The Rising Tide of Hydro & Marine Power

When you hear the words “Renewable Energy,” it’s usually solar panels and windmills that come to mind.  Others imagine hydroelectric and biofuels.  And some who really know the sector might think of geothermal or waste-to-energy plants as well.  Not many think of marine power.  Why is that?  Probably because whatever marine energy technologies and projects that are out there haven’t yet reached commercial success.  But that doesn’t mean there’s no real movement on that front.  A quick look at Cleantech Group’s Hydro & Marine Sector reveals hundreds of fledgling technology and project development firms hatching into the blue ocean of a bright new marketplace.

Where is this bright new marketplace emerging, you ask?

Image: Albaimages/Alamy

Just like in the days of empires, when the British ruled the seas with its advanced naval power, the UK is again leading the world in its mastery of the seas with its development of a marine energy industry.  Not only is the UK leading in its development of new, commercially-viable technologies, it is leading in terms of advanced renewable energy policies that are incubating and nurturing the infant marine energy marketplace.  Scotland, in particular, is eager to take on the mantle of leadership in this industry with what will be the largest tidal power project in the world, at the Pentland Firth off the Orkney Islands.  The project is planned for 86 MW of tidal power, with the potential to construct up to a 400 MW system.  No other existing or planned tidal project in the world comes close to matching this output.   Scotland enjoys about 25% of Europe’s tidal resources, and it clearly intends to take maximum advantage of that geographic benefit.  Scotland’s government should be commended for realizing the potential of marine power with its infusion of millions of pounds into R&D and regulatory streamlining.   Its confidence in marine power has encouraged the UK government to follow suit with further public investment, as well as private investors who are also increasingly confident and sending large sums of capital to the nascent industry.  If any country is going to prove the viability of marine power in the next ten years, it will be the UK, with Scotland showcasing the major tidal and wave projects that prove it.  Once again, the British are coming.

That’s not to say that there’s nothing going on in the industry on this side of the pond.  Although trailing the UK and Europe in investment and policy, the US and Canadian governments are clearly aware of North America’s oceanic power potential.  Marine energy investment from states, provinces, and federal governments is increasing, and private capital is starting to take notice and follow suit.  $16 million in marine renewable energy grants from the US Department of Energy is just the latest round of funding spurring innovation in several states.  Several promising wave and tidal technologies are floating to the top of the R&D cauldron, and demo projects are starting to see green lights from the Bay of Fundy to Puget Sound.  Additionally, a round of federal bills that could significantly boost the industry are gaining bipartisan traction in Washington.  The MLP (Master Limited Partnership) Parity Act will open up renewable energy projects to a much broader range of investors than the sector currently has access too, and promises to significantly lower the costs of financing startups and projects.  The Marine and Hydrokinetic Renewable Energy Act would streamline licensing and regulatory compliance, designate one agency to coordinate environmental reviews, and shore up government R&D in marine energy tech to support the sector.  In short, the US is primed to make a giant leap forward in catching up to the UK’s advanced marine and renewable energy policy framework.  Add to this forward momentum the Navy’s aggressive drive towards becoming a fully renewable organization.  Millions of Department of Defense dollars are in a constant flow towards renewable energy projects, and marine energy is the most likely sector among renewables to gain the favor of an ocean-based organization.  Major military contractors such as Lockheed Martin (working on ocean thermal energy) and Eaton Corporation (developing marine current turbines) have created new business units to develop these technologies and plants for the Navy.   So some big US corporates are already in the game, and just like has already happened with major European energy corporations, major US and Canadian energy companies are now noticing the tide coming in for marine power.   Many more investors and industries are bound to take notice of these signals that indicate an emergent market that’s safe enough to dive into. Scotrenewables is an example of this, and its recent $12 million funding (ABB Technology Ventures, Total, Fred Olsen Renewables) earlier this year is tracked in the marketing intelligence platform i3.

Many other nations have also gotten their feet wet with advanced technologies.  Portugal, Spain and Israel have begun to commercialize wave energy harvesting.  France has declared its entry into tidal and wave at the urging of several continental energy giants.   Norway is hedging against future limited oil supplies with significant advances in wave power and an operational osmotic (salinity-gradient) power plant.  China and India are opening up their waters for developers from Ireland and Australia to come and demo and upscale their innovations.  But when countries with the geographic, economic and capital resources like the UK, the US and Japan start to turn towards the sea to meet their energy demands, a truly global marketplace begins to take shape.

The political and capital will to support marine power is finally distilling around the world.  Thirty years ago, the nascent wind and solar industries seemed too costly and untested to risk substantial government support.  We know how that story has turned out.  That’s where marine energy industry is today – still high-cost and risky, but with just enough entrepreneurs and policymakers insisting on its potential that it can start to attract a substantial flow of private and corporate capital.  The marine power industry is just a few projects away from proving itself as a viable, profitable source of consistent energy.