Argument: Wave energy will become viable with greater economies of scales
Hwee Hwee Tan. "Riding on the next wave of promise". Energy Current. 1 Mar. 2008 - Will wave be cost-effective in the long-run?
However, the workshop is a baby step towards securing a place for wave in the renewable energy mix. As with other wave energy projects, the devices to be deployed off the Oregon coastline are prototypes that have yet to prove their commercial viability. The biggest challenge for wave energy remains on delivering a cost reduction necessary for its long-term sustainability as a renewable energy source.
To date, offshore wave devices are producing electricity at costs far higher than competing renewables like wind and solar.
The lowest energy cost from offshore wave devices so far range from 12 UK pence (US$.24) per kilowatt-hour (kWh) to 44 pence (US$.88) per kWh, according the UK-based Carbon Trust. JAMSTEC's Mighty Whale, for instance, is said to be capable of operating at JPY60 (US$0.59) per kWh with modifications to its mooring system and under suitable sea conditions based on test results six years ago.
Dr. Miyazaki expects the cost to come down to JPY 20 (US$0.19) per kWh for new devices developed during the second stage of wave development, which is about to kick start in Japan. The figure may be comparable to the average cost of solar energy, now estimated at between US$.19 to US$.25 per kWh, but is still higher than wind energy, which can cost as little as US$.04 per kWh.
Indeed, as compared to other renewables, wave energy faces an uphill climb in proving its commercial viability. However, as analysts have indicated, the costs may come down if time is given for the current projects to grow in scale and volume.
"Because the industry is new, there are no economies of scale, which means that all units [of wave energy devices] must be individually produced at higher costs," Elefant said. The cost of wave energy will remain on the high side as compared to competing forms of renewables until enough projects are developed to reach economies of scale, according to Elefant.
Most wave energy developers are now banking on the promise of cost reductions in the long run based on gains from economies of scale and learning experience.
"Many wave developers cite prices as low as two to four U.S. cents per kWh," Thorpe said. "The trick is to predict where the bottom of the curve is, I think it will be about five UK pence (about 10 U.S. cents) per kWh," he said.
In order to deliver on the promise of cost reductions in the long run, the UK Carbon Trust emphasised the need to improve engineering design before a large number of devices are manufactured and installed.
With the recent surge of interest in wave and other renewables, however, developers are rushing to launch wave energy devices on a commercial scale. This brings forth a question: How far can wave deliver on the promise of cost reductions, environmental and social benefits given the current state of technology?
While several devices developed by Pelamis and Oceanlinx are currently being deployed as large scale units, other devices under development will probably never work, while many will never be economic, Thorpe said.
"The biggest difficulty facing wave energy is the failure of some of these heavily supported wave energy devices to deliver on their promises, which could bring about a cynical view from investors of the whole sector," he said.