Wave hub firm turns to Europe

www.thisiscornwall.co.uk
September 03, 2009

A HOMEGROWN Cornish company is to manufacture and deploy its first pioneering wave energy device in Europe because support from the Government is so "poor". The move by Bodmin-based Orecon, a spin-off from the University of Plymouth, means the region has already missed out on a multi-million pound contract to build three wave-to-energy buoys which will now be constructed in Portugal.

Business leaders fear that Devon and Cornwall could miss the chance to reap the economic rewards from the emerging renewable sector, describing the situation as "unbelievable". Orecon said it had pursued manufacturing the devices – each capable of powering around 1,500 homes – in the Westcountry and in the North East. But chief executive David Crisp told the Western Morning News: "We have gone to Portugal because there are opportunities there, which there aren't in England. The reality is that in this country support for marine renewables is poor."

Mr Crisp said the Portuguese government had been "very aggressive" in their pursuit of wave energy companies, offering a package of capital grants and greater rewards for the energy they produced. In the UK, wave energy receives the same number of Renewables Obligation Certificates (ROCs), which fund clean energy through an industry levy, as established offshore wind technology, a situation Mr Crisp described as "ludicrous".

Despite having a berth on the Wave Hub project, a giant electrical "socket" on the seabed about 10 miles offshore of Hayle, and the region having the best wave energy resource in Europe, the company's first project in the UK is likely to be in Scotland where five ROCs are offered for every MW hour (MWh) of energy generated compared to the two given in England.

"We were looking to deploy our device somewhere in England and initially we were looking for a site off the Isles of Scilly," Mr Crisp explained. "That was where we wanted to go because of the very good wave climate and the helpfulness of the people locally. It was a pretty expensive proposition.

"Then we looked at Wave Hub as well and then we came across the opportunity in Portugal. We get about double the valuation for electricity we produce that we would in this country. On top of that, they have got substantial capital grants from Europe and the Portuguese government.

"Portugal is much more attractive to us and to our power company partners. We believe we can make a very modest profit. In England, if we deployed here we will make a loss." He went on: "I got quite keen in deploying off the Isles of Scilly and building in Falmouth and so did the rest of the team. "Part of the vision for Orecon was to help stimulate a whole new industry in Cornwall which would regenerate the region without damaging it. I guess my rose tinted glasses were ripped off my face by reality."

Tim Jones, chairman of Devon and Cornwall Business Council, said he was "flabbergasted" and pledged to raise the issue with South West Regional Minister Jim Knight. "It is just so disappointing, it's unbelievable," Mr Jones said. "Here's a great opportunity for the future, we have the best natural energy resources in the UK and is looks as though, yet again, we are going to be the Cinderella, in terms of benefiting from it.

"It almost defies belief. It is like grasping defeat from the jaws of victory. What we now need to do is make sure that it doesn't happen again. We have to make sure that this is the first and last time we lose the opportunity to capitalise on our natural resources. "The great hope for the new economy was to fill gaps left by traditional industry but we are losing out to other countries. These are our own assets and it seems we can't work out how to use them to our benefit."

Mr Crisp said there were the skills but not the infrastructure to manufacture in the Westcountry. And while he stressed that the region had not lost the business "forever" he admitted that the Portuguese shipyard now involved would have a "competitive edge" in the future. He warned the Government needed to "send the right signal" to the emerging industry by upping the value of ROCs and help those developing the technology with capital grants "up front".

Stephen Peacock, enterprise and innovation executive director at the South West Regional Development Agency, said the ROCs system "does need to be improved" to help England compete with other nations.

He said: "We have been working with industry to make that case to Government and officials are looking into the matter seriously. The RDA has supported Orecon with a £229,000 research and development grant with a view to them coming to Wave Hub in the future. The Government is now addressing the issue of capital grants with the recent announcement of a £22 million fund to help get early devices in to the water.

Our region has made huge advances in developing a marine renewable industry that could employ thousands of people. With the construction of Wave Hub next year we will have in our region the world's biggest and best wave energy test facility. "We expect total investment in marine energy in the South West to top £100 million in the next two years, and we have every confidence in forging a new marine energy industry in South West England that will bring long term benefits to the region."

A spokesman for the Department of Energy and Climate Change said the Government was "committed to the development of the wave and tidal power energy sector in the UK". He saod: "With a rich natural resource and many of the leading technology developers based here, the UK continues to be seen across the world as a focus for the development, testing and deployment of marine energy devices.

"For this reason the Government has put in place a comprehensive range support mechanisms – from the earliest research and development phases through to commercial deployment under the Renewables Obligation, under which wave and tidal power energy devices receive an enhanced level of support."

In July, he said, the Government announced an additional £60 million of support for marine energy which included £9.5 million for Wave Hub and a further £10 million to support the South West's "significant potential for wave and tidal power energy deployment, research, demonstration and engineering".