Ocean Energy Development & Funding Mechanisms

HMRC Economics ForumApril 2012

Ocean Energy Development & Funding Mechanisms

Ocean Energy Development & Funding Mechanisms

• Why?

• Ocean Energy Strategy

• Funding Sources

• Ocean Energy Industry Fund

• General

Is 2020 seen as a waypoint on a much longer path?

What actions are to be developed around a longer-term vision forelectricity from marine renewable energy resources?

2030 2040 2050

10GW 25GW ? ?

Why?

The Market – export of electricity

Ireland has sufficient generation to meet its electricity needs.

Where is the market for our substantial resource and how can this be accessed?

Study of exporting renewable electricity Study on the viability and cost benefit analysis for Ireland of exporting renewable electricity using the co-operation mechanisms in Directive 2009/28/EC • Assumes Ireland meets its binding target domestically and monetises additional

RES-E production through exports • Assumes no additional burden on tax-payer or consumers to fund infrastructure • Projects are developed under Joint Project frameworks or statistical transfers

Economic Study - SQW

Economic Benefits of Ocean Energy Development

• Examine the commercial outlook for the industry and summarise the challenges facing the sector

• Show the potential economic contribution of the industry in terms of energy output and manufacturing and supporting industry

• Identify the optimal respective roles for the private and public sector in developing ocean energy

• Review the strategic options for Ireland to maximise the economic contribution of the industry

Headline Conclusions

By 2030 the NPV per technology of the OE market could be worth >€1.5bn to both the RoI and NI and provide >20,000 jobs.

Definite costs and development potential are not yet transparent as the OE industry is immature – although huge potential markets exist.

Learning rates are expected to rapidly increase with relatively significant levels of support in the short term.

Only learning by doing will add the required clarity to the possible cost reduction/learning rates, and to any decision for further subsidy.

Further early intervention in OE will allow time to prove the envisaged cost improvements while maintaining the possibility of a developed Irish OE industry and its benefits.

Headline Conclusions

A funding gap exists between prototype funding and revenue support (REFIT or ROCs) schemes.

Higher initial revenue tariffs should be evaluated

Further Capital Grants to early demonstrator, pre-production and production devices should be considered.

The actual capacity installed by 2020 and beyond is heavily dependent on enabling actions and support policies.

Possible Strategy:

Investigate REFIT to enable early development

Enable further capital grant funding for promising technologies (National & European - NER300 / FP7)

Continue strong RD&D funding/programmes to attract and retain the best talent and develop/attract high value companies through talent pooling

Review progress 2015 – but always actively engage OE sector

Ocean Energy Development & Funding Mechanisms

Ocean Energy Development & Funding Mechanisms

• Why?

• Ocean Energy Strategy

• Funding Sources

• Ocean Energy Industry Fund

• General

International

OE Development Roadmap to date

2008

2010

2012

2015

2018

2020

Full scale demonstrators

Small-scale arrays 10/20MW

Arrays of 100s MW

Publish updated

Plan (OREDP)

Support Pilot projects, new concepts

Original 2020 target of 500

MW

Steering CommitteeDCENR, SEAI, MI, DECLG

Advisory GroupDCENR, DEHLG, CER, EirGrid, ESB Networks, ESBI, MI, MRIA, EI, IDA, SFI, NOW, IWEA, BG, BnM + others

as appropriate

•Oversee the implementation of the Strategy•Support liaison with other Dept. & Agencies•Advise on issues arising from the Advisory Grp•To be reconstituted following OREDP

Intended to be mechanism for co-ordinated action to support and enable ocean energy development

OEDU Management to 2011

Now pending revised OREDP and direction from reconstituted interdepartmental governance mechanism.

The Programme Actions of OEDU to date

Establish test facilities

Fund industry research, development and demonstration

Enhance Research Infrastructure

Undertake Strategic Environmental Assessment & establish new planning

Intensify resource and site assessment

Promote development of engineering and other supply chain capabilities

SEA done, Planning in process by DECLG

On-going

Enhance Galway on-goingBelmullet lease submitted

Reduced fund 2012

Completed at HMRCIn process at IMERC

With EI on-going

Connection study for 500MW completed

2008

2010

2012

2015

2018

2020

Support grid infrastructure development studies

Ocean Energy Development & Funding Mechanisms

Ocean Energy Development & Funding Mechanisms

• Why?

• Ocean Energy Strategy

• Funding Sources

• Ocean Energy Industry Fund

• General

Funding Sources

Project

Private

EuropeanNER 300,

FP7, MaRINET

NationalSEAI

NationalEnterprise Ireland

NationalIDA / SFI

Ocean Energy Development & Funding Mechanisms

Ocean Energy Development & Funding Mechanisms

• Why?

• Ocean Energy Strategy

• Funding Sources

• Ocean Energy Industry Fund

• General

Industry Support Scheme

Scope• Industry-led projects to develop and test wave and tidal energy capture

devices and systems;• Independent monitoring of projects/technologies;• Industry-led R&D aimed at the integration of ocean energy into the

electricity market and the national electricity grid (and network)• Data monitoring, forecasting, communications and control of OE systems• Specific industry-led research projects which will be carried out by research

centres, third level institutions and centres of excellence Status• 32 company projects supported. Value - €15m. Grant support €4.8m

Development Protocol for OE Technologiesused for Industry funding evaluation

Projects Supported

Near Shore DeviceCyan TechnologiesCarnegie/CETO

AttenuatorSeapower - HammerheadOCRE Ltd (energy storage)WavebergWave Energy Ireland

Power Take OffSeapower – C PumpLimerick WaveBlue PowerHouston Engineering

OWCOcean Energy Ltd

WECsJospa – Irish Tube CompressorJospa – ChuterKey EngineeringBenson

Point AbsorberWavebob

Tidal EnergyOpen HydroTEL

Others / Supporting ServicesIBM – acousticMRIAWestWave (ESBI)OpenTankTechnology from Ideas

Commercialisation Fund Proof of Concept

Innovation Partnership

Feasibility Study

R&D Fund <€150k

Innovative HPSU

Growth Fund

Mixed packagesR&D Fund >€150k

Early stage R&D work R&D support Company Growth

Enterprise Ireland support for R&D and company growth

Projects should:

• A unique approach over existing alternatives

• Address a significant customer/end-user need

• The potential to positively impact the Irish economy

Innovation Voucher

Commercialisation Fund - Proof of Concept:The programme aims to support academic researchers to explore innovative scientific concepts with commercial potential.

The scheme focuses on a proof of concept model where individuals or small groups work on short applied projects to develop a product concept through to a stage where an understanding of the commercial viability of the concept is gained.

Innovation Partnership:The Innovation Partnership Initiative offers financial support to companies who engage in collaborative research projects with Irish universities and institutes of technology. Enterprise Ireland provides grants of up to 80% towards eligible costs of the research project. The proposal process and administration of the project is managed by the participating third level research institution.

Innovation Voucher:Voucher for R&D work in 3rd level up to €5,000. Support proof of concept.

Enterprise Ireland

Feasibility Study:The aim of the Feasibility Study initiative is to assist a company or individual to investigate the viability of manufacturing a new product or process or to develop a new internationally traded service. The purpose of the study is to provide the necessary information to enable the promoter (and Enterprise Ireland) to reach firm conclusions regarding the project's viability.

R&D FundThe R&D Fund is open to existing and potential clients of Enterprise Ireland, Údarás na Gaeltachta and the city and county enterprise boards that want to develop new and more innovative products, processes and services.

Funding of up to €450,000 is available to help Irish companies realise their R&D potential which will lead to increased sales and profitability

Enterprise Ireland

Ocean Energy Development & Funding Mechanisms

Ocean Energy Development & Funding Mechanisms

• Why?

• Ocean Energy Strategy

• Funding Sources

• Ocean Energy Industry Fund

• General

InfrastructureCable to Galway Test Site/SmartBay

Linking Industry / Test Sites / SmartBay

Supply Chain

Projects require supply chain to build initial prototypes and future arrays

Supply Chain report and database for marine Energy including Offshore Wind, Wave and Tidal is being finalised.(Enterprise Ireland & SEAI)

Summary Progress since 2009

• Ocean Renewable Energy Development Plan being finalised• Interim national co-ordination/collaboration mechanisms developed• Strategic Environmental Assessment completed• New Planning system in the works

• Foreshore Lease for Belmullet grid-connected wave test facility submitted• Enhanced research facilities at HMRC.

• 32 industry projects supported with high profile for a number of technologies• Complementary high-profile industry ICT initiatives as part of SmartBay • Effective Industry Association established

• Reports produced (Economics/Ports and Shipping/Engineering Sector) to create greater awareness of potential value and supply chain opportunities and requirements

• Grid analysis enhanced – 500MW Connection study, Isles, Eirgrid Offshore Grid etc• Study on export of electricity

ICOE 2012The National Convention Centre October 17-19

ICOE 2012 Themes

This is an international conference, so this is an opportunity to showcase Ireland’s strength and expertise in this emerging sector.

Take up a stand at the exhibition

Overall emphasis is on operational and industrial experience.

Further Information

Thank you and further Information

Sustainable Energy Authority of Irelandwww.seai.ie/oceanenergy

Enterprise Irelandwww.enterprise-ireland.com

Marine Institutewww.marine.ie