Proceedings of the Sixth International Conference on Asian and Pacific Coasts (APAC 2011)

December 14 16, 2011, Hong Kong, China

THE CHALLENGES TO BE ADDRESSED IF TIDAL ENERGY IS TO BECOME ECONOMICALLY VIABLE

1. Drivers influencing future a future energy supply make up With current concerns on the environmental impact of the increasing use of fossil fuels to satisfy our ever increasing energy demands, Governments are introducing policies which require greater capacities of renewable energy systems to be used within future energy supply make-up. The most popular renewable technologies being utilised at sufficiently large scale installations at present include: hydro power and wind power. However, in many applications there are major limitations associated with these systems. In the case of Hydro power: low head run of river systems result in seasonal variations in power output, which can be directly correlated to the seasonal rain fall of a specific geographical region; while high head systems require the construction of a damn causing flooding of large land areas resulting in considerable environmental and ecological damage. In the case of wind energy systems, the limitations are related to the variability of power output associated with the unpredictability of the wind. In order to maintain integrity of the power supply system there needs to be either stand by generating capacity to meet demand when there is low or no power output or demand management to flex large parts of the demand to match the output from the wind energy systems. In all cases, the stochastic power supplied from these systems increase the cost of generated electricity.

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In order to be part of a future power generation portfolio make up, emerging generation technologies must at least perform above a certain threshold level in the context of cost of generated electricity; responsiveness of generating plant to demand; security of supply/ resource availability; environmental impact; and finally execution risk. Since the execution risk associated with any new technology entering the market is always going to be higher, theyre required to have superior performance in the other areas of power supply performance to mitigate this risk. The tidal resource within our coastal waters has the potential to provide a consistency of energy supply which goes a long way to achieving this mitigation. In many places, bathymetric variation, complex shapes of coastal land forms and proximity to amphidromic centres serve to focus and phase these flows into a highly energetic resource which can be harvested to generate predictable and firm renewable power delivery. These tidal flows, and the resultant electrical power, are highly predictable and dependable offering significant advantages over both wind and wave generated power. The most energetic tidal sites are often avoided by both leisure and commercial marine users, reducing the impact tidal harvesting is likely to have on other activities. Within the UK the exploitable tidal energy resource has been estimated as being sufficient to generate 94TWh per year of electricity in water depths of 40 meters or less [1] - equivalent to about one quarter of the UKs annual electricity consumption. The global resource from tidal and other marine currents may exceed 1100TWh/y [2]. Tidal energy clearly scores highly compared to other renewable generating types in the existing UK generation portfolio in terms of availability of resource, security of supply, and arguably, environmental impact. Its predictability makes its energy attractive in a future renewable weighted electricity market when compared to wind and wave, which provide less certainty over the timing of their power generation. Although early stage demonstration devices have taken to the water with limited success, there is, as yet, no mature tidal generation device in production and generating electricity considered to be commercially viable. However, a number of projects are currently under development. A major challenge to be addressed is to deliver acceptable capital and operating costs and to establish a track record for reliable generation, driving down their cost of money. As tidal energy technology matures and for it to be considered cost competitive it needs to benchmark its self with the costs of equivalent technologies, the closest of which is offshore wind. In the development of a tidal energy industry, the technology needs to: demonstrate high reliability; and either match the costs associated with the development of offshore wind or better these.

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2. The acceptable costs for power generation In an effort to establish the costs for different power generation technologies you need to take into consideration the upfront capital cost for erecting and commissioning the pant and the operational costs over the engineering life for servicing and maintenance and fuelling costs for operation. These costs can be further elaborated when investigated as elements contributing to the generation of electrical power. Elements of cost: When considering the cost of electricity, the total lifecycle cost of generation by any one plant should be considered, i.e. the total capital and operating costs of the plant divided by the total power it has generated. There are several components to this cost: capital costs of the plant and equipment; cost of money on that capital over the term of the project; cost of maintenance and operations over the life of the project; and cost of fuel and other consumables. The total life cycle cost of a system can be further viewed as either fixed costs, or variable costs. Looking at the preceding list in this way, we can assign the costs as follows: Fixed costs: 1. The capital costs of the plant and equipment; 2. The cost of money on that capital over the term of the project; 3. The cost of maintenance and operations over the life of the project; Variable costs: 4. The cost of fuel and other consumables. The cost of money could be viewed as variable, however in most cases it is considered as a fixed commitment over the term of the project; and, calculated as the total interest payments that would accrue if the capital was borrowed at a typical interest rate of 10% and repaid so that the project was fully amortised by the end of its working life. Similarly, there are arguments that operations and maintenance could be a variable cost, either with time or with generation. However, in practice generating plants run routine maintenance schemes until they are decommissioned and accordingly are viewed as a fixed cost commitment over the plants lifetime, although the annual value of this cost can inflate with time. 3. Establishing cost associated with offshore wind To date, progress in developing renewable energy generation capacity has focused on onshore and offshore wind farm development. This market has experienced significant growth in the last decade with installed global total capacity growing from 10,200MW in 1998 to 120,791MW in 2008. A considerable portion of recent growth has been in offshore wind which has grown

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from about 10,000MW installed capacity in 2003 to 58,000MW in 2008 with significant future growth forecast [3]. Since tidal energy is a renewable resource whose development shares many of the characteristics and challenges of offshore wind development, it seems reasonable to expect the tidal generation market to behave in a similar way to this mature market if: - tidal devices can be build to a cost which compare favourably with the capital and operating costs of offshore wind generation; and - develop a track record for operational reliability. Both tidal and offshore wind installations should generate power for 30% to 40% of the time but, given the predictability and dependability of tidal generation, tidal energy should have a competitive advantage, all other things being equal. Published information on the development costs of offshore wind [3], as reported in Table 1, suggests that large installations are being developed at capital costs in the range of 1.2 million 2.7 million Euros per megawatt (MW); and future forecasts seem to lie in the range of 2 2.2 million Euros per MW. An analysing of the capital cost breakdown for the Horns Rev and Nysted sites shows that about 20% of costs are associated with site planning and export to shore with the remaining 80% associated with the equipment and interconnection.
Table 1: Analysis of offshore wind developments and a digest of the related investment components. (4Extract from the Economics of Wind Energy, EWEA).

This sets a useful capital costs target tidal devices should be aiming for. The cost of device and moorings should be competitive with the cost of an offshore wind turbine and its foundation. This sets a target capital cost of around 1.2 million Euros (or about 1million) per megawatt for the device and its mooring for devices built on a commercial scale. Obviously, technologies with the early stages of market development do not benefit from engineering cost optimization and economies of scale and therefore it is not unexpected that prototype and early batch devices will be more expensive. Moving from prototype to mass production, introduces scope to drive down the cost of many components and the assembly itself. Figure 1 illustrates operating expenditure (2006) for a number of offshore wind sites.

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When compared with tidal energy production costs, the cost of money for developments should be competitive with wind once a track record has been established. Accordingly, investment related costs should be similar or less so long as capital costs per MW is similar or less as identified earlier. Balancing costs should arguable be less given the dependability of tidal energy flows, but in no case should be more. The focus should be on matching, or beating, operating and maintenance costs which for offshore wind are around 16/ MWh.

Figure 1. Offshore wind operating costs (4Extract from the Economics of Wind Energy, EWEA).

4. Establishing costs associated with tidal energy A wide range of tidal devices have been proposed to include horizontal and vertical axis rotors, oscillating foils, other hydrodynamic shapes, and venture devices. Large scale impoundment of tidal height change has also been proposed. A few first generation technologies have progressed to the large scale prototype stage, which look not dissimilar to marinised wind turbines, as shown in Figure 2. The Carbon Trust [4] has considered the costs of 1 st generation tidal devices and published a summary of the capital cost breakdown for a typical device (Figure 3). For devices under development, the Carbon Trust [5] concluded that the capital cost of tidal energy devices at prototype stage lay in a price band 5000 to 8000 per MW (Figure 4) and the likely cost of energy from devices under development lay in a range band 4 to 7 times higher than the current cost of combined cycle gas powered generation. Of the devices deployed to date, weight

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has been a major component which results in escalated device and installation costs. The majority of the 1st generation technologies which have been deployed, have weighed in at approximately 1000 tonnes/ MW. At such weights, installation of devices has to be undertaken by large, expensive marine vessels developed for the offshore oil and gas industry. These vessels can command charter rates in excess of 100K/ day. When you consider mobilization time, onsite operational time and standby time, the charter cost for installing such a unit can easily exceed 1million. If you then require a similar vessel to facilitate access for service and maintenance, this will considerably escalate the O&M costs associated with tidal device economics.

Figure 2: 1st Generation marinised wind turbine technologies.

In the evolution of a tidal energy industry, the Carbon Trust also identified the cost of immature technologies can fall over time and highlight four mechanisms that could potentially drive costs reductions, to include: Concept design developments; Detailed design optimisation; Economies of scale; and Learning in production, construction, installation and operations and maintenance. When analysing the potential for cost reductions in association with Figure 3, the areas where these can be achieved become primarily limited to Power train, Structure and Installation, accounting for approximately 70% of the systems capital costs. The other 30% is either a fixed cost associated with project engineering and management or has already benefited from cost reduction associated with production efficiency gained through volume. This is demonstrated by the fact that generator and off-board electrical equipment

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elements of tidal systems are relatively mature technologies and likely to have benefited from cost reductions in applications in other fields i.e. wind energy. This guides us towards the rotor, power train, structure, and installation as the areas where the most effective impacts on cost reductions can be made.

Figure 3: Breakdown of costs associated with 1st Generation tidal technologies.

Figure 4: Device costs and related energy production costs today (6Extract from Carbon Trust Report on Wave and Tidal Energy).

For a technology to be considered commercially viable, it has to make a return on investment of 10%, therefore whether this can be achieved will be dictated by the capital cost of the plant together with the O&M costs; and the tariff received for the electricity generated [6]. In the UK today, when the

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wholesale price drops to 25/ MWh, plant capital costs need to be less than 500/ MW. Where an enhanced tariff is available, two Renewable Obligation Certificates (ROCs) are awarded per MWh, this equates to approx 120/ MWh and where three ROCs per MWh are awarded, this equates to 165/ MWh. In order for to facilitate the commercialisation of a tidal energy industry, the Scottish Government have introduced 3 ROCs for tidal energy. This has set a target figure of 3.5million/ MW for installed capacity, as shown in Figure 5. In order to attain the targeted device cost for economic acceptance, new design concepts need to be considered which allow for significant cost savings in the previously identified areas to be realized. This is being achieved either by simplifying or eliminating major components within each of these categories. This is where the development of 2nd Generation tidal technologies has focused. One such system capitalising on this is the CoRMaT tidal generator system [7].

Figure 5. Target device cost to achieve commercial acceptance.

5. Next generation tidal technologies Next generation (2nd Generation) tidal turbines have now evolved towards full scale commercial demonstration and show promise of substantively reducing the costs of tidal energy. The costs savings associated with 2nd Generation (2G) technologies are being achieved through: 1) eliminating the costly rigid supporting structure used for station keeping; and 2) reducing complexity and the number of components in the power capture and conversion drive train and power take off systems. Some 2G tidal technologies employ direct drive, permanent magnet generators (eliminating the need for a gearbox), passively yawing with the tidal current (eliminating the need for active yaw or pitch control) and use of a flexible mooring for station keeping (eliminating the need for a heavy, rigid mono-pile). The CoRMaT technology is an example of such a 2G system. This technology using two closely spaced, fixed pitch, contrarotating

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rotors. These capture energy from the tidal flow to directly drive a contrarotating generator, as shown in Figure 6. The development and performance of this prototype system has been extensively reported [7, 8].

Figure 6: Visualisation of the CoRMaT tidal system.

First generation turbines produce wakes which persists for many rotor diameters downstream, however CoRMaTs contra-rotating rotors are designed to reduce the vorticity elements in the wake, having positive implications for the packing density when deployed as a array of devices. These benefits arise from a smaller amount of seabed has to be rented to generate a given amount of electricity and the amount of inter-device cabling per MW can be as much as halved, with subsea cabling a significant expense.

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Power transfer: The relatively slow prime mover rotational speed of a tidal turbine (a 250kW machines rotors each rotate at around 23rpm) normally necessitates a gearbox to increase the speed suitably for a common multi-pole generator. The use of contra-rotation enables direct drive to contra-rotating generator with a large number of electrical poles. This results in: 1. complete elimination of a gearbox as the relative speed of the two contrarotating rotors effectively doubles the rotational speed in the generator; 2. higher overall drive-train/ take off efficiency of typically 90% near rated load, compared to around 80% for a costly multi-stage high torque gearbox (4stage efficiency of 90%) and generator (90% efficiency); 3. elimination of mechanical linkage as the rotor blades are mounted directly onto the generator elements; and 4. increased reliability and a diminished maintenance requirement. The benefits from next generation technologies lead to significant savings in capital expense and elimination of many sources of failure, offering potential reduction in operating expense. The design weight of the contra-rotating turbine is currently approximately 44 tonnes per Megawatt, driving cost savings in deployment, operations and maintenance through the need for smaller handling vessels. The device has followed a disciplined development through IEA-OES suggested development Technology Readiness Level stage gates and has successfully generated electricity at sea at 30th scale. Recent work building a supply chain and completing the engineering development of a range of device sizes for standalone community scale applications; distributed generation scale operations and large scale commercial tidal array deployment has yielded encouraging financial projections. It is now intended to build commercial 500kW devices to be deployed in an array to: prove operation of the device at a commercial generating scale; confirm inter-device research methodologies; and develop operating procedures and maintenance intervals for devices deployed in larger arrays. Such a deployment also establishes a track record, reducing the cost of capital for the eventual development of larger tidal arrays. Projections for the capital cost of early 500kW small batch construction are demonstrating a target figure of less than 3.5 million per MW being achieved. 6. Conclusions This paper demonstrates that for tidal energy to be accepted as being cost effective it has to compete favourably with offshore wind in terms of capital and operational maintenance costs. Tidal is one of the few clean energy resources to allow a finite amount of daily supply to be firmly contracted. 1st Generation tidal technologies are so expensive that it is unlikely that they will achieve a cost level that will make them competitive. The development of 2nd Generation tidal

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technologies is showing promise in under-cutting the current targeted costs for tidal energy systems at this stage of technology maturity. As these develop, the capital and operational costs of emerging technologies are likely to fall. Therefore, at the current time tidal generation is an immature technology and second generation devices e.g. CoRMaT, etc offer the ability to make significant reductions to both capital and operating costs. This provides the ability for tidal power to produce electricity at a cost comparable to offshore wind. References 1. Quantification of exploitable tidal energy resources in UK, npower juice, July 2007 2. Ocean Energy Systems Implementing Agreement: An International Collaborative Programme. IEA-OES. 2008 3. The Economics of Wind Energy, The European Wind Energy Association, March 2009) 4. Capital, operating and maintenance costs, The Carbon Trust at http://www.carbontrust.co.uk/SiteCollectionDocuments/Various/Emerging %20technologies/Technology%20Directory/Marine/cost%20of%20energy/C apital,%20operating%20and%20maintenance%20costs.pdf 5. Future Marine Energy, Results of the Marine Energy Challenge: Cost competitiveness and growth of wave and tidal stream energy, The Carbon Trust 2006. 6. C M Johnstone, D. Pratt, J A Clarke, A D Grant, A requirement for tidal energy to be cost competitive with off-shore wind energy Proc. 3rd International Conference on Ocean Energy 2010, Bilbao, Spain, October 2010. 7. J A Clarke, G Connor, A D Grant, C M Johnstone and S Ordonez-Sanchez Contra-rotating Marine Turbines: Single Point Tethered Floating System Stability and Performance Proceedings of the 8th European Wave and Tidal Energy Conference, Uppsala, Sweden, September 2009. 8. J A Clarke, G Connor, A D Grant, C M Johnstone and S Ordonez-Sanchez A Contra-rotating Marine Current Turbine on a Flexible Mooring: Development of a Scaled Prototype Proc. 2nd International Conference on Ocean Energy 2008, Brest, France, October 2008.