Ocean energy remains a nascent energy industry, with tidal stream technology at a pre-commercial stage and wave technology at demonstration level. These technologies require further research and development effort and significant cost reductions to partake in the highly competitive markets for grid power. Consistent cost reductions with increasing deployment have been seen in other renewable energy technologies, such as wind turbines and solar photovoltaics, and it is expected that a similar trend will be seen in future for ocean energy. Therefore, ocean energy has the opportunity to play a crucial role in the transition to net-zero, especially with the predictable nature of the tides and complementary generation profiles of wave to wind and solar.
This required reduction in the costs of ocean energy technologies could occur through some combination of two mechanisms: incremental reductions in the Levelised Cost of Energy (LCOE) facilitated by subsidised deployment of technology, and step-change cost reductions resulting from directed innovation programmes.
A range of ‘what-if?’ scenarios are used to illustrate the costs of different policy mixes within a range of input assumptions. These scenarios all have the target of meeting cost-parity assuming an average European wholesale market price of 50 €/MWh. The inputs come from published literature, case studies of other renewable energy technology development, and experience of the industrial partners within the DTOceanPlus consortium.
This work highlights the need for a mix of policies to drive down the LCOE of ocean energy whilst minimising the overall investment needed for wide-scale deployment of these technologies. This work also shows the wider benefits to society that can be achieved by ocean energy, and how these benefits can outweigh the costs involved. In all the scenarios discussed in this report, the open-source design tools being developed in the DTOceanPlus project can contribute to the development of the ocean energy sector, facilitating both incremental and step-change cost reductions.