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Wave power is an area with great and promising theoretical potential. However, in order for it to be translated into a market potential, technological development must proceed, driving forces must be maintained and opposing forces must be overcome.
The theoretical potential is great – 10 % of the world’s energy needs could be covered by wave power, which would correspond to investments at around € 500 millions. The electricity production cost with wave power is – assuming an industrial scale – competitive compared to, for example solar cells. The ability to build large plats for volume production appeals to power companies, who with their financing possibilities could ensure a rapid installation rate. But even the challenges are great. The companies that will develop the technology and market are small, with little power and endurance. Actual costs are still high, as entire development costs must be eliminated on a few producing units (if any exists at all). Very few solutions have reached past the development and demo stage, making the designs expensive.
Much development work remains, and capital is limited for most actors. Endurance – in addition to actual technical success – is critical, which makes wave power companies dependent on continuous financing. Competition in this area is great – many companies are competing to first install their solution on a large scale. An open question is whether there is room for a variety of solutions in wave power. On the one hand, a breakthrough can act as an “icebreaker” for wave power as a whole. It can help bring it up to the agenda, make it easier to raise capital, make support systems include wave power and facilitate licensing procedures. On the other hand, a breakthrough, which is followed by economies of scale and falling production costs, can lead to a dominant design pushing away other solutions.
In addition there are other renewable energy sources that have progressed further, and the risk of wave power is that the large focus and ambitious target image regarding renewable energy that exists now will prioritize the implementation of existing solutions rather than the development of new ones.
Swedish companies are well-represented in this area, especially considering the relatively bad wave climate around Sweden’s coasts. On the one hand, subcontractors such as ABB are active in several solutions, and will also be able to deliver peripheral devices to virtually any solution. Vattenfall is also active in the area. Swedish research holds a high class internationally. In addition, there is a wave power plant manufacturer, Seabased AB, who is relatively far ahead in their development.
The conclusions from this in-depth study are that although wave power has great theoretical potential, the challenges are great and commercialization is longer than five years ahead. But the likelihood exists that the successes that companies achieve in the near future will determine who can become significant actors in the future.