Clean Power

Published on July 31st, 2014 | by James Ayre


Giant Wave Energy Project In Australia Called Off, “Not Commercially Viable”

July 31st, 2014 by  

One of the largest planned wave energy projects in the world — the ARENA project in Australia — recently bit the dust. The 19 MW project — which was slated for development off the coast of Portland in Victoria, Australia — was once advertised as being the biggest wave energy project in development in the world, so the failure of the project represents a relatively significant blow to the industry, especially when you consider the fact that the reason for the project’s demise is that it wasn’t “commercially viable”.

Image Credit: Waves via Flickr CCImage Credit: Waves via Flickr CC

The company behind the project — US-based Ocean Power Technologies (OPT) — recently fired its CEO, Charles Dunleavy, so it may be that there’s more to it than that. The project would have cost around $232 million to develop, with $66.5 million of that set to come from the Australian government, as per a previously made pledge.

The project has always had its doubters, though, so it’s failure isn’t a surprise to everyone, as RenewEconomy notes:

The decision by the Martin Ferguson’s Department of Energy in 2009 to pick the OPT project as a candidate for funding in 2009 raised eyebrows at the time, particularly because Australian based technologies were overlooked.

Even back in 2009, I wrote in the now defunct Greenchip column in The Australian newspaper that OPT had been accused of being unable to deliver on its own projects.

“OPT was criticised by Collins Stewart, its sponsoring broker on London’s Alternative Investment Market, last year because of delays and cost over-runs at a wave project in Spain. Collins Stewart broker Raymoned Greaves told The Times last July that OPT had a ‘total inability to deliver’ on projects. ‘The continued delays baffle us,’ he was quoted as saying.”

Humorously (in a way…), the ARENA project was being developed at the same site where an earlier version of OPT’s PowerBuoy technology was “scrapped after part of the machine snapped off while being towed into place by an ocean tug in 2002.” That project was funded by the Australian federal government and the local Victorian government.

Not really a good track record to date.

It’s currently unclear whether the money pledged by the Australian authorities will be made available to other wave energy projects or simply reabsorbed by the government. Only $5.6 million was delivered before the project failure, and that will be repaid according to reports.

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • James Donnaught

    I’m betting that the “commercial viability” excuse came from the company itself. Their ‘total inability to deliver’ isn’t likely to feature in their press releases.

  • JamesWimberley

    Britain hosts the European ocean energy test centre (EMEC – link) in the Orkney Islands. After decades of research and pilots, wave technology is still not mature enough for commercial deployment in any of its many variants, The ocean surface is a perfectly horrible environment for any machinery, and especially electrical. So best to keep on researching.

    This does not apply to tidal, which is mature. In tidal flow setups, the generators are completely submerged, in a stable and manageable environment.

  • Biff

    Wave/ocean power and geothermal have promised much over the years but delivered bugger all. As Calamity_Jean says, wind and solar are proven technologies with a lot of sites still untapped and further efficiency gains to come. As storage increases they will only look more attractive.

    Tethering devices to the ocean floor or forcing water 3 km underground doesn’t really stack up. Wave energy should still be encouraged via private funding and appropriate tax breaks but let the developers prove it first, at their investors’ expense.

  • Trilobyte

    For the same $230 million they could be generating 2 GIGA watts, still in the ocean; then it would be a very attractive option for business.

  • Ronald Brakels

    Commercial viability was never a possibility. The pilot plant may have led to commercial viability in the future, presumably in locations that have a carbon price, but there was no way it was ever going to make money in a country where the wholesale price of electricity averages around 3 to 4 cents and is falling. So cancelling this project for not being commercially viable is like cancelling a Death Metal Concert for not having enough polka music. It was never supposed to have polka music in the first place!

    • Henry WA

      My understanding is that this project had technical problems and that even in the long term and at scale it was unlikely to be commercially viable. It would seem that a competing Australian company Carnegie Wave Energy (CWE), which has also received some government support, but which initially was less favoured, is a better long term bet. There are also a couple of European designs which look promising. Wave energy is very concentrated compared to wind, so can have a smaller footprint. The CWE design is fully submerged so it has no visual impact and it can function where it is not a danger to (or in danger from) surface vessels.

      • Ronald Brakels

        I expect that soon we’ll have a few designs for wave power that clearly have promise and they will be trialed on a larger scale and modified and then a winner will emerge from among them. More or less the way wind power is now always a variation on a three blade design. But I don’t know if it will ever pay a significant part in energy generation. However, I am glad people are working on it. I would be surprised if wave power ends up a large part of the energy generation pie, but I have been surprised before.

  • Calamity_Jean

    Honestly, why bother with wave energy? Solar and wind are cheaper, easier to install, and nowhere near running out of good locations. Use part of the “wave energy” research money for improving batteries, and use the rest to subsidize wind and solar.

  • jburt56

    If humanity always waited for lame excuses like commercial viability we would still be riding horses.

  • Dag Johansen

    Australia completely overbuilt their electrical system already.

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