Global warming, energy security and rising oil prices have resuscitated the marine energy sector. Ocean energy is a predictable and abundant source of energy with the ability to supply approximately 10 percent of the world's electricity needs.
The value of worldwide electricity revenues from wave and tidal stream projects could ultimately be between pounds sterling 60bn (euro 77.40bn) and pounds sterling 190bn (euro 245.10bn) per year. The United Kingdom is a clear leader both in terms of activity and in terms of support to the sector. It possesses 50% of Europe's wave energy potential.
Like all renewable energy technologies, the marine energy sector is now trying to reduce costs and reach grid parity. Support from the government, private investor interest and the relatively untapped resource will spur expansion.
"After the loss of interest in the sector following the fall in oil prices in the 70s, marine energy has now been given a new lease of life," notes Frost & Sullivan Research Analyst Gouri Nambudripad. "Countries in Europe that are rich in marine resources, both wave and tidal, such as the United Kingdom, Ireland and Portugal are investing in and supporting this technology."
As mentioned, within Europe the UK is a front-runner in the marine energy industry. According to estimates, 20% of UK's total electricity requirement can be harnessed from ocean energy. The Carbon Trust has also predicted that marine energy could contribute up to one sixth of the UK's '20% renewable energy by 2020' target. Scotland with its rich ocean energy resources plays an important role. In fact, 25% of Europe's tidal resources and 10% of Europe's wave energy resources are found in Scotland. One-fifth of UK's electricity needs could be fulfilled by marine energy production in Scottish waters. Estimates show that Scotland has the resource potential to install 1.3GW of capacity from marine energy by 2020.
One of the biggest barriers to the growth of the industry is the competition it is facing from other renewable energy sources that are both mature, such as wind, and growing, such as solar. The renewable energy sector is currently very dependent on support from the government and there is only a limited amount of funding that the government can provide. This situation is dampening the prospects of the European marine energy sector.
"The marine energy sector has a number of technological hurdles to overcome, with the most significant being the ability to survive the harshness of the ocean environment," adds Nambudripad. "While marine energy currently lags behind many other renewable energy technologies, it is, over time, poised to catch up and provide meaningful amounts of electricity."
Promisingly, private investors are showing considerable interest in the sector. These range from private equity and venture capitalists to utilities who are partnering with device developers to assist them in taking their devices from pre-commercial and testing phase to full-scale commercialisation. With steep learning curves, government support and private funding, the sector is set to contribute significantly in the next five to ten years.
There have been estimates that investments of over pounds sterling 500bn (euro 645bn) would be necessary for wave energy to contribute 2000 terawatt hours per year (TWh/y) worldwide. At the same time, it has been estimated that if ocean energy technologies continue to be supported and achieve their predicted potential, approximately 3 gigawatts (GW) of installed capacity could be available in the EU by 2020.