Monday, 22 August 2016

What floats SME's boat?

Last week I visited the Isle of Wight. I took the big old car ferry. As it left Southampton port, it was dwarfed by the behemoth container ships headed for China and the berthed oil takers pumping their cargos to the nearby oil refinery. With its gas flares and funnels, the refinery loomed like an alien palace – possibly beautiful, but not by standard human aesthetics. Next, the ferry passed a sizable fossil fuel power station, with the pylons heading off towards Southampton. As the ferry approached the Isle of Wight, the ugliness spawned by our efficient economy was replaced by a thing of beauty enabled by our prosperity: hundreds of sailing boats out for Cowes week. It was sunny and breezy and a gorgeous day for sailing. Dozens of identical red-sailed dinghies hugged the coastline. The old man sitting next to me on the ferry deck explained to his grandchildren that these were the sailing school boats.

Arriving in East Cowes port, to the left is a museum, which is on the site of the boatyard where the hovercraft and flying boat were first invented and built; to the right were the offices of SME (Sustainable Marine Energy), where I could spot someone having their lunch. I couldn’t resist trying my luck for an interview. My timing couldn’t have been more fortunate. There were very few people at the office – some were in Orkney installing the SME prototype onto the moorings they’d installed in June, using their own rock anchor method (see photos below). Others were of course sailing in Cowes week. Luckily the managing director Jason Hayman was there. I asked whether he had drawn the short straw in being stuck in the office. He said he’d actually just come back from Orkney and would be sailing himself later in the week.

The anchoring ROV being lifted out of the water at the 'Falls of Warness' EMEC tidal site, Orkney, having successfully installed the drilled rock anchors in June 2016.

What makes SME tick?

I wanted to understand SME’s business philosophy better, and during our discussions the following ideas appeared to be the most important:

  • Specialisation: SME has specialised in ‘the bit that keeps the turbine in place’, namely the support platform and moorings. They partnered with an established turbine specialist, SCHOTTEL.
  • Organic growth: they were starting with a small technology as a route to eventually building megawatt-sized technology. Their chosen development route was via an early-adopter market that was likely to include remote communities.

Of course, what really interests me is the ‘Why?’. Why have a development path that goes against the established consensus of how things should be done? Why do the opposite of the front-runners? So I started with a question about something SME are good at: their rock anchor mooring system. If their remit was simply to provide a platform for the turbines, why have they spent years developing an underwater drilling rig? Why have they focussed on the specific sub-problem of mooring in an energetic resource, when there are other specific sub-problems that could be tackled? I am fascinated by the application of physics first principles to economics, so was delighted to hear just how much SME’s development route was informed by first principles.

The focus on moorings is all to do with costs. Usually such discussions centre on cost of energy, but Jason Hayman thought the cost of development - bringing a technology to market – was also important.

Using fundamental principles to reduce Cost of Energy

SME looked at the design problem in terms of the ratio of mass to power. I understand this as a proxy for costs to revenue; a useful shorthand provided the differences between the proxy and reality are kept in mind. Jason compared Pelamis’s 750 tonne mass for a 750kW device to SME’s 18 tonnes for a 100kW device. One of the ways mass was reduced was by mobilizing the mass in the bedrock (using anchors imbedded in the seabed) and in the water (using buoyancy to create tension in the mooring cables). We had a discussion about the engineering function performed by the mass. One way to reduce the ratio of mass to power is to change the manner in which engineering functions are achieved. Provision of reaction force can be achieved with less mass, using tension rather than compression. This principle can be seen in the historic progression from Victorian arched stone bridges to lightweight modern tension bridges. This is another advantage of taut mooring over conventional designs.

Devil’s advocate question: Isn’t there a risk that starting off with a small product will price it out of the market?

The reason why engineering structures tend to be big is that overhead costs get spread out, so they make up less of the unit cost. Jason acknowledged the wins to be made by going big, but gave examples of cost reductions due to repetition and volume production (such as ships built during WW II).

As for what early adopters can afford, he pointed out that early adopters are not mainstream. The previous occupiers of his office were an example of this – Trinity House. They had been the first to power their light buoys using solar panels. At the time, solar panels were very expensive – they’d been developed for satellites. Using them for light buoys saved someone going around in a boat topping them up with diesel. However, the strongest argument for entering the market with modestly sized technology was in terms of the development cost, rather than cost of energy.

Using fundamental principles to reduce the cost of development 


One of the biggest challenges for marine renewables is getting to the point where development can be supported by customers rather than investors. SME’s development approach is based on two considerations: bringing their technology to market quickly and cheaply, and making sure that it can be fixed easily. Jason compared technology development to learning how to sail: no one gets it right the first time. You learn to sail using a dingy that hugs the coast, rather than taking a full sized yacht into the open ocean. So SME tested in the Solent prior to the tests they are currently doing in Orkney. Their decision to partner with a turbine specialist has helped speed up development.

Accessibility is a cost driver, and this explains the focus on detachable seabed attachments. Lifting at sea is expensive. On land, you need a crane that weighs the same order of magnitude as the load. At sea, you need a vessel an order of magnitude larger than the load, as it has to provide buoyancy and a righting moment for both the load and crane. You especially want to avoid a 100 tonne lift to replace a £5 component! These principles suggest that the market-entry technology must be small, built from small components, and easily detachable.

Devil’s advocate question: Surely many big engineering projects get it right the first time?

For example, designing a new ship involves numerical modelling, tank tests, certification, and then engineering design and build. This process sets the precedent for the development route that the tidal turbine frontrunners are following. Jason was pleased I had offered ships as an example, as this suited his counterargument. Ship design is based on millennia of trial and error, and more recently we have access to much empirical knowledge that lets us take design shortcuts. The empirical data is specific to each type of ship, so is not useful for marine renewables. He also pointed out that technologies and their support infrastructure have to grow together. Heathrow was not initially built with huge runways in anticipation of the A380.

Does national culture influence technology development?

Given the reference to Heathrow, I wondered what Jason thought of France building port infrastructure now, in anticipation of megawatt-scale tidal turbines. I was surprised to hear he was quite optimistic about the French pilot arrays; but then, the French do have a good track record of massive innovative engineering projects. He also thought the American design competition model was another promising route to going big quickly. We discussed the Wave Energy Prize. If the winner was any good, the American government could get the big guys to buy in by putting out a procurement order for 100 devices. He was concerned that the British mode of operation was somewhere in between the enterprising Americans and the socialist French. While we are good at innovating, we lag behind in cashing in on these innovations.

This is the reason that he didn’t think the ‘going big quickly’ model was suited to the UK, and that ‘the tortoise would eventually overtake the hare’. One of the challenges of this approach is making sure the tortoise has enough to eat along away. I was not aware that small scale marine renewables did not at present qualify for public support. Marine energy is excluded from the feed-in tariff. Other support mechanisms such as the Contract for Difference only apply to multi-megawatt schemes. This means that current policy only supports one specific route to market. SME believes the government should be removing barriers and has been lobbying for equivalent support of their route to market.

Why aren’t the pilot arrays considering floating multi-turbine devices?

Given the strong arguments offered for taut-moored turbines, it puzzled me why all the pilot arrays currently being developed were considering gravity-based designs. Jason explained this was due to the long lead time on these projects – when the designs were picked there were no taut-moored designs that had been sea-trailed. Furthermore, the capital required for these projects necessitates the involvement of big, risk-adverse companies. Big companies tend not to chop and change the technologies they are developing; they are not set up to be good at innovation. Jason was confident that SME’s first prototype had better potential for good cost of energy than the first array turbines, in terms of the fundamental physics and better availability, because accessibility has been built-in to the design.

This photo is quite recent and shows PLAT-O just moored next to the dock at Hatston near Kirkwall in Orkney. This was prior to the marine operations, just after PLAT-O had been lifted into the water.  Once installed PLAT-O will be approximately 15m below the surface so not visible.

Many thanks to Jason Hayman for the interview at short notice, and David Stoddart-Scott for the photos and captions.

Image credits:
'Whatever floats your boat' by Ronan Lynam:
Photos of SME operations at Orkney, copyright SME Ltd:

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