Tidal Energy: Economic Reality or Fantasy?

Presentation to the International Consulting Economists’ Association

By Peter Dixon, Kepler Energy March 12th, 2013

© Kepler Energy 1

Some context

© Kepler Energy 2 Source: Wikipedia

Almost all the evidence points to warming…

Source: Met Office © Kepler Energy 3

Increasing CO2 is the main driver of climate change

Source: NASA © Kepler Energy 4

UK has made significant changes to its energy supply portfolio – enough?

© Kepler Energy 5

In particular, the carbon content of fuels used for electricity generation has dropped – enough?

© Kepler Energy 6

NG future scenarios paint a picture of reducing carbon intensity…

Source: National Grid 20 year scenarios © Kepler Energy 7

Shale gas is seductive….

Source: Wikipedia © Kepler Energy 8

But there are few signs that new nuclear will ever get built, and will the grid really work with such large wind capacity? And what will be the impact of

shale gas on CCGT? And what will be the impact of CCS on CCGT costs?

Source: National Grid 20 year scenarios © Kepler Energy 9

The problem with wind generation is that the wind is not reliable….

© Kepler Energy 10

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Annual Average Load Factors for UK Wind

Onshore wind

Offshore wind

Ofshore 28.7%

Onshore 26.4%

Source: Energy Trends 2012

Meanwhile….in the short term (and longer term?) will the lights go out?

Source: Ofgem © Kepler Energy 11

Yes

Source: Ofgem

Loss of Load Expectation (LOLE) is the probability of demand being higher than available capacity in any year. This measure is expressed in hours per year. Expected Energy Unserved (EEU) is the corresponding volume of demand that is expected not to be met in any year. EEU combines both the likelihood and potential size of any supply shortfall.

© Kepler Energy 12

DECC provides forecasts of future generating costs, but its estimates vary significantly with time….

© Kepler Energy 13

What is Levelised Cost?

Source: DECC © Kepler Energy 14

Prices will rise because generating costs are going to rise….but by how much?

Source: DECC 2012

EdF is asking for > £100

© Kepler Energy 15

How come the current wholesale price is so low? Old, clapped out plant, cheap gas, marginal pricing……

Year ahead base load power prices 2008 / 2012

Source: Heren European Daily Electricity Markets cited by Ernst & Young and EDF Energy

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Wholesale electricity prices in £ per MWh

© Kepler Energy 16

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Will renewables ever be cost competitive? Will tidal (and wave) ever be competitive?

© Kepler Energy

Tidal primer!

© Kepler Energy 18

Net result: tidal variation is non-uniform. Note that tidal velocities may not correlate exactly with tidal range

© Kepler Energy 19

Global potential is high, but no detailed studies are available. Figures shown may under-estimate supply since only represent kinetic energy extraction by

axial turbines at limited Cp.

Source: Atlantis Resources. © Kepler Energy 20

There are two significant tidal range plants – one new in Korea (right) and one older in France at La Rance (left)

© Kepler Energy 21

Economics of La Rance are obscure but unlikely to have recovered costs - project is now fully ‘written down’ and renovation is taking place.

What about the Severn Barrage?

© Kepler Energy 22

Hafren Power assert that LCOE will be £160/MWh for 30 years and then about £20/MWh. Environmental and other impacts are potentially significant, and DECC ‘remains open minded but cannot support due to lack of detail’

Options for tidal stream power (1)

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• Axial flow turbines

(“underwater windmills”) – “Unducted”

» MCT (most developed)

» TidalStream

» Tidel

» … at least 8 others

– “Ducted”

» Lunar Energy

» Open Hydro

» … at least 8 others

– Fixing options: • Fixed foundation

• Pivoted

• Anchored

© Kepler Energy

Options for tidal stream power (2)

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• Vertical axis turbines

– Blue Energy

– Polo

– Gorlov helical turbine

– … 4 other vertical axis devices

• Horizontal axis turbine

– THAWT (Oxford development)

– Water Wall (drag device)

• Oscillating devices

– Stingray

– Pulse Tidal

– … other oscillating devices

• Unusual variants

– Tidal Sails

– Atlantis “Aquanator”

© Kepler Energy

• Turn the axis of a Darrieus vertical axis wind turbine (VAWT) through 90 to

lie horizontally across a tidal flow

• Stretch across the flow direction

THAWT Concept Transverse Horizontal Axis Water Turbine

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Tidal flow

• Length is limited only by stiffness of structure and width of tidal channel

• THAWT is scalable horizontally

© Kepler Energy

THAWT Blades are arranged in a truss for strength and stiffness

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Stretch a straight bladed Darrieus turbine across the flow,

Poor rigidity High Blade bending stresses

Arrange Blades to form a triangulated truss structure

High rigidity Lower Blade stresses Can be stretched sideways - scalable

Invented by Houlsby, McCulloch and Oldfield in discussion (Patented) © Kepler Energy

Scalability of tidal devices

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Wind turbine

Diameter can be

increased

THAWT can be stretched

Axial tidal turbine

diameter limited by depth!

Wind turbine

diameter can be

increased

© Kepler Energy

CAD representation of Kepler’s turbine in fence configuration

28 © Kepler Energy

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Market segmentation has developed around differing tidal velocity profiles – because of Kepler’s technical and geometric advantages, it is more efficient at lower

velocity profiles, opening up more location opportunities in areas with less installation risk.

The turbine design has been optimised for velocities up to ~2.5m/sec. Future development will extend its range ‘upwards’ relatively easily.

All other turbines are designed to cope with Orkney conditions of ~3-4m/sec. It will be very difficult to take weight and complexity out in order to be commercially competitive at lower velocities.

Note: power = f(v3)

© Kepler Energy

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Kepler is a member of RegenSW and is engaging with stakeholders in preparation for a tidal fence development.

© Kepler Energy

THAWT in the Bristol

Channel?

31 © Kepler Energy

One key problem (?): guaranteed cyclicality of tidal generation output.

© Kepler Energy 32

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Time in Cycle

Turbine Power Output (kW)

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Kepler’s strategic position in lower velocity, shallower tidal streams is very strong. And costs will be competitive with off shore wind…..

Depth

Velocity

Kepler 1st Generation

Illustrative

© Kepler Energy

Discussion

34 © Kepler Energy