RenewableUK and SI Ocean supply chain workshop

RenewableUK hosted a pre-All Energy workshop that reported SI Ocean's work to date, and discussed interaction between the supply chain and the wave and tidal sector.

Several reports were unveiled:

• David Krohn (RenewableUK) gave a summary of RenewableUK's recent report on the sector, alliteratively entitled: 'Conquering challenges, generating growth'.
• Henry Jeffery (University of Edinburgh) announced SI Ocean's technology status report, and asked for comments and feedback.
• Clare Hamner (Carbon Trust) announced SI Ocean's cost of energy report and also asked for feedback. In particular, she asked whether the forecast cost of energy with 1GW of installed capacity was viable.

In the supply chain discussion, there was a real sense of urgency in getting the sector off the ground. Conflicting viewpoints were expressed. Sometimes this lead to insight and consensus; sometimes to an almost tangible frustration about impasses lying on the road ahead.

'This unique window might not deliver'

Abbie Badcock-Broe (IT Power) summed up the sense of urgency with the words above. Andrew Jamieson (Offshore Renewable Energy Catapult) warned that the prize of a marine renewables industry based in the UK was not to be taken for granted: he declared that 'the risk of underachievement is real', and cautioned against complacency: 'the world will overtake us'. Rob Saunders (TSB) described the support offered by the TSB as 'timely intervention'.

One reason for this sense of urgency is the uncertainty caused by the recent reassessment of the size of the industry. Clive Adshead (SMD) reminded the audience that as recently as 2008, the forecast for wave and tidal capacity was 1.3 GW by 2020. The allure of a slice of a ~£5 billion pie resulted in a supply chain hungry to find ways to add value to the industry. Clive believed the forecast in the recent RenewableUK report was more realistic: ~140 MW by 2020, with favourable contract for difference support. This latest forecast meant there was 'not enough likely installed capacity to make a business case' and as a result, SMD had delayed building prototypes of equipment developed for the wave and tidal industry. Clive warned that it was 'paramount that the latest predictions (installed capacity) are met – if they are missed this time around, the industry will not get the backing of the supply chain'.

Impasse #1: A toolbox for the first arrays

The need to stick to the schedule for installing the first arrays sets the scene for impasse #1. Joury Van Gijseghem (DBE) described this as a 'chicken or egg' situation: we need a toolbox to build the industry, but we need an industry to make building the toolbox bankable. His suggested solution was to build the first arrays without specialist installation equipment, and focus simply on getting 'something into the water'.

Ferdinand Dees (Mojo Maritime) shared his experience of doing just that. When installing something in a tidal race, apparently 'the ROVs took themselves out', so they used divers instead. He concluded that without the right tools in the toolbox, 'it is not safe; it is not efficient'. Abbie (IT power) went further to warn that rushed installation was a threat to the industry. She suggested that we are trying to run a 'long distance marathon when we can barely walk' (project development in tandem with technology development), and that this shifting of priorities away from the natural technology development process could inhibit innovation.

Clive (SMD) suggested another way to end this impasse: better engagement between the providers and end users of specialist equipment. He said SMD prototype the installation equipment they had designed if there was enough commitment from potential customers. He highlighted the potential problem of each developer asking the supply chain for different customised components: 'the non-recurring engineering is the expensive bit'. He called for more collaboration to prevent this; not only between developers and contractors, but within the supply chain industry itself. Joury (DBE) agreed that early contractor involvement was important.

Another impasse bypass suggested by Clive was to have a 'business strategy based on products, not an industry'. This suggests that SMD are considering co-funding development of tools for the marine renewables industry by identifying markets for these tools in established industry.

Impasse #2: Cats and seagulls

There was much audience discussion about collaboration. Everyone agreed it was desirable but difficult. Andrew (Catapult) expressed frustration that while there was plenty of talking about it, 'the doing was like herding cats'. Ownership of new intellectual property (IP) generated collaboratively appeared to be a stumbling block. Clive (SMD) offered the charming image of the seagulls from 'Finding Nemo' crying 'Mine! Mine! Mine!'

Ferdinand (Mojo) suggested we should forget about the IP and simply get on with making things. However, he recognised that this was easier for larger companies. Jeremy Smith (QED Naval) agreed with this, saying that they 'used IP as a tool to talk to the big guys', and suggested gentleman's agreements be made about IP. After the talk he explained this comment to me: he was referring to the importance of respecting the context of the IP. He felt that any barriers to collaboration would slow or hinder development of the industry, and suggested that the corporates 'work with the SME to develop the product or license the ideas... so the industry can benefit and grow to its full potential rapidly'.

Abbie (IT Power) who works for a consultancy assisting technology developers, didn't think IP could be shared. She later explained to me that although IP was not an issue for IT Power, many of their customers were keen to retain IP. Michael Betschart (Andritz Hydro Hammerfest) said that his company was happy to collaborate on enabling technologies, and had no interest in the resulting IP, but that there were strategic development areas where they did not want to collaborate. David (RenewableUK) recounted how a new company brought out a tidal turbine that was very similar to an existing technology, and noted that this did not harm the more established company. This anecdote suggested that IP is not the only thing that determines the value of a small technology company.

Impasse #3: Who shoulders the risk?

Another stumbling block for collaboration is the question of who bears the risks for the first arrays. Michael (Hammerfest) summarised the problem: investors are not willing to take the risk of a 10MW project, and it is hard to find a supply chain that will bear that risk. Andrew (Catapult) said that 'there is no magic wand' for this problem, and noted that objectivity about risk was required to overcome this impasse.

Clive (SMD) questioned ownership of supply chain equipment such as drill rigs. It is particularly difficult to decide who bears the cost of this equipment, as there is uncertainty about the size of the future market. He suggested a consortium of all the project partners to share the risks and costs.

There were a couple of speakers who addressed risk reduction. John Watson (NAREC) gave a talk on how NAREC could support risk reduction: accelerated lifetime testing, checking component integration, and practising O&M manoeuvres in order to reduce times. Rob Eavis (PolyGen Limited) suggested that costs and risks could be reduced by replacing steel tubes with polymer tubes. The lack of corrosion and fatigue would reduce the need for over-engineering. He listed other advantages, such as an existing mature supply chain, existing marine applications (Salmon farms), neutral buoyancy and low friction surfaces.

Uncertainty about point of entry

There was some discussion about the way forward. Henry (UoE) said it was 'not the responsibility of the supply chain' to find solutions to these impasses. Ferdinand (Mojo) bemoaned the lack of a concerted European push, lead from above, to facilitate collaboration. Henry thought that nevertheless there would be support at EU level for collaborative projects if 'an organisation went to them with a solution'. Charlie Blair (Carbon Trust) said that the Carbon Trust was working on getting utilities together to work on innovative technologies. Rob Sanders (TSB) gave a talk on how the TSB was supporting collaborative projects. The focus is now moving to system support and enabling technologies, and they are planning a funding call at the end of this year for offshore energy infrastructure. Rob noted that better use could be made of the SMART scheme. He also highlighted Eurostars as a funder of cross European collaboration. Andrew (Catapult) said that it was within the Offshore Renewable Energy Catapult's remit to facilitate collaboration between the UK supply chain and the marine renewables industry. He expressed a strong commitment to supporting wave and tidal, and appealed to the supply chain to get involved.

Learning from the offshore wind industry

There were a couple of interesting references to the offshore wind industry. Clive (SMD) cited the offshore wind industry as an example of how not to engage the supply chain: a gap analysis by the Crown Estate identified installation as a high risk area, yet Clive was not aware of anyone in the sub-sea installation supply chain being asked by the offshore wind industry how to assess and mitigate the risks of installation. Joury (DBE) said there was much to be learnt about expectations. With GW of wind installed onshore, it was thought that moving offshore would be easy. However, more work was required to marinise wind turbines than initially thought. He concluded that it was unrealistic to think that wave and tidal could be brought to maturity quickly. Henry (UoE) said wave and tidal would have to work harder than offshore wind at getting costs down. 

Abbie (IT Power) noted that when looking for solutions, we often refer to oil and gas, and offshore wind. However, wave and tidal are different. She concluded that we need innovative ways of thinking, and alternative ways of working together: we can't afford to be greedy.

Comments on the main conference (All Energy Opportunities 2013):

http://www.wavepowerconundrums.com/2013/06/aeo-fundamental-challenges.html
http://www.wavepowerconundrums.com/2013/06/aeo-trends-and-titbits-cost-of-energy.html
http://www.wavepowerconundrums.com/2013/06/aeo-trends-and-titbits-commercialisation.html

Image credit:
'Bored at work, so I made a giant duck attack a seagull', by Karin Z:
http://imgur.com/ulgyLEg. Observant readers will recognise the duck as Florentijn Hofman’s Rubber Duck project.