Global Wave and Tidal Energy Market: Need for Additional and Abundant Resources Encouraging Investments.

The global wave and tidal energy market is fragmented with over 200 companies currently operational and none holding a dominant share. The development of this technology is still in the nascent phase, which leaves potential scope for new players to introduce innovative technologies. As a result, it is uncertain whether it would consolidate in the near future. The report observes that the duration of prototype testing to project demonstration to eventual large-scale commercial project construction is a long one. Also, constant financial and policy support from respective governments is imperative for the full-fledged commercialization of wave and tidal energy.

The report suggests that strategic alliances are mandatory for small technology developers and special purpose project companies to prosper. These alliances are equally important for players with financial might too, to gain advantage in the fragmented global market for wave and tidal energy. Some of the key players operational in the global wave and tidal energy market are Carnegie Wave Energy Ltd., Pelamis Wave Power Ltd., Ocean Renewable Power Company LLC, Ocean Power Technologies, Inc., Tenax Energy, Atlantis Resources Ltd., AquaGen Technologies, S.D.E. Energy Ltd., and Marine Current Turbines Ltd.

Valued at US$497.7 mn in 2014, the global wave and tidal energy market is estimated to reach a valuation of US$11,345.0 mn by 2024, rising at a robust CAGR of 23.2% during the forecast period of 2016 to 2024.

Oceans Contain Vast Clean Energy Resources

Technological advancements have proven that if harnessed properly, the vast ocean area could prove to be a significant source of sustainable energy, which also is clean and in sync with environmental preservation requirements. Wave and tidal energy enable the exploitation of ocean energy, although they have contrastingly different market dynamics.

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Tidal energy is segmented into tidal stream and tidal range energy. The latter is a mature form of energy generation technology and entails the construction of tidal barrages. The former, tidal stream power plants, is a new technology with plenty of scope for development. On the other hand, wave energy is still under forthcoming technology with a relatively new concept. All these segments are expected to witness significant growth in terms of installed capacity and investments during the forecast period.

Geographically, the global market for wave and tidal energy can be segmented into North America, Europe, Asia Pacific, and Rest of the World. Major developments are underway in Europe, which are expected to sustain the region as the most prominent regional market. South Korea has been detected by the report as one of the most significantly developing markets in terms of tidal barrage operations. Wave energy development in Asia Pacific is expected to remain concentrated in Australia.

Heavy Initial Investments Hindering Growth Rate

Preservation of the environment by extending the use of clean energy is a primary focus across the globe, and depleting conventional energy resources call for the development of new resources that are in abundance, Moreover, several governments in developed as well as developing nations are encouraging new energy technologies with supportive long-term policies and subsidies. These factors are expected to drive the global market for wave and tidal energy.

However, return of investment (ROI) remains the most prominent restraint on the global market for wave and tidal energy as entering the market requires high initial investments. Additionally, the commercialization of technology is awaited in this sector as only tidal barrages are currently capable of ROI, while wave and tidal steam are still only a potential concept.

According to the author of the report, “The general trend in the wade and tidal energy market indicates a retraction of grant and venture capital financing. The market would have to be dependent solely upon private equity or debt financing, for which commercial viability of projects is an absolute necessity.” The author suggests primarily focusing on the commercial deployment of these technologies with long-term power sales contracts as priority.

Key Segments of the Global Wave and Tidal Energy Market

Wave and Tidal Energy Market: Type analysis

• Wave energy
• Tidal energy

Growth of Global Wave and Tidal Energy Market Spurred by Demand for Power from Remote Locations

Bolstered by the recent advances, wave and tidal energy technologies are just beginning to reach their capability as potential commercial power sources. While only a few projects currently exist, the technology is fast exhibiting a huge potential for generating power in remote locations where drawing grid connections will neither be cost-effective nor viable. Wave and tidal energy comprises methods of harnessing power from ocean to generate energy. Owing to the abundance of ocean surface and substantial potential of generating energy across many nations, governments are impelled to pursue wind and tidal energy as an important part of the future renewable energy mix.

What factors are responsible for global wave and tidal energy market’s exponential growth?

A recent analysis by Transparency Market Research has revealed the global wave and tidal energy market to surge at 23.2% CAGR between 2016 and 2024. The report has pegged the market to reach US$11.3 bn by 2024 from a valuation of US$497.7 mn in 2014.

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Around 200 companies worldwide are either partially or fully involved in the development of the renewable energy sector comprising wave and tidal energy. A majority of these companies are technology developers offering innovative energy converter devices. Since there is no dominant technology in the wave and tidal energy sector, both are considered to reap economies of scale thereby encouraging large-scale deployment of tidal stream power plants.

Currently, the cost of constructing wave and tidal energy power plants is exorbitant. However, vendors operating in the market are expecting major cost reductions in the future as the industry shifts its focus from prototype testing to a widespread deployment phase. Enterprises operating in the market are also expected to achieve economies of scale from the manufacture of energy converter devices and from the construction of on-shore grid connection infrastructure. Furthermore, the power plants will enjoy cost benefits from the sharing of fixed infrastructure. This will subsequently contribute towards the reduction of tariffs on electricity generation. These are the primary factors aiding the expansion of wave and tidal energy market.

What are the latest projects promising favorable prospects for global wave and tidal energy market?

Strong tidal currents have challenged sailors in the Pentland Firth, a strait that separates Northern Scotland from the Orkney Islands, for centuries. Some of this incredible marine energy is now being utilized through a project called MeyGen. In the summer of 2015, the Atlantic Group had begun the construction of submerged tidal turbines consisting of four three-bladed and seabed-mounted turbines. These turbines are expected to deliver 6 MW to grid by 2016 and power almost 3000 homes in Scotland. Furthermore, Atlantis intends to build 269 turbines capable of generating over 398 MWs of electricity in the firth by the early 2020s, thus providing power to roughly 200,000 homes.

Besides this, Oregon-based Northwest Energy Innovations has installed a wave energy conversion device off the coast of Hawaii in June 2015. The turbine has the capacity of extracting power from the horizontal and vertical motions of waves using high-pressure hydraulics. Furthermore, a 45-ton apparatus called Azura has been built in a test facility of the U.S. Navy located off the Kaneohe Bay on Oahu. This is a small experimental device exhibiting a capacity of only 50 KWs. Azura, however, is the first and the only grid-connected wave energy system in the U.S.

Globally, the construction of power plants to capture wind and tidal energy has been increasing at a robust pace. Such rapid proliferation of wave and tidal energy projects will prove lucrative for the market’s future.

Wave and Tidal Energy Market will reach US$11,345.0 Mn at CAGR of 23.2% by 2024.

The ocean can prove to be one of the largest reserves of clean, sustainable energy thanks to more efficient ways of harnessing wave and tidal energy. Since wave and tidal power plants are still a relatively new technology, they provide ample scope for growth or development. These power plants enable power generation even in remote locations where grid connections are not feasible. The global wave and tidal energy market also receives strong support by governments worldwide. Several countries now have well-defined government policy frameworks and incentive schemes that encourage the adoption of these power plants.

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According to a report published by Transparency Market Research (TMR), the global wave and tidal energy market was valued at US$497.7 mn in 2014 and is projected to reach US$11,345.0 mn by 2024, expanding at a whopping CAGR of 23.2% between 2016 and 2024.

TMR analysts address three important questions that companies operating in the wave and tidal energy market have:

Q. Which regions will hold lucrative opportunities in the market?

Major developments in wave and tidal stream plants are expected to occur in Europe. South Korea is expected to witness massive growth in terms of tidal barrage operations. Wave energy development will be high in Australia in the Asia Pacific region. Commercialization of this technology to its fullest extent is expected to create a huge scope for growth in the market.

Q. What are the challenges hampering the adoption of wave and tidal power plants?

The high capital investment required for the infrastructure and installment of wave and tidal power plants is a major problem. The low maturity of this technology is another major factor dampening the lack of deployment of wave and tidal power plants.

A lack of funding channels is also impeding the market’s growth. A case in point would be Pelamis Wave Power Ltd. The company failed to secure the funding required for the development of wave energy technology in November 2014, as per reports. The company which developed P1, the world’s first offshore wave power converter to generate electricity into a national grid, is unable to further develop their product owing to insufficient funds.

Q. What are the recent developments in the global wave and tidal energy market?

Aquamarine Power Ltd. and the National University of Ireland, Maynooth have collectively secured an €800,000 EU Horizon 2020 grant to improve the performance of Oyster, a wave energy converter. The new program will enable researchers to explore ways to optimize the energy capture and the economic performance of Oyester, which is developed by Aquamarine Power.

In July 2016, wave energy developer Carnegie Wave Energy Limited announced the successful commissioning and deployment of a wave monitoring buoy in the South coast of Mauritius. Atlantis, a company based in Singapore, has entered into an agreement with SBS Intl Ltd. for the development of a 150MW tidal stream site in Indonesia. The plant is expected to be the first commercial scale tidal array in South East Asia.

Such successful deployments of wave and tidal stream plants are expected to continue to ensure the growth of the market and increase the deployment of these plants.