Next Article in Journal
Integrating Economic and Ecological Benchmarking for a Sustainable Development of Hydropower
Next Article in Special Issue
Techno-Economic Related Metrics for a Wave Energy Converters Feasibility Assessment
Previous Article in Journal
Sustainable and Practical Firmware Upgrade for Wireless Access Point Using Password-Based Authentication
Previous Article in Special Issue
Experimental Research on Primary and Secondary Conversion Efficiencies in an Oscillating Water Column-Type Wave Energy Converter
Article Menu

Export Article

Open AccessArticle
Sustainability 2016, 8(9), 873; doi:10.3390/su8090873

Risk vs. Reward: A Methodology to Assess Investment in Marine Energy

Institute for Energy Systems, The University of Edinburgh, Edinburgh EH9 3JL, UK
*
Author to whom correspondence should be addressed.
Academic Editors: Diego Vicinanza and Mariano Buccino
Received: 12 July 2016 / Revised: 18 August 2016 / Accepted: 23 August 2016 / Published: 31 August 2016
(This article belongs to the Special Issue Wave Energy Converters)
View Full-Text   |   Download PDF [3706 KB, uploaded 31 August 2016]   |  

Abstract

The majority of WEC (wave energy converter) projects are expensive and pose a large risk to a developer. Currently no developers have been successful in commercialising a WEC. So far, many wave energy feasibility studies have only considered the LCOE (levelised cost of electricity), assessing investment in marine energy technologies from a purely financial point of view. No previous studies have, however, explicitly accounted for development risk as well as the LCOE to determine the feasibility of a project. This paper proposes a new methodology that can be used to account for both risk and the LCOE to give a clearer picture of the feasibility of a WEC development. By combining the LCOE and risk score for a particular development, the “value for risk” can be calculated, presented here as the “RR ratio” (“Risk/Reward ratio”). A number of case studies were chosen to test the model, investigating the RR ratio for a number of different WEC technologies and ranking them to suggest an optimal development path for the industry. Results showed that projects that combine many innovative technologies provide the best “value for risk”. These devices overall had the highest risk, suggesting that multiple developers are likely required to collaborate in order to reduce the risk down to acceptable levels for each. View Full-Text
Keywords: marine energy; risk; reward; LCOE; investment marine energy; risk; reward; LCOE; investment
Figures

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Scifeed alert for new publications

Never miss any articles matching your research from any publisher
  • Get alerts for new papers matching your research
  • Find out the new papers from selected authors
  • Updated daily for 49'000+ journals and 6000+ publishers
  • Define your Scifeed now

SciFeed Share & Cite This Article

MDPI and ACS Style

Hutcheson, J.; de Andrés, A.; Jeffrey, H. Risk vs. Reward: A Methodology to Assess Investment in Marine Energy. Sustainability 2016, 8, 873.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Sustainability EISSN 2071-1050 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top