By Dr. MATTHEW HANNON
Ten years ago, the UK passed the Climate Change Act, signalling its low-carbon ambitions.
As the UK began investing heavily in sustainable energy technologies, one in particular captured the imagination: marine energy.
In 2008 the Scottish Government launched the £10 million Saltire Prize.
It was to be awarded to the developer who generated the greatest volume of electricity from Scottish waters by June 2017.
Ten years later the prize money remains unclaimed.
This is a trend mirrored by other marine energy programmes such as the UK’s £42 million Marine Renewable Deployment Fund, established in 2006, which failed to award any funding for technology demonstration.
So what went wrong?
Research from the University of Strathclyde and Imperial College London finds that government and industry went “too big, too soon” in the belief that marine energy was close to commercial application.
For instance, the UK Government’s 2010 Marine Energy Action Plan targetted large wave and tidal stream arrays from the mid-2010s and a total of 1-2GW of capacity by 2020, equivalent to a typical UK coal-fired power station.
Underpinning this optimistic view was an incomplete understanding of the challenges associated with generating electricity in the real ocean environment – and developers being overly ambitious in order to secure investment.
As well as being too ambitious, the Saltire Prize was also considered by some to be too rigid.
The University of Edinburgh identified that the highly-specific criteria served to constrain the approaches taken by potential competitors, in turn restricting the field of entrants.
Greater flexibility may have seen a winning design. Given the Prize is reported to have cost the taxpayer £400,000 to maintain, an important question is: did it still deliver any value?
One argument is that such competitions themselves catalyse innovation even if a prize is never awarded, as companies invest additional time and money to out-compete their rivals.
More broadly, the prize signalled that government believed marine energy could deliver “utility scale” generation in the medium-term, lending it legitimacy and in turn piquing investors’ interest.
Shortly after the prize and other major funding programmes were announced in the mid-2000s, major technology companies and energy utilities entered the market. Rolls Royce acquired Tidal Generation Ltd in 2009, Siemens acquired Marine Current Turbines in 2012 and both E.On and Scottish Power tested wave devices bought from Pelamis in 2010 and 2012 respectively.
However, as marine energy failed to live up to expectations many of these withdrew during the mid-2010s.
Ultimately, the Saltire Prize was the right idea at the wrong time.
The highly-ambitious prize came too early and companies’ failure to meet the criteria has seriously undermined the legitimacy of marine energy.
Even so, innovation prizes can lend new technologies valuable legitimacy and spur entrepreneurs into action. We know energy innovation demands both risk and reward.
Innovation prizes offer an attractive compromise between the two and could still play an important role yet in helping marine energy reaching the mass market.
As Scotland’s marine energy sector breaks new ground, such as the MeyGen tidal stream array and world’s largest-ever tidal stream device from ScotRenewables, it is now time to consider if something should fill the void left by the Saltire Prize.
MATTHEW HANNON is Chancellor’s Fellow of Technology and Innovation at the University of Strathclyde Business School. He is lead author of Examining the Effectiveness of Support for UK Wave Energy Innovation since 2000: Lost at Sea or a New Wave of Innovation?
1 Jun 2018