in the wider energy mix, which has been written into policy documentation at both national and European level, has so far failed to materialise in the form of prolific multiple device array deployments. The research, development and innovation environment has not delivered on its intended objective of demonstrating commercial technology readiness, and the historic development trajectories for ocean energy technologies may not represent the most cost-effective route to product commercialisation. This research explores the wave and tidal energy research, development, and innovation environment through extensive stakeholder engagement within the ocean energy sector, and through application of suitable techniques from innovation theory. The purpose of this research was three-fold. Firstly, an objective analysis of the development of the wave and tidal energy sectors – building a comprehensive understanding of their development to date through extensive stakeholder engagement, and comparing wave and tidal energy technology development with that of historic energy technologies that have successfully entered into commercial operation – was necessary in order to identify whether the attempt by ocean energy technologies for rapid up-scaling of technology is consistent with the development pathway that was followed by energy technologies which have successfully transitioned from novel invention to full commercial operation. This work identified several dichotomies that are present in the nascent stages of technology development in the wave and tidal energy sectors. Secondly, the uncertainties surrounding existing capital and revenue costs, and the uncertainties within the potential future cost reductions associated with current technology trajectories, could lead to unsustainable investment requirements. Commercialisation of wave and tidal energy technology is predicated upon significant cost reduction – the current technology costs are not feasible for large scale roll out of technology. A research focus on the economic uncertainty through application of learning theory and a learning investment sensitivity analysis was anticipated to demonstrate the economic impact of minor perturbations from idealised reference assumptions. The results from this work suggest that even minor perturbations in input parameters have substantial negative impact on overall investment requirements to bring technology to a level of cost competitiveness. Thirdly, the policy landscape surrounding wave and tidal energy development has not been specifically compared and contrasted, using a number of performance metrics, to a technology which was subject to similar expectations in the form of income streams – wind energy technology. The causes and motivations for the rapid transition to large-scale technologies and ‘accelerated innovation’ within ocean energy technology were considered within this research, which suggested that a mismatch between policy support and technological readiness could misguide and misdirect the innovation pathway, harming the commercialisation prospects of ocean energy technology. In order for the successful emergence of economically sustainable wave and tidal energy technologies, a paradigm shift may be necessary, a change from the current approach that has to date dominated technological development within both the wave and tidal energy sectors. This research draws together industry consultation with academic insight to identify an optimised innovation pathway, culminating in a policy appraisal to guide and inform economically sustainable development of wave and tidal energy technologies.