Most of the wave energy converters under development are planned for operation in shallow to intermediate water depths, typically 30 m to 70 m. However, the limited water depth reduces the wave energy resource as compared to offshore deep water. This paper presents an analysis of the water depth effects on the wave energy resource and on the energy absorbed by a floating device. The analysis is based on a procedure to modify the wave spectrum as the water depth reduces, namely the TMA method Bouws et al., 1985. J. Geophys. Res. 90 (C1), 975–986. The method is based on the hypothesis that the similarity principle for the saturation range of shallow-water spectrum is not restricted to the equilibrium range, but is valid across the entire spectrum. A point absorber-type wave energy converter is modelled and the wave climatology of Figueira da Foz (Portugal) is used as a case study. Significant reduction has been identified for both the wave energy resource and wave energy converted as the water depth decreases. The presented methodology can be used for preliminary cost benefit analysis and decision making regarding the best water depth for installation of specific wave energy converters.