To many frantic forward-thinking consumers, clean ocean energy appears as an untapped resource of the future. Yet the research, design, and development of ocean power have all been practiced for hundreds of years.

Examples of this can be found as far back as when Sir James Clark Ross successfully sounded the bottom of the South Atlantic ocean in 1840. His primary task was to study the speed that sound travels in water, and in addition revealed information about the effects of ocean currents and salinity levels.

Since then, various forms of research have reached the conclusion that ocean power is conducive to the creation of an extremely dependable source of renewable energy.

So, where is all of this headed?

Let's consider the pros. To start, ocean energy is dense and extremely predictable. The size and energy of waves can be known anywhere from 3 to 5 days in advance. Also, tides are based on lunar phasing, which allows them to be predicted up to hundreds of years in advance. This evidence of incomparable dependability has given companies the initiative to begin investing in ocean power.

Ocean Energy Industry

The United Kingdom paved the way for the development of the ocean industry. Between 1976 and 1982 the U.K. Wave Energy Program provided £60 million to fund wave power research.

Professor Steven Salter provided the ground work for future research during this project. His device, the Duck, absorbed 90% of the energy incident on the device, and achieved conversion efficiencies of up to 90%.

Since the project was disbanded in 1982, locations with the greatest future market potential have developed ocean power projects. The most promising locations are in the UK, Canada, and the US.

These countries offer the most auspicious locations because of their already identifiable dependence on resources of the ocean industry. This dependence has given way to the construction of support and service companies that have extensive experience in marine construction and engineering.

Ocean Energy Technology

Out of the 35 major players in the race to commercialize ocean power technology, 24 are focusing mainly on wave energy. This focus is driven by 2 factors.

1. Availability of wave energy compared to the resources of marine current and tidal stream

2. Renewable electricity available to use by almost 50% of the world's population living within 60 miles of the coast

The most highly regarded instrument in current wave energy endeavors is called a point absorber. This device resembles a buoy, but transforms its wave-induced movement into electricity via a mechanical device on the ocean floor.

Although not as prevalent, research involving tidal energy is also coming along. 11 out of the 35 companies are developing technology based on successes in the lab and in-water testing.

The focus of tidal energy companies is the development of horizontal axis turbines. Similar to land-based and offshore wind turbines, that are used to harness tidal energy.

Ocean Energy Market

Since 2001, slightly more than $500 million has been invested in the 35 most active power companies. Included in this total is venture capital, government-backed DII funding, and equity and debt funding raised on the capital markets.

Tracking this market in terms of revenue and market size has proven to be difficult at this early stage, since only a handful of advanced ocean power companies have reported any sort of revenue. Yet, those who have reported revenue have shown notable activity since early rounds of investing a few years ago. Examples of this are:

• 2006: Marine Current Turbines sold a technology development license to EDF Energy, a subsidiary of Electricité de France, worth 2 million.

• Ocean Power Technologies reported a $1.7 million revenue in 2006, and at 45% increase in 2007 recorded at $2.5 million. This was largely on the back of a follow-on contract from the U.S. Navy and payments by Iberdrola and Total from the first phase completion of a 1.39-MW power plant in Santoña, Spain.

• Earlier this year, ESB Independent Energy signed a five-year Power Purchase Agreement with Marine Current Turbines to buy electricity generated from the tidal company's recently installed 1.2 MW turbine in Northern Ireland.

Over the last seven years, the total investment in ocean power companies has been on the rise. 2001 brought numbers barely reaching $25 million, while a plateau between 2003-2004 hovered around $50 million. Finally, the market began to take off around 2006, and by this year, investment climbed to just over $500 million.

Ocean Energy Future

The driving force behind the adaptation of ocean power will be the value of the energy these devices generate. The primary component in determining the value will be the installed system cost. Yet, there are other variables being taken into consideration.

Operations and maintenance costs, especially those that are unplanned due, for example, to ocean storms could increase the cost of energy significantly. The additional investment of developing robust devices to withstand storm conditions will likely drive this industry.

If we compare the cost structure for renewable energy technologies and that of fossil fuel-fired power plant, we can see how they are significantly different. Fossil-fuel power plants are weighted heavily toward fixed capital and installation costs, while renewable energy technologies are weighted toward the cost of initial installation and ongoing operations. The cost of managing ongoing operations will surface when considering the lifetime of a wave farm.

Throughout the lifetime of a wave farm, operations and management will remain as the only recurring payment on the system. Therefore, the cost of energy generated from a wave farm will drop abruptly.

Bearing in mind the cost of energy, levelized costs of energy (LCOE) take into account the fixed and recurring costs of a wave power device as a function of the energy it is able to generate. Lower fixed and recurring costs and high energy output leads to lower LCOE values. This will lead to a competitiveness of ocean power technologies relative to other energy sources.

The development of all future ocean technology will thrive initially in areas with high wave energy density. Wave energy in these areas allows the devices to absorb more energy and convert that to power at a greater rate than those in areas with low wave energy density.

The delay in the introduction of ocean power technology as a source of renewable energy shows us that although good things are projected, the industry still lacks a strong holding. Even so, there has been an increase in numbers and activity since 2001, proving that interest as well as the number of companies taking initiatives are also on the rise.

Until next time,

Emily