London, UK [RenewableEnergyWorld.com] The European marine energy industry is still working to weather the economic storms leveled by the global recession, according to new analysis from Frost & Sullivan. 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 lifelines helping companies continue to develop this predictable and abundant energy source that is capable of one day supplying 10 percent of the world’s electricity needs. Government support and new investments are key factors to boost the market, according to Frost & Sullivan.
Frost & Sullivan estimates that if ocean energy technologies continue to be supported and achieve their predicted potential, approximately 3 gigawatts (GW) of installed capacity could be available in the EU by 2020.
The recession has effectively bottlenecked investment, temporarily slowing down development. In response, the UK government recently announced a raft of rescue measures.
The UK Carbon Trust granted £250,000 and £150,000 to Pelamis and 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.
The EU is also supporting the sector. A consortium led by the Finnish wave energy company AW Energy, signed a €3 million contract with the EU in October 2009 under the CALL FP7 -Demonstration of the innovative full size systems. The project will focus on deploying a 300kW device, known as the WaveRoller, in Portugal for a one year testing period.
“Continued government intervention is absolutely necessary to boost the marine energy market,” said Gouri Kumar, an industry analyst with Frost & Sullivan. “Consequentially, the injection of venture capital, private equity or government grants is critical, especially since the financial crisis effectively sank contributions from private investors.”