On the face of it, it has been a great few weeks for the tidal-energy industry. Firstly, we had the announcement by Atlantic Resources regarding the build of its one-megawatt prototype, which is on its way to be tested at the European Marine Energy Centre (EMEC) in Orkney.
Then came news that Hammerfest Strom is also building a 1MW unit in Scotland and which will be tested at EMEC in 2011.
I’ve long been a believer in tidal energy – predictable and reliable. There is also little doubt that Scotland’s tidal resources are huge and offer a secure clean future energy source.
We should be pleased – over the moon, even – that we’re apparently well on our way to exploiting this resource.
The problem I have, though, is that while I am indeed pleased, I have this nagging feeling that there is something awry here that, typically, the mainstream media tends to ignore. They tend towards the big headline, but most look no deeper.
What’s causing this nagging feeling is, of course, that neither Atlantic Resources nor Hammerfest Strom are UK, let alone Scottish, companies. The former is effectively Australian and the latter is Norwegian.
I accept that both companies are awarding some work on these demonstrators to a couple of Scottish and English companies, but we cannot, and should not, ignore the fact that large, if not the main, elements of the real value-adding work is going to overseas companies.
At the time of writing, Hammerfest Strom is staying near silent about its supply chain, which makes me suspicious.
With Atlantic Resources, it has been possible to determine that the generator, gearbox, turbine blades, subsea connectors and controls are all being sourced from overseas companies.
OK, an Aberdeen engineering consultancy carried out the detail design for the system. However, the firm concerned is a subsidiary of an essentially Singapore-based company – which is where Atlantic Resources happens to have its Far East HQ.
So, for the Atlantic Resources project, Norway, Singapore, Australia, the US and others are all providers of specific bits of hi-tech hardware.
With Hammerfest Strom, I may be wrong, but I think we can reasonably assume that its supply chain will follow a similar pattern, especially now that the Austrian international technology group and hydro-engineering specialist, Andritz, has bought a 33.3% stake in the company and its UK subsidiary.
In a statement issued by Andritz when it bought its stake in Hammerfest, the company said that its research-and-development centres in Austria, Germany and Switzerland would ensure the further development of this technology in close co-operation with Hammerfest Strom.
Statoil is a founding shareholder in Hammerfest, and you can bet that means Norwegian companies will benefit from this project. ABB is another stakeholder.
As it happens, though, Statkraft, the highly innovative state-owned Norwegian energy company, is a shareholder in Atlantic Resources, but there are no UK or Scottish companies acting as shareholders in either company. Unless, that is, you count ScottishPower as owning a piece of Hammerfest. But SP is owned by Iberdrola so doesn’t count as British any more as far as I’m concerned.
Hammerfest Strom recently said Scotland was a natural home for the development of its technology given the tidal resource and emerging renewables culture.
The question, though, is: why did it take a Norwegian and an Australian company to do what we should be doing for ourselves?
Let’s be in no doubt that, as what the markets call “first movers”, these two companies stand to benefit immensely from these developments.
That said, Marine Current Turbines – a company based in Bristol – is also a first mover as it already has an operational tidal turbine. This 1.2MW SeaGen unit is located in Strangford Lough, in Northern Ireland, is connected to the grid and is happily operating 24 hours, seven days a week.
It suggests that MCT is already considerably further ahead in terms of commercial deployment than either Hammerfest Strom or Atlantic Resources, although the Norwegian firm has successfully operated a demonstrator for several years in its home waters.
Interestingly, from our point of view in Scotland, MCT now has approval for a lease from The Crown Estate to deploy its technology off Brough Ness, on the southern side of Orkney, some time during 2017.
But here’s the reality of MCT. You think it’s British?
OK, stakeholders include BankInvest (Dutch investment boutique); Carbon Trust Investments; EDF Energy; ESB International (Irish electricity utility); Guernsey Electricity; High Tide (Dutch private-equity company), and Siemens Energy.
At least Carbon Trust Investments is a UK vehicle.
Here we have three companies, all of which are reasonably well advanced in development and deployment of tidal technologies. All are aiming to exploit Scotland’s tidal resources. All have UK vehicles created to achieve that. But the real ownership is primarily foreign.
Of course, there are other UK and Scottish companies with technologies at various stages of development. But this trio are leading the pack.
Once they have completed their trials off Orkney and updated their corporate CVs, they will use this experience to take on global opportunities.
I would seriously doubt whether Atlantic Resources or Hammerfest Strom will build their production model turbines in the UK, although MCT just might because of its roots.
So here’s the big question: why is it that Scotland – the UK – has such difficulty getting properly home-grown companies in tidal energy off the ground – properly capitalised and with all the appropriate engineering capability and support?
Don’t blame the Holyrood or London governments because they have actually done a stirring job in promoting the whole tidal thing – pushing the Saudi Arabia of tidal-energy image and providing seed-corn funding as well as, in Scotland’s case, the £10million Saltire Prize.
A major culprit is the financial sector – banks, private-equity houses and others of their ilk.
Mind you, given the recent performance of this sector, such failure should come as no surprise.
Another culprit is British industry itself, with remarkably little interest shown in the tidal-energy sector in terms of engineering manufacturing.
I was musing recently as to why Scottish and Southern Energy had signed an agreement with Mitsubishi Heavy Industries that will lead to the two companies working together on a range of technologies, including offshore windfarms; advanced technology for smart electricity grids and low-carbon vehicles; carbon capture and storage, and high-efficiency power generation.
The answer, of course, is simple. The fact is that there is not now a Mitsubishi equivalent in Scotland or, indeed, in the UK.
But surely we must have companies capable of designing, building and supplying components for complete tidal-turbine systems – haven’t we?
Someone please say “yes” because, otherwise, we should maybe be looking for something else to do, and quickly.
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