Download Ocean Energy Annual Report 2011

Ocean Energy
Development Programme
Annual Report 2011
Contents
Contact Persons
04 This is Ocean Energy
Business Development and Management
Site Development
06 The Aegir Shetland Project
08 Partnership with
the Local Community
09 Tonn and AMETS
Technology Development
10 Pelamis
10 Technology Readiness Level
10 Monitoring Wave Developers 11 Standpoint Project 2011
11 Seabased Wave Energy –
Project Maren
Veijo Huusko
+46 70 242 80 70
veijo.huusko
@vattenfall.com
Jörgen Josefsson
+46 70 620 33 22
jorgen.josefsson
@vattenfall.com
Introduction and
executive summary
Göran Franzén
+46 72 245 99 83
goran.franzen
@vattenfall.com
I am pleased to present the first annual report for Vattenfall’s
Ocean Energy Development Programme (OEDP). This annual
report describes last year’s achievements of the OEDP and
additionally provides a comprehensive overview of Vattenfall’s
positioning in the field of ocean energy.
Technology Development
Gunilla Andrée
+46 76 141 35 85
gunilla.andree
@vattenfall.com
Björn Bolund +46 72 234 24 38
bjorn.bolund
@vattenfall.com
Oskar D Fängström
+46 703 86 34 70
oskar.danielsson-fangstrom
@poyry.com
Business Development
12 Country by Country Overview
14 Industrial Partnerships
15 Environmental Responsibility
Per Holmberg
+46 70 378 35 73
per.holmberg
@vattenfall.com
Eoghan Maguire
+44 78 25 32 94 22
eoghan.maguire
@vattenfall.com
Site Development
Kristin Andersen
+46 70 618 38 97
kristin.andersen
@vattenfall.com
Erik Sparrevik
+46 70 384 47 94
erik.sparrevik
@vattenfall.com
Communications
Colin Stewart
+44 79 72 13 14 34
colin.stewart
@vattenfall.com
Harvey Appelbe
+35 38 68 22 69 92
harvey.appelbe
@tonnenergy.ie
Since 2006, Vattenfall AB R&D Projects has been investigating
the potential for ocean energy to offer a major new renewable
energy source, and in 2009 Vattenfall established a formal
ocean energy programme. Our early work focused on reviewing
conversion technologies to determine when and where they
could be viable.
In early 2011 we completed our investigations and finalized
a comprehensive business review of the ocean opportunity.
Our proposed business plan was approved by the EGM in April
2011. The bottom line of the business plan is to focus our efforts
on a demonstration of one of the existing leading technologies
and also to concentrate on a leading market for ocean energy.
In this report we present the status of the ocean energy opportunity. You will learn why and how we have decided to focus on
Scotland as the leading market for early projects. The report
also introduces Pelamis – the ocean energy technology that we
are pursuing. You can read about our first 10MW wave farm
project in Shetland, using this technology, and why we are excited by the relationship with the local community organisations
on Shetland.
As you read this report, I hope you will see three common
themes that we have deliberately adopted in our strategy for
ocean R&D:
l Value: We are working on ocean energy before it is commercial because we are creating measurable value for Vattenfall
in terms of competence and a credible position that can be
realised when the commercial market opens. Working now
is more valuable than waiting and trying to buy in later.
l Partners: We are minimising the risks and costs of accumulating this value by working through partnerships, where
others contribute competence and cash to the work that
needs to be done in a way that fits with value creation for
Vattenfall.
Maria Parent
+46 76 807 65 50
maria.parent
@vattenfall.com
© Vattenfall
Photo: Pelamis Wave Power Ltd.
Veijo Huusko. Photo: Elisabeth Redlig
In 2012 we will continue to intensively pursue these themes. For
the coming year, I hope we can have enough confidence in our
technical evaluations and industrial partnerships to order our
first 1MW machine for deployment in Orkney, Scotland in 2014.
This would provide us with the competence and confidence to
consider ordering machines for our 10MW farm in 2016, which
in turn might allow us to consider more than 40MW by 2018,
when we expect several technologies to be ready and proven.
To summarize, I am very pleased with our first year of results
and also excited about the potential of the ocean energy development programme in the near future; not least because of the
strong team of smart people we have working on it. Once you
have read this report, I encourage you to contact them directly
to learn more about their work. I know you will find it compelling.
Veijo Huusko
Director, Low Emitting Generation
Vattenfall AB
l Companies: We accumulate the value of our investment in
ocean R&D by doing the work through purpose-built companies in the local market, where the value of the company
increases as our work succeeds.
Ocean Energy Annual Report 2011
3
This is Ocean Energy
Ocean energy is a huge untapped renewable energy resource that represents a
major growth opportunity for the coastal regions of Northern Europe. According to
EU targets, this massive natural renewable energy resource off Northern Europe’s
western coasts could be harvested by about 188GW installed capacity by 2050.
The wave energy industry could soon
become the next wind industry, with a
similar level of economic activity and
decarbonisation potential, but it will not
happen automatically. As with any new
energy source, it will take a concerted
effort to convert this opportunity for
Europe.
Among the pioneers of wave power
Those communities and organisations
that move early will have the best chance
of benefitting from the opportunities
linked to ocean energy. Consequently,
Vattenfall initiated some ocean energy
projects in 2006, in order to remain
among the leaders of sustainable energy
production. The team completed an initial
review phase in 2010 and has concluded
a thorough evaluation of the ocean energy
opportunity. They were convinced that
the first ‘pilot’ wave farms of 10MW from
2015 should be in Shetland to the North
of Scotland. If all goes as expected,
Vattenfall plans to ramp up to farms of
50MW and then commercial scale farms
of >100MW after 2020. But this is still a
long way to go.
Adding value to Vattenfall’s production
portfolio
Ocean energy could make a significant
contribution to decarbonising Vattenfall’s
power generation portfolio, because a
large quantity of energy can be harnessed
from the ocean movement with negligible
CO2 emissions. Offshore wave is considered a relatively environmental benign energy source, with limited negative impact
on the local environment. For some species the impact could even be positive.
However, important knowledge gaps still
exist and Vattenfall is closely involved in
the ongoing research within the field.
Suitable regions for ocean energy
Pelamis, a Scottish technology, illustrates
how a region like Scotland is currently
leading this race largely due to its clearly
articulated political commitment. Consequently, Vattenfall’s investments in ocean
energy will happen first in Scotland, close
to the leading technologies, strong wave
resources and adequate feed-in supports.
In time there is hope that Ireland, with
its massive natural ocean resources,
will follow suite, although policy building
blocks remain to be put in place. Recent
announcements from the Isles project
are suggesting a subsea grid will further
unlock the marine renewables there. This
will be critical to realising the export dimension of Scotland and Ireland’s marine
potential, which is much larger than the
domestic market can accept. The British
Isles alone should contribute some 5GW
of clean ocean energy to Europe by 2035.
Constraints that ocean energy faces
Although the technology has been developed since the 1970s and a few full scale
devices are in the water producing power,
the products remains in an embryonic
state. The current lack of capital has
slowed this development. Industry associations estimate that capital required
by these small companies collectively is
just EUR 157 million. Still, private capital
is not available to them and the recent
funding announcements from the EC of
EUR 22 million, the UK Government of
EUR 24 million and the Scottish Government of EUR 43 million are welcome, but
public funds are not sufficient.
A promising outlook
Like any new energy source it will take
time to refine the emerging wave conversion technology to survive and operate
viably in the violent oceans. It could take
as long as 20 years before wave electricity is at the same level as offshore wind
today. This is still compelling because
the cost of wave energy could potentially
continue to reduce at a pace faster than
offshore wind. Furthermore, there are
substantial benefits of having both wave
and wind on the grid, since wave energy
continues to arrive from the large oceans
long after winds have calmed after the
storm and is so much more predictable.
While the benefits of ocean energy are
compelling, they are far from inevitable.
A concerted effort will be required to
overcome the remaining hurdles.
Upcoming challenges
By working at this early stage Vattenfall
can carve out a valuable position by developing its competence and credibility in
time to exploit the emerging opportunity.
The company is motivated to work in
ocean energy to show the opportunity to
the existing large industrial players and
communities so that they will pick up the
high
medium
low
very low
Wave resource distribution in Europe
Graphic: Vattenfall, Source: Aquaret
baton, bringing to bear their significant
capabilities and financial capacity to
commercialise the opportunity. However,
there remains a lot of difficult R&D work
to be done in the challenging open ocean
environment, before this type of energy
could be regarded as a viable new energy
source. ■
The launch of one machine segment at Pelamis docs in Leith, Scotland. Photo: Pelamis Wave Power Ltd
This is Ocean Energy
5
The Aegir
Shetland Project
Aegir Wave Power Limited
is a joint venture company
between Vattenfall (owning
66 %) and the Edinburgh
based manufacturers of
Pelamis wave energy
machines, Pelamis Wave
Power Ltd (owning 34 %).
The focus of the Aegir
company is to develop,
construct and operate one
of the first small wave farms.
Good reasons for Aegir
Since wave energy is still at an early stage
of development with a lot of uncertainty
and risks, the Aegir Wave Farm is focused
on the task of demonstrating wave power
at the modest scale of 10MW. Success-
fully showing that wave energy is a viable
source of electricity at this scale will allow
for further, larger projects to be developed
and built in the future. In parallel, the Aegir
project will provide an excellent platform
to gather valuable skills, experience and
knowledge that can be used to maximise
the benefits of future projects. Working
closely with the leading technology company, who happen to be Scottish, is an
excellent way of introducing Vattenfall into
the ocean energy ecosystem, and to build
competence.
Functioning of the wave farm
At 10MW, the wave farm will consist of
10 to 14 Pelamis wave energy converters
moored offshore in waters deeper than
50 metres off the coast of Shetland. Electricity generated by the machines will be
exported back to the island via a subsea
cable on the seabed, where it will be fed
in to the local electricity grid via a small
substation. Once the wave farm is up and
The 10 MW project is situated
off the Shetland isles. Shetland
is an archipelago off the northeast coast of Scotland. The
islands lie some 80 kilometres
to the northeast of Orkney and
280 kilometres southeast of
the Faroe Islands and form
part of the division between
the Atlantic Ocean to the west,
and the North Sea to the east.
The archipelago has an oceanic
climate, a complex geology and
a rugged coastline.
Graphic: Vattenfall
6
Site Development
running Pelamis machines will, from time to
time, need to be towed back to sheltered
waters for maintenance work.
Each machine is held on site with a
mooring system, consisting mainly of
anchors set into the seabed and chains
lying along the seabed to rope tethers
which connect to the nose section of the
machine via the yoke structure. Every
wave converter will have its own mooring system but will be linked electrically
to neighbouring machines by flexible
umbilical cables. These will hang in the
middle of the water column with sufficient
slack to allow each machine to move
independently without putting tension
through the electrical cables. Power from
all machines will be gathered via the
network of flexible umbilicals and join one
static cable on the seabed landing on
Shetland and then via a 600MW highvoltage direct current (HVDC) interconnector to the mainland.
Finding the optimal position for the wave
converters
Development work establishing the optimal location, design and layout for the
wave farm has already begun, and Aegir
has identified an area of search within
which it plans to locate the project. The
area of search is approximately 100km2
and lies off the southwest coast of the
Shetland Mainland between Kettla Ness
and the Bay of Scousburgh, with the
outer boundary almost 10 km offshore.
The final position of the machines
within the wave farm will be influenced
by a number of factors being assessed
at the moment. This includes technical,
financial and environmental aspects as
well. A holistic approach to the siting is
taken, aiming to identify the optimal location considering local community, stakeholders, and wild life. The preferred option
will have two rows of machines, front and
back, running parallel to the coastline
with machines facing the sea. In each
Several Pelamis converters can be connected together
and be linked to shore through a single seabed export cable.
Graphic: Aegir Wave Power
row, machines will be set side-by-side
separated by a space of about 300 m.
The two rows of machines will be offset
to reduce any effects of the front row on
the machines behind them. The artist’s
impression above shows what a project
with four machines might look like.
In addition to getting planning consents, the construction of the wave farm
will also require the Shetland transmission link to the Scottish Mainland to have
been completed to allow for power to be
exported to the main UK network.
Having secured agreement from The
Crown Estate to locate the project here,
Aegir is currently focused on completing
site survey work, engineering designs and
carrying out an environmental impact statement.
Environmental assessment
The environmental assessment considers
the use of the area by other stakeholders,
e.g. commercial shipping and fishing, as
well as the ecological status and sensitivity of the area, e.g. environmentally
protected areas for seabirds and marine
mammals. This information and the dialogue with different stakeholders, interest
organizations, and regulators is a crucial
step in the ongoing environmental impact
assessment (EIA) process.
Current status and future planning
This will allow Aegir to develop a detailed
design of the project and its potential
interaction in order to support the application for required planning permissions and
licenses from regulators such as Marine
Scotland in 2014. Aegir hopes the first
power export from the site will be in 2016
and, once built, the wave farm will occupy
only a small fraction of the current area of
search with a footprint of about 2 km2.
The Aegir project represents an excellent opportunity to learn more about the
impacts and interactions associated with
wave farms. By maximising the learning
from this small demonstration through
all phases, from development to decommissioning, it will help future wave farm
developments around Shetland to be
planned and developed such that wave
energy can help contribute positively to
the Shetland economy, communities and
environment in a sustainable and complimentary way. ■
Site Development
7
Partnership with
the Local Community
In November 2011, the Shetland Council and Shetland Charitable Trust entered
a partnership with Vattenfall to develop a roadmap for ocean energy development
around the Islands. Katrina Wiseman describes the partnership with Vattenfall as a
representative for the Shetland Islands Council and Shetland Charitable Trust.
through the Zetland County Council Act
1974, promoting the conservancy and
control of development in the coastal
area of Shetland up to 12 miles off the
coast. The Council has also implemented
a Regional Marine Spatial Plan to actively
manage the marine resources, allowing
the planning of ocean energy projects
alongside fishing and other activities.
Katrina Wiseman, Shetland Highlands and Islands Enterprise, Veijo Huusko, Vattenfall AB, Bill Manson, Shetland
Charitable Trust, Alistair Cooper, Shetland Island Council. Photo: Shetland Islands Council and Shetland Charitable
Trust
By combining Vattenfall’s knowledge of
technology and energy development with
our knowledge of our offshore environment and the community we believe
we have the best chance of success in
ocean energy, and that we will secure
the most community benefit from early
success in Shetland, including the option
to co-invest in projects with Vattenfall to
reap future profits.
The Shetland Islands are positioned in
the path of the strong predominant winds
and storms which blow over the North
Atlantic Ocean, so it is little surprise that
the Islands possess one of the world’s
strongest wave and wind energy resources. The strength of this resource makes
the Shetland Islands an ideal location to
site a wave farm project.
High experience in marine environment
and resource planning
Shetland is viewed to be one of the most
promising locations in the world for the
development of renewable energy. The
8
Site Development
wind, waves and tides offer the opportunity to generate significant amounts of
electricity, much more than required by
the Islands.
Aside from our excellent wave resources Shetland is very well placed for
developing ocean energy with 40 years
of experience in oil and gas; expertise
and capabilities in marine engineering
from fishing, aquaculture and oil and gas;
and a proactive community with a track
record of working closely with the energy
industry. Our community understands the
marine environment, the challenges and
the potential rewards.
Shetland is unique from a marine spatial
planning perspective. The Islands have
a rich and diverse maritime heritage
evolved and grown out of the Island’s
geographical remoteness and the fishing
and oil and gas industries, which has
resulted in a strong and dynamic marine
management ethos. Shetland Islands
Council has developed regulatory tools
to enable the management of our waters
The Shetland
community benefits from Aegir
Shetland happens to emit more CO2 per
capita than America. Acutely aware that
our dependence on fossil fuels is unsustainable, we are highly motivated to ensure that
a new and sustainable energy source is
brought about.
The partnership will give us valuable firsthand experience from Aegir that will inform
a strategy to enable the whole Shetland Islands community to capture the ecological,
economic and social benefits of its sizeable
ocean energy potential and the planned
electricity cable to the Scottish mainland.
For Shetland, renewable energy offers the
prospect of a new and growing industry
that will generate jobs and strengthen skills
among local people. It could also create
diversification opportunities for existing
firms operating in the marine and engineering sectors. As renewable energy activity
increases, Shetland’s image as a Renewable
Energy location strengthens. The greatest
chance of significant benefits arises from
being involved from the start. ■
Tonn and AMETS
Tonn Power Limited is a joint venture company between Vattenfall (owning 51 %),
the Irish wave energy technology company Wavebob Ltd and the Irish power utility
Bord Gáis Eireann (both together owning 49 %).
The focus of Tonn company is to develop,
construct and operate wave farms in
Ireland, to the extent that is permitted
by the local market conditions. Following
positive pronouncements by the Minister
for Energy in 2009, Vattenfall hoped that
a 5MW demonstration wave farm could
be developed in Ireland by Tonn. The
company submitted two applications to
secure exclusive rights to explore two potential locations. During 2010, Vattenfall
worked, through Tonn, with the local Irish
authorities (SEAI) and the local power
utility ESB International (ESBI) to make
progress in matters such as the consenting procedures. It became apparent that
the ‘first come, first serve’ process to
allocate seabed sites was packed with
more than 130 applications, many of
which were from speculative developers
hoping to secure an asset.
Gaining knowledge on environmental
impacts of wave energy at the AMETS
Realising that the permitting process for
commercial sites was not functioning, and
eager to help Ireland develop its opportunities, Tonn entered a partnership with SEAI
and ESBI to develop a full scale test site
called the Atlantic Marine Energy Test Site
(AMETS). Tonn’s role in the project was to
work on the environmental impact assessment, giving Vattenfall a good opportunity
to build competence for similar work in
Scotland. SEAI’s role, representing the Irish
Government, was to manage and finance
the construction of the subsea cables and
other infrastructure. Vattenfall encourages
Irish Government to stay the course.
Through Tonn, Vattenfall worked with
ESBI to complete the environmental
impact assessment, which included more
than a year of marine mammal observations, bird surveys and benthic seabed
sampling. The environmental impact
statement was completed and the consent
application was filed with the Department
of Environment in December 2011. While
the consent process is expected to be
completed in the first quarter of 2012,
given Ireland’s financial situation, it is
unlikely that the Irish Government will fund
Wavebob (yellow) and Pelamis (red) machines with
associated moorings deployed at AMETS.
Graphic: Frank O’Reilly
construction of the site for some year.
The appetite to fund the AMETS project
reflects the Irish Government’s careful
attitude toward wave energy R&D. As a
result of these market conditions, and
wanting to focus on only one market,
Vattenfall encouraged the Tonn board to
adopt a holding pattern to conserve its
cash reserves until Ireland is more capable
of exploiting the opportunity in the future.
A review of the project opportunity in
Ireland is expected in 2013, by which time
the market conditions in Ireland and Scotland will be clearer. ■
Graphic: Sustainable Energy Authority of Ireland, Marine Institute
Site Development
9
Pelamis
The wave-induced motion of the hinged
joints is resisted by hydraulic rams, which
pump high-pressure fluid through hydraulic
motors via smoothing accumulators. The
hydraulic motors drive electrical generators to produce electricity. Power from all
the joints is fed down a single umbilical
cable to a junction on the seabed. Several
devices can be connected together and
linked to shore through a single seabed
cable. Important features of the Pelamis
concept are the ability to tune the motion
of the structure for optimized wave energy
absorption and the survivability characteristics, for example the structure’s dive
through higher waves.
One of the existing Pelamis P2 machines at EMEC off the Orkney Islands 2010. Photo: Pelamis Wave Power Ltd
Pelamis Wave Power is recognized as world leader within the wave energy industry
with regard to technological maturity and offshore experience. The Pelamis wave
energy converter resembles a 200 meter long sea snake, floating on the ocean
surface, facing the waves. It is a semi-submerged, articulated structure composed of
cylindrical sections linked by hinged joints.
More Technology Development Projects
Technology
Readiness Level (TRL)
Wave power technology is an immature
sector with developers in various stages
of development as well as different
approaches to the development process.
As a prospective buyer of wave power
converters Vattenfall has a need for a
systemic metric of the development process both in order to assess the development of each concept and as a way of
communicating to developers what we
expect from their development process.
For this end Vattenfall has chosen to use
the so called Technology Readiness Level
(TRL) approach originally developed by
NASA and adapted for wave power by
Irish utility ESB International. In short, TRL
divides the development process
10 Technology Development
from idea to commercial readiness into
nine levels. In the wave power adaption
each level is described in terms of what
needs to be achieved, covering aspects
from numerical and experimental verification to system configuration. Vattenfall is
actively working for TRL to be used as a
standard for the whole sector.
1. PowerBouy (Ocean Power Technologies,
USA): The PowerBouy is a point absorber working against a so-called heave
plate. Hydraulic pistons in the section
below the buoy harvest the resultant
force between the buoy and plate.
volume change
and consequently
a pressure difference between the
chambers. Energy
is extracted via an
air turbine when
the air is trying to
stabilize the pressure between each
pair of chambers.
Wavebob device
Photo: Wavebob Ltd
3. Wavebob (Wavebob Ltd, Ireland): See
text under Standpoint Project 2011
for further information.
Monitoring Wave Developers
While the Pelamis wave concept is
Vattenfall’s main track, other concepts
are also evaluated in view of the high risk
associated with wave power technology
development. Three other deep water
technologies (presented below) have
been chosen for further studies based on
their advanced development status:
Programme history
Funded in 1998, the Pelamis wave energy
converter has undergone a stepped
development programme including simulations, tank tests, scale sea trial and several full-scale offshore sea trials. Pelamis
have deployed four first generation (P1)
machines followed by two second generation (P2) devices in 2009 and 2011.
Having monitored the Pelamis technology since 2008, Vattenfall engaged
in-house personnel to perform a technical
due diligence in 2009, gaining knowledge
and identifying the need for technical and
cost-related improvements in the existing
P2 machine. To follow up, a joint cost
reduction and performance enhancement scoping study was carried out at
the beginning of 2011. This study, which
included a detailed project cost model,
concluded that a ‘scaled up’ configuration
based on the existing technology platform
of the P2 offered economic advantages
without excessive risk.
Current status of Vattenfall’s Pelamis
programme
Together with a business case model,
Vattenfall set out and pursued a route
forward towards an enhanced P2 machine
(P2e), which comprises the following steps:
1. Work with Pelamis to reduce the cost
and increase the technical performance of the existing wave device
(the P2) and choose a new machine
configuration going forward. While
Vattenfall helps to set the requirements and derive the necessary work
strands, most of the technical work is
carried out by Pelamis
2. Perform tank test to validate the
numerical model and test survivability.
3. Build and test a full scale device
at EMEC (European Marine Energy
Centre) during 2014-2015.
4. Evaluate and build a 10MW pilot plant.
In late 2011, the first activities aimed
at reducing cost and increasing performance was undertaken. This work
detailed the possible positive impact of
active control, altered geometry, increased
size and new material. A number of work
strands were started where the outcome
will help decide on the configuration for
the first machine to be deployed in EMEC
2014. The work also highlights the possible future improvements and the effort
needed to get there.
Outlook and upcoming challenges
The first part of the work has focused
on reducing the remaining uncertainty
and confirming the economic performance
of the ‘P2e’, to provide a basis for Vattenfall procurement, detailed design and
subsequent build. For 2012, attention is
now expanded to include challenges in
the subsea grid, operations and maintenance as well as insurance. The outcome
of current work and the result of the tank
test in 2012 will hopefully emerge into
a compelling business case leading to
the purchase of Vattenfall’s first Pelamis
wave power converter. ■
Wavebob wave energy converter at full
size for deployment in a pilot zone off the
Portuguese coast in 2013. The Wavebob
is an axis-symmetric, self-reacting point
absorber. The construction comprises two
bodies, the torus and the float-neck tank
(FNT). Whilst the torus rides the waves the
FNT is tuned to move out of phase with
the waves. The resultant force drives a
hydraulic or a rack and pinion power takeoff system. Vattenfall is responsible for the
risk assessment of the design, manufacturing and deployment of the device and
has arranged several design workshops.
Seabased Wave Energy – Project Maren
Illustration of Wavebob functioning
Graphic: Wavebob Ltd
Seabased wave generators and sub-sea transformer at Runde, Norway. Photo: Vattenfall
The Maren project started in 2008 and
is a test of the Seabased wave energy
devices on the west coast of Norway.
The Seabased concept is to have a buoy
floating on the surface connected by a
wire to a linear generator mounted on the
seabed. Two units and a subsea grid were
deployed in 2009 and the project naturally
expired by December 2011. An evaluation
of the project will follow during 2012.
Standpoint Project 2011
PowerBouy device. Photo: Ocean Power Technologies Ltd
2. AWS-III (AWS Ocean Energy, Scotland):
Basically a floating raft with rubbercovered chambers. Waves acting on
the rubber membranes cause a
The Standpoint (Standardisation of Point
Absorber Wave Energy Convertors by
Demonstration) project is a joint EU project
between six members (Wavebob, GL Group,
Hydac, Gernerg, Laborec and Vattenfall
AB), which will seek to demonstrate a
Technology Development
11
Ocean Energy in other
European countries
Country by
Country Overview
Many countries around the world have the natural resources for ocean
energy. Nevertheless, not only natural preconditions are crucial, but
political commitment and financial support also play an important role
in pursuing a sustained R&D development programme in this area.
Ocean Energy around the world
Due to the earth’s rotation the prevailing wind direction
is from west to east. Consequently, the best wave energy
conditions are found at exposed west coasts around the
world, since waves are created by wind blowing over the
sea surface. So it is natural that there is some R&D activity
in countries such as Australia, USA and Canada where the
wave energy resource is strong. Other countries with good
resources like Chile, South Africa and various Ocean Island
States are also showing interest in wave power. However, a
rich energy source is not enough to make progress, but a
broad programme of supports is required. In many of these
countries the support for R&D in wave energy is insufficient
or once-off.
Pioneers in wave energy development –
Scotland and the UK
In Europe, however, several countries have ambitious and
sustained wave energy development programmes in progress.
First and foremost, the UK and especially Scotland have
among the best resources in Europe and have probably
contributed more public funding to wave energy R&D than
the rest of the world put together. In addition, the UK has
the Renewable Obligation Certificate system as a mechanism to provide revenue support for new renewable energy
sources. In the case of wave and tidal this is as high as five
times the normal price for electricity, equivalent to perhaps
EUR 392 per MWh for machines connected before April
2017. Although this will be reviewed as part of the electricity
market reform in the UK, it is expected that adequate revenue
support will be available for some time, while wave and tidal
become commercially viable and make a contribution to the
UK’s renewable energy needs.
This illustrates the uniquely strong political support for
wave and tidal in the UK and in particular in Scotland, where
Alex Salmond’s SNP party has an overall majority. Aside from
financial support, having strongly articulated political commitment has ensured that other enablers, such as consenting
procedures, are streamlined. Notably the UK hosts the vast
majority of technology development companies.
12 Business Development
rt
po
up
s
rce
blic
m
sou
y
eso
g
, pu
ve
i
ary
r
e
r
ntu
s
n
t
r
t
i
t
e
e
l
n
n
k
n
v
m
a
e
u
n
mm
a
a
o
c
d
r
o
a
u
i
n
W
T
I
C
S
M
G
R
e
urc
1
+
+
+
+
+
+
+
+
+
+
+
+
Ó
Benchmark for
the sector.
Grid access is the only factor, which needs to
be improved in the near future.
2
+
+
+
+
+
+
(+)
Ø
Good wave
resources,
financial
situation
thwarts
development.
Ireland has arguably the most high quality wave
resources in Europe. Ireland had an ambitious
phased development programme in 2006 including both a substantial feed-in tariff as well
as public grants for R&D. Due to the financial
crisis it is unlikely that Ireland will be able to
afford the financial or political attention needed
to grasp the ocean energy opportunity from
Scotland in the short term. A critical element to
Ireland’s role in the sector will be its ability to put
in place export agreements to supply the UK.
3
+
+
+
+
+
+
+
(+)
Ö
Robust
actors, newly
developing
sector.
France has good wave resources along its
Atlantic coast. The wave power sector is in its
infancy but a recently introduced feed-in tariff
for marine energy in combination with a new
public R&D programme will create opportunities.
However, it is likely that initial efforts will be
focused on tidal energy.
4
+
+
+
(+)
+
Ò
In the near
term mainly
a proving
ground for
prototypes.
Portugal has a good feed-in tariff for small-scale
deployment and is in the process of developing an
infrastructure for deployment of wave power. However, lack of domestic technology and/or project
developers makes Portugal dependent on attracting foreign developers in competition with UK.
5
+
(+)
None
?
+
+
Ö
The
“negotiable”
tariff is an
unknown.
Very
domestic
profile for
sector.
Spain has good wave resources along its northern
coast and off the Canaries. There is a thriving
publicly funded wave power programme focused
on R&D in place involving many Spanish companies and institutions, however somewhat
isolated from mainstream wave power development. Feed-in tariffs or similar remains to be
introduced to be commercially attractive.
6
+
+
+
+
-
-
N/A
There is a near
total lack of
governmental
interest.
Of the Nordic countries Norway has by far the
best physical resource, on the level of UK and
Ireland. However, Norway does not have the
same need to develop new renewable energy
sources.
N/A
+
None
-
(+)
N/A
Some public
funding for
technology
development.
Sweden has marginal wave resources and there
is e.g. no specific feed-in tariff or similar. There
is however some public funding for technology
developers motivated by export opportunities,
as well as for a 10 MW wave demonstration
farm on the Swedish west coast.
This is illustrated well by the fact that the first full scale test
site of some 11 berths is being tested in the open ocean.
The British Isles as Vattenfall’s
prevailing Ocean Energy area
Compared to other countries and their respective political
commitment towards ocean energy (see other countries
on the right), today the British Isles in Scotland and the UK
have the most favorable conditions for pursuing an ocean
energy programme. This is why Vattenfall has chosen to focus
its ocean energy R&D work on the British Isles as there
are both excellent wave resources and a genuine political
will to develop the sector. The company’s immediate efforts
are concentrated on Scotland and the UK where adequate
political and financial supports exist.
High expectations for R&D Ocean Energy
in Scotland and the UK
There remains a number of market challenges. Ocean energy
must show that it is approaching viability in a timely manner
if it is to continue to receive adequate support. In particular
it must contribute to Scotland’s target to meet an equivalent of a 100 percent demand for electricity from renewable
energy by 2020, which is the main political motivation. This
may be frustrated by the technology company’s ability to
raise private funding to improve their product performance.
It may also be inhibited by insufficient transmission grid access, which is very constrained in the remote coastal areas
of Scotland, such as Shetland, where these projects are best
situated. To address these concerns the OEDP are working
closely with other utilities as well as other stakeholders to
help the Scottish government to shape new policies. Additionally, Vattenfall has been working to develop the opportunities
in Ireland where the transmission grid is planned strategically
and it may be possible to more easily locate commercial
projects, if an export regime with the UK is put in place. ■
nt
me
m
Co
None
None
Business Development
13
Industrial
Partnerships
At the beginning of 2011 the Ocean Energy
Development Programme (OEDP) completed a
comprehensive review of its business plan. As part
of the analysis the OEDP realised that in order for
the business plan to be valuable, the number and size
of wave farms would have to ramp up significantly
from 2020 to 2035, once the technology was proven
at a commercial scale. This would require deployment
scales (100s of MW/year) similar to offshore wind
today. The industry may need to be producing more
than one full scale machine per week in 2020. Today
it can manage one machine a year.
Installation of the mooring blocks at the EMEC nursery test site.
Photo: EMEC Ltd
Unlike the offshore wind supply chain, the
wave industry is not taking an existing
product and putting it offshore. There
are no existing large companies present
in the sector able to do the R&D work
required to get machines into the water.
Wave energy converter products are
currently being developed by very small
companies, the largest of which has 70
people working for it and has raised EUR
60 million in total.
Vattenfall realised that in order to scale
up at the required pace the wave energy
supply chain needed large industrial
players to put their engineering capability, manufacturing capacity and financial
backing into the sector.
Ocean energy still an infant industry
The tidal technology space has seen
the arrival of companies like Rolls Royce,
Alstom and Siemens. Familiar with the
rotating turbine technology of tidal
stream product inventors, these large
industrials have bought out the original
development companies and adopted
their technologies as their own. This has
not yet happened in wave energy, because
the technology used is unfamiliar and the
timescales to have proven designs ready
to be productised are longer.
In order to introduce large industrial
14 Business Development
players into the wave energy sector,
the OEDP set about forming a system
integration business with two large
organisations. During 2011 a comprehensive business development exercise was
performed to evaluate all of the potential
partners.
Partnerships with Babcock and Abengoa
In November 2011 the OEDP entered
a partnership with Babcock, a large UK
Operations & Maintenance (O&M) company, and Abengoa a large Spanish EPC
(Engineering, Procurement and Construction) company. These two represented a
good fit with Vattenfall’s business plan for
ocean energy, since they shared the appetite to develop this opportunity in the
UK. Together they provided the requisite
O&M and EPC capabilities for renewable
energy in the offshore environment.
Nautimus Ltd – a joint venture formed by
Vattenfall
In December 2011, Vattenfall founded
Nautimus Ltd and invested sufficient
capital to enable the business to begin
developing its business plan as a system
integrator for wave and tidal farms. If
the business plan proves compelling, it
is hoped that Vattenfall, Babcock and
Abengoa will co-invest to undertake their
first technology project (the deployment
of P2e at EMEC), building competence
and capability before building wave farms.
This way, Vattenfall hopes to significantly
reduce the risk associated with the first
10MW Aegir project.
Industrial partnerships support utility
cooperations – E.ON and Iberdrola
The Nautimus partnership also provides a
basis for Vattenfall to coordinate its work
with other utilities also working on ocean
energy. Both E.ON and Iberdrola (Scottish
Power Renewables) have purchased
Pelamis wave energy products and have
deployed them at the European Marine
Energy Centre (EMEC) test site. Through
Nautimus, Vattenfall plans to buy a third
enhanced machine (P2e) and deploy it
alongside the existing two machines at
EMEC. This will provide a valuable opportunity to reduce costs, and share valuable
insights of array effects and device performance. Where E.ON and Iberdrola will
gain the most operational data, Vattenfall
will gain information for the new product
design. By sharing the information all
three will have more confidence in the
technology before considering investment
in their own arrays elsewhere. ■
Environmental Responsibility
Effective management of our environmental responsibilities is essential for the
success of the Vattenfall’s Ocean Energy Development Programme (OEDP) to
develop commercial wave farms. The OEDP is working actively with environmental
issues, both within the Aegir Shetland project and through international research.
Progress towards consent
The Aegir Shetland project reached an
important environmental milestone in
autumn 2011, when the ”Scoping Report”
was issued to consent authorities. This
described the wave farm and the local
environment at a high level, suggesting
which baseline investigations should be
undertaken to characterise the site and
the potential effects.
The scoping phase is one of the
mandatory phases within the so called
”Environmental Impact Assessment” (EIA),
a several-year long process providing
the basis for the consent application for
the project and, eventually, the consent
decision taken by the regulator Marine
Scotland, in consultation with other
authorities and stakeholders. By issuing
the scoping report and receiving scoping opinions back, the Aegir project (see
page 6) is now able to move into the
impact assessment phase in 2012. This
will take more than one year, including a
variety of field surveys, e.g. investigations
of the sediment and biological life at the
sea bottom, as well as the presence of
marine mammals and sea birds. The baseline environmental information will be fed
into the EIA and be of crucial importance
for identifying the optimal site layout for
the wave farm and grid route within the
larger development area.
Field surveying started
Some field surveying has already started:
the measurement of the wave climate using two different buoys deployed in 2011
is an important milestone. These buoys
will stay at their locations for several
years, collecting wave height, length, and
direction. The wave data is important
because it gives information about the financial, technical and biological feasibility
of the Shetland project. It is used to determine the amount and nature of energy
in the waves; meaning how much energy
the wave farm will be able to convert into
renewable electricity.
Using results from international research
Although offshore environmental in-
vestigations are fairly standardized,
many knowledge gaps exist in relation
to wave energy. As this industry is only
emerging now, the legislative process
and guidelines are being developed. It
is important for OEDP that Vattenfall is
actively involved in their formulation to
influence the development of the future
framework. While valuable knowledge and
experiences can be transferred from the
offshore wind industry, more is needed.
The environmental team of the OEDP and
Aegir maintain close contacts with leading research groups, attending several
important environmental meetings and
workshops, both as the role of a project
developer but also as a selected expert
advisor. Vattenfall sits on the board of
various EU projects, as well as on the
largest national R&D programme for
environmental research in the UK. Through
Tonn, Vattenfall has also gained experience
working on the EIA of the AMETS wave
test site project in Ireland that has just
been submitted for formal consent. ■
Photo of starfish identified during diving inventory of sea bed habitats at AMETS. Photo: MERC consultants
Business Development
15
About Ocean Energy
Converting the enormous energy of the ocean waves into renewable electricity is a massive but challenging opportunity for Vattenfall. This annual
report gives you an insight in how Vattenfall’s dedicated R&D Projects team
is working on the Ocean Energy Development Programme to move from R&D
into actual commercial wave farms. It provides you with descriptions of some
of the 2011 highlights, including:
l The formulation of a new ocean energy strategy for Vattenfall.
l Achievement of some key milestones in the development of a Vattenfall’s first (10MW) pilot wave farm off the Shetland Islands, The Aegir project:
- Lease agreement with The Crown Estate in the UK
- Partnership with the local community
- Deployment of two wave measurement buoys
- Completion of the Environmental Scoping Report and opinion
from the authorities.
l The formation of a the first engineering services company, with large industrials partners, dedicated to wave energy: Nautimus Ltd.
l Technology development progress with the world leading technology developer Pelamis Wave Power.
Asset Development
R&D Projects
Ocean Energy Development Programme
www.vattenfall.com
2012, April
Vattenfall AB
SE - 162 87 Stockholm
Sweden