Ocean Energy Development & Funding Mechanisms

Ocean Energy Development & Funding Mechanisms HMRC Economics Forum April 2012

Ocean Energy Development & Funding Mechanisms Ocean Energy Development & Funding Mechanisms • Why? • Ocean Energy Strategy • Funding Sources • Ocean Energy Industry Fund • General

Why? Is 2020 seen as a waypoint on a much longer path? What actions are to be developed around a longer-term vision for electricity from marine renewable energy resources? 2030 2040 2050 25GW ? ? 10GW

The Market – export of electricity Ireland has sufficient generation to meet its electricity needs. Where is the market for our substantial resource and how can this be accessed? Study of exporting renewable electricity Study on the viability and cost benefit analysis for Ireland of exporting renewable electricity using the co-operation mechanisms in Directive 2009/28/EC • Assumes Ireland meets its binding target domestically and monetises additional RES-E production through exports • Assumes no additional burden on tax-payer or consumers to fund infrastructure • Projects are developed under Joint Project frameworks or statistical transfers

Economic Study - SQW Economic Benefits of Ocean Energy Development • Examine the commercial outlook for the industry and summarise the challenges facing the sector • Show the potential economic contribution of the industry in terms of energy output and manufacturing and supporting industry • Identify the optimal respective roles for the private and public sector in developing ocean energy • Review the strategic options for Ireland to maximise the economic contribution of the industry

By 2030 the NPV per technology of the OE market could be worth >€1.5bn to both the RoI and NI and provide >20,000 jobs. • Definite costs and development potential are not yet transparent as the OE industry is immature – although huge potential markets exist. • Learning rates are expected to rapidly increase with relatively significant levels of support in the short term. • Only learning by doing will add the required clarity to the possible cost reduction/learning rates, and to any decision for further subsidy. • Further early intervention in OE will allow time to prove the envisaged cost improvements while maintaining the possibility of a developed Irish OE industry and its benefits. Headline Conclusions

A funding gap exists between prototype funding and revenue support (REFIT or ROCs) schemes. • Higher initial revenue tariffs should be evaluated • Further Capital Grants to early demonstrator, pre-production and production devices should be considered. • The actual capacity installed by 2020 and beyond is heavily dependent on enabling actions and support policies. • Possible Strategy: • Investigate REFIT to enable early development • Enable further capital grant funding for promising technologies (National & European - NER300 / FP7) • Continue strong RD&D funding/programmes to attract and retain the best talent and develop/attract high value companies through talent pooling • Review progress 2015 – but always actively engage OE sector Headline Conclusions

Support Pilot projects, new concepts OE Development Roadmap to date International Full scale demonstrators Small-scale arrays 10/20MW Arrays of 100s MW Original 2020 target of 500 MW Publish updated Plan (OREDP)

OEDU Management to 2011 • Oversee the implementation of the Strategy • Support liaison with other Dept. & Agencies • Advise on issues arising from the Advisory Grp • To be reconstituted following OREDP Steering Committee DCENR, SEAI, MI, DECLG Advisory Group DCENR, DEHLG, CER, EirGrid, ESB Networks, ESBI, MI, MRIA, EI, IDA, SFI, NOW, IWEA, BG, BnM + others as appropriate Intended to be mechanism for co-ordinated action to support and enable ocean energy development Now pending revised OREDP and direction from reconstituted interdepartmental governance mechanism.

Undertake Strategic Environmental Assessment & establish new planning SEA done, Planning in process by DECLG The Programme Actions of OEDU to date Intensify resource and site assessment On-going Enhance Galway on-going Belmullet lease submitted Establish test facilities Fund industry research, development and demonstration Reduced fund 2012 Completed at HMRC In process at IMERC Enhance Research Infrastructure Promote development of engineering and other supply chain capabilities With EI on-going Support grid infrastructure development studies Connection study for 500MW completed

Funding Sources

Industry Support Scheme Scope • Industry-led projects to develop and test wave and tidal energy capture devices and systems; • Independent monitoring of projects/technologies; • Industry-led R&D aimed at the integration of ocean energy into the electricity market and the national electricity grid (and network) • Data monitoring, forecasting, communications and control of OE systems • Specific industry-led research projects which will be carried out by research centres, third level institutions and centres of excellence Status • 32 company projects supported. Value - €15m. Grant support €4.8m

Development Protocol for OE Technologies used for Industry funding evaluation

Projects Supported Near Shore Device Cyan Technologies Carnegie/CETO Attenuator Seapower - Hammerhead OCRE Ltd (energy storage) Waveberg Wave Energy Ireland Power Take Off Seapower – C Pump Limerick Wave Blue Power Houston Engineering OWC Ocean Energy Ltd WECs Jospa – Irish Tube Compressor Jospa – Chuter Key Engineering Benson Point Absorber Wavebob Tidal Energy Open Hydro TEL Others / Supporting Services IBM – acoustic MRIA WestWave (ESBI) OpenTank Technology from Ideas

Enterprise Ireland support for R&D and company growth Company Growth Early stage R&D work R&D support Commercialisation Fund Proof of Concept R&D Fund <€150k Growth Fund R&D Fund >€150k Mixed packages Innovation Partnership Innovative HPSU Feasibility Study • Projects should: • A unique approach over existing alternatives • Address a significant customer/end-user need • The potential to positively impact the Irish economy Innovation Voucher

Enterprise Ireland Commercialisation Fund - Proof of Concept: The programme aims to support academic researchers to explore innovative scientific concepts with commercial potential. The scheme focuses on a proof of concept model where individuals or small groups work on short applied projects to develop a product concept through to a stage where an understanding of the commercial viability of the concept is gained. Innovation Partnership: The Innovation Partnership Initiative offers financial support to companies who engage in collaborative research projects with Irish universities and institutes of technology. Enterprise Ireland provides grants of up to 80% towards eligible costs of the research project. The proposal process and administration of the project is managed by the participating third level research institution. Innovation Voucher: Voucher for R&D work in 3rd level up to €5,000. Support proof of concept.

Enterprise Ireland Feasibility Study: The aim of the Feasibility Study initiative is to assist a company or individual to investigate the viability of manufacturing a new product or process or to develop a new internationally traded service. The purpose of the study is to provide the necessary information to enable the promoter (and Enterprise Ireland) to reach firm conclusions regarding the project's viability. R&D Fund The R&D Fund is open to existing and potential clients of Enterprise Ireland, Údarás na Gaeltachta and the city and county enterprise boards that want to develop new and more innovative products, processes and services. Funding of up to €450,000 is available to help Irish companies realise their R&D potential which will lead to increased sales and profitability

InfrastructureCable to Galway Test Site/SmartBay

Linking Industry / Test Sites / SmartBay

Supply Chain Projects require supply chain to build initial prototypes and future arrays Supply Chain report and database for marine Energy including Offshore Wind, Wave and Tidal is being finalised. (Enterprise Ireland & SEAI)

Summary Progress since 2009 • Ocean Renewable Energy Development Plan being finalised • Interim national co-ordination/collaboration mechanisms developed • Strategic Environmental Assessment completed • New Planning system in the works • Foreshore Lease for Belmullet grid-connected wave test facility submitted • Enhanced research facilities at HMRC. • 32 industry projects supported with high profile for a number of technologies • Complementary high-profile industry ICT initiatives as part of SmartBay • Effective Industry Association established • Reports produced (Economics/Ports and Shipping/Engineering Sector) to create greater awareness of potential value and supply chain opportunities and requirements • Grid analysis enhanced – 500MW Connection study, Isles, Eirgrid Offshore Grid etc • Study on export of electricity

ICOE 2012 The National Convention Centre October 17-19

ICOE 2012 Themes Overall emphasis is on operational and industrial experience. This is an international conference, so this is an opportunity to showcase Ireland’s strength and expertise in this emerging sector. Take up a stand at the exhibition

Further Information Thank you and further Information Sustainable Energy Authority of Ireland www.seai.ie/oceanenergy Enterprise Ireland www.enterprise-ireland.com Marine Institute www.marine.ie

Ocean Energy Development & Funding Mechanisms