The marine energy market is estimated to be valued at USD 1.33 Bn in 2024 and is expected to reach USD 5.11 Bn by 2031, growing at a compound annual growth rate (CAGR) of 21.2% from 2024 to 2031. The increasing demand for renewable sources of energy and focus on developing offshore wind and wave energy projects are driving significant growth in the marine energy market.

Market Driver - Increasing Demand for Renewable Energy Sources

As climate change concerns grow internationally, the focus on cleaner energy has accelerated rapidly in the past decade. Ocean waves and tides are abundant sources of renewable energy with minimal intermittency compared to other renewables. Harnessing these vast ocean resources could play a major role in satisfying rising clean energy needs while mitigating adverse environmental impacts.

Many nations have adopted more ambitious renewable targets in response to the climate crisis. As policymakers under renewable portfolio standards push more aggressive carbon reduction, turning to diverse marine energy solutions will grow in appeal. Complimentary sources from the ocean will be necessary to achieve very high levels of renewable penetration over the coming decades.

Major economies are seeking to meet emissions cuts through expanding adoption of renewables for power generation. Corporations and industrial consumers are also responding to stakeholder pressure for greener operations. This surge in demand signals vibrant opportunities for marine technologies to carve market share catering to buyers’ needs for clean and local renewable options.

Market Driver - Technological Advancements Improving Marine Energy Viability

Technological innovations have been crucial to overcoming past challenges curbing marine energy commercialization. Further technical breakthroughs promise to increasingly strengthen the business case for marine energy going forward. Wave and tidal converters able to operate dependably for longer under harsh sea conditions would reassure investors and attract greater investment interest in marine projects.

On the tidal side, new turbine designs allowing for simpler installation and maintenance in challenging offshore environments have led to better project economics and grid parity coming within reach on favorable sites. Software solutions to optimize energy capture and array performance through real-time adjustments based on changing sea conditions are also helping to raise capacity factors. Such tech progress multiplies marine energy’s productive potential from individual devices up to utility-scale.

As these innovations commercialize and costs fall, bankers will view marine assets as less risky propositions. Lowered risk perceptions can then feedback to spur learning curve effects that accelerate the technology development process for players in the marine energy market.

Market Challenge - Environmental Impact Assessments Causing Delays

The marine energy market faces several challenges in its growth and expansion. One of the major issues is the rigorous environmental impact assessments that marine energy projects are subjected to before being sanctioned. As marine energy technologies involve installing devices in oceans and seas, there are risks of disruption to marine ecology and habitats. Therefore, environmental regulators rightly conduct detailed impact assessment studies to understand the potential impacts.

However, these assessment processes often take a long time, sometimes over 2-3 years for completion. The lengthy assessment periods cause major delays in the commissioning of marine energy projects. This delays the timelines for first power generation and grid connectivity. It further pushes back the revenue generation potential for project developers. The uncertain assessment timelines also add to the project risks and costs.

Overall, the slow assessment procedures pose a big challenge for the bankability of marine energy projects and deter investments in the marine energy market.

Market Opportunity - Synergies with Industries like Aquaculture and Fisheries

The marine energy market presents some attractive opportunities which can be tapped into for growth. One such opportunity lies in exploring synergies with synergistic blue economy industries like aquaculture and fisheries. There are opportunities to leverage existing infrastructure for multiple uses.

For example, marine energy devices could be installed within or around existing fish farms and shellfish production areas. This will help meet local power needs for aquaculture and reduce costs. Similarly, artificial reefs created by marine energy foundations could boost local fisheries by providing new habitats. Such symbiotic relationships with other blue industries can help marine energy projects attract more partners and mainstream faster.

It can also enhance the commercial viability of marine energy through additional revenue streams. Tapping into the synergies will be a promising way for the marine energy sector to find new applications and accelerate penetration in marine energy market.

Focus on technology innovation - Developing innovative and efficient marine energy conversion technologies has helped companies gain an edge. For example, Wello Oy invested heavily in R&D from 2014-2018 and developed their revolutionary wave energy converter Penguin that can harness power from multiple wave directions at once. This has allowed them to deploy successful pilot projects across Europe.

Partnerships for project development - Collaborating with government bodies, utilities and local communities has helped lower development costs and risks. In 2016, Atlantis Resources formed a strategic partnership with Scottish government funding agency SDS to develop their MeyGen tidal stream project. This 249MW project is now the largest tidal stream array in the world.

Leveraging multiple funding avenues - Successful companies have tapped various sources like VC/PE funding, government grants and carbon credits to fund commercialization. For example, Minesto received over $30 million in funding from the Swedish Energy Agency, the EC and private investors between 2009-2018 to develop their deep-water kite system.

Focus on niche early markets - Targeting specific regional microgrids and islands with demonstrated demand helped companies gain first-mover advantage. Ocean Power Technologies deployed its PB40 PowerBuoy in Hawaii in 2008, one of the first ocean wave power installations in the US connected to a utility grid.

Insights, By Energy Type: Natural Advantages Drive Wave Energy

In terms of energy type, wave energy contributes 44.7% share of the marine energy market owing to various natural advantages. Wave energy harnesses the kinetic energy of the ocean waves and is driven primarily by wind energy. Around 2,500 terawatts of power from waves hit our coastlines each year, which is double the world's electricity consumption. The abundance and predictability of wave energy resources provide a major advantage over other renewable energy sources.

Additionally, waves have higher marine energy density than solar or wind energy at approximately 30 kilowatt-hours per meter. These various natural characteristics of wave energy distribution and harnessing make it an attractive marine energy as renewable alternative.

Insights, By Application: Reliable Base Load Generation Boosts Tidal Energy

In terms of application, power generation contributes 68.9% share of the marine energy market in 2024 due to tidal energy's potential for reliable base load power. Tidal energy harnesses the rise and fall of ocean tides to generate electricity. The tides are extremely predictable, with precise timings that can be forecast decades in advance. This inherent predictability allows marine energy generation to provide a reliable source of base load power to meet continuous demand.

Some tidal basins have tidal ranges high enough to power turbines for over 10 hours each cycle. With no fuel costs, tidal energy also provides stable, long term price visibility unlike fossil fuels that are vulnerable to market price fluctuations. The consistent base load generation capabilities are especially valuable for integrating other variable renewable resources into national grids. As a result, power generation has emerged as the primary application driving growth of the tidal energy segment.

Insights, By Technology: Continuous Innovation Stimulates Ocean Thermal Energy Conversion

In terms of technology, oscillating water columns contributes the highest share of the marine energy market owing to ongoing research and development. The Ocean Thermal Energy Conversion (OTEC) segment has seen gradual growth stimulated by continuous technology innovations. Early OTEC plants struggled with technical challenges like materials able to withstand temperature variations and corrosion from seawater.

This movement drives an electrical turbine without the need for evaporators and condensers as in legacy OTEC cycles. The lower mass flow rates, modular assembly, ease of construction and lower capital costs have made oscillating water columns an attractive proposition. Steady refinement of core oscillating water column technologies are hence driving the marine energy market by making OTEC competitive at larger commercial scales.

• The SeaGen Project by Marine Current Turbines Ltd. in Northern Ireland has been operational since 2008 and has generated over 10 GWh of electricity. This project demonstrates the long-term viability and efficiency of tidal energy installations in contributing to the power grid.
• Carnegie Clean Energy Limited successfully completed the CETO 6 wave marine energy project off the coast of Western Australia. The project has provided valuable data on wave energy conversion and has the potential to supply both electricity and freshwater through integrated desalination.
• The European Marine Energy Centre (EMEC) reports that Europe accounts for over 65% of global marine energy deployment, with the United Kingdom leading in installed capacity.
• Studies suggest that marine energy could supply up to 10% of the European Union's electricity demand by 2050, emphasizing its strategic importance in achieving energy security and sustainability goals.

The major players operating in the marine energy market include Ocean Power Technologies, Inc., Minesto AB, Atlantis Resources Ltd., Carnegie Clean Energy Limited, Wello Inc., CorPower Ocean, Ocean Renewable Power Company, Aquamarine Power, Seabase Ship Management Private Limited, BioPower Systems Pty Ltd., AW-Energy Ltd., Magallanes Renovables, Orbital Marine Power, SIMEC Atlantis Energy, Oscilla Power, Inc., Nova Innovation Ltd., Marine Current Turbines Ltd., Pelamis Wave Power Ltd., AWS Ocean Energy Ltd., AquaGen Technologies, and Marine Power Systems Ltd..

• In April 2022, Eco Wave Power Global AB, a Swedish-Israeli company specializing in wave energy technology, announced plans to develop a wave energy power station at Port Adriano in Mallorca, Spain. The project aims for a capacity of up to 2 megawatts (MW) and is part of Spain's efforts to meet renewable energy targets.

• By Energy Type
  • Wave Energy
  • Tidal Energy
  • Ocean Thermal Energy Conversion (OTEC)
  • Salinity Gradient
  • Others
• By Application
  • Power Generation
  • Desalination
  • Environmental Protection
  • Cooling and Heating
  • Others
• By Technology
  • Oscillating Water Columns
  • Point Absorbers
  • Attenuators
  • Overtopping Devices
  • Others