Select Committee on Science and Technology Appendices to the Minutes of Evidence


Memorandum submitted by Wavegen

  Applied Research and Technology Limited, trading as Wavegen is a private company carrying out research and development into devices for converting wave energy into electrical power. The company is recognised as a world leader in this field and has developed and operates the world's first commercial scale wave energy plant.

  Since its formation in 1990 Wavegen has raised and invested over £13 million to fund its development activities, 82% of which has come from private equity investors with the remainder from UK and EU R & D grants. Wavegen currently employs 18 people, with the expectation that this will increase further over the coming year. Wavegen welcomes the opportunity to contribute to your enquiry.

  Over the years projects have moved from the high level fundamental research phase in co-operation with UK universities, primarily Queen's University Belfast, through concept development and model scale trials on a number of devices to the manufacture and installation of full scale demonstrator plant, most notably the LIMPET 500kW device on Islay. Currently Wavegen is developing floating offshore wave energy devices in the power range 300kW to 1500kW with a view to placing a demonstrator unit off the coast of Scotland in 2003.

  The west coast of the UK is particularly favoured for the application of wave power devices due to its exposure to Atlantic wave systems. Waves generated by storms thousands of miles from our coast lose very little energy as they travel to our shores. Wave energy is therefore more stable in its supply than wind energy in that waves can exist even when the local weather conditions are calm. The average wave power in deep water off the west coast of the UK is in the order of 60 to 70 kW per metre length of wave crest which compares favourably with offshore Spain (40 kW/m), USA and Canada Pacific coast (30-40 kW/m) and India and Japan (15-20 kW/m). India, Japan, and Portugal have all made significant investments in wave energy developments over the last 20 years and Canada has recently placed contracts in respect of demonstration projects.

  The UK government invested in wave energy research and development in the 1970s and 1980s, primarily with universities and nationalised research laboratories. The target set under these studies was to develop individual schemes capable of delivering 2GW of electrical power. With little prior research and development activity and no realistic cost base the schemes produced by NEL (National Engineering Laboratory) and the universities of Bristol, Edinburgh and Coventry gave very high unit costs of electricity generation, upwards of 10p per kWh and generally over 16p per kWh. Given the magnitude and complexity of these mammoth schemes the technical risks and therefore generation cost risks were high. The fall in oil prices in the 1980s killed off the impetus to develop such large wave power schemes. Since 1999 the UK government has been actively supporting wave energy under the New and Renewable Energy Programme. Wavegen has benefited from financial support under this programme and is currently discussing further proposals with the DTI.

  Since 1990 nearly all R&D into wave energy devices has been carried out by SME (Small Medium Enterprise) companies such as Wavegen. The degree of financial risk that venture capital companies are willing to take has necessitated that "demonstrator" wave energy devices under development are much smaller than those considered by the Department of Energy in the 1970s. Typically, devices being developed range in design power output from 100kW to 1MW. The key issues faced by SME development companies in bringing their devices onto the market are:

    —  Raising funding for the R&D phase which can be upwards of £5 million and three years for any one device.

    —  Raising funding for the construction of a demonstrator unit which can be upwards of £3 million per device.

    —  Sub-sea power line costs. Sub-sea power cables need to be provided running from the relatively deep water where wave energy devices are sited to the shore. This can cost upward of £1 million for a 10km line capable of carrying 3MW, with the costs per megawatt metre reducing as the power and transmission voltage increases.

    —  Shore-side grid connect costs. Most coastal locations that are suitable for bringing a power line ashore have a weak grid that needs strengthening before connection is possible.

    —  Suitable model test facilities. The UK's hydrodynamic test tanks run by the National Physical Laboratory up until the 1980s (Feltham, Teddington, St Albans) have all been dismantled following privatisation. Most wave energy companies rely on smaller scale university facilities to carry out scale model tests. However, scale effects can be significant and no large scale facility where rigorous tests can be carried out under laboratory conditions exist in the UK. Wavegen has had to invest in the construction of its own test tank in order to overcome this problem.

    —  Availability of wave power device construction sites. Wave power only works economically if the unit cost of construction is kept low. As the power density from waves is relatively low (in comparison with hydrocarbon fuels) then the devices themselves must recover the energy from a large area of sea to provide significant power output. This means a large number of devices and a low unit cost of production. The most suitable facilities to build wave energy devices are coastal construction sites, ie offshore construction yards or shipyards. The decline in North Sea oil development has led to the mothballing or closure of most of the UK's offshore construction yards that were involved in the construction of floating or gravity structures. Shipyards in the UK are mainly involved in defence work and are therefore not set up to respond competitively to volume production of relatively simple devices.

    —  The low cost of electricity in the UK. Wave power will require a lengthy period of development before the unit cost of generation can come down to the very low values for electrical power currently set by the gas power generation industry. Wind power received considerable support from the Danish government in the 1980s and 1990s which sustained a developing wind power industry and allowed costs of generation to fall. A similar level of support will be needed for wave power.

  The current arrangements for the Renewables Obligation will help significantly to assist the increased use of renewables. However new renewables such as wave power will require additional support, not only at the R&D phase but also during the initial commercial phase where the benefits from the renewable obligation will not be sufficient to allow such new technologies to compete with established renewables.

  The New and Renewable Energy Programme should be expanded in order to give comparable support to renewables as was given to the nuclear industry during its initial years.

  While there is sufficient wave power resource around the UK coast to provide all of the country's electrical power needs, a realistic target for the UK by 2020 would be to supply one sixth of its power requirement from waves. This requirement could be met by a number of "wave energy farms" located offshore (within 20 km of the coast). Unlike other forms of renewable energy such as wind power and biomass, the planning issues would be minimal, the environmental impact would be minimal, job creation would be significant in the engineering and construction industries and the inspection and maintenance aspect would sustain a permanent support industry.

18 September 2002

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