Weekly Intelligence Brief

Government intervention imperative for marine energy development

8 December 2009

Around 3GW of installed capacity could be available in the EU by 2020 provided ocean energy technologies continue to be supported and achieve their predicted potential, according to Frost & Sullivan.

Reflecting on the impact of the global economic crisis, the firm highlighted that this market was particularly hard hit by the recession because it relied so heavily on venture capital and private equity investment. But now, it looks as though the UK government and the EU will extend long-awaited lifelines helping companies continue to develop this predictable energy source.

In the UK, the Carbon Trust allotted £250,000 and £150,000 to Pelamis and Marine Current Turbines (MCT), respectively, to focus on installation and maintenance, while the Marine Renewables Deployment Fund has offered a £22 million grant to wave and tidal developers. A part of a £20 million of venture capital from the budget for low carbon technologies has been earmarked for marine energy technology developers.

Continued government intervention is absolutely necessary to boost the marine energy market. To a certain extent, this is an inevitable consequence of the fact that the sector is still in the prototype development stage. Consequentially, the injection of venture capital, private equity or government grants is critical, especially since the financial crisis effectively sank contributions from private investors.

In addition to the support from the government, the sector can also benefit from investment from venture capital and private equity players. But such participation isn’t expected to come in a big way at this stage.  For their part, companies should strive to differentiate the merits of their technology in order to showcase the future potential of the device and solicit enough capital to be able to reach commercialisation.

Read more:

Carbon Trust: http://social.tidaltoday.com/search/node/Carbon+Trust

Marine Current Turbines: http://social.tidaltoday.com/search/node/MCT