Wave Energy Market

Wave Energy: Harnessing the Power of the Ocean

Wave energy, also known as ocean energy or wave power, is a promising renewable energy source that utilizes the kinetic energy generated by ocean waves to produce electricity. As the world faces increasing energy demands and the need to transition to sustainable alternatives, wave energy presents a viable solution with numerous advantages. This essay explores the concept of wave energy, its significance as a renewable resource, its top impacting factors, and the government policies that promote its development.

Wave energy refers to the capture and conversion of the energy present in ocean waves into usable forms of power. Waves are produced by the interaction of wind, tides, and the gravitational pull of the moon and the sun. The kinetic energy generated by the motion of waves holds great potential for electricity generation, making wave energy an attractive and eco-friendly alternative to conventional fossil fuels.

Advantages of Wave Energy

Renewable and Clean: Wave energy is a renewable resource that depends on the natural forces of the ocean, making it an environmentally friendly option. It does not emit greenhouse gases or contribute to air pollution, thus mitigating climate change and reducing the carbon footprint.

Abundant and Predictable: Oceans cover approximately 71% of the Earth's surface, making wave energy a vast and consistent source of power. Unlike solar or wind energy, waves can be predicted with high accuracy, allowing for efficient planning and optimization of energy production.

High Energy Density: Waves possess a significant energy density, meaning that even small waves can generate substantial amounts of power. With the advancements in wave energy technologies, capturing this energy has become increasingly feasible.

Top Impacting Factors

Wave Intensity and Duration: The intensity and duration of waves play a crucial role in determining the energy potential of a particular location. Coastal regions with consistent and powerful waves are ideal for wave energy installations.

Technological Advancements: The development of efficient wave energy conversion technologies is essential for the commercial viability of wave energy projects. Innovations in wave energy converters and mooring systems have significantly improved the overall efficiency and reliability of wave energy devices.

Environmental Considerations: While wave energy itself is a clean energy source, the installation and operation of wave energy devices can have environmental impacts. Proper assessments and mitigation strategies are necessary to ensure minimal disruption to marine ecosystems, including the protection of marine life and habitats.

Government Policies and Initiatives

Research and Development Funding: Governments worldwide have been actively investing in research and development initiatives to support the advancement of wave energy technologies. Funding programs aim to enhance efficiency, reduce costs, and address technical challenges associated with wave energy conversion.

Feed-in Tariffs and Incentives: Governments may provide financial incentives, such as feed-in tariffs, to encourage the integration of wave energy into the power grid. These incentives offer long-term contracts and guaranteed payments for wave energy producers, fostering investment and growth in the sector.

Regulatory Frameworks: Governments establish regulatory frameworks to govern the deployment, operation, and maintenance of wave energy projects. These frameworks ensure safety, environmental compliance, and streamlined processes for obtaining permits and licenses.

Dynamics of Wave Energy Market

Drivers in Wave Energy Market

Increasing electricity demand from coastal communities

The rising demand for electricity from coastal communities is driven by several factors. According to the World Bank, the global average per capita power consumption exceeds 3,135 kWh annually. Countries such as the US, Canada, Japan, the UK, South Korea, and Germany exhibit high per capita energy consumption due to the extensive use of electric appliances like heaters, air conditioners, and refrigerators. Increased consumer spending capability also contributes to higher power consumption in these nations.

To address the growing energy needs, there has been a significant increase in global investments in renewable energy. In 2020, renewable energy investments reached a record high of approximately $303.5 billion, representing the largest share of global power investment. Renewable energy sources, particularly wind and solar photovoltaic (PV), have contributed significantly to global electricity generation, accounting for almost 28% in 2020, as reported by the IEA's "Renewables 2020" report. Supportive policies, including feed-in tariffs, renewable portfolio standards, tax incentives, and auctions, have played a crucial role in driving the deployment of renewable energy projects.

Coastal regions have experienced a rapid growth in population, leading to an increased demand for electricity. In countries like Australia, the US, and Japan, a significant portion of the population resides in coastal areas, with 36% in Australia and the US and around 80% in Japan. The expansion of coastal populations creates a dual challenge of rising power demand and limited land availability for setting up land-based power generation plants. As a result, there is a growing interest in utilizing wave energy converters to generate clean energy in coastal regions, driving the growth of the wave energy market.

While the wave energy industry offers significant growth potential, there are challenges to overcome. High capital investments required for installing wave energy power infrastructure pose a restraint to market growth. However, government initiatives and investments in the renewable energy sector present opportunities for key players in the wave energy industry. Technological advancements, increased use of renewable energy sources, and the construction of tidal stream power plants contribute to market expansion. Nonetheless, considerations regarding the potential impact of wave energy on marine life need to be addressed to facilitate market growth.

The abundant wave energy resources in the world's oceans present an untapped opportunity for power generation. Waves provide a consistent and renewable energy source with the potential for coastal and offshore electricity production. Wave energy aligns with the goals of reducing carbon emissions, transitioning to cleaner energy sources, and achieving sustainability targets. Incorporating wave energy into the energy mix diversifies the renewable energy portfolio, reducing reliance on fossil fuels and enhancing energy security.

Ongoing advancements in wave energy technologies, including improved efficiency, reliability, and cost-effectiveness of wave energy converters, contribute to the growth of the industry. Supportive government policies, incentives, and financial mechanisms play a crucial role in stimulating the development and deployment of wave energy projects. Collaboration among countries, research institutions, and industry stakeholders facilitates knowledge-sharing, technology transfer, and joint research efforts, accelerating the growth and commercialization of wave energy technologies.

Restraints in Wave Energy Market

Insufficient infrastructure and environmental challenges pose restraints to the wave energy converter market. To maximize power generation, proper connections to port facilities and grid infrastructure are crucial, requiring additional infrastructure such as onshore substations, underground cables, and transmission lines. Setting up this infrastructure incurs labor and capital costs. Moreover, the mooring of wave energy converters presents difficulties as it involves anchoring ropes to the sea floor bed with drilled-in anchors. Therefore, the establishment of wave energy power plants of any scale requires additional infrastructures, acting as potential restraints.

Opportunities in Wave Energy Market

On the other hand, increasing research and development (R&D) investments and technological development present opportunities in the wave energy industry. Wave energy is still an emerging technology, and companies are working on pilot projects to explore its viability and cost efficiency. Researchers are studying various parameters to optimize wave energy converters and reduce costs while maintaining efficiency. Many countries are investing heavily in renewable energy technologies, with significant R&D investments in wave energy. For example, the US government has allocated approximately $12 million to support the development of innovative marine and hydrokinetic energy technologies. The International Energy Agency predicts rapid growth in renewable energy sources, with renewables expected to cater to about 30% of global power demand in 2023. Oceans, covering a larger surface area than land, receive abundant solar radiation and wind motion, making them ideal for wave energy converters to harness solar energy and enhance power generation.

Overall, while challenges related to infrastructure and the environment exist, increasing R&D investments and technological advancements offer promising opportunities for the wave energy converter market.

Challenges in Wave Energy Market

Significant Investment Requirements

Wave energy converters encounter a series of obstacles due to the high initial capital investment involved. Throughout their lifespan, these converters operate in marine environments that contain various impurities and a high concentration of salinity, which can corrode even the most resilient metals. Enduring these harsh weather conditions poses a considerable challenge for wave energy converters. To ensure efficient, reliable, and long-lasting operation, manufacturing companies must employ thick sheets of top-grade metals and apply multiple layers of corrosion-resistant, heavy-duty coatings. However, this process not only adds weight to the wave energy converters but also escalates their price. In fact, the cost of a wave energy converter can reach up to ten times that of other renewable technologies that offer similar output. Furthermore, expenses associated with installation and mooring, along with costs incurred during the manufacturing and coating processes, significantly contribute to the overall capital expenditure (CAPEX) of the project, presenting a potential obstacle for market adoption.

Wave energy conversion technologies are still in their early developmental stages, facing various technical challenges. These include the need to discover efficient and reliable methods for capturing and converting wave energy, designing robust and cost-effective devices, and addressing concerns regarding device survivability and maintenance in harsh marine environments. The substantial upfront costs associated with wave energy projects serve as a significant limitation. The development and deployment of wave energy devices and infrastructure can be financially demanding, which restricts the number of projects progressing beyond the pilot or demonstration phase. The high capital expenses, maintenance costs, and uncertainties regarding return on investment need to be overcome to encourage broader adoption of wave energy. Connecting wave energy devices to the electrical grid can be a logistical and financial challenge, particularly for projects situated in remote areas or far from existing grid infrastructure. The availability of suitable connection points and the expenses associated with transmission infrastructure can impact the economic feasibility of wave energy projects. Another crucial consideration is the potential environmental impact of such projects, such as underwater noise, electromagnetic fields, and effects on marine ecosystems. Adhering to environmental regulations and fulfilling permitting requirements is vital to ensure responsible and sustainable development of wave energy projects. Moreover, wave energy resources exhibit geographic and temporal variability, making it difficult to predict and optimize energy production from wave energy devices. Fluctuations in wave conditions can affect the stability and consistency of energy generation, posing challenges for project planning and grid integration. Finally, the wave energy industry faces competition from well-established and mature renewable energy technologies like wind and solar. These technologies have advanced commercialization, larger market shares, and established supply chains, creating a more challenging environment for wave energy to compete against.

Ecosystem of Wave Energy Market

Power generation is expected to dominate the market, primarily driven by the increasing focus on renewable energy production. With an estimated market share of 45% during the forecast period, the power generation segment will witness substantial growth due to the rising global demand for electricity and advancements in technology. Meeting the growing worldwide energy demand necessitates expanding the capacity of the power sector. Among various renewable resources, electricity generated from the sea holds significant potential, offering predictability and high availability, which contributes to its popularity and market dominance.

The desalination segment is also a crucial area within the market as the use of saltwater for producing drinking and usable water becomes increasingly prevalent. Desalination plays a vital role in transforming saltwater into freshwater suitable for drinking and agricultural purposes. The resilience of saltwater compared to freshwater makes it an important resource in addressing water scarcity issues.

In terms of technology, the market is divided into oscillating body converters, oscillating water column, and overtopping converters. Among these, oscillating body converters are projected to experience the highest compound annual growth rate (CAGR) during the forecast period. These converters offer greater operational efficiency compared to the other technologies, contributing to their expected market dominance.

Considering the location of wave energy projects, the market is categorized into onshore, near shore, and offshore segments. The near shore sector is anticipated to hold the largest market share. This is attributed to factors such as high operational effectiveness, easier installation processes compared to offshore projects, and cost advantages. The near shore locations offer favorable conditions for wave energy projects, driving their prominence in the market.

Overall, the power generation segment is poised to lead the market, driven by the focus on renewable energy sources. Desalination plays a crucial role in utilizing saltwater resources effectively. Oscillating body converters are expected to demonstrate the highest growth rate, while the near shore segment is projected to hold the largest market share due to operational advantages and cost considerations.

Regional Insights

Europe has emerged as the leader in the wave energy market, securing the highest revenue share in the previous year and expected to maintain its dominance in the forecast period. This is attributed to the presence of numerous key players in the region and the increasing generation of wave energy. Moreover, Europe has witnessed significant investments and government initiatives aimed at advancing ocean wave energy technology, further driving market growth.

Within Europe, several countries have taken proactive roles in the research, development, and deployment of wave energy technologies. The United Kingdom, Portugal, and Scotland have particularly excelled in terms of installed wave energy capacity, establishing themselves as leaders in the field. According to the Ocean Energy Europe's "Ocean Energy Status Report," the region had over 45 MW of installed wave energy capacity by 2020.

In North America, there is a growing interest in wave energy, especially in the United States and Canada. The United States, primarily along the West Coast and in Hawaii, is home to several wave energy projects at various stages of development. The Pacific Northwest, encompassing states like Oregon and Washington, has become a prominent hub for wave energy research and testing.

While South America shows potential for wave energy development, the industry is still in its nascent stages. Countries such as Chile and Brazil are actively exploring wave energy opportunities through research and development activities. However, as of 2023, commercial-scale wave energy projects in South America remain limited.

Africa boasts significant wave energy potential with its extensive coastlines and favorable wave conditions. Countries like South Africa and Mauritius have demonstrated interest in wave energy by conducting pilot projects and feasibility studies. Nonetheless, wave energy development in Africa is still in its early stages, and the number of commercial-scale projects is limited.

The Asia-Pacific region, including Australia, China, Japan, and South Korea, has shown increasing interest in wave energy. Australia, with its vast coastline, has been actively exploring wave energy opportunities and conducting pilot projects. China, too, has made strides in wave energy research and development, with several demonstration projects already operational. However, as of 2023, the installed capacity of wave energy in the Asia-Pacific region remains relatively limited.

Dominating Companies in Wave Energy Market

• OCEAN POWER TECHNOLOGIES
• ECO WAVE POWER
• CORPOWER OCEAN
• WELLO OY
• CALWAVE POWER TECHNOLOGIES
• AW-ENERGY OY
• CARNEGIE CLEAN ENERGY
• SINN POWER
• AMOG CONSULTING
• OCEANENERGY
• WAVE SWELL
• INGINE INC.
• AWS OCEAN ENERGY
• LIMERICK WAVE
• ARRECIFE ENERGY SYSTEMS
• HANN-OCEAN ENERGY
• ACCUMULATED OCEAN ENERGY
• AQUANET POWER
• RESOLUTE ENERGY
• BOMBORA WAVE POWER
• MARINE POWER SYSTEMS
• APPLIED TECHNOLOGIES COMPANY
• WEPTOS A/S
• OSCILLA POWER
• ABLE TECHNOLOGIES, L.L.C.
• LEANCON WAVE ENERGY
• SENER GROUP
• EXOWAVE
• WITT ENERGY
• WAVE DRAGON APS
• CHECKMATE SEAENERGY LTD
• ONEKA TECHNOLOGIES
• MOCEAN ENERGY           
• NEMOS GmbH
• Atargis Energy Corporation

Recent Developments in Wave Energy Market

• CorPower Ocean, a leading wave energy technology developer, announced a partnership with Simply Blue Energy, an offshore wind and wave energy developer, in 2021. The collaboration aims to develop a wave energy project off the west coast of Ireland. By combining their expertise and resources, CorPower Ocean and Simply Blue Energy seek to accelerate the deployment of wave energy technology and contribute to the renewable energy transition in the region. The partnership reflects the growing interest in wave energy and the collaborative efforts to harness its potential.
• Bombora Wave Power, an Australian wave energy technology company, announced its acquisition by Enzen, a global energy and environment consultancy, in 2020. Enzen aims to leverage Bombora's innovative wave energy technology and integrate it into its sustainable energy solutions portfolio. The acquisition strengthens Enzen's position in the renewable energy sector and highlights the company's commitment to driving advancements in wave energy technologies.
• Ocean Power Technologies (OPT), a leading wave energy technology developer, entered into a partnership with Enel Green Power, a renewable energy company, in 2019. The collaboration focused on the deployment and testing of OPT's wave energy converters at Enel's wave energy test facility in Italy. The partnership aimed to assess the performance and reliability of OPT's wave energy technology under real-world conditions, with the ultimate goal of commercializing wave energy solutions and expanding their deployment globally.
• AW-Energy, a Finnish wave energy technology company, partnered with Sumitomo Mitsui Construction, a leading construction firm based in Japan, in 2019. The collaboration aimed to advance the development and commercialization of AW-Energy's WaveRoller wave energy technology in Japan. By combining AW-Energy's expertise in wave energy conversion with Sumitomo Mitsui Construction's engineering capabilities, the partnership sought to accelerate the deployment of wave energy solutions and contribute to Japan's renewable energy goals.
• Carnegie Clean Energy, an Australian wave energy company, entered into a partnership with Enel Green Power in 2018. The collaboration focused on the joint development of a wave energy project off the coast of Australia. The project aimed to harness the abundant wave energy resources in the region and deliver clean, sustainable electricity. The partnership demonstrated the mutual interest of both companies in advancing wave energy technologies and their commitment to driving the transition to renewable energy.
• Bombora Wave Power, an Australian wave energy technology company, announced a partnership with EDP, a global energy company, in 2021. The collaboration aims to develop and test Bombora's mWave™ wave energy converter at the European Marine Energy Centre (EMEC) in Orkney, Scotland. The partnership seeks to accelerate the commercialization of wave energy technology and contribute to the renewable energy transition in Europe.
• CorPower Ocean, a Swedish wave energy technology developer, acquired Sustainable Marine, a UK-based marine energy solutions provider, in 2020. The acquisition aimed to enhance CorPower Ocean's capabilities in delivering commercial-scale wave energy projects. By combining their expertise, the companies aim to accelerate the deployment of wave energy converters and drive the adoption of sustainable marine energy solutions.
• Ocean Energy, an Irish wave energy technology company, partnered with Aquatera, an environmental consultancy, in 2020. The collaboration focused on the development of a wave energy project in the Canary Islands. The project aimed to harness the abundant wave energy resources in the region and contribute to the local renewable energy goals. The partnership showcased the collaborative efforts to advance wave energy technologies and their integration into the energy mix.
• Mocean Energy, a Scottish wave energy technology developer, entered into a partnership with EC-OG, an energy storage and subsea power specialist, in 2019. The collaboration aimed to integrate EC-OG's energy storage system with Mocean Energy's wave energy converter. The partnership aimed to enhance the reliability and grid integration capabilities of wave energy systems, contributing to the commercial viability of wave energy projects.
• Wello, a Finnish wave energy technology company, partnered with Lloyd's Register, a global engineering and technical services provider, in 2018. The collaboration focused on the certification and validation of Wello's Penguin wave energy converter. The partnership aimed to demonstrate the performance and reliability of Wello's technology, enhancing investor confidence and supporting the deployment of wave energy projects.

Wave energy represents a significant opportunity for sustainable electricity generation. Its renewable nature, predictable resource availability, and potential for high energy density make it a compelling alternative to traditional fossil fuels. With ongoing technological advancements and supportive government policies, wave energy has the potential to play a crucial role in the global transition to clean and renewable energy sources, reducing greenhouse gas emissions and contributing to a more sustainable future.