Trading tidal energy: Time to invest in Europe’s surging wave power?
21:14, 18 April 2022
Investment in European tidal-energy projects doubled last year as pressure mounts on Europe to meet its goal of achieving 100 megawatts (MW) of ocean-generated power across the EU by 2025.
Siemens Gamesa Renewable Energy (SGREN) and Shell (RDS) are among the members of the Ocean Renewable Energy Action Coalition – focused on advancing the deployment of ocean-based renewable energy.
Trade Royal Dutch Shell plc – RDSa CFD
However, both companies have been more focused on offshore wind projects rather than tidal ones, for now, and that’s been mainly down to the cost of investing in tidal power generation.
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Trade Siemens Gamesa Renewable Energy, SA – SGRENe CFD
Advantages of tidal energy
That’s not to say the focus won’t shift as investment in the ocean sector continues to increase.
“Tidal energy has certain advantages compared to fossil-derived energy sources, the main one being zero-carbon emissions,” Evridiki Dimitriadou, energy analyst at S&P Global Commodity Insights, told Capital.com.
“It also has advantages compared to other renewable energy sources of being much more predictable, for example, while solar- and wind-generated energy depends significantly on weather conditions,” Dimitriadou added.
Ocean-energy investment doubles
Public and private investment in ocean energy totalled €70m ($75.5m) in 2021 – a 50% increase on the year before, according to an Ocean Energy Europe report.
It highlighted that 2.2MW of tidal-stream capacity was installed across Europe last year, an increase of 260 kilowatts (KW), or 0.26MW, on the previous year.
The report also noted that 681KW (0.68MW) of wave energy was installed in Europe in 2021, marking a threefold increase compared to 2020.
Overall, 11.5MW of tidal-stream installations are currently in European waters – and 1.4MW of wave energy.
It marks an improvement on progressing the sector. However, it is still a long way off the target set by the European Commission.
Outlook for tidal- and wave-energy expansion
Tidal-stream deployments are set to continue at a steady pace in 2022, with at least 1.4MW of capacity slated for installation, with most new devices set for British and Dutch waters.
“Outside of Europe, installations in 2021 could add at least 1MW of tidal-energy capacity. Canada will lead deployments with the progress of Nova Scotia’s pilot farms, while China is set to install at least one device,” the energy report said.
Meanwhile, up to 2.8MW of wave-energy capacity is lined up for deployment in Europe, the bulk of which will come from full-scale devices.
The report said that most of these deployments will occur in the UK, Spain and Portugal, and added that four new full-scale devices – made by Corpower Ocean, Eni SpA (ENI), Bombora and Wavepiston – should hit European waters in 2022.
Trade Eni SPA – ENI CFD
Putting money into tidal tech
Fernando Hernandez, principal at Hernandez Analytica and business ambassador for Scotland in the Americas’ energy sector, shared his thoughts with Capital.com.
Said Hernandez: “The intermittency of renewables became evident in 2021, which led to electricity price spikes in Spain, prompting government intervention and price protection.
“This, in turn, elevates the need for tidal technologies to be developed and scaled to bolster grids, as tidal can function when there is no wind or sun, as is the case for wind farms and solar parks, respectively.
“In the realm of tidal technology, Orbital Marine made significant advances when it launched a floating tidal system in 2021, the Orbital O2, off the coast of Orkney in the UK. This system can generate an unprecedented 2MW.”
Hernandez further explained that the Orbital O2 system can be installed not only along coastlines, but also on rivers, and can be repositioned at sea. Moreover, the system uses a four-point anchoring approach, which reduces complexities and costs.
“The aforementioned unlocks deployment opportunities for such tidal technology and the system’s global scalability. Therefore, it is not surprising that publicly traded TechnipFMC (FTI) invested in Orbital Marine and is now a shareholder of the tidal company.
“Another company that is making similar advances at Orkney via EMEC [the European Marine Energy Centre], and which has a system that equally floats to generate renewable electricity, is Mocean Energy. Will they be the next Orbital Marine in terms of attracting capital from a publicly traded company?
“In closing, the market might be on the cusp of increasing its impetus and investments in tidal.”
Trade Technipfmc – FTI CFD
Is it a good time to invest in tidal energy?
Simon Johns, managing editor of Lubes’n’Greases, LNG Publishing, told Capital.com: “From an environmental and sustainability perspective, tidal energy technology looks like a worthy place to direct investment.
“In Europe especially, tidal power ticks a lot of EU taxonomy regulation’s boxes, and so future-proofing against regulations should be straightforward.”
However, Dimitriadou noted that the ways of generating tidal energy still need more testing: “Additionally, the geographical location of particular countries favours more tidal-energy generation than others due to significant tidal range.
“The UK has recently communicated an increase in investment to tidal energy as part of the investment in renewables strategy, while the EC has also stipulated tidal energy targets for 2025 and 2030 as well.
“The above could mean investment in tidal energy by the private sector could be one of emerging opportunities, particularly as the need for further alternative energy sources has become more paramount than ever.
“However, so far, only small amounts of tidal energy have been generated globally, while the investment required in technology and infrastructure is substantial,” Dimitriadou said.
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