APPENDIX 23
Memorandum submitted by Sea Power International
AB (publ)
Our belief is that the renewable industry is
an emerging industry in a high tech area with an attraction much
like the IT industry. Perhaps this is the next future industry
to attract capital to make it move. Much is still to be done on
R&D but facts are that we already have the first operational
offshore device of its kind for the production of electricity
utilising the energy in ocean waves.
At present our industry has to depend on governmental
subsidies. The wave power industry is very much in the same situation
as the wind power industry was when the Danish government took
a collective, political economy standpoint and made the wind industry
to be one of the most successful industrial developments in Denmark
ever. And profitable! With the right approach from the UK Government
the wave power industry can become of major importance in the
near future not only for the domestic industry but for export
business as well. This industry will then have a good chance to
attract the venture capitalists as the IT industry did.
For many years different projects have sought
to harness the power of the waves in the oceans to produce energy
that is clear and renewable. (The Marine Foresight Panel has stated
that if 0.1 per cent of energy in the oceans was converted to
electricity, it would supply the world's energy demands more than
five times over). The west coast of Scotland has one of the best
wave "climates" in the world, and is seen as the ideal
place in the UK to develop such a project.
Sea Power International wish to begin to utilise
this vast resource, using the methods it has developed using its
own means and helped by capital injections from some 350 truly
enthusiastic shareholders over the past 13 years. This makes use
of a Floating Wave Power Plant (FWPV), allowing the capture of
the higher energy waves found offshore, and negating the need
for natural shore features or expensive civil engineering works.
Sea Power has already built, tested and successfully operated
a full-scale version of the design off the Swedish west coast
during the 1990's. For reference see attached drawing.
As a result of a competition under the SRO3
legislation, Sea Power International has won a contract with Scottish
and Southern Energy to supply wave-generated electricity to the
Shetland Islands, at a guaranteed price, for 15 years. Estimated
starting date for the production is 15 October 2002. This electricity
will replace some of the current expensive and polluting diesel-generated
capacity on the islands. In order to fulfil this contract Sea
Power International has set up a separate company named Sea Power
Scotland Ltd that will build and operate an initial wave power
plant to fulfil this contract. The remaining problem is funding.
If this first power plant will be built and put into operation
the company will subsequently build further plants to take advantage
of the DTI's proposal that 30 per cent of the UK's energy needs
(30 billion kWh per year) should be derived from renewable sources.
The projected cost of building, installing and
commissioning the first plant is £2,600,000.
The implementation of the project would see
the creation of many new, skilled jobs, in addition to securing
jobs in the project's supporting industries. Sea Power is in addition
seeking to start a centre of technical and manufacturing expertise
of wave power technology with its five year expansion programme
to produce a further 29 plants.
Sea Power has as well through its subsidiary
Exim Stromturbiner AB, developed a turbine utilising the tidal
currents and streams in rivers. The turbine has been successfully
tested in laboratory scale. A Joint Venture has now been established
on the Shetland Island with the objective to have the turbine
tested in the strong tidal currents there. The Joint Venture is
for the time being looking for economical support on the islands.
If funds are provided the test will go ahead during February 2001.
The prototype turbine is already manufactured and delivered.
Sea Power also plans to bring hydrogen-producing
units online, to begin to meet the demand for the clean production
of gas from rapidly advancing fuel cell technology, currently
being spearheaded by companies such as BMW and Mercedes.
Our involvement in the production of hydrogen,
"The Fuel for the Future", is attracting special interest
as our floating platform can be looked upon as an ever-producing
gas field and with the capacity to store the fuel produced on-board
until unloaded into a gas tanker. SPI has recently participated
in a number of conferences relating to the notion of replacing
petrol with hydrogen. During the last conference (held in Bavaria,
Germany), California's Secretary of the Treasury stated that 22
per cent of all new cars in California would be powered by hydrogen
by no later than 2005. In view of the exciting possibilities,
both BMW and Mercedes (currently world leaders in the area) have
invited SPI to meetings in order to ascertain the prospects of
importing environmentally friendly produced hydrogen from Sea
Power. At the present time, hydrogen is being imported from Canada
and Africa, which are the only places where it is currently produced
in an environmentally friendly manner. Sea Power wants, as a first
step, to convert the original FWPV plant (currently moored in
the Gothenburg harbour) into a hydrogen-producing unit. This would
take place within the framework of a UK LINK project together
with Professor John TS Irvine, St Andrews University in Scotland.
Stemming from talks with St Andrews, Sea Power will also meet
with Rolls Royce in order to find a more extensive base for a
UK LINK project.
Sea Power estimates that in year five, it would
be possible to have five FWPVHY plants commissioned. These would
each deliver 1,340,000m3 of hydrogen, which should be measured
against the fact that a single car fuelled by hydrogen will need
approximately 4,500m3 per year. This equates to one plant supplying
in the vicinity of 230 cars' yearly consumption of hydrogen.
It is estimated that close to 100,000 cars in
Germany and California will be hydrogen-fuelled within the next
ten years—creating an annual demand for up to 450,000,000m3
of hydrogen, (the yearly production of 400 FWPVHY's).
ANSWERS TO
QUESTIONARY:
Technological viability. Is the technology available
for efficient generation of power from waves and tides?
The answer is without reservation Yes!
Our prototype Floating Wave Power Vessel (FWPV)
was tested outside the west coast of Sweden during eight months
including the winter season. This prototype plant was designed
after extensive laboratory testing at the Chalmers University
of Technology, Gothenburg, at their ship testing facilities. Further
laboratory tests, after this full-scale test, have been made at
Chalmers and the Hydraulic Research Limited of the UK, Wallingford,
and have only confirmed the results. It is however important to
understand that much R&D remains to be done to improve any
new technology.
Our stream (tidal current) turbine is a development
stemming from already commercially operating wind turbines from
the same inventor. The only difference is that the turbine is
lowered into the water streams making it five to eight times more
efficient. Laboratory tests are now to be confirmed in a prototype
test at the Shetland Islands planned for February this year.
Commercial viability. Will wave and tidal energy
become commercially viable in the near future, and attractive
to the private sector as a profitable investment?
Yes!
but:
at present our industry has to depend on governmental
subsidies. The wave power industry is very much in the same situation
as the wind power industry was when the Danish government took
a collective, political economy standpoint and made the wind industry
to be one of the most successful industrial developments in Denmark
ever. And profitable! With the right approach from the UK Government
the wave power industry can become of major importance in the
near future not only for the domestic industry but for export
business as well. This industry will then have a good chance to
attract the venture capitalists as the IT industry did.
The political pressure on environmental questions,
underlined by recent findings about mans influence on the global
warming effect, and technological advances, will sooner or later
attract investors from the private sector. As the "players"
in established energy sectors have enormous interests to defend
it is however essential that governments takes the lead supporting
the new companies involved in the development of the renewable
energy sector. As often is the case in new, emerging industries,
founders very often start from a very small capital base.
Current projects. What projects are currently
running in the UK and how successful have they been? Why did past
projects fail?
Sea Power International AB has currently three
projects in the UK.
1. The Floating Wave Power Vessel (FWPV)
to be built and put into operation offshore the Shetland Islands.
For the time being we are working to get funding and offers for
the construction. The interest in Scotland and on the islands
is mainly stemming from the fact that our projects can generate
work now and in the future. Available central and local funds
are however too small to make it possible to start. We are therefore
looking for partners in Scotland for the actual construction and
all over Europe on the investment side. EU can offer some grants
but for our small company the effort to get through the complicated
bureaucratic procedures is too costly and slow. We have so far
in spite of big efforts not been successful to raise enough capital.
2. The tidal current turbine is now in place
on the Shetland Islands for test. We have formed a local Joint
Venture and are waiting for response on our request for cost sharing
from local funds. Only laboratory results are available for the
time being but if everything goes according to present plans we
will have information in the end of February this year.
3. Hydrogen. As described above we are currently
trying to start a joint project with St Andrews University.
We have not been involved in projects in the
UK before and we do not have first hand information why they failed.
We have however studied the results in as much detail as possible
and our opinion is that they were too fragile and too expensive.
They were built disregarding the harsh sea conditions, well known
to the shipping and offshore industry. Our Floating Wave Power
Vessel is based on proven marine engineering technology used in
shipbuilding all over the world. For the production of the electricity
we utilise robust and standard turbines and equipment developed
over long periods by leading suppliers like ABB and others. We
have developed and tested the FWPV for the past ten years. The
development and testing have been conducted successfully and the
FWPV is now ready for commercial use.
Renewables strategy. What role should wave and
tidal energy have in the Government's renewable energy strategy?
Should they be a higher priority?
They should absolutely have a higher priority!
This is true for governments all over the world but as UK and
especially the northern part enjoy one of the best wave "climates"
in the world it is our opinion that the UK Government would put
wave and tidal energy more in focus than what is the case now.
There are more interesting projects than ever waiting for the
breakthrough and the interest is growing very fast all over the
world.
Research and development. What Research &
Development is being undertaken at present? How much funding is
available and how easy is it for innovative ideas to gain support?
Is national funding for R&D being well co-ordinated? What
sorts of peer-review processes are undertaken?
Our general feeling is that the R&D is at
its lowest today as too little funding is available. We have together
with the St Andrews University applied for funds for a hydrogen
project. Although as always there is (a necessary) bureaucracy
we have been well received. Until now, however, we have had no
success. We think that more funding has to be available for demonstrating
devices or many good ideas will never be realised. The level of
support today (up to 35 per cent) is too little for most of the
new projects now under development. Has to be at least 80-90 per
cent!
To answer your question in full, we have too
little experience but we have got good help so far from the different
enterprises in Scotland and on the Shetland Islands.
Environmental aspects. What are the environmental
implications of wave and tidal energy, particularly for marine
life? How will such devices affect shipping?
Different to windmills and coast based wave
power plants, offshore plants and tidal turbines are not disturbing
the views or the landscape at all. The impact on marine life is
very small and we found that around our prototype plant off the
Swedish west coast there were a lot of fish around. There would
be no problem for the shipping at all as the offshore plant and
turbines will be well marked and can be located outside the normal
shipping routes.
International comparisons. How does Britain
compare with other comparable nations in R&D in this field?
What projects are currently being undertaken abroad and how successful
have they been?
On the first question: Very good!
On the second question we have only been able
to find out about two projects beside the numerous under testing,
construction and in a few cases production in Europe. One prototype
model has been produced in Australia. The system uses a parabolic
wall which focuses wave energy into a column. Initial testing
of the 1:25 model has been encouraging and the company has received
a $750,000 grant through the Australian Greenhouse Office's Renewable
Energy Commercialisation Programme. The other one is an older
project in Japan called the Mighty Whale, designed around an oscillating
water column.
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