“Scotland rules the waves,” Alex Salmond declared in 2011, as the Scottish government unveiled a high-tech electricity generating device built by one of the nation’s wave energy companies.
Three years later, the country’s hopes of leading the world in tapping the power of the sea is under serious threat.
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Aquamarine Power, the Edinburgh-based developer whose 26m-wide 800KW wave machine Mr Salmond was celebrating, announced this month that it was laying off all but its “core operational and management team”.
The company’s drastic downsizing came just two weeks after the collapse of Pelamis, Scotland’s other most high-profile wave energy pioneer.
The woes of the sector have implications beyond Scotland. Success in tapping wave energy could make a substantial contribution to worldwide efforts to cut carbon emissions and lay the foundations for a large industry.
Scotland has more wave and tidal machines installed than any other country and Offshore Renewable Energy Catapult, a research body set up by the UK government, cites estimates that 180GW of electricity generation capacity could be deployed worldwide by 2050.
“At the moment we are absolutely leading the world in this,” says Stephen Wyatt, ORE Catapult strategy director.
But Mr Wyatt says private investment in wave energy is drying up and a fundamental change in approach is needed. “There is real risk that the UK loses momentum,” he says.
The US and Australia, along with Denmark and other Scandinavian countries are seen as the main challengers.
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The wave sector’s main problem is the difficulty of coming up with a device that can efficiently and reliably operate at sea. Pelamis, with its snakelike offshore floating structure, and Aquamarine’s inshore seabed-mounted paddle have both suffered repeated technical setbacks, as have other approaches.
“As a sector, they massively over-promised what they could deliver on,” says Keith Anderson, chief executive of ScottishPower Renewables, a unit of Spanish utility Iberdrola, which invested millions of pounds in one of Pelamis’s test machines.
Wave companies have also suffered, at times, because they have been managed by inventors and because of their reliance on venture capital finance, which demands relatively rapid returns, Mr Anderson says. There has been a lack of involvement from large industrial manufacturing groups, he adds.
“The truth is none of the companies have been able to prove they have a device that operates the way it was meant to and which is capable of staying in situ for long periods of time,” he says.
But Mr Anderson says the sector is still worth supporting given the vast potential energy resources, particularly in a country such as Scotland with its long, wave-battered coast.
The Scottish government, which invested millions in Pelamis and Aquamarine, is keen to stress its continued commitment. Political rivals and some employees have criticised its decision not to step in as private investors have departed but Fergus Ewing, Scotland’s energy minister, says rules on state aid and financial “prudence” left him little choice.
Instead, he has announced the creation of Wave Energy Scotland, an organisation that will push for more collaboration between government, academia and wave companies, many of which have previously been fiercely competitive.
Mr Ewing also hopes for increased support for the sector from the UK government and EU. He notes that some Scottish wave ventures, such as Albatern, are still well funded — and that the whole marine energy sector should soon get a boost from large-scale deployments of tidal energy machines.
“It’s not all doom and gloom,” he says.
However, ORE Catapult estimates that £200m in funding will be needed to move the industry to a commercial footing — a substantial sum, though one that wave developers say is a tiny fraction of the government money that has been invested in researching and developing nuclear power.
Mr Wyatt says to win investor confidence, developers must pool efforts to improve components and systems, rather than “jump in” to building a new generation of full-scale test machines.
Neil Kermode of the European Marine Energy centre in Orkney, the hub for wave machine testing, says the UK should not “lose its nerve”.
The UK was once a leader in wind power and even deployed the world’s biggest turbine in Orkney in the 1980s, Mr Kermode says. But a loss of industry confidence and lack of government support meant the technological initiative shifted to Germany and Denmark.
“This is the moment when we really need to knuckle down,” he says.
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