Transparency Market Research has released a new market report titled, Wave and Tidal Energy Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2016-2024. According to the report, the global wave and tidal energy market was valued at US$ 497.7 Mn in 2014 and is anticipated to reach US$ 11345.0 Mn in 2024, expanding at a CAGR of 23.2% from 2016 to 2024.
When harnessed effectively, ocean could prove to be one of the largest reserves of clean and sustainable energy. Wave and tidal energy are the two major forms of harnessing ocean energy. These have significantly different market dynamics. Tidal energy can be broadly segmented into tidal stream and tidal range energy. Tidal range power plants entail construction of tidal barrages. This is a mature form of energy generation technology. Commissioned in 2011, the Sihwa Lake Tidal Power Station with 254 MW capacity in South Korea replaced France’s Rance Tidal Power Station as the largest tidal power plant in the world. Tidal stream power plants are a relatively new technology with ample scope for development. Wave energy is a relatively new concept. The two sectors are likely to experience significant market growth in terms of installed capacity and investments in the near future.
Currently, over 200 companies operate in the wave and tidal energy sector. Most of these players are extensively involved in the business of development of energy converter technology. Wave and tidal stream technologies have significant potential of reaping benefits of economies of scale. Large-scale commercial array deployments of wave and tidal power plants are projected to be followed by massive cost reductions. Strong development of the offshore wind energy sector in several countries can contribute significantly to cost reduction potential of wave and tidal energy.
The path from prototype testing and project demonstration to large-scale commercial project construction is a long one. Constant financial and policy support from local governments is imperative for technology developers for brisk commercialization of their energy converter devices. Currently, the industry structure is fragmented. It is difficult to ascertain if the industry would consolidate in the near future. However, establishment of special purpose project companies and strategic alliances would be imperative for small technology developers to invest in projects across the world.
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Major developments in wave and tidal stream plants are expected to take place in Europe. On the other hand, South Korea is estimated to grow the fastest in terms of tidal barrage operations. Wave energy development in Asia Pacific would be concentrated in Australia. Currently, only tidal barrages are capable of generating returns on investments through the sale of electricity. Tidal stream and wave power plants are still not capable of generating power at grid parity levels. Commercialization of technology is the need of the hour for this sector. Otherwise, it would be difficult for project developers to sign long-term power sale contracts. Reduction in costs would become a necessity as the sector shifts from grant financing to private equity and debt financing.