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.
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