Power from the Oceans: Wind Energy Industries Are Growing, and as We Look for Alternative Power Sources, the Growth Potential Is through the Roof. Two Industry Watchers Take a Look at Generating Energy from Wind and Wave Action and the Potential to Alter the Energy Landscape

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The prospects for ocean-based renewable energy development look brighter all the time. Current and potential markets for offshore wind, wave energy, and tidal power are all expected to show considerable growth over the next five years.

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Offshore wind systems use turbines to generate electricity. Wave systems use floating rafts or devices fixed to the ocean floor and harness the energy generated from bobbing or pitching. Other wave-energy approaches include devices that use the rise and fall of water in a cylindrical shaft to generate electricity and shoreline devices that channel waves into reservoirs to concentrate wave power.

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Tidal-energy power traditionally involves erecting a dam across the opening to a tidal basin. The dam includes a sluice that is opened to allow the tide to flow into the basin. The sluice is then closed, and as the sea level drops, traditional hydropower technologies can be used to generate electricity from the elevated water in the basin.

An analysis of the potential market for offshore renewables shows a growing industry promising to supply energy for millions of people. For the entire sector, we project 5,800 megawatts (MW) of installed capacity between 2004 and 2008, of which 99% will be in the form of offshore wind farms. Because the wave and tidal-energy industries are younger and less well developed, it will take until at least 2010 for these industries to take off. During that period, we expect to see the value of the market increase by nearly $3 billion a year. Again, most of that will occur through offshore wind projects.

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Offshore Wind

Currently, Europe is the only region in the world with any operational offshore wind capacity; it is expected to have 88% of the new capacity over the coming five years. European countries increased capacity more than fivefold in 2003 alone, with Germany and the United Kingdom leading the way. These countries will account for 66% of projected capital expenditures between 2004 and 2008, with Germany, buoyed by many large and expensive deepwater projects, dominating the market.

As technology improves, Europe can expect to achieve large strides in capacity using proportionally fewer turbines. Long-term signals are good for the U.K. market. Despite a very promising future forecast, an air of uncertainty hangs over Germany, which is dependent on large, technologically challenging projects. In Denmark, where a lack of government commitment is deterring potential developers and investors, only one project is scheduled for installation by 2008.

The North American market lags approximately five years behind Europe, but it is expected to increase capacity and become prominent in the market after 2007. Offshore wind has a potentially large market in North America, but it could easily fail before it gets a chance to take off. Success of early projects, particularly in the United States, is critically important in the face of uncertain planning regulations for offshore wind. In Canada, there are fewer immediate projects, but the long-term view is more positive. If the flagship Nai Kun project off Prince Rupert in British Columbia is successful, then it could be the first of many such wind farms.

The United States has considerable offshore wind potential, but regulation remains a source of concern. Cape Wind Associates' controversial project off the coast of Massachusetts is considered critical to the future of offshore wind in the United States. Its success or failure is likely to set a precedent for future developments in the country. If regulators approve this wind farm, new and existing players are likely to take advantage of the potential and generate many proposals for new projects. …