To commercially deploy ocean energy technology will require €500 million in investment before 2020, grid roll-outs, a common European framework, public-private partnerships and, ideally, feed-in tariffs, Remi Gruet told EurActiv. But its advantages could more than outweigh that.
What policy progress have we seen since the EU’s Ocean Energy action plan was announced in January?
Quite a bit, The Commission and Ocean Energy Europe worked together to design the energy forum [for 2016] in a way that would enable industry, the Commission and member states to identify core issues and solutions for the sector, and implement them. We have two meetings planned – one in Brussels this Friday, 4 April, and one in Dublin on 11 June, and these will gather stakeholders, industry representatives, academics, think tanks, member states and the Commission together.
What is the forum’s purpose?
The forum was flagged in the EU’s action plan. Its objective is to identify core issues and implement solutions. Deliverables are a market deployment strategy and at the end of the forum, hopefully an industry initiative at the EU level. If we manage to reach that stage, it will be a success. The forum will include three workstreams – technology, markets & finance, and infrastructural and environmental issues.
What impact has it had on investment so far?
Investment will tend to come towards the end of the forum. At the moment it is driven by member state policies supporting the sector. The Commission’s announcement was not aimed at driving investment so much as raising awareness and putting the right people together so they could work out how to get the investments going.
What do you think the industry initiative could look like?
It is a bit early to answer that. Our objective is to leverage €500 million by 2020 and the roadmap can deliver part of that objective. We hope that it will get member states together to agree on the framework for supporting ocean energy. That needs to be concerted so that we have a very good result at European level, and we have competition across countries that are interested in the sector. What we need is a consistent framework across different countries so companies are not jumping from one framework to another and have better access to projects than at the moment. The procedural part of the forum is important. There are lots of issues around grid connections and the time it takes to get consent. All of that has an impact on the cost of energy in the end. The more streamlined the procedures are and the easier the access to finance is, then obviously the lower the cost of energy in the end.
Which Ocean Energy sectors are likely to benefit the most – tidal, salinity gradient or ocean thermal energy?
We expect all technologies to benefit. Solutions currently tend to be focused on tidal and wave as they are closest to market at present, but we want to go beyond those and include all other technologies as well.
What sort of targets and timeframe for the industrial development of the sector are you hoping for in 2016?
A target of providing 100GW in ocean energy by 2050 is our long term vision but by 2025, we also have a target for the market roll-out of ocean energies. By 2015, we expect to have a few of those technologies being reliable enough to be deployed. By 2020 we expect to have a better cost-confidence and by 2025, we expect to have market rollout beginning with the first cost-competitive commercial farms.
You used to work for the European Wind Energy Agency, what similarities and differences do you find with ocean energy?
There is a really important similarity in that it is highly likely that these technologies are going to be built in Europe by European companies. If you look at the wind sector, over 90% of turbines installed in Europe are sold by European companies – including 100% of offshore turbines. That is because of similarities in the types of device we are talking about – bulky devices that are heavy and require specific investment and a high level of knowledge to handle. These are not solar panels on the roof. They are big things that you need cranes and ships to move. Because of the similarities, I expect the EU market to be controlled by EU players, which from an economic crisis and industrial developments perspective is a good thing. For me, that is a key parallel to be made between wind and ocean energies. You can see this already in market – Alstom, Siemens, GDF Suez and the utilities involved, and even smaller companies like Aquamarine Power on the wave side, they are EU players testing and installing here.
Is work on Ocean Energy public-private partnerships going on beneath the radar?
There is lots of discussion around innovative finance in the sector. Historically it has relied on grants but companies have also invested over €600 million euros in the last seven years. We estimate that there has been €80 million of public funds invested in the last few years as well. Private funding is much higher at the moment and one key area the forum will look at is how to leverage private finance using public money – not just in grants but loans but through risk sharing, funds and facilities etcetera.
How have Ocean Energy’s prospects been affected by the 2030 energy and climate targets debate, and current outcome?
It’s very clear that having 2020 targets has helped Member States pin down what kind of renewable energy mix they want to develop. Even with less mature technologies like ocean energy, you can clearly see how these targets have moved them up the agenda. So it’s difficult to see how ocean energy could remain unaffected by the Commission’s 2030 proposal, which we find lacking in ambition. But it’s also difficult to quantify the effect that this will have on the sector in the long run.
How would you react to those in the renewable sector who say that ocean energy is a diversion of vitally-needed funds from areas such as wind and solar which could reduce emissions now?
For starters, our technology already works. The concepts are proven. You need to invest in wind and solar of course, but you also need a range of technologies to help the integration of wind and solar into the grid. Ocean energies are much more predictable and less variable than wind or solar and can help with balancing that. Climate change isn’t driving renewables development anymore – maybe it was in 2005/6, but not now it is being driven by industrial development and building a new sector for Europe. With the latest developments in Russia, it is also being driven by concerns about energy security and independence, using the resources we have at home and making sure that they are able to secure the 100% delivery of power. For that you need a mix of renewable technologies. You can’t rely on just two.
How does ocean energy contribute to the competitiveness, jobs and growth debate?
We are on the verge of building a new industrial sector for the EU. I personally don’t know many sectors where EU companies control over 90% of market – airplanes may be one, but cars are certainly not – and we have that in onshore and offshore wind and I think we can have that in ocean energy as well.
Would you like to see Ocean Energy Feed-in tariffs?
Yes, FITs are a great way of funding technologies so they can be deployed. We need a combination of FITs for the more mature ocean energy technologies and grant funding and innovative finance for technologies that are less developed. The main problem we have is getting technologies that are inbetween from research to commercial deployment stage and the NER2300 scheme is a good example. Two ocean energy projects were funded through that and we need these innovative finance ideas to be identified and used to enable us to reach commercial deployment, at which point you can rely on FITs and, hopefully at some point, market price. But historically, FITs –and any support mechanism – can work. In my experience, they’re easier to design so they can work effectively and they’re easier to adapt. That doesn’t mean we weren’t happy with the renewable obligation certificates in the UK. They are another funding mechanism that worked.
Remi Gruet is the Policy and Operations Director for Ocean Energy Europe from where this piece was taken. It was originally published in EurActiv which is a Europe-wide web magazine which has excellent news and articles which have a European flavour.