Green Economy in a Blue World-Full Report

mandated). The approach in this section is to determine the price-competitive capacity of each of the selected marine renewable energies against fossil-fuel based conventional energy sources. The section also discusses costs for the latest available reference year. However, it is important to take into account trends in the costs curves, dependingonwhere the respective technologies are on the innovation curve. The table below provides a rough estimate of costs, with the best available data for some of the primary costs associated with selected marine- energy technologies. These costs are taken from the IPCC and, in most cases, are based on sparse information due to the lack of peer-reviewed reference data and actual operating experience. They therefore often reflect estimated costs based on engineering knowledge. 2.2.3 Economics of different marine- based renewable energy sources Offshore wind energy When conventional power is replaced by wind- generated electricity, the costs avoided depend on the degree to which wind-power substitutes

eachof the threecomponents: fuel cost; operation and maintenance (O&M) costs and capital cost. Wind power avoids full fuel and CO 2 costs, as well as a considerable portion of the O&M costs of the displaced conventional power plant. Henceforth, the cost comparison lies within capital costs. The level of avoided capital costs depends on the extent to which wind-power capacity can displace investments in new conventional power plants (combined cycle natural gas power plant), and thus is directly tied to how economically viable wind energy is compared with fossil-fuel based energy. For instance, in the figure below, a reference case is depicted to compare the cost of generating wind power with conventional power. One economic advantage of wind energy compared to conventional energy generation is the relatively constant, non-fluctuating input costs, compared to fossil-fuel price fluctuations. Although intermittent winds can mean output fluctuations, input prices for wind energy are constant at almost zero and hence the final cost of wind energy is independent of input fuel prices. The input resource costs per kWh

in a Blue World

Summary of core available cost and performance parameters for different ocean energy sources Marine-energy technologies Design life a (years)

Investment costs in US$ (2005 ec) per KW

Annual O&M costs in US$ (2005 ec) per KW

Wave

6,200 – 16,100 b

180 b

20

100 b

40 c

Tidal range (using tidal barrage)

4,500 – 5 000 b

Tidal current

5,000 – 14 300 b

140 b

20

37- 60

20 e

Wind energy

2,200 – 2 900 d

Nuclear energyf

1,800

0.06 g

25-40

Coal energyh

1,000 – 1,500

0.002

35-40

Source: IPCC, IEA, EWEA and others

Notes: a) Design life estimates are based on expert knowledge. A standard assumption is to set the design lifetime of an ocean energy device to 20 years; b) Based on the estimates provided by Callaghan (2006), Previsic (2004) and ETSAP (2010); c) Tidal barrages resemble hydropower plants, which in general have very long design lives. Tidal barrages are therefore assumed to have a similar economic design lifetime as large hydropower plants that can safely be set to at least 40 years; d) Approximate data adapted from the EWEA, 2009 for an offshore wind turbine installed in Europe, between 40 and 180 MW and reflected in 2005 USD; e) Data taken from EWEA, (2009), f ) figures are taken from a MIT report and translated into 2005 USD, g) O&M costs do not include fuel costs, h) IEA (2010)

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