Tides of change: could marine energy be with us much sooner than we thought?

Q. What is the status of SeaGen and Marine Current Turbines at present?

A. SeaGen is the world’s first commercial prototype to produce tidal power at this scale and our only grid connected turbine. Our plan is to move forward with The Skerries - a 10.5 megawatt (MW) tidal energy farm off the coast of the Welsh island of Anglesey in a fast flowing patch of 25 metre deep open sea known as The Skerries. We are planning to install several turbines to generate about 10 MW and we are working with npower Renewables on that project. Construction and commissioning timescales will be subject to the length of the planning process, but it is anticipated this could take place between 2011 and 2012, but it is very dependent on raising the money.

We have also signed an agreement with Canada’s Maritime Tidal Energy Corporation to harness the huge tidal currents of the Bay of Fundy in Nova Scotia, Canada.

Q. What are the challenges you face to ensure the technology you develop is deployed on a commercial basis?

A. We have to crack the cost of installation, and that is a problem that faces offshore as well as us – so some more thinking and radical design is required. This is the major technical hurdle that we face currently and something we need to wrap up with the The Skerries project.

We also have to ensure that the systems are very reliable – we are very pleased with where we have got to now, but reliability is so important in a marine environment, because access is restricted and because conditions can be so bad. In my view, we need reliability that is on a level with that of the aviation or nuclear sector.

Then we have the commercial challenges. These are very expensive projects – to get where we are today has taken about £30 million and SeaGen alone was £20 million. The challenge here is in raising the money and in doing so, maintaining your value and the credit crunch has made this much more difficult. There also needs to be a strong supply chain with good partnerships with large-scale players.

Q. What is the potential for tidal to be part of the future, renewable energy mix?

A. I think it has to, but it is a question of whether the Government realises that.

The critical thing for the UK is to create a market because only then can you take advantage of the industry. The UK has historically not done this, we lost our wind industry because we didn’t create a proper market, so I think that is the biggest challenge for the Government.

It is good news the Government is supporting wave and tidal energy because that will make investors much more comfortable about long-term investment. But it needs to do more. For example, in the budget this year the Renewable Obligations Certificate (ROC) for offshore wind were increased from 1.5 to two, exactly the same level as wave and tidal. So now, when you go to speak to financiers and they have the option of investing in offshore wind or investing in wave and tidal it is a no brainer – one is established and very prominent and the other not, with the technology sitting with very small companies. The effect of raising the ROC for offshore wind has been to pull our market out from underneath us. The Government needs to address this, increasing the tidal ROC to about five, so that there is no differential between wave and tidal.

Q. How do you find the current investment climate?

A. Very difficult. The credit crunch has meant the big player’s money has dried up and that has had a nasty impact on those of us at the end of the supply chain. We still have equity requirements and we are in the market looking for equity, our last partner came in at the beginning of 2008.

Plus, the venture capital community is doing two things at the moment; firstly it is doing triage on its existing portfolio, supporting only those it thinks will survive and, secondly, it is brokering very harsh deals, so you have to be very careful going into any investment deals that you have actually create some value for your company. That is the reality of the market at the moment; it is really aggressive and pretty unpleasant.

Q. How do you think the Government can encourage investment?

A. Firstly, it needs to up the multiples of ROC and that will send out a very clear message to the investment community. We need a strong signal from the Government that it is serious about wave and tidal energy.

There needs to be a signal from The Treasury by creating suitable tax breaks, and this would encourage investors by showing them that this is an area that the Government wants them to invest in.


Q. Do you think tidal energy is neglected compared to other renewable sectors?

A. There are people in Government who are very keen to see tidal energy happen but there voices aren’t very loud. I believe tidal is viewed by the majority of the Government as a soundbite, that it will be here by 2020, but my view is that it can be here much quicker and all you need is the will to do it, and if you can get the will then it will snowball.

The Government focus is obviously on nuclear and offshore, so in that regard, we are peripheral, but in terms of potential and the necessity of renewable energy – then we are part and parcel of the renewable mix.

I would say that, so far, very little money has been invested in the technology to get it to this stage, but now is the time to ensure that we don’t starve the commercialisation and that we make sure we do it extremely well.

Related Content:
Green and Environmental Interviews
Marine and Tidal Energy News

Related Links:
www.marineturbines.com