Levelised Cost of Energy estimates of ocean energy

This is an extract from the Feasibility and Cost Benefit Analysis considering the commercialisation of wave and tidal energy undertaken as part of the DTOceanPlus project. Please see the full report for further details.

A wide range of cost estimates have been published for ocean energy technologies. There is significant uncertainty at this nascent stage of the sector, where only single demonstration devices or small arrays have been deployed, and few devices have been operated for many years. It is also important to note there is uncertainty due to the reliance on projected costs for operating these arrays, which could be ±30% for simplified cost estimates for pilot plants.

Estimates from the following studies are presented in Table 1 and Table 2 for wave and tidal, respectively, and shown graphically in Figure 1 and Figure 2.

• Ernst & Young / Black & Veatch (2010) Cost of and Financial Support for Wave, Tidal Stream, and Tidal Range Generation in the UK

• SI Ocean (2013) Ocean Energy: Cost of Energy and Cost Reduction Opportunities

• IEA OES (2015) International Levelised Cost of Energy for ocean energy technologies

• Jenne, Yu & Neary (2015) Levelized Cost of Energy Analysis of Marine and Hydrokinetic Reference Models

• JRC (2018) Ocean Energy Technology Development Report

• Offshore Renewable Energy Catapult (2018) Tidal Stream and Wave Energy Cost Reduction and Industrial Benefit

• BEIS (2020) Electricity generation costs

These studies are reported in different currencies (EUR, GBP, USD) and have been calculated for a range of base years. Therefore, three estimates are shown for LCOE: (1) in reported currency, (2) converted to euro, and (3) corrected for inflation to 2020 (report publication date used if no currency date stated). Conversion factors of EUR 1.00 = USD 0.83 and EUR 1.00 = GBP 1.11 have been used based on the 3-month average to end 2020. Historical inflation based on UK ONS Data. Different studies quote either a single number, a range, or high/medium/low estimates.

Note also that these studies represent varying levels of sector commercialisation, some give values for 100 MW of cumulative deployed capacity (CDC), whilst others quote ‘first commercial arrays’ or 10 MW project (which is assumed to be similar). They are not directly comparable due to differing input assumptions, etc. However, the broad trends from these studies have been used to inform the estimate of LCOE at sector commercialisation (assumed to correspond with 100 MW of CDC for each sector).