Strategic Innovation Acceleration - UK marine energy industry: pathway to commercialisation Simon Robertson

Strategic Innovation Acceleration - UK marine energy industry: pathway to commercialisation Simon Robertson

Contents Carbon Trust Overview Innovation first principles UK Innovation landscape Marine energy programmes Conclusions 2

The Carbon Trust We have accelerated sustainable, low carbon development for more than 12 years Advice Footprinting Technology We advise businesses, governments and the public sector on opportunities in a sustainable, low carbon economy We measure and certify the environmental footprint of organisations, products and services We help develop and deploy low carbon technologies and solutions, from energy efficiency to renewable power What we have achieved: Helped our customers to save 3.7 billion; Helped our customers to save 38m tons of CO 2; Catalysed over 300m of investment into clean technologies. 3

Carbon Trust Innovation We are a 24 strong team in London (and growing), and an office in Edinburgh (also growing) We operate on longer term/public sector grant funded work and commercial day rates. Delivering different solutions for different customers along the innovation journey Prioritising innovation areas Designing innovation initiatives Delivering innovative solutions Example customers:

Contents Carbon Trust Overview Innovation first principles UK Innovation landscape Marine energy programmes sample Conclusions 5

The Innovation process involves complex journeys from concept to commercialisation Technology journey Proof of principle (Basic research) Proof of concept (Applied research) Proof of viability (Early demonstration) Proof of scalability (Full demonstration) Proof of value (Marketable product) Proof of quality (Warranted product) + Leading Wave Leading Tidal Company journey 1 or 2 individuals (sweat equity) Form venture (or new unit) (Friends & family) Bring in first outsider (Angel or seed) Recruit specialists (Venture Capital) Grow operational staff (IPO) 30+ employees (Revenue) Market journey No interaction (Technology push) Markets identified (Indifference) Market Field trial (Recognition) Early adopters & niches (Benefit quantified) Rational economic purchase (Market pull) Technology & market evolution (Feedback) Regulation journey General Regulation neutral or negative General Regulation neutral Specific Regulation positive General Regulation positive General Regulation neutral or positive

Case study 1 There are three key technical challenges for marine energy innovation Challenge Performance We know it can work (in principle) but can we generate significant power from wave and tidal energy devices? Requirement Demonstration of current best in class concepts to understand what we can do with todays technology. Keep a watching brief on new 2 nd /3 rd generation technology 2 Cost We know current cost are very high but is it possible to make significant cost reductions? Explore the potential for cost reduction, and accelerate most promising options in terms of devices, supply chain and commercial factors Scale-up 3 Can multiple devices be deployed Develop the business case: Quasicommercial project development for collectively, and can we tackle the industry challenges of cost first farms coordinate public sector effectively? support and statutory bodies

Costs and timescales Costs to move along the technology journey are high and it takes time. The leading wave and tidal device developers Pelamis and MCT Siemens were both established in the late 1990 s after years of academic research. Current state of the sector: Big Industrials: eg Siemens, Alstom, Andritz, Voith, Kawasaki Tidal 2014 Technology journey Basic research (Proof of principle) Applied research (Proof of Concept) Early demonstration (~1/3 scale) (Proof of viability) Full scale demonstration (Proof of scalability) First farms (Proof of durability) Market diffusion (Proof of value) ~ 10k ~ 100-500k ~ 1-3m ~ 10-40m ~ 40-80m+ Wave 2014 Small-Medium Enterprises 8

Contents Carbon Trust Overview Innovation first principles UK Innovation landscape Marine energy programmes Conclusions 9

UK innovation landscape the funders Low Carbon Innovation Coordination Group European Funding eg. Scottish Government Offshore Renewable Energy Catapult Marine Energy Technologies, Projects and Testing Infrastructure 10

UK innovation landscape the programmes ROCs CFD Saltire Prize REIF, TCE MEAD NER300 Scale/TRL MRPF ETI MRCF MFA, MESAT, TCE Enabling Actions, In-Stream Tidal Type of Support: Revenue Support MEC, MEA WATES, WATERS1,2,3,FP7, MARINET, ERA-NET, H2020 Grant Investment RESEARCH COUNCIL FUNDING eg. SUPERGEN Academic 2005 2010 2015 2020 2025+ Timespan of support Total public investment = 150m- 200m 11

Features of a robust innovation process Accelerating the journey between concept and commercialisation requires the following: Understand the four journeys and how best to accelerate them by prioritisation and development of bespoke support programmes. Facilitates collaboration and coordination between stakeholders. Promote knowledge exchange within and into/out of the sector. Demonstrates value for money and GVA/jobs benefits. Includes flexibility to balance clearly defined objectives with the uncertainty of true R&D Technically robust gated process grounded in good engineering. Technology Push OR Research-focused Market Pull Customer-focused May not meet customer needs Innovators focus on main challenges 12

Contents Carbon Trust Overview Innovation first principles UK Innovation landscape Marine energy programmes Conclusions 13

Carbon Trust - Marine Energy Programmes We have delivered 50m of marine energy innovation working with UK Governments and Industry Understanding the challenge Facilitating development Accelerating cost reduction Proving the technology Marine Energy Challenge 2003-2006 Founding Funder since 2005 Marine Energy Accelerator 2007-2010 Marine Renewables Proving Fund 2009-2011 Innovation Needs Mapping Demonstrating at scale Joint Industry Projects EU market assessment echnology Innovation Needs Assessment 2012,2014 Marine Renewables Commercialisation Fund 2012-2015 Marine Farm Accelerator 2013+ SI Ocean 2012-2014 14

Marine Energy Accelerator Understanding cost drivers and market opportunity CFD 30.5p/kWh Offshore wind Onshore wind / nuclear CFD 305/MWh Wholesale price First farm costs 10MW after 10MW installed WAVE 15

Proving the technology the Marine Renewables Proving Fund (MRPF) 22.5m fund, 2009-2011 Successful deployment of 6 full-scale prototypes Deployment Operations Maintenance Power generation - 10 GWh + Ties with EMEC and test site in Ireland 16

Marine Farm Accelerator, 2013+ The Marine Farm Accelerator is a collaborative programme focussed on developing technology for early Wave and Tidal Arrays. ORE Catapult programme delivered in partnership with the Carbon Trust Steering Group of project developers, mainly tidal Technical working groups of experts Liaison group of technology developers Phase 1 (2014): six workstreams driving scope for R&D projects: Electrical Systems, Yield Optimisation, Installation Methods, O&M, Insurance, Cable Stabilisation Phase 2 (2015+) will implement the identified R&D projects Programme based on the successful Offshore Wind Accelerator.. 17

Offshore Wind Accelerator Objective: Reduce cost of energy by 10% in time for Round 3 77% (36GW) of licensed Offshore Wind Accelerator capacity in UK waters Joint industry project involving 9 developers + Carbon Trust Only developers are members Aligned interests, commercially-focused International outlook for best ideas 60m programme 2/3 industry, 1/3 public (DECC) 45m spent to date, 14m forecast for FY1415 Two types of project Common R&D concept development and knowledge building Discretionary Projects demonstrations Value to members New lower-cost technologies, ready to use Insights into best technologies for Round 3 Funding for demo projects Set up 2009, runs to 2016

Offshore Wind Accelerator - Access Vessels Objective: Increase accessibility of turbines for O&M Competition Design development Fjellstrand Sea trials TranSPAR Nauti-Craft Divex BMT Houlder Competition for novel access systems in 2010-450 entries - 30 countries - 13 finalists Umoe Otso Momac

International Collaboration UK- Canada 20

Conclusion Concept to commercialisation involves many aspects not just technical. Support programmes need to be well targeted, flexible, coordinated and prioritised against needs across the range of development challenges. The approach to date has made significant progress but we have not yet successfully commercialised the sector so new smarter initiatives with greater levels of national and international collaboration are needed. 21

Simon Robertson Simon.robertson@CarbonTrust.com Thank you for Listening Technology Acceleration Manager Carbon Trust Innovation Team Forsyth House 93 George Street Edinburgh EH2 3ES Old Scotland ICOE 2014 attendance kindly supported by: