What’s the Prognosis for Marine Renewables?

What’s the prognosis for marine renewables? Not so great, if you believe this recent Wall Street Journal article that documents some of the low points of the past years for the industry. These include Finavera’s sunken buoy and its subsequent decision to put marine renewables development on hold or more recently, the temporary grounding of the Pelamis project in Portugal resulting from funding problems. I’m quoted in the article, expressing my view that all of these bumps in the road (or ebbs in the tide) are part and parcel of the rocky path to commercialization.

Ironically, the availability of loan guarantees and stimulus funds into renewables, not to mention incentives like production tax credits and investment tax credits may actually have the perverse effect of hurting marine renewables. As the WSJ article points out:

As renewable energy moves into the mainstream, proven sources, like wind and solar, are siphoning off the lion’s share of private investment and public support. Utilities facing state requirements to rapidly increase their supply of renewable power – and with a recession sapping available funding – prefer a proven technique over wave energy, where as many as 80 largely untested technologies are competing for attention. While wind farms are becoming a common site in many states, government agencies are still hammering out how to regulate anything more than a few test buoys.

It doesn’t help that at present, marine renewables are also more expensive than other more mature renewables. The Earth 2 Tech blog references a study developed last year
by consulting firm Black and Veatch (B&V) for the California Renewable Energy Transmission Initiative. According to the report, within California, wave and marine current power generation can cost as much as $445 per MWH and $410 per MWH, respectively. By contrast, other renewables like wind, solid biomass, hydroelectric and geothermal come in at $150 per MWH. That’s not surprising, given that more established renewables benefit from economies of scale and standardization. In fact, according to this source, back in 1980, windpower cost 80 cents per kwh (or $800/mwh) to produce compared with 3 to 6 cents per kwh today, with a production tax credit factored in. Already, wave and tidal cost cost half of what wind did back in 1980, yet are further advanced.

Despite the recent negative stories, there’s still reason for optimism. The City of San Francisco remains optimistic about prospects for wave, as does the State of Maine, which just last week awarded $800,000 in funding to the Ocean Renewable Power Company (ORPC) to develop its tidal technology. And just last month, the British Wind Energy Association released this report prepared by Redpoint Consultants which concluded that:

diversifying the renewable energy mix by including a greater proportion of wave and tidal stream energy would reduce requirements for back-up and reserve capacity, lower carbon emissions and save fuel. This could lead to cost savings of as much as 3.3% of the annual wholesale cost of electricity due to the increased mix diversity.

Ultimately, that failures are coming more frequently to the marine renewables is good news, not bad – because it means that projects are actually getting into the water (as an aside, implementing a more reasonable regulatory scheme that would facilitate siting for demonstration projects would free up funding so that companies could focus on improving their technology instead of spending millions on the permitting process). Perhaps marine renewables won’t be ready for full blown commercialization in the next year or two, but the technology shows enough promise to keep moving forward.

Tagged as: marine renewables