business development of renewable marine energy

BDI – Practical Guide – p. 2

Practical Guide

Contents

1. INTRODUCTION ........................................................................................................................................3

1.1. Scope of the study ...........................................................................................................................3

1.2. APC partners ....................................................................................................................................4

2. OBJECTIVES OF THE STUDY ......................................................................................................................7

2.1. This study should, in particular, take into account the following issues: ........................................7

3. RANGE OF STUDY .....................................................................................................................................7

3.1. Cross border cooperation ................................................................................................................8

3.2. Industrial Development ...................................................................................................................8

3.3. Other Economic Development Issues ........................................................................................... 10

3.3.1. Marine Environment ............................................................................................................. 10

3.3.2. Financial Engineering and Insurance .................................................................................... 10

3.3.3. Maritime Risks....................................................................................................................... 10

3.3.4. Other Activities ..................................................................................................................... 11

3.4. Issues for Research and Innovation .............................................................................................. 11

3.5. Energy Issues ................................................................................................................................. 11

3.5.1. Regulation of local energy systems....................................................................................... 12

3.5.2. Smart Energy Networks ........................................................................................................ 12

3.5.3. Transport and storage ........................................................................................................... 12

3.5.4. Integration schemes in energy planning ............................................................................... 13

3.6. Education and Training ................................................................................................................. 13

3.7. Economical and Financial Issues ................................................................................................... 13

3.7.1. Funding ................................................................................................................................. 13

3.7.2. Cooperation between Enterprises ........................................................................................ 14

3.8. Maritime Issues ............................................................................................................................. 14

3.9. Governance Issues ........................................................................................................................ 14


1. INTRODUCTION

The Atlantic Power Cluster seeks to exploit the renewable energy potential of the marine and coastal

environment of the participating regions. The APC regions span the Atlantic coastline including regions

from the UK, Ireland, France, Spain and Portugal. They are represented by 16 partner organisations, some

of which are regional authorities and some research or technical centres, as shown in Fig. 1 and table,

below.

The project is supported by the Atlantic Area Operational Programme 2007 – 2013. It started in February

2012 and will run for 24 months. One of its activities is the Practical Guide, conducted within the “Work

Package 4, Business Development”.

This study was put together by Bretagne development Innovation with data provided by a sea and littoral

expert.

1.1. Scope of the study

The development of the exploitation of Renewable Marine Energy (RME) for these regions is of particular

importance. Aware of the potential energy, economic and social development associated with this,

Atlantic regions therefore wish to launch a strategic and economic study to define in this policy area their

strategy for development and co-operation.

They actively support the development and exploitation of marine energy and are already collaborating

through various programmes and projects, including the APC (http://atlantic-power-

cluster.eu/index.php/en/) project conducted within the framework of the European programme

INTERREG IV B combination of atlantic regions. The European level is also important in this study, which

aims to create a social and political environment suitable for marine energy and to strengthen the

capacity for innovation and competitiveness of European regions.


1.2. APC partners


Fig. 1: Map of Partners


Partner Organisation Partner Region 1 SODERCAN Cantabria (ES)

2 FUAC –Foundation University of La Coruña, ES Galicia (ES)

4 Bretagne Innovation, FR Bretagne (FR)

5 FAEN –Asturias Energy Agency, ES Asturias (ES)

16 CIEMAT – Spanish Environment Energy Research Centre, ES Spain (info provided on

Asturias Region) (ES)

6 Regional Council of Basse-Normandie, FR Basse-Normandie (FR)

8 CIT – Cork Institute of Technology, IE Ireland (IE incl. N Ireland,

UK) 3 Galway County Council, IE

9 EVE – Basque Government Energy Agency, ES Basque Country (ES)

10 Wave Energy Centre, PT Portugal

(North, Centre, Lisbon &

Azores) 11 INEGI, PT

12 SEGEC – Scottish European Green Energy Centre, UK Scotland (UK)

13 Pôle des Eco-Industries de Poitou –Charentes, FR Poitou –Charentes (FR)

14 Société Publique Régionale des Pays de la Loire, FR Pays de la Loire (FR)

15 Regional Council of Aquitaine, FR Aquitaine (FR)

7 CPMR –Atlantic Arc Commission, FR (Study coordination)

(Partner number 17, Regen SW UK, has withdrawn from the project and had been replaced by Plymouth

University after the study was launched).

2. OBJECTIVES OF THE STUDY

The economic outlook, energy and social development of RME are challenging, the stakes are high but the

difficulties numerous. Providing strong support of regional and local policies and a concerted action by all

public and private partners are necessary conditions to this development, and require the development of

a coordinated strategy.

APC regions, supported by the European Union, wish to conduct a study whose main objective is the

development of strategic elements for the coordinated development of MRE in both regions to finally

supply the strategy to the industry and policy makers, to make the most of this potential development in

economic terms and in terms of local employment.

2.1. This study should, in particular, take into account the following issues:

• Energy supply and decentralised energy systems

• Economic development (institutional support structures, businesses, industrial use or not, cluster

development and know-how exportability)

• Port Infrastructure

• Research and innovation, training

• Regulatory aspects

• Joint activities

3. RANGE OF STUDY


Ideally, the study should take into account all potential issues associated with the development of RME. It

should also appear with regard to each of these potential issues, the potential associated benefits, the

risks, the external factors and more generally all critical factors likely to have an influence on strategy.

Among the key issues identified to date, by APC partners in particular, include:

• Industrial issues

• Port and logistic issues (land, sea)

• Energy Issues

• Other direct and indirect economic issues

• The challenges of research and innovation

• Academic issues and training

• The environmental and social issues

• Institutional and regulatory and governance issues

• Issues associated with the development of European regional and national marine and coastal

policies

A number of questions related to these issues are outlined below as a guide. This list is probably not

exhaustive and the study may reveal other important issues that do not feature.

3.1. Cross border cooperation

Beyond the common perception of the Marine Renewable Sector stakeholders, please analyse where the

strengths, weaknesses, opportunities and threats of both regions could benefit from the cross border

cooperation.

In particular please find specific correlation when one region can be help by strengths in the other region,

in order to create cooperation, when it is more beneficial than competition.

3.2. Industrial Development

Industrial Development associated with the design, implementation and operation of production facilities

is one of the major challenges of RME for APC partners. Marine energy can be exploited in various forms

(wind, waves, swell, heat or cold, currents, salinity gradients or temperature...), associated with different

industrial sectors. Even if all energies are not usable on the coasts and marine areas of APC partners

regions, all industries/sectors are based on a common core of knowledge and industrial know-how (off-

shore) and marine energy, and it is possible for APC regions to develop their potential (for example in

research, innovation or industrial development) even in sectors where there is no potential local1 energy:

all sectors (fixed wind farm, floating wind farm, tidal energy, wave energy, thermal energy: heat pumps,

1 Ocean thermal energy, in which the resource is available in tropical zones, or exploitation of the thermohaline

currents


SWAC2, ETM..., osmotic energy) should be taken into account, and no sector should be eliminated without

careful consideration of all options associated with direct or indirect economic development.

Each sector will be examined in terms of associated industrial development opportunities and in its

entirety (design, project development, Construction, O & M, dismantling and recycling).

The analysis of industrial development opportunities takes into account the possible mechanisms for this

development:

• development of existing companies and industrial facilities

• restructuring of companies and modification of existing installations

• creation of new businesses or new business networks (see below)

Emphasis will be placed on the following aspects:

3.2.1. Development / Restructuring of Port Capacity

Construction activities and maintenance of marine energy parks could lead to development and

restructuring of the existing port facilities, and re-distribute port functions among several locations. It is

desirable that this development is designed with a strategic vision beyond mere competition between

ports, with a view on European and national optimization.

3.2.2. Industrial Co-development

It is a matter of looking for potential industrial synergies, between different MRE sectors, or between

MRE and other industries.

• Example: swell/waves and port works

• ETM and drinking water (eg: island energy systems, areas where RME are abundant and water

resources are limited) • Associated risks

An audit of business categories was recommended:

- mapping the supply chain, building a database of companies - Communicate MRE jobs through creating partnerships, consortia, and promoting opportunities for

joining consortia

Engineering businesses need capital investment. This can encourage diversification and give new opportunities to supply chain businesses.

Work with utilities to lower costs and promote investment in areas with higher existing costs

Look at wider opportunities for business – be open about the real opportunities in MRE, and define areas for co-development/growth as MRE alone may not be enough to sustain a business plan.

Identify regional strengths/weaknesses and define cooperation opportunities (made in WP2, CRPM).

3.2.3. Regional Pattern of Economic Development (APC regions)

2 Seawater Air Conditioning


Potentially, marine energy is an excellent engine for economic development; built on a broad foundation

of knowledge and skills valuable in other maritime or mainland areas, this sector is likely to contribute to

the competitiveness of both regions and their endogenous growth without undue risk of hyper-

specialisation. The study should identify how this sector can be integrated with a maximum contribution

in the regional pattern of economic development in APC regions, notably contributing to the priorities

identified in the economic strategy of each APC regions. Experiences of public-private partnerships are to

be analysed.

3.3. Other Economic Development Issues

Beyond industrial development, there is significant potential for economic development in areas directly

or indirectly related to the production of renewable marine energy.

3.3.1. Marine Environment

The development of RME based on a set of skills and expertise in the marine environment: knowledge of

the physical and biological marine environment and maritime activities in coastal areas.

APC regions have significant assets, with access to many marine research organizations and expertise.

They are in a good position to develop and offer a full range of expertise by public or private consulting

firms, for example in the following areas:

• forecasting and prediction (estimation of producible energy, management and network

integration)

• RME project development

• environmental assessment and monitoring

• geotechnology

• etc.

3.3.2. Financial Engineering and Insurance

The exportation of any knowledge in MRE will go through complete control over the construction of

projects in this field, including the financial engineering: it will indeed be able to propose not only an

industrial energy project that is socially, economically and environmentally acceptable but also the

corresponding financial solutions.

The insurance industry will develop around new projects, opening up development opportunities to

companies that have been able to invest to master this new market.

There is also potential for development around the guarantees associated with reversible use of public

space by the production facilities.

3.3.3. Maritime Risks


The emergence of MRE, a new sector in the maritime industry, poses new challenges to maritime risk

management (collision, safety, notes, etc.), but also opens the way for the development of valuable

know-how in a wide area, eventually in synergy with other maritime sectors already dealing with issues of

surveillance, security and safety.

3.3.4. Other Activities

The development of marine energy can support the development of other activities and cross border

cooperation, specific or not:

• Tourism: ecotourism, technical (visits to parks or facilities)

• Activities of congresses, conferences

• Joint activities (offshore aquaculture)

• Other joint activities (diving schools, etc.)

3.4. Issues for Research and Innovation

The development of the use of MRE rests on a broad base of research and innovation over a large number

of areas. These include, in an indicative sense, oceanography and meteorology, modeling of energy

systems, studies on the optimization of these systems (combination of land and marine resources), the

regulation of energy systems, materials…

Innovation could rely on existing clusters or poles of competitiveness, or on new specialized clusters

(which may involve organizations from APC regions in particular, refer to the “Espace Atlantique”.

A network of universities and research organizations could be structured in the field of MRE, and in all

related fields, including:

• Environment,

• meteorological, oceanographic forecasts,

• law,

• economy.

Development must rely on a network of test sites tailored to each of the sectors.

The study should identify other organizations of this kind in Europe (eg: Renewable UK) and analyse their

actions.

3.5. Energy Issues

Beyond the aspects of production, marine energy is likely to change the energy situation in coastal areas,

especially APC regions. MRE could indeed potentially meet all long term electricity needs, and beyond

some needs (mobility, heat) currently met by other sources.


This potential energy transition must be accompanied by a thorough study of the local energy systems,

which should include the following issues:

• Smart grids – these are a great opportunities for communities, • Storage.

3.5.1. Regulation of local energy systems

Currently renewable energy sources are often considered primarily as a supplement limited to traditional

sources (fossil, nuclear), which leads to avoiding the question of their gradual replacement - possibly full

term - of these traditional sources.

The integration of increasing amounts of onshore and marine renewable energy produced locally opens

the way for development of decentralized energy systems at local or regional level, compliment (and

eventually as alternatives) to centralized systems, particularly in outlying regions such as APC regions,

who are disadvantaged in the context of centralized networks, while they are favored in terms of access

to marine energy resources.

3.5.2. Smart Energy Networks

Coastal regions with significant marine energy resources can expect to meet, beyond their own electricity

needs, part or all of their other energy needs. This development will therefore involve the electrical

network type "smart grids" but also, without a doubt, eventually the development of multivector energy

networks (electricity, gas, heat...) associated with gateways ("electricity to gas," etc.).

Control of these areas is potentially both a key issue for the development of MRE, and potential

development of know-how widely exported beyond the scope of MRE and perimeter coastal and

maritime regions.

3.5.3. Transport and storage

Marine energy available in the northwest Atlantic Ocean is intermittent and / or fatal; their integration

with the energy system requires that careful consideration is given to the control of transportation issues

(to compensate for the lack of correlation between production areas and consumption areas) and storage

issues (to compensate for the lack of correlation between periods of production and the periods of

consumption). This question is usually discussed only in terms of the electrical interconnections or

centralized storage. There exists decentralized storage solutions around which can be built potential

industrial sectors.

MRE sectors with the most potential (wind, waves and swell, thermal energy, thermohaline currents) will

in the medium or long term exploit offshore areas away from coastal and terrestrial power systems and in

some cases away from areas where energy may be consumed: this poses a problem of long-distance

transport and ultimately integration into the gird.


In addition, potential MRE is superior to current electricity needs alone, and MRE may eventually

compete with all present energy systems (sectors including oil and gas), little can be transported and

stored using a vector more suitable than electricity.

Development of the sector in the medium term will therefore require the mastering of these new issues,

and the question arises as to whether peripheral have the opportunity to develop skills and industrial

capabilities in these areas also important at European level.

3.5.4. Integration schemes in energy planning

MRE are confronted by difficulties integrating with terrestrial networks generally designed as a

centralized model, where they fall more in competition with terrestrial ENR.

Taking them into account in the strategic planning is a major challenge; among relevant policy schemes

that may be mentioned for each APC partners regions, which would integrate a larger share in the future

production of marine energy and their value in the regional energy system.

3.6. Education and Training

MRE is a recent sector, where large-scale operational development will require high-level training

(engineers and technicians). The needs will cover all fields of MRE, at all stages of project development to

industrial exploitation in particular financial engineering, forecasting production, risk management and

environmental impacts.

The challenges of training in these areas for APC regions will be analyzed in order to identify strengths and

weaknesses, opportunities (regional or global openings) and threats (competition, uncertainty, skills and

governance).

Particular attention should be spent on research for synergies between existing maritime training and the

future (polyvalent training, in-house training, complementary support training accompanying mutations

in fishing activities or commercial...) relying in particular on existing maritime training institutions and

highlighting the possibility of organizing a network to cover the field completely for future needs. The

possibility of developing training programs to meet the needs of one or more systems of RME should be

discussed.

3.7. Economical and Financial Issues

3.7.1. Funding

The economic model associated with MRE is very different from that of conventional energy: low

operating costs (since the basis of the energy is free), but high in capital costs. Their development but also

the governance of future associated energy systems, notably depends on the capacity of local

stakeholders to mobilize long-term financing to high levels.

Based on benchmarking experiences in other countries or regions, the study should propose financing

schemes, highlighting the strengths and weaknesses of each of the existing systems and their potential

interest for each APC regions.


3.7.2. Cooperation between Enterprises

The study should focus on approaches to bring together small to medium sized companies (PME/PMI) in

order to enable them to respond collectively to the Invitations to Tender (AO) and arrange funding to

meet the challenges and legal solutions to develop this type of partnership.

The study should rely on benchmarking of existing experiences from renewable energy projects,

particularly in Germany, Denmark and Scotland (eg: Community Energy Scotland). This will also consider

the contribution of initiatives across territories or sectors to network companies (eg: Bretagne Pole Naval

or NEOPOLIA).

3.8. Maritime Issues

MRE is a new challenge with new actors in model maritime environment, in the true sense and

figuratively, by centuries of history; their maritime integration (acceptability, synergies...) is an important

issue, which functions in particular:

• by clarifying the legislative and regulatory framework,

• by a reflection on the regulation of various uses of the maritime area, starting with the coastal

area,

• by searching for synergies between maritime activities susceptible to the improvement of project

economics and their acceptance by other maritime and coastal actors.

The study should identify in these areas the potential contribution of the action from APC partners

(particularly in terms of strategic planning) and identify priority areas for action.

3.9. Governance Issues

An ambitious strategy should unite the actions of many types of partners:

• Institutional: various levels of local authorities in both regions, public research organizations or

expertise, networks, State

• Industrial: energy suppliers, naval and maritime engineering specialists

• Marine users and coastal fisherman, fish farmers, involved in maritime transport and leisure

• Academics and researchers

• Citizens: Citizens interest associations or collective interest groups, etc.

The study should analyze models of governance capable of supporting the development of MRE, whether

specific MRE models or models successful in other areas which could be transferred to MRE projects

Particular attention will be given to addressing these issues.

business development of renewable marine energy

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