Select Committee on Science and Technology Seventh Report


Commercial viability


34. The principal reason for the abandonment of the earlier UK Wave Energy programme was the perceived poor economic prospects for wave energy, compared with other renewable technologies.[74] It became the conventional wisdom that wave, and by association tidal, energy would produce electricity at too high a price to be commercially viable. The evidence we have received contradicts this view. ETSU's Report, "A Brief Review of Wave Energy", estimated the price of electricity generated from wave energy devices at that time to be around 4 - 8 p/kWh. Our evidence supports this view (for example Wavegen is contracted to supply energy at 5.95 p/kWh under the Scottish Renewables Obligation[75]), and would indicate that tidal energy schemes could operate at a similar price.[76]

35. At a cost of 4- 8 p/kWh, wave and tidal energy is significantly more costly than electricity from an average fossil fuel power station (about 2 - 3 p/kWh). But it must be recalled that wave and tidal energy are both at an 'immature' stage of their development, and that a true picture of the cost of electricity from wave and tidal energy will only be available after large-scale devices have been operating for some time. Already, the cost of wave and tidal energy has fallen over the past 10 to15 years and is competitive in niche markets, such as remote islands.[77] As the technology develops, with more full-size demonstrators and economies of scale beginning to have an impact, it would be reasonable to expect the price to fall even lower. Wind energy, which is now considered to be a viable, near-market energy source, was even more expensive when it was first actively supported by Government.[78] Witnesses pointed out that wave and tidal energy had achieved similar reductions in cost without the large amount of subsidies - £10 billion, Thomas Thorpe estimated[79] - that wind had received.[80] Fossil fuel, and nuclear, electricity generation also started off with what would now be seen as unacceptably high costs.

36. We also note the comment made by the Engineering Business Ltd. company, that cost "will depend on the economic framework of the energy sector and the political importance given to power production diversity and the desire to generate more power from renewable sources.".[81] Dr Martin similarly suggested that the success criterion should be "pounds per tonne of carbon dioxide avoided" rather than the raw electricity generation price.[82] As we begin to contemplate the enormous cost of climate change, the 'external' costs of electricity generation can no longer be ignored.[83]

74   Evidence, p 75, paragraph 2.1. Back

75   Thomson, Q 161. Back

76   See, for example: evidence p 47, paragraphs 30-33; p 93, paragraph 2; and p 113, paragraph 3.2. Back

77   Thomson, Q 163; evidence, p 50, paragraphs 7-8; p 159, paragraph 4.1; and An Overview of Wave Energy Technologies, AEAT-3615, May 1998. Back

78   New and Renewable Energy: Prospects for the 21st Century, DTI, March 1999, pp 12-13. Back

79   Thorpe, Q 67 and evidence, p 29, paragraph 4.1. Back

80   Evidence p 20 and p 146.  Back

81   Evidence, p 138, paragraph 22.  Back

82   Martin, Q 105.  Back

83   Also see: HL Paper 78-I, paragraph 351.  Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 8 May 2001