Innovation within marine renewables
Marine renewables is still a relatively young industry and provides a setting where innovative thinking and entrepreneurship can and does flourish.
Offshore wind is the most established part of the industry but new ideas are continuously being developed for example regarding the size of turbines, wind farms being placed even further offshore, floating turbine foundations and installation of foundations in icy waters. Innovations are also being made in energy generation in the marine environment as well as in connection with the vessels and equipment used in the industry.
Innovation for generation of energy
A significant milestone within offshore wind is Statoil’s development of Hywind Scotland which commenced operations in October 2017. This project is the world’s first floating offshore wind farm with 30 MW capacity on floating structures at Buchan Deep, 25 km offshore Peterhead, harnessing Scottish wind resources to provide renewable energy to the mainland.
Development of wave and tidal energy is still approximately 10-15 years behind the offshore wind industry with the levelized cost of energy being approx. £350 / MWh. However, there is still a lot of enthusiasm within the industry to unlock its significant opportunities. The UK is currently the undisputed global leader and the Department of Energy and Climate Change (DECC) estimates that wave and tidal stream energy combined has the potential to deliver around 20 per cent of the UK’s current electricity needs which equates to an installed capacity of around 30 – 50GW. Several initiatives are being taken in the UK for the development of this industry segment, for example:
- European Marine Energy Centre (EMEC) is situated off Orkney in Scotland. The Centre was opened in 2003 as the world’s first (and only) grid connected facility for the testing of both wave and tidal energy technologies. Scotland is a natural site for such test centre as around 10% of Europe’s wave resources flow along its shores. Allowing for the testing of commercial-scale prototypes, EMEC is an important site for the advancement of tidal and wave-power devices.
- MeyGen is the world’s largest tidal stream project currently under construction in the waters off the north coast of Scotland between Caithness and Orkney. The first foundations and turbines for the project were installed in October 2016. It is the world’s undisputed flag-ship project for tidal energy and will deliver a fully operational renewable energy plant consisting of 269 submerged tidal turbines of almost 398Mw powered purely by the tide. This is enough electricity to power 175,000 homes.
- Wave Hub was fully commissioned in 2012, 10 miles off the north coast of Cornwall in South West England. Developed by the South West RDA (Regional Development Agency), it is the world’s largest offshore wave energy test centre. Once connected Wave Hub will provide Wave Energy Converter operators opportunities to test an array of full scale wave energy devices over several years in a realistic, fully monitored marine environment.
At a time when combining adaptability, innovative thinking and sustainability is essential, Wikborg Rein awarded our 7th annual entrepreneur scholarship to companies contributing to a renewable, more energy-efficient future. One such company, Waveco AS, was awarded 30 hours of legal support to develop its sub-wave concept for offshore wave-energy. Their business idea is to use mass produced, simple units to exploit the distance variations between a buoy on the surface and a turbine below the wave zone, converting the motion into electrical energy. For more information see www.waveco.no (The other company awarded the scholarship, Gether AS, received 15 hours of legal assistance for their patented solutions for thermodynamic storage of temperature differentials for local heating and/or cooling of office buildings, industrial production and agricultural buildings. For more information see www.gether.no.)
Innovations relating to vessels and equipment
The installation of wind turbines and other energy generating equipment offshore often requires use of installation-, subsea and support vessels. Some vessels traditionally engaged in the offshore oil and gas industry have also been utilised within the marine renewable segment, but as the marine renewable industry develops it requires tailor made vessels to meet the needs of the industry in a more (cost) efficient manner and be able to undertake more complex operations, larger lifts and operations within extended weather windows. There are currently two main trends within the offshore wind industry having a bearing on the new vessels we are seeing coming out of yards:
Firstly, the increased size of offshore turbines and foundations will rule out many of the multipurpose vessels that can perform both oil and gas maintenance and offshore wind installation work. A new generation of purpose-built offshore wind farm installation vessels will therefore be required to meet this demand. One of the world’s largest and most advanced wind farm installation and construction vessel to date is the “Seajacks Scylla” which was delivered from Samsung Heavy Industries Co., Ltd. in November 2015 and is capable of performing lifts of up to 1500 tonnes.
Secondly, the installation of offshore wind farms further offshore and into deeper waters also demands specialist solutions for installation, uptime and performance. One of the main challenges is the need for technicians to stay offshore for prolonged periods of time as well as to speed up transfer times between turbines to improve utilisation rates of technicians and reduce downtime. One solution to these challenges is the utilisation of service operation vessels equipped with helipad, accommodation capacity and motion-compensated walk-to-work gangway systems that allows technicians to access wind turbines in harsh weather conditions. Another solution is based on having multi-vessel approach with an accommodation vessel or platform working alongside a number of crew transfer vessels transporting technicians to and from the turbines. The industry has not settled on a preferred approach and we will likely see development of these and other solutions to meet this challenge.
Legal aspects of the innovation process
Lessons learnt by start-ups within the marine renewable and other industries can be of vital importance as entrepreneurs continue to foster new concepts for generation of renewable energy within the marine environment. While legal challenges may seem less of a priority in the hectic phases of bringing an idea to life, our experience is that there are some important legal issues that start-ups need to take into account in order to survive the initial problems invariably faced on the road to success:
- Protect your idea: Some ideas may be patented, some may not. In either case it is important to protect the idea from being misused or stolen. This can be done by ensuring a Non-Disclosure Agreement (NDA) is signed with partners, co-investors, suppliers and others in which they undertake not to misuse the information received.
- Shareholders’ agreement: The chosen form of ownership to avoid personal liability is usually a private limited company. At the time of establishment attention needs to be given to how the company will obtain financing, what happens if either of the founders wants to exit etc. These issues should all be set out in the shareholders’ agreement.
- Sale- and distribution: There are huge variances between the various middle-man sale and distribution contracts, so it is important to make sure to choose the right type of co-operation agreement.
- Who owns what? If one of the employees in a company develops a good product, the rights to that product will usually rest with the employer. But what if one of the co-entrepreneurs brings a product into the company – or if an external consulting engineer comes up with a brilliant technical solution? Clarifying ownership rights to inventions is critical.
- Seek assistance in drafting your key contracts: Good contracts secure and build values, while bad ones may represent an equal number of pitfalls. Some start-ups build their success on that first, big contract – make sure it is a good one.
- Company law: Getting things like employment agreements, incentive earnings and consultancy agreements right will limit the number of legal issues you will run into on your path to success. If your start-up budget doesn’t currently account for legal fees: apply for the next Wikborg Rein entrepreneur scholarship in 2018!