As the world faces increasing threats from climate change, the importance of developing renewable energy technologies and reducing their costs has similarly increased. Marine energy technologies (which include wave, tidal, ocean current, ocean thermal, and salinity gradient resources) are a nascent suite of renewable technologies. There are vast marine energy resources available around the world and within U.S. territorial waters, and as the technologies have continued to develop, the long-term trajectory of cost reductions and performance improvements is of particular interest. This study specifically investigates the long-term cost reduction potential for commercial wave energy technologies, as wave energy represents the largest marine energy resource available to the continental United States. Similar studies focused on other resources and technologies may follow in the future.
Through its Water Power Technologies Office, the U.S. Department of Energy (DOE) supports research and development to advance wave energy technologies and other marine energy systems. DOE was interested in collecting information to better understand present-day status and long-term potential for cost reductions and performance improvements within the wave energy industry. As a result, an expert elicitation study was conducted by the National Renewable Energy Laboratory, the results of which have been summarized in this report. Technical experts from the United States and other countries were asked for their input on the industry’s current and future trends regarding the levelized cost of energy (LCOE) and on important factors that would drive performance improvements and cost reductions.
The expert elicitation process consisted of in-person workshops, webinars, and quantitative data collection. The methodology was modeled on a previous elicitation study on the progress and cost-reduction drivers of offshore and land-based wind energy technologies (Wiser et al. 2016). An initial workshop was held in October 2019, followed by a webinar in April 2020 to introduce the elicitation process to a targeted list of experts. Each of the participants was later asked to provide data reflecting their best assessment of a baseline LCOE for the year 2020,1 ranges regarding the year when LCOE could reach 30 cents per kilowatt-hour (kWh) under both conservative and optimistic scenarios, and further LCOE estimates for the year 2050 (again, following conservative and optimistic scenarios).
Based on their responses, estimates for 2020 LCOE ranged between $0.35/kWh and $0.85/kWh with a mean value of $0.57/kWh (±$0.18/kWh).2 On average, the respondents believed that LCOE could reach $0.30/kWh by 2033 (±8 years) under conservative assumptions and 2029 (±6 years) under an optimistic scenario. Results for LCOE in the year 2050 under the conservative and optimistic scenarios were $0.13/kWh ± $0.06/kWh and $0.07/kWh ± $0.03/kWh, respectively. The analysis of the elicitation results demonstrates that among the surveyed experts there is weak agreement on existing LCOE values but strong agreement on the possibility for future LCOE cost reductions and performance improvements.
Most of the participants ranked structural assembly costs as the highest contributor to LCOE for the 2020 baseline case. Operations; power take-off; mooring, foundation and substructure; and maintenance costs were other major cost drivers identified by participants. The respondents also thought that capacity factor could gradually increase from 2020 to 2050, and that wave devices like oscillating surge wave energy converters and hybrid systems along with oscillating water columns could gain popularity in future years.