30 Sep A champion in marine renewable energy coming from Portugal
Mr. António Sarmento, President, WavEC, highlights the complexity of entering a new global energy paradigm
Portugal has all the potential for testing and manufacturing marine renewable technologies due to a strong electricity grid and significant number of ports and shipyards close to the coast. The necessary infrastructure and mild climatic conditions, poses an opportunity to test technologies developed for open-ocean coasts. Let’s begin the interview by hearing you sum the other ‘key ingredients’ that Portugal boasts that make it such a competitive destination in this respect?
That is an interesting topic, because this is a project that we are promoting together with other organisations, in particular our work with CoLab +Atlantic, which is a cluster of companies and research organisations who want to exploit the development of ocean technology. We also cooperate with the Forum Oceano, which is the cluster of the Maritime Industry, alongside CEIIA and INESC TEC, which are well known centres of technology transfer based in Oporto. We call it ACT, it is not an acronym, but it means Atlantic laboratory for future technologies. Indeed, what we are trying to build on two existing infrastructures that have been attracting marine renewable energy technologies, one at Aguçadoura, where two wave energy technologies (AWS and PELAMIS) were tested from 2000 to 2008. Between, 2011 and 2016 a disruptive 2 MW floating offshore wind turbine prototype called WindFloat was tested for about five years. Aguçadoura is a facility that involves not only about 3 km2 of available ocean space, but also an electrical cable and an onshore structure. Here you can test technologies up to around 4 megawatts, which means that presently it is most suitable for ocean energy technologies. A forthcoming wave energy project from a Swedish company will start in 2021 up to 2028. Then, further North of Aguçadoura, in Viana do Castelo we have the WindFloat Atlantic Farm that was deployed in 2019 in an area that has been assigned in the Portuguese maritime spatial plan as an area for test and demonstration of maritime renewable energy technologies. This is an area of about 400 km2. In this area, because of the WindFloat Atlantic farm, we have a 40 MW electrical cable that allows for other technologies to be tested. Now we are discussing with a global company in the oil and gas industry the possibility of using this infrastructure to test another technology for floating offshore wind. We are trying to combine these two infrastructures, the one at Aguçadora and the one at Viana do Castelo, with a third one, which is being developed by INESC TEC, which is an infrastructure to test underwater robotics.
What we want to do is to create a pool of infrastructures in the sea that may be used for any technology developer involved in renewable energy, robotics, Internet of Things, digital ocean, aquaculture or production and storage of hydrogen at sea. The fact that we have deep coastal waters close to the shore is relatively balanced between the amount of resource, but also relatively mild climate. In addition to that we have all the built infrastructure, the electrical grid, ports, shipyards and a wider supply chain. As it is in the north of the country, it means that the supply chain available in Galicia could also be used. It is a very interesting and accessible area, via the airports which are just 20 to 30 minutes away from these sites. It is something that we are really pushing to happen. It is very well aligned with the strategy of our government. There is an industrial strategy for marine energy that was approved three or four years ago, which is focusing on exactly the same. At this stage for us the possibility of producing energy from the ocean is very interesting. But it will be something in the medium to long term, because energy is still very expensive and technology is not completely available to be used at a large scale and with competitive costs.
Talking in general terms, what does the outlook for Portugal’s green energy market look like?
I think we are facing very challenging and innovative times. If you look into the auctions that took place last year and this year on solar PV, the numbers are completely surprising. Last year there was around 700-megawatt connection points available in the auction, which is already a very significant amount of power. There were 20 to 24 competitors. The average price offered to supply energy to the grid was EUR 20 per megawatt hour, which is around 40 percent of the average cost of electricity production in Portugal. This year the minimum offer was EUR 11, which means around 20 percent!
But there was a case of a company that had solar PV and storage that indeed offered a negative price, meaning that they will be paying to supply energy to the grid, possibly because they already have a customer that will absorb most of their energy production. In some cases, they have to supply the energy to the grid, as they cannot manage it otherwise. Their proposal was to pay for an energy injection into the grid. It is very difficult to the consequences of such a move for the long-term, but that there will be a lot, not only in terms of the panorama of renewable energy and competition with other sources, in particular wind, but also in terms of penetration of electricity into other uses of energy, in particular energy demands that presently make use of fossil fuels (trucks, shipping, aviation, heavy industry, etc.). If you have very cheap energy, then the possibility of producing hydrogen or synthetic low emission flues at a low cost is very strong.
That is part of the reason why Portugal has identified hydrogen production as a key element of their energy strategy in the long-term. This is also aligned with the strategy of the European Union. Hydrogen production and storage will be the new development, as it allows to transfer cheap renewable energy into applications where electricity may hardly enter. I am talking about large energy consuming industries such as shipping, cement or metallurgical or ceramics and possibly in the longer term also aviation. There are a lot of challenges yet, but indeed, it opens a lot of opportunities. I think that we are now facing something that is similar to the experience we had 20 years ago with telecommunications and informatics. For Portugal, this is a great opportunity, because if we are able to attract a large amount of interested companies in producing solar PV energy here for the electricity market, it means that there will also a large amount of companies interested in using solar PV to produce hydrogen and in general low emission synthetic combustibles.
We understand that WavEC works through three business areas, them being Wave, Offshore Wind, and Ocean technologies, including offshore aquaculture. We see that 60 percent of the company’s income comes from R&D projects, and the other 40 percent makes up services rendered to private institutions. Would you give us an overview of the inception story and evolution of WavEC?
WavEC is a start-up from IST, Instituto Superior Técnico, which is the engineering school of the University of Lisbon, where I was a professor for many years. As an academic my research area was wave energy from 1978 to 2003 when WavEC was created. There were two main reasons why we created WavEC. One is that I thought that this could be a very interesting opportunity for the country and that this was not only about R&D. I needed to put in an effort to attract companies to this field and also create conditions for international projects to develop here. I also wanted to work in a more agile organization.
The other reason was that there was a number of people that were getting their PhDs in this field at the University. And the offer that the university had and still has for these young people is not very attractive. I thought that this can also be a way to attract young people to work in this area with a better future than just staying as a grant holder at university for years and years. In 2007, one of WavEC associated companies, EDP, became interested in offshore wind and asked us for advice on what their move should be in regards to offshore wind. We started looking into the subject and we were in a way, fortunate as we understood two things. First, that our coast was relatively deep close to the shore. So fixed foundation offshore wind turbines were possibly not very interesting. At the same time, coinciding with a visit that I did to MIT, I understood that floating offshore wind was possible. I came from MIT with this idea. Then a week later, I met a lady from the US with whom I was working previously on a wave energy project and she told me that she started a company developing floating offshore solutions for wind energy, named WindFloat. When I looked into the solution, I immediately recognized it was interesting. The following week we had our final seminar with EDP where I invited her to present their idea. Ten years later, we have WindFloat Atlantic. Ever since we have been working with EDP and others in offshore wind and now offshore wind represents a very significant part of our activity. We have done a lot of advising work to companies on wave and offshore wind, namely to EDP, GALP, Repsol, Gas Natural Fenosa and Iberdrola among others. We have also been working on this for the European Commission.
Then we have a lot of work on engineering aspects, namely on computational models, tank testing, engineering design and analysis and we supported a lot of wave energy technology developers in starting their first models. For instance, this company that I mentioned, CorPower, will be testing their first prototype here in Portugal from 2021 onwards. It is a company that we have been working with since 2011. This is a very interesting technology. This a breakthrough with respect to what I know from other technology developers in this field.
Then, we have a lot of work done on environmental monitoring. We have been involved in all of the offshore tests of marine renewable energy technologies. We do monitoring campaigns, environmental assessment and a lot of underwater acoustics. We have also been working on things related to the supply chain, offshore logistics and cost analysis and financing of marine renewable energy. We have a wide scope, that varies along the tine, sometimes we have more expertise in one area than the other, but we feel that it is important to support our clients and also to advise governments in developing he appropriate public policies.
New developmental pathways are being geared towards sustainable use of the marine environment by maximising use of ocean space while reducing costs through shared infrastructure. Last year in conjunction with the Norwegian Embassy and Innovation Norway WavEC organised the Marine Renewable Energy and Offshore Aquaculture seminar. What potential synergies exist between deep water floating wind, wave energy, hydrogen production, offshore aquaculture and seaweed cultivation to drive ‘higher capacity’ and ‘seasonally consistent’ energy output?
At this stage, those synergies may happen, but I doubt it will be a major stream to combine different uses in the same structure. The reason is that all these technologies are still maturing. The technological, financial and market risks associated to each one of them are sufficiently important. In the long-term, once we have complete mastery over the technology risks and operational risks, I think that there will be a time where you try to use the same structure for more than one purpose. But I do not think it will happen in the in the next five or ten years.
What will possibly happen meanwhile is the share of the naval support infrastructure and the share of support infrastructures. When you have something in the sea, you need to have vessels to travel to and from. These vessels are not always in operation, so you will reduce costs if you can combine for it to be used for more than one single use. Here, in Portugal, this is perhaps our weakest point at present because we do not have any oil and gas operations, so none of these big support vessels that exist in the UK, Netherlands or Norway. This means that for operations that are not so big, you need to have vessels coming from these areas to here. You can imagine the mobilisation costs are extremely high. However, if you have a number of different projects of different nature being developed simultaneously, then one of these vessels can be here and support the different projects without significantly increasing the cost. I think that in the early phase, the combination will be mainly the sharing of support infrastructure and maybe later the sharing of the same space, which I doubt will happen in the short-term. I imagine that this will happen in several phases. The first phase would be when these projects are sufficiently close to be using the same support infrastructure, then projects use the same space, and then use the same or part of the same infrastructure.
Fresher, Jump, SeasSnake and LiftWec are stand out in regards to innovative approaches to contemporary problems. With the vast number of projects WavEC is currently working on, which are the ones that you can highlight which have the potential to produce breakthrough technologies for the sector?
For some of those projects, I do not expect that they will bring any breakthrough in the sense that the breakthroughs that we need are technological breakthroughs. Some of these projects are not related to technology, but with the conditions that you need to create for the market to develop. In terms of the breakthroughs that you need, they are the breakthroughs that show that your availability is much bigger, that your costs are much less, that the risks are lower. That is the type of breakthrough that you need at present. Then you have to build an environment which is receptive for this.
Some of these projects have to do with creating the environment that gives confidence and also spreads knowledge and anticipate future challenges. I sense that the breakthroughs are on the technology side. As the cost of money is one of the critical aspects of these technologies, reducing the perception of risk by insurance and financiers is a critical issue.
WavEC has almost existed for 17 years, establishing itself as a key institution for innovate marine technology solutions. With your 20th anniversary on the horizon, what would you say are the higher-level strategic objectives for WavEC in the coming decade?
First is to not only to be in the markets that we are today which are Wave and Wind, two very well-established markets. It is also about being able to expand to other markets or at least to technologies that will have an impact in these markets. That means aquaculture, Hydrogen and technologies that will have an impact that we have not yet mastered presently. These are data science, space technology and space observation technology. These are technologies that will have an impact in the development of the other technologies and on the market, so we need to master them. There is a second challenge which is very personal: because of my age I need to prepare my replacement in due time. We are moving towards promoting people up to positions where they can take control, however it will not be as simple, as I have been around for so long that my replacement is somewhat challenging.
Could you provide us with a final message to the readers of Newsweek?
The energy system is changing because of people’s perception on the environmental impact we are having, as well as due to the unclear future about the availability of fossil fuels, which we know is relatively limited. I believe that renewable energies have progressed so fast that even if we had an abundant source of fossil fuels, the change will happen. My message is that people should understand that the change has an impact on costs and that society has to be prepared to pay for these costs. These costs are not only the costs of introducing new technology. We ought to understand that if we want to make this happen, we need to invest and that this investment has a cost. This cost is not only related to the cost of developing new technology, but also the cost of decommissioning partially used infrastructure. Portugal’s natural gas power plants, for example, are only partially used, due to the renewable energy sources that we have. These partially used infrastructures are not economically sound, however they are needed, otherwise when renewable energy, like wind or solar, are not available we will face blackouts. People should be aware that this requires a lot of investment to make such changes in the energy system and that the hope of extremely cheap renewable energy will not happen in one day. The cost of energy today is not a consequence of the decisions that we take today, it is the consequences of the decisions that people took ten years ago.