The North East possesses one of the world’s most advanced pieces of testing equipment in the marine energy sector, but today that £16m device lies idle.
While its owner, the ORE (Offshore Renewable Energy) Catapult facility at Blyth, is confident it will turn again, there are growing doubts over the long-term future of the wave and tidal energy industry following a series of damaging blows late last year.
When Siemens bought tidal energy developer MCT (Marine Current Turbines) in 2011 it was seen as the dawn of a new era for tidal energy, with its SeaGen S turbine – which was being tested at Blyth – being touted as the industry leader.
But early last month, following a strategic review, Siemens said it could no longer see a viable market for tidal energy and announced it was closing its ocean energy division.
This followed Scottish wave energy pioneer Pelamis’ decision to close with the loss of 40 jobs, and this itself was followed by Edinburgh-based developer Aquamarine Power saying it was laying off all but its core staff.
The wave sector’s main problem is the difficulty of coming up with a device that can efficiently and reliably operate at sea.
Pelamis, with its snakelike offshore floating structure, and Aquamarine’s inshore seabed-mounted paddle both suffered repeated technical setbacks, as have other approaches.
These latest high-profile failures echo concerns raised by one of the region’s leading entrepreneurs, Tony Trapp, 10 years ago.
Mr Trapp, founder and managing director of Northumberland-based Osbit Power, previously helped set up two of the region’s leading subsea companies, SMD of Wallsend and the IHC Engineering Business.
He said: “The Engineering Business carried out an extensive £6m research and development programme part-funded by the DTI.
“We carried out extensive evaluations from an analytical and practical viewpoint and also built and successfully deployed a full-scale 180 tonne, 150kW tidal stream generator at Yell Sound in Shetland over a two-year period.
“We came to the clear conclusion that tidal stream and wave energy technologies were difficult and expensive to bring to successful commercial maturity.
“My view is that these technologies are not a sensible use of intellectual and financial resources, for many reasons. I made my views clear at a meeting with the DTI in 2004.”
With the UK possessing 60% of Europe’s potential tidal and wave resource the Government established the ORE Catapult to drive forward developments in the marine offshore field. It also supported the sector’s development in the 2013 Energy Act which provides the largest subsidies of all renewable technologies.
However, last month ORE Catapult released a new report, Financingin the Wave and Tidal Industry,which highlights the ongoing difficulties.
It says: “We know there is a lack of willingness from potential investors to invest in wave and tidal energy at the moment.
“The situation is becoming critical, particularly with one leading wave energy developer having recently entered into administration and the withdrawal of a leading OEM (Siemens) from the tidal sector.”
One major criticism of the industry is that in a bid to attract scarce finance, marine developers repeatedly over-promise and under-deliver.
Each time they go back to the money markets the investment community becomes a little more wary, which in turn fuels the drive to oversell the sector’s promise.
Despite these concerns developments continue, including one involving a North Shields company, while in Ramsey Sound, Pembrokeshire, Wales, a full-scale tidal power generator trial is to get under way this year, with EDF Energy agreeing to buy the electricity. The hopes of many in the industry reston a scheme about to go into trial on the northern tip of Scotland, near Thurso.
The MeyGen scheme, which has secured more than £50m investment, mainly from the public sector, comprises four 1.5MW turbines, as well as the construction of the onshore infrastructure to support the project.
The main developer in this project is Atlantis Resources, which had earlier tested the 1.5MW turbines at the ORE Catapult facility (formerly the National Renewable Energy Centre) in Blyth.Tony Quinn, ORE Catapult operations director, said: “Our world-leading test and demonstration facilities here at ORE Catapult’s National Renewable Energy Centre in Blyth include the 3MW tidal turbine nacelle test rig, which can be used to test complete systems, or for component testing.
“The National Renewable Energy Centre received £10m funding from DECC and £6m from the ERDF to build this testing asset. Clients have included Siemens MCT and Atlantis Resources, who tested their AR1000 1MW turbine in the facility in 2012, enabling the development of their next generation AR1500 (1.5MW) tidal turbine.
“The company recently announced that it is to install its AR1500 machines in the Pentland Firth as part of the MeyGen Project.”
He added: “Financing in the wave and tidal industry highlights how important wave and tidal technologies are to our future renewable energy mix in terms of the social and economic benefits they bring. But sector funding has reached a critical juncture and we need to act now to bolster this strategically important market for the UK economy.
“The catapult is already working with industry and others, particularly academia, to focus research priorities on reliability, health and safety, installation methodology, and electrical connections, to de-risk and drive down industry costs.
“We continue to see growth in our research, testing and demonstration activities in support of the UK’s offshore renewable energy sector and will continue to act as a hub for the development of these technologies in the North East.”
ORE Catapult wants to see coordinated public and private funding and support for technologies to derisk investment.
This would include greater alignment and standardisation of technologies, greater coordination between private and public sector investors, and a potential role for government in underwriting debt finance for the industry.
The Financing in the Wave and Tidal Industry report concludes: “We believe there is a lack of willingness from potential investors to invest in wave and tidal energy at present.
“The situation is getting critical, as we have witnessed with the recent entry into administration of one leading wave energy developer.
“This market is strategically important to the UK and is on the brink of floundering. It is crucial that something is done to bolster the prospects of the industry in order to get investors back in play.
“Despite their reluctance to invest at the moment, the above mentioned investor groups will have a key role to play when their risk and return profiles start to align with the prospects for marine technologies and array projects.”
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Oceanflow Energy chief upbeat about future
Despite the difficulties currently facing the industry, one North Shields investor remains convinced of its long-term future.
Graham Mackie invented the Evopod tidal device almost 10 years ago and the latest prototype is to begin generating electricity at Sanda Sound, off the west coast of Scotland, this summer.
The trial device is one quarter of the size of the potential commercial machine with Mackie and his company Oceanflow Energy targeting it at remote coastal and island communities.
Oceanflow Energy has spent £1.5m on the Evopod, with over £600,000 coming from the Scottish Government and the now-defunct regional development agency One North East, and the rest from private investors.
Its initial successful trials of a 1kW device were completed off the coast of Northern Ireland between in 2009, and the new trials in the Mull of Kintyre are with a 35kW device.
Anchored to the sea bed the Evopod harnesses the energy of tidal streams. It was installed late last year and survived its first major hurdle when the location was hit by the weather ‘bomb’ that crashed into the UK last month.
Although Mr Mackie is eager to set up a manufacturing base and create jobs in the North East, he does not expect the devices to be used along the North East coast as its waters are too shallow. Reflecting on the recent slew of bad news for the industry, he said. “The Siemens announcement was disappointing news, but its particular technology was expensive to install.
“One of the major problems is the robustness of the turbine which has to be placed in the sea. We have developed our own using my knowledge from the oil and gas industry.”
He says the industry also faces technological challenges in securing the devices to the seabed and his training as a naval architect can help overcome these issues.
He added: “Government support is vital to securing the future of the industry and in helping with the low carbon transition. Private investors cannot sort out global warming.
“We are still at the development phase, and as investors see the technology operating successfully more money will be attracted into the industry.”