By Isabella Kaminski

Douglas-Westwood also predicts that annual capital expenditure on wave and tidal projects will reach US$500 million in 2015, up from approximately US$52m in 2010.

According to The World Wave & Tidal Market Report 2011-2015, wave and tidal installations over the coming year are already double those in 2010 and a total 150 MW capacity will be installed between 2011-2015.

The UK, Canada and US are the three biggest markets; the UK leads with 110 MW of installations forecast. According to Ian Jones, lead report analyst, capital expenditure in the UK will total almost US$900m over the next five years, with annual expenditure approaching US$500m in 2015.

Frank Wright, Renewable Energy Manager at Douglas-Westwood, says: “Small commercial projects are starting to be realised with a dramatic increase towards the end of the forecast period, led in large part by the UK’s first licensing round which has encouraged large projects to come forward from utility companies. The next two years will be vital in creating an investment environment that allows the financial community to fund these projects and to invest in the necessary supply chain.”

The report also highlights the challenges of the wave and tidal industries, saying that although costs are high at present they could drop as the supply chain develops and dedicated manufacturing begins. It says that the financing of wave and tidal projects and devices is dependent upon long-term industry confidence and visibility.

Wright says: “Commitment to long-term market mechanisms and targets must be given so that investors gain confidence. Initial commercial projects must have strong support from government, given the high costs involved. The financial sector will not respond otherwise.”