The aim of work package 7 was to create, test and validate a lifetime model of marine energy converters to provide more reliable predictions for the investment community and to enable fair comparison of the economics of alternative marine energy technologies. Wave energy converters were classified, according to their mode of operation, as Clustered and Independent Oscillating Absorbers or Overtopping and Pneumatic devices. Collated component cost data were used to obtain an indication of how the cost distribution (capital cost, operational cost, etc) differed between classes of marine energy converters and to evaluate a target capital cost for each type of device that would ensure confidence in attaining a target generation cost. The method of calculating present value of the cost of generated electricity estimates the required values when each input or component of expenditure and revenue is described by a probability distribution (e.g. a normal distribution), and financial parameters are risk-adjusted. Multiple calculations, with randomised parameters, produce a statistically valid distribution of the expected costs of electricity, payback period, etc. The variation of unit cost and the variability of financial parameters may be set to model and explore confidence in future trends.
A method has been developed for directly comparing the relative efficiency of a set of wave energy schemes that produce the same electrical output. Based on the Data Envelopment Analysis technique, this provides a means for identifying the production system (e.g. a marine energy conversion scheme) that minimises the use of inputs to attain a target output relative to a peer group of producers. This is a generalisation of the single input-output ratio measure of efficiency, with the specific advantage that it is insensitive to the units that define each parameter, or their relative importance. The resultant efficiency measures are unaffected by variation of the units employed for each parameter providing that the ratio between the inputs into alternative schemes remains constant. This approach is easily extended to assess the economic efficiency of a scheme producing multiple outputs. Additional work has addressed the impact of site accessibility on the cost of offshore operations and reliability, the quantification of the predictable output in the UK market, and the estimation of power output of both wave and tidal devices on the basis of site-specific data and device performance characteristics. In addition, collaboration between WP7 and WP12 has considered the macro-economic impacts of the installation, operation and maintenance of various hypothetical scenarios. This fusion of micro- and macro-economic factors into a single framework offers alternative design criteria in the development of large scale marine power schemes.
It is now possible to compare directly the relative economic efficiency of wave energy schemes of equal capacity independent of 'best guesses' of individual component costs and of variations in market prices.