Capital Costs

The choice of energy source for electrical power generation is driven by a number of factors including: cost of generated electricity; responsiveness of generating plant to demand; security of supply/ resource availability; environmental impact; and execution risk. Within these, tidal energy is unique among renewable technologies since it has the capability of providing predictable, firm power contributing to security of supply. This predictability gives tidal energy additional value in a future electricity market. Especially those where stochastic renewable technologies contributing to a sizable component of the power supplied; and where reserve capacity is required to maintain supply during periods of non-availability. In the shorter term, in order for tidal energy to gain commercial acceptance tidal technologies under development need to produce electricity at a competitive price, similar to that of off-shore 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 from about 10,000MW installed capacity in 2003 to 58,000MW in 2008 with significant future growth forecast. 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 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 suggests that large installations are being developed at device 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.This sets our capital cost targets for tidal energy developments.