Development of Ocean Energy Sector in Ireland: Non-Financial & Non-Technical Barriers
Explore the non-financial and non-technical obstacles hindering the ocean energy sector in Ireland. Issues such as financing, funding, R&D priorities, and cooperation with Scotland are discussed, along with interactions with various industry stakeholders and broader sector challenges. The focus remains on non-financial aspects, excluding financial and technological factors.
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Presentation Transcript
Non-Financial & Non Technical Barriers to the Development of the Ocean Energy Sector in Ireland Peter Coyle & Ray Alcorn Feb 3 2017
MRIAs Policy Studies Maritime Infrastructure Needs Education Needs Supply Chain All available at www.mria.ie Financing & Funding Non-Financial Barriers R&D Priorities Cooperation with Scotland Initial Consenting Development Zones
Terms of Reference 2016 Starting point was non-financial and non-technical barriers to OE With emphasis on insurance Did not bias the interviews gave everyone 8 options as a starting point But kept everyone away from finance (equity, loans, grants etc) and technology (works/doesn t work; test facilities etc) ..as far as we could!
Who we met Irish International Seapower ESB x 2 B&V consultants ECORYS Andrew Parish CIL Carnegie Wave EMEC Arthur Cox Blue Power Energy Scottish Enterprise RenewablesUK Technology from Ideas MaREI x 2 Nautricity Swiss Re DP Energy SmartBay UK Marine Energy Catapult Willis Insurance Enterprise Ireland x 2 Doyle Kent Partnership Pure Marine Gen Myton Systems Ocean Energy Europe Ocean Energy Oceans Consultancy Lloyds of London DTTAS NOW Ireland Marine Institute Benson Engineering Sustainable Nation Ireland Open Hydro
BROADER ISSUES Communications with OE Industry Public Engagement CURRENT CORE ISSUES Funding Scale Up IDZs Policy Technology Insurance Decommissioning O&M Consenting H&S
Insurance - Phases Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29 Y30 Y31 Y32 DECOMMISSIONING CONSTRUCTION DESIGN & PRE DEV OPERATIONAL Construction & Operational 3rd Party Construction All Risks Delay in Start-up Marine Transit and Marine Delay in Start up Professional Indemnity Offshore Employers Liability Public Liability Directors and Officers Operational All Risks Business Interruption Performance Warranty Terrorism Marine Protection and Indemnity Operational 3rd Party Construction & Operational 3rd Party Construction All Risks Delay in Start-up Marine Transit and Marine Delay in Start up
Insurance Example Products GCube insure 30GW of renewables world wide No offer for performance guarantees or warranties
Illawara Mercury http://www.illawarramercury.com.au/story/36 72332/oceanlinx-wave-generator-delays/ Aiming at the right target: Cable failure account for 77% of offshore wind losses relate to cable, not to devices 2/3 of cases relate to contractor error at construction phase but may not be identified until operations begin
Insurance Cost Wind Example Insurance Cost in /MW Installed as OPEX 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Onshore Wind 100MW Offshore Wind 200MW Offshore Wind Round 3 400MW First of a Kind Nth of a Kind Source : Mott MacDonald UK Electricity Generation Costs Update 2010
Insurance Some findings No evidence that ocean energy uninsurable during design, construction, operation and decommissioning phases ..but it won t be cheap However, no performance bonds or guarantees available Companies expected to self-insure (won t be acceptable to utilities) or de facto become developers themselves However, guarantee issue could be short-term e.g. until individual devices run dependably for 8,000 hours +, device-developer portfolio consolidates into a small number of robust players
Share of Global Installed Capacity by Type Cumulative Offshore Wind 2015 Cumulative Onshore wind 2015 302GW 41% 420.9GW 57% Cumulative Other Renewables 2015 12.1GW 2% Source : EWEA
Global Insurance Premiums Annual Insurance Premiums (US$Bn) $10.51 $6.02 $4.32 $0.39 CUMULATIVE OFFSHORE WIND 2015 CUMULATIVE ONSHORE WIND 2015 CUMULATIVE OTHER RENEWABLES 2015 CUMULATIVE GLOBAL TOTAL RENEWABLES Source : Calculation based on scale and % premiums Exceedence Ltd
The Insurance Prize (immature) offshore wind is a reasonable comparator for ocean energy Annual premiums for offshore wind were c$390m (2015) with claims of c$105m I.e. based on offshore wind precedent, ocean energy represents an insurance opportunity
Report Recommendations Make insurance an eligible cost under the SEAI Prototype Development Fund Establish a working group involving SNI, SEAI, MRIA etc Continue to support EU Ocean Energy Forum initiative on insurance 30 50m fund Maintain the OPIN initiative to facilitate scaling through partnership and to aid companies to self- scale. Hold once-off briefings for MSO and Health and Safety Authority on ocean energy and then bring on to SEAI Ocean Energy Advisory Group
ALL the Studies AND todays presentations at WWW.MRIA.IE
