Abstract
In this report, The Economist Intelligence Unit examines the past, present and future of energy innovation for the blue economy. The report looks at the energy needs of different ocean economy sectors, assesses groundbreaking innovations and outlines an enabling environment for energy innovation within the blue economy. Based on three case studies and in-depth interviews with 30 energy and blue economy experts, this report provides valuable insights for all stakeholders working to develop new, clean solutions for the blue economy and beyond.
The report is divided into the following five chapters:
In chapter one, we briefly outline the central sectors of the blue economy—both emerging and established—and identify the main energy consumers. The ocean economy is an important part of both the US and global economy: maritime transport is the largest consumer of energy in the blue economy and a large contributor to global CO2 emissions. As such, the sector is now pushing towards cleaner energy usage. Maritime tourism is the largest ocean-based industry in terms of GDP contribution and employment in the US and is a major consumer of energy. Ship and boat building and the offshore oil and gas industries are also major consumers of energy within the US. Within all of these sectors, including fishing and aquaculture and ocean observation and navigation, marine energy presents opportunities for renewable, in-situ or local power generation that could help pave the way towards the blue economy of the future.
In chapter two, we examine the sailto-steam transition. Steamships were central to a revolution in global trade and migration in the late 1800s and early 1900s. Nearly a hundred years passed between the first voyage of a commercial steamship in 1807 and the completion of the transition from sailboats to steamships. Settling on the paddlewheel as a propulsion system facilitated the earliest commercial steamships while subsequent innovations, particularly screw-driven propulsion and the marinisation of the compound engine, drove increasing diffusion. Steamships gained traction through a series of increasingly large pathway markets while policy support, financing and insurance and complementary infrastructure (among other factors we discuss) were integral to the scaling-up and long-term success of steamships. While wind propulsion went out of fashion with the rise of steamships (which were part of a global transition towards fossil fuel energy sources), new methods of harnessing wind for ocean transport are now burgeoning.
Energy storage, especially batteries, is the theme of chapter three. New economic and political attention towards alternative energy paradigms drove a wave of battery innovations during the 1970s. The lithiumion (Li-ion) battery has become the most prominent of these and now serves as the backbone of the electronics, electric vehicle (EV) and utility storage markets. In the blue economy, energy storage—especially the higher energy density offered by Li-ion batteries—powers ocean observation and research. This observation and research produces fundamental knowledge that enables all blue economy sectors to grow. Furthermore, the battery-driven autonomous underwater vehicle (AUV) market is rapidly growing while the electric boat market is poised to expand in the near future. Time, collaboration, pathway markets and marinisation (adapting technology for use in marine environments) were all central to the development of new battery technologies. Yet batteries still have major limitations for blue economy usage that new innovations— like improved in-situ power generation— could help to overcome.
Chapter four examines the rise of offshore wind. Despite being a relatively new source of energy, offshore wind is now one of the fastest-growing renewable energy sources in the world and will expand massively in terms of value and power generation by 2040. This growth has been fuelled by the advancement of all aspects of offshore wind farms, but especially larger, more advanced turbines and improved foundations. The emergence of new materials led to improved turbines while lessons from the oil and gas industry allowed for better foundations and improved siting further offshore and in deeper waters. While the market size has increased, prices for offshore wind power have rapidly declined and the industry is now creating a large number of jobs and becoming a major player in its own right. Offshore wind is one promising option for green hydrogen production which could enable a near carbon-neutral energy system. Though a number of factors drove the development of the offshore wind industry, marinisation of pre-existing onshore wind technology and specific government policy support are two critical elements of its success. Offshore wind shows us that with proper government and societal incentives and an eye towards leveraging existing technologies, other offshore technologies may have a path towards success.
Finally, chapter five ties the lessons of the case studies and interviews together to identify resource mobilisation—particularly of time—as key for energy innovation in the blue economy. It then outlines eight elements of the enabling environment that can increase the likelihood of successful innovation and reduce the need for the two key ingredients. The chapter details the state and relevance of each element generally, as well as for marine energy specifically, a set of technologies that hold particular promise for the blue economy. These eight elements, ordered broadly by the technology readiness levels (TRLs) they correspond to, are: 1) marinisation, technology transfer and collaboration; 2) policy support; 3) financing environment; 4) enabling and complementary technologies; 5) public awareness, attitudes, and social acceptance; 6) pathway markets, competition and economies of scale; 7) testing, standards and certification; and 8) complementary infrastructure.