In practice, delivery of the projects to schedule depends on a range of factors, many of which will be tackled directly by the project development companies. A range of challenging technological,environmental, planning and economic factors may have to be overcome in order that the process may be completed successfully.


In addition to the activities undertaken by the project development companies, the successful development of the projects also depends crucially on others who are in a position to contribute to the development process, including technology providers, infrastructure providers and government.


In order for the projects to be built, it will be necessary for wave and tidal generation technologies to be developed to a point where they are suitable for commercial deployment at the levels necessary for the Pentland Firth and Orkney waters projects. Their technical capabilities must be confirmed: they must be shown to operate well, with predictable levels of generation performance, reliability and availability, and with acceptable environmental impacts. In addition to that, the demonstration of these achievements must be accepted by project investors. Today, in May 2011, there is not yet an established supply chain for wave or tidal technologies which is capable of providing tens or hundreds of devices per year for commercial deployment. To enable project development schedules to be met, a substantial acceleration in technology research, development and demonstration activities is required.


The Pentland Firth and Orkney waters wave and tidal projects require electricity grid infrastructure to convey their output. There is presently very little available grid capacity near to the project sites – existing capacity is understood to be the order of tens of megawatts capacity, versus the projects’ total potential of over 1000 MW capacity. Consequently, it is clear that additional transmission and distribution infrastructure will be required for the projects to be fully built. Provision of this will be a significant undertaking, itself requiring consents, investment and other steps similar to those set outin this report for the wave and tidal generation projects. Investment in the wave and tidal projects is crucially dependent on appropriate and timely delivery of the grid infrastructure.


The Scottish Government is giving strong support for development of the Pentland Firth and Orkney waters projects, and given the magnitude of challenges in development, continuation of this support will be essential for development to be successful. Support will be necessary on a range of issues, including project consenting and finance. Marine Scotland is leading initiatives to facilitate environmental impact assessment and provision of consents, and financial support measures for wave and tidal projects are currently being considered in context of the UK government Renewables Obligation Banding Review, Electricity Market Reform consultation and the Green Investment Bank. The outcome of these policy developments could have a very material impact on the rate and scale of development.


In order to derive an approximate forecast of potential expenditure between 2011 and 2020, the installation plan is combined with the cost breakdown and a forecast of changing CAPEX and OPEX per megawatt installed each year. Finally, the timing of expenditure is offset relative to the year of installation according to the following assumptions:


  • Development and consents: This is anticipated to be spread over five years before the first year of installation, assuming that consents are granted at least one year before the start offsite works;
  • Device manufacturing: This is expected to occur over two years with 25% of spend in the year of installation and 75% in the year before installation;
  • Balance of plant manufacturing: Costs are spread over two years with 50% of expenditure in the year of installation and 50% in the year before installation.
  • Installation: All expenditure is in the year of installation; and
  • Operation and maintenance: Associated costs are spread over 25 years of operation from the year of installation, with a reducing cost profile due to the industry learning how to carry out activities efficiently and as equipment becomes more reliable.




To view further detail please read the  Content Source: The Crown Estate, May 2011 – Wave and Tidal energy in the Pentland Firth and Orkney waters: How the projects could be built.