Josephine V. Yam

Clean Energy

Wave Energy Industry: The Role of Government in Accelerating its Development

Josephine V. Yam, May 2010
This article will briefly discuss the crucial role that government plays in accelerating the development of wave energy as part of its clean energy portfolio strategy towards a low-carbon economy.

There is an emerging interest in the development of wave energy because of the confluence of the imminent need to address climate change, the heightened concern on the dwindling supply of fossil fuels and the increasingly competitive economics of wave energy (Boyle, 2004). As the demand for world energy consumption steadily rises over the next decades and as clean energy alternatives are sought to reduce carbon emissions, governments have responded to support the development of renewable energy power generation, including wave energy (Zhang, Li, & Lin, 2009). The primary goal is that the clean and sustainable energy obtained from waves will be produced at very competitive prices so that it becomes a clear, viable alternative to fossil fuels (Al-Habaibeh, Su, & McCauge, 2010).

Wave energy generation refers to the energy of ocean surface waves and the utilization of that energy to generate electricity (Al-Habaibeh et al., 2010). Ocean waves are a power-dense, predictable source of clean and sustainable energy that wave energy converters (WECs) convert into mechanical energy in order to generate electricity (Dunnett & Wallace, 2009). Wave power is dependent on the following factors: wind speed, duration of the wind blowing, the distance of open water that the wind has blown over, water depth, wave height, wave length and water density (Al-Habaibeh et al., 2010). Countries with vast coastlines and high waves approaching the shore are in the best position to capitalize on wave power (Zhang et al., 2009).

Wave energy technologies have a plethora of environmental advantages which include the following:


First, WECs release very little greenhouse gases (GHGs) and thus make a significant contribution to meeting a country’s climate change objectives as compared to the conventional electrical generating mix of coal, gas and nuclear pants (Boyle, 2004).

Second, WECs also have a low visibility profile, as they only protrude a few meters from the ocean surface and are installed several kilometers offshore. This makes them a small hazard to shipping and likely more appealing to nearby residents who might otherwise object to wind turbines or solar arrays as being unsightly (Dunnett & Wallace, 2009).

Third, WECs are unlikely to affect migratory fish patterns or coastal eco-systems (Boyle, 2004). Lastly, the mooring lines that keep the WECs in place can actually provide artificial reef habitat for sea life (Dunnett & Wallace, 2009).

Despite its environmental advantages, wave energy technologies are beset by technical and economic barriers which include the following:


First, wave power is subject to largely random variability (Falcao, 2010). Due to complex topographies and monsoon climates, it varies significantly from the region to the region. For example, wave energy resources are distributed unevenly in the different regions in China (Zhang et al., 2009).

Second, wave energy technologies are still far from maturity. Existing WECs are still deficient in many aspects, such as high cost, low efficiency, poor reliability, poor stability and lack of scalability (Zhang et al., 2009).

Lastly, wave energy development, from concept stage to commercial stage, has been found to be a difficult, slow and expensive process. Many wave technologies seem overly complex and use energy conversion techniques that require large, expensive devices with a poor mass-to-power output ratio (Al-Habaibeh et al., 2010). The high costs of constructing, deploying, maintaining and testing large prototypes under very harsh environmental conditions have hindered its development, which has been made possible primarily because of government subsidies (Falcao, 2010). In fact, the International Energy Agency notes that it is unlikely that wave energy technology will play an important role before 2030 because of its high commercial risk (Dalton, 2010).

It is therefore incumbent upon the government to proactively enact policies that incentivize the robust development of the wave energy industry. Or is it?

There is the “myth of the righteous” that holds that a good idea will always succeed and government intervention is unnecessary. However, most significant innovations that have led to major societal changes have been identified and fast-tracked precisely by government especially if the benefits of such changes are not directly commercially valuable. For specific renewable energy technologies to succeed, pointed and well-conceived government intervention is required, usually in the form of legislation (Mallon, 2006).

There is also the “hands-off myth” that holds that government intervention only undermines the proper working of markets. However, it is axiomatic that government has a fundamental role and responsibility to establish attractive market conditions. Government must intervene because the power sector and energy markets lack ways to incorporate the benefits of innovation and positive societal change into their decision-making. The required government intervention must create price signals that allow companies to reflect the external benefits in their balance sheets and thereafter leave markets to maximize efficient delivery (Mallon, 2006).

The three types of government policies that are necessary for the wave industry to overcome technical and economic barriers so that it can have a huge impact on the world’s clean electricity production (Leijon, Bernhoff, Berg, & Agren, 2003) are innovation policies, manufacturing policies and deployment policies (Dalton, 2010).

In respect of innovation policies, the government’s goal is to develop science and engineering research so as to increase the innovation capability within an economy and move its economy further up the value chain. For example, the Irish government significantly increased its annual wave energy research and development (R&D) budgets (Dalton, 2010). Also, when the Chinese government passed the Renewable Energy Law in 2005, it included substantial subsidies and more vigorous R&D programs on wave energy in order to establish a technological and industrial base for this new level of harnessing renewable resources (Zhang et al., 2009). In the European Union, most of the R&D activities in wave energy have taken place because of the financial support and coordination provided by the European Commission (Falcao, 2010).

In respect of manufacturing policies, the government’s goal is to target job creation and wealth generation so as to increase economic output and value-added activity. For example, the Irish government established a capital grant investment subsidy to the private sector for the manufacture of WECs provided that they are manufactured in Ireland. It also introduced very favourable corporate tax rates from 0% to 5% to allow wave energy manufacturing companies to firmly establish themselves in the local and global markets (Dalton, 2010).

In respect of deployment policies, the government’s goal at this final critical step to market penetration is to ensure that wave energy contributes to delivering its energy efficiency, renewable energy and emissions reduction targets (Dalton, 2010). For example, the Irish government has fast tracked appropriate procedures for planning permission, suitable grid connection and enhanced feed-in-tariff mechanisms (Dalton, 2010).

In conclusion, the government needs to intervene and play a very central role in accelerating the development of the wave energy industry. It needs to recognize its primary responsibility in achieving the right balance of strong renewable energy legislation and long-term wave energy policy initiatives in the three areas of innovation, manufacturing and deployment (Dalton, 2010). Indeed, as wave energy is considered to be environmentally sound in avoiding GHG emissions, it is likely to become an attractive commercial and political proposition as economies move towards an imminent carbon-constrained world (Boyle, 2004).

References


  • Al-Habaibeh, A., Su, D., McCague, J., Knight, A. (2010). An innovative approach for energy generation from waves. Energy Conversion and Management, 51(8), 1664-1668.
  • Boyle, G. (2004). Renewable Energy: Power for a Sustainable Future, second edition. Oxford University Press, 298-340.
  • Dalton, G., Gallachoir, B. (2010). Building a wave energy policy focusing on innovation, manufacturing and deployment. Renewable and Sustainable Energy Reviews, In Press, Uncorrected Proof, Available online on May 5, 2010, http://www.sciencedirect.com/science/article/B6VMY-500XYDM-1/2/0d1835b16454cee7a5631afed074c7d3) (accessed May 21, 2010).
  • Dunnett, D., Wallace, J. (2009). Electricity generation from wave power in Canada. Renewable Energy, 34(1), 179-195.
  • Falcao, A. (2010).Wave energy utilization: A review of the technologies. Renewable and Sustainable Energy Reviews, 14(3), 899-918.
  • Leijon, M., Bernhoff, H., Berg, M., Agren, O. (2003). Economical considerations of renewable electric energy production--especially development of wave energy. Renewable Energy, 28(8), 1201-1209.
  • Mallon, K. (2006). Renewable Energy Policy and Politics. Cromwell Press, 5-33.
  • Zhang, D., Li, W., Lin, Y. (2009). Wave energy in China: Current status and perspectives. Renewable Energy, 34(10), 2089-2092.
Josephine V. Yam
Josephine is CEO & Co-Founder of B3 Canada, a mission-driven organization in Canada dedicated to building breakthrough boards through innovative board matching services for businesses, professionals and nonprofits.

Josephine is a highly accomplished lawyer-social entrepreneur with significant years of professional legal, policy, leadership and entrepreneurial experiences in the private, public and nonprofit sectors in Canada and internationally. She has been admitted to practice law in New York (USA), Alberta (Canada), Ontario (Canada) and the Philippines. She has also been interviewed on international television such as CNN and CNBC and featured in the international news magazine Newsweek.

Josephine recently graduated from Stanford University's Executive Program for Non-Profit Leaders. She also completed her Master of Laws (LLM) degree at the University of Calgary, Faculty of Law. Complimenting her advanced education at Harvard Law School and the University of Toronto, Josephine currently serves as one of the Energy Futures Lab Fellows of The Natural Step Canada.

Before founding B3 Canada, Josephine was the Executive Director of the Environmental Law Centre of Alberta and Lead Advisor for Corporate Consulting at the Pembina Institute. As Board Member of Immigrant Services Calgary, a large registered charity, Josephine served as Corporate Secretary, member of the Executive Committee, Board Development & Nominating Committee, Audit & Finance Committee and CEO Evaluation Committee. In the public sector, Josephine served as Senior Legal Counsel with the Government of Alberta’s Ministry of Justice and Ministry of Energy. In the private sector, Josephine worked with the international law firm Baker & McKenzie in its Hong Kong, Manila and Toronto offices, the Asian Development Bank and Procter & Gamble.

With her significant legal and senior management experiences in the private, public and nonprofit sectors in Canada and internationally, Josephine deeply understands that cross-sector collaboration in social innovation is crucial to achieving positive change in the world. This is what drives her deep commitment to advance B3 Canada’s mission of strengthening the board leadership capacity of Canada’s nonprofit sector as a force for good in society.

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