Waves Start to Make Ripples in Renewable Energy World


PARIS — Little electricity is being generated from the ocean except at scattered test sites around the world, many supported by European governments.

That is partly because the technical difficulties of making such systems work have been great.

However, the next three years are expected to be critical in determining whether such power is cost effective, with about 30 wave energy projects expected to start operations, according to Emerging Energy Research, an alternative energy advisory firm in Cambridge, Massachusetts.

One company providing lessons in the trials and tribulations of ocean energy is Pelamis Wave Power, the world’s first attempt at a commercial wave power operation.

As governments and power companies pour money into research and technology, “they’re taking a close look at Pelamis and other leading wave technologies to bolster their understanding of costs, risks and development potential of ocean energy,” said Alex Klein, a research director at Emerging Energy Research.

Pelamis, a Scottish company, deployed its Aguçadoura wave park off the coast of Portugal in 2008. But four months after it was connected to an electricity grid and began generating power it ran into technical difficulties that required its three energy converters to be removed from the sea. Pelamis blamed it on “excessive wear on bearings” and has since identified a solution.

But its troubles did not end there. The project was besieged by financial problems when the Australian investment group Babcock & Brown — the major stakeholder in Aguçadoura — collapsed during the financial crisis, leaving the project in limbo.

In September, the Portuguese utility Energias de Portugal and the engineering company Efacec purchased Babcock & Brown’s 77 percent stake in Aguçadoura. Pelamis owns the rest.

Pelamis said a new version of its machine that is 180 meters, or 590 feet, in length, is being manufactured at Leith Docks in Edinburgh for the German utility E.ON and would be tested at the European Marine Energy Center in Orkney, Scotland.

“Our focus with Babcock & Brown was always with the project being a stepping stone to the next stage of a much larger project,” said Max Carcas, business development director of Pelamis.

Mr. Carcas said the logistics of operating and maintaining the wave machines turned out to be just as important as their conceptual design.

“I think it’s pretty normal with a new technology that there are trial periods,” said Hugo Chandler, a renewable energy analyst at the International Energy Agency. “Problems are always found which have to be resolved.”

Suffice to say that the technology will need time to mature.

“Wave energy technologies are still in the preliminary stages of development, where wind turbines were approximately 15-20 years ago,” said Annette von Jouanne, one of the leading researchers in the field, of Oregon State University.

But Ms. von Jouanne predicted that the catch-up time for wave energy would be accelerated by available advanced technologies and materials and because of lessons learned from other renewable industries.

Other countries developing the technology include Ireland, South Korea and the United States. About 100 companies are working on projects, and many of them are seeking financing, but only a few have ocean-tested their products.

One of them is Ocean Energy, an Irish start-up that concluded in August a two-and-a-half-year test period in Ireland, where its quarter-scale device consistently produced electricity from waves. It aims to raise €15 million, or $22 million, by March.

Another is Aquamarine Power, a Scottish start-up that installed its Oyster wave energy prototype over the summer at the European Marine Energy Center.

“We are testing a full-scale unit,” said Martin McAdam, chief executive of Aquamarine. “But we need to go through two more iterations before we can get something that is mainstream and viable.”

In September, Aquamarine raised £10 million, or nearly $16 million, during its first round of funding, with a goal to raise £50 million to use over three years.

Yet another project moving along comes out of Oregon State University, which has received $13.5 million in funding, including a five-year $6.25 million grant from the U.S. Department of Energy, to establish the Northwest National Marine Renewable Energy Center in Newport, Oregon. The center is designing a full-scale ocean energy project to be deployed in 2011.

“Wave is probably the last, globally distributed, abundant renewable resource that remains untapped,” said Michael Ottaviano, managing director of Carnegie Wave Energy, an Australian company that plans to license its wave power technology to utilities.

Carnegie seems to have a willing audience. In August, the Australian government committed to generating 20 percent of the country’s electricity supply from renewable sources by 2020.

The Australian coastline has the potential to produce 171,000 megawatts of wave energy, according to Bakers Investment Group, which could meet the power needs of about 1.1 million homes if harvested effectively. Near-shore projects create electricity underwater or harvest wave energy to power onshore turbines.

Yet, Ross Paul, managing director and chief investment officer of Bakers Investment, said investors would be attracted to more mature technologies like wind and solar, mainly because it was still too expensive to produce energy from waves.

“Although there is promise in wave technology, at this stage the investment is highly speculative,” Mr. Paul said.

Emerging Energy Research estimated that the first generation of small-scale wave energy projects cost four to six times more than current power prices in most markets.

Aquamarine Power plans to sell its Oyster device at less than $6.5 million per megawatt installed, within four years. Wind energy costs about $1.5 million per megawatt installed, according to Sven Teske, renewable energy director for Greenpeace International.

“Today, because we’re working with a full-scale prototype, the total cost is closer to” $16.3 million, Mr. McAdam said of Aquamarine.

This makes the industry heavily reliant on government funding. The financial crisis has not helped investment prospects, either. “I’ve gone through a number of start-up companies,” said Mr. McAdam, “and this has been more difficult than previously.”

Carnegie Wave Energy, which reported a loss of 9 million Australian dollars, or $8.2 million, in its 2009 financial year following a loss in 2008 of more than 18 million dollars mainly because of research and development expenditure, has seen its shares double in value since January, in anticipation of commercial success.

Subject to conditions being met, including winning an Australian government grant, Investec Bank Australia intends to provide or procure funds of up to 250 million dollars for Carnegie’s pilot project. That is the largest financial commitment to a wave energy project since Babcock & Brown’s investment in Aguçadoura, according to Bakers Investment.

Mr. Paul of Bakers Investment said that the investment remained highly speculative because “wave technology is not yet commercially ready, nor has it demonstrated cost-effective deployment without significant public sector subsidy.”

Mr. Klein of Emerging Energy Research said he was optimistic over all about the potential of wave power.

But new technological developments have already turned Aguçadoura’s red, snake-like energy converters from the first commercial wave farm into a historic relic, providing a cautionary tale.

“It’s going to be imperative that there are policies in place to get wave energy out on the learning curve,” Mr. Klein said.



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