WAVE ENERGY CONVERTER MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

The wave energy converter Market size is valued US$ 19.52 Bn in 2024 and is expected to reach US$ 26.15 Bn by 2031, growing at a compound annual growth rate (CAGR) of 4.3% from 2024 to 2031. Wave energy converters are devices that are deployed in the oceans to harness the kinetic energy from ocean surface waves and convert it to useable electric power. There are a few main types of wave energy converters including point absorbers, attenuators, and overtopping devices.

Regional Analysis:

• Europe: With a 38% market share in 2020, Europe led wave energy converter market . During the projection period, there is also expected to be a considerable rise in market . The expansion of the market is attributed to many factors such as government policies, laws or mandates that encourage the development or commercialization of wave energy, the increase in the installation of wave energy projects, and others. The market may grow as a result of expanding wave energy installations, increasing ocean energy technology capacity targets, and a growing transition to sustainable energy sources. Ocean energy technologies, such as wave and tidal, are expected to significantly impact Europe's energy systems and industry by 2030, according to the European Commission's draft EU plan.
• North America has established itself as the second largest regional market for wave energy converters. The region accounts for over 25% of the global installed capacity due to strong government support initiatives and the presence of key industry players. Countries like the U.S. and Canada have introduced financial incentives and favorable policies to boost investments in ocean energy technologies over the last decade. This enabled local companies to rapidly develop and test their solutions.
• Furthermore, the region is home to global leaders like Oregon State University and Columbia Power Technologies who have significantly contributed to the research and development of novel wave energy designs. Their continuous efforts have facilitated improvements in conversion efficiency and survivability in harsh marine environments. This makes solutions from North America some of the most widely tested and most optimized in the market . Several demonstration projects have also helped build confidence among potential clients about the reliability of these offerings.
•  Asia Pacific has emerged as the fastest growing regional market for wave energy converters. Countries with long coastlines and ambitious renewable targets like China, Japan, South Korea, and Australia are actively supporting the establishment of a local manufacturing base. Their focus is on utilizing abundant indigenous wave resources to meet rising energy demands in a sustainable manner.
• Governments in the region provide fiscal incentives for wave energy projects and promotional policies to attract component suppliers and technology developers. Furthermore, power purchase agreements at favorable rates by national utilities encourage private investments. This has prompted global suppliers to set up local manufacturing plants and assembly hubs in the region to capitalize on emerging opportunities. Localization efforts are also reducing the cost of ownership for wave energy projects in Asia Pacific. These factors are likely to accelerate the pace of commercial deployments in the coming years.

Figure 1. Wave Energy Converter Market Share (%), by Region, 2024

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Wave Energy Converter Market Analyst’s Views:

The wave energy converter market has significant growth potential over the long term. The main drivers for growth are the rising need for renewable sources of energy and growing focus on reducing dependence on fossil fuels globally. Coastal regions with strong wave activity are ideal locations for harnessing the power of waves. Technology advancements will be a key enabler for increased commercialization of wave energy converters. Manufacturers are investing heavily in R&D to develop more efficient and cost-effective solutions.

However, high initial installation costs remain a major restraint to the adoption of wave energy converters. The market is still in the early stages of development and achieving significant economies of scale has been challenging. Environmental concerns related to the impact on marine ecosystems is another barrier. Competition from relatively mature renewable technologies like solar and wind also poses a threat. Fluctuating wave resources pose reliability issues that need to be addressed.

Europe, particularly countries around the northern Atlantic, dominates the current wave energy converter market due to supportive government policies and the presence of leading developers Going forward, Asia Pacific is expected to witness the fastest growth, led by countries like China, Japan, and South Korea. Their long coastlines and focus on developing indigenous renewable energy sectors make the region highly suitable for wave power generation. North America will also see increased investments as concerns about energy security increase participation from private players.

Wave Energy Converter Market Drivers:

Increasing focus on clean energy transition: The increasing focus on renewable and clean sources of energy globally is a major driver for the growth of the wave energy converter market. There is a rising acknowledgement of the role of human activities like greenhouse gas emissions in bringing about climate change and global warming. This has led to efforts by governments and international bodies to transition away from fossil fuels to renewable sources of energy that do not pollute the environment. Many countries have now pledged to reduce their carbon footprint and dependence on coal and oil by adopting ambitious renewable energy targets for the future.

Transitioning to clean energy has also become more necessary given the environment and health impacts of continued reliance on fossil fuels. Burning of coal, oil and natural gas releases harmful pollutants into the air like nitrogen oxides, sulfur dioxide and fine particulate matter. This leads to increased air pollution which affects public health and also harms ecosystems. The costs of health issues caused by air pollution have been rising rapidly. Moreover, dependence on imported fossil fuels also affects energy security for many countries. This has incentivized research and development of various renewable technologies that can replace coal and gas based power plants over time. For instance, the US Department of Energy selected four advanced wave energy technologies to receive around US$ 8 million under its testing and validation program in 2022.

Advancements in wave energy technologies: Significant advancements are being made in wave energy conversion technologies which is another key driver for the market growth. Wave energy is still at a relatively nascent commercial stage compared to other renewable sources. However, extensive research efforts by universities and private firms have led to development of new and innovative wave energy devices with improved performance characteristics over the past decade. Earlier devices mainly relied on simple oscillating water columns and buoy based designs. Now various second and third generation technologies are emerging that can more efficiently capture energy from ocean waves.

Some examples include point absorber devices, oscillating wave surge converters, attenuators and overtopping devices. Different designs optimize aspects like wave absorption, electrical power output, survivability in harsh marine environments and ease of operation & maintenance. Materials research has also enabled creation of lighter and more durable components. Tech giants are actively working on integrating advanced sensing, The Internet of Things IoT, data analytics, and autonomous functionalities into wave energy plants to remotely monitor equipment performance. Recent advancements in power electronic converters and offshore grid integration have further expanded the potential for deploying large, utility-scale wave farms.

For instance, the International Renewable Energy Agency (IRENA), in 2020, nations spent over $30 Bn on renewable energy research, development, and demonstration (RD) globally.

Wave Energy Converter Market Opportunities

• Developing cost effective solutions: Developing cost effective solutions could be a great opportunity in the wave energy converter market. Wave energy converter technology is still at a nascent stage and commercial viability has been a major challenge so far. The levelized cost of energy from wave energy converters is still significantly higher compared to other renewable sources like solar and wind. However, with continuous research and development, the costs have been coming down gradually. Focusing on modular designs, use of advanced materials, simplified power take off systems, and innovative mooring solutions can help boost efficiency and reduce capital expenditure drastically in the coming years. For instance, as per the Ministry of Environment report 2021, the project demonstrated good energy yields with the advanced buoys and was able to supply clean energy to the national grid at a cost of around US$0.15/kWh which marks a significant reduction compared to earlier wave park projects.
• Collaborations between research institutions and industrial players: Collaborations between research institutions and industrial players provide a great opportunity for growth in the wave energy converter market. When academic researchers and private companies work together, it allows for innovative technologies to progress more rapidly towards commercialization. Each party brings crucial but different skills and resources to push technical and engineering advances further. Universities and national labs can focus on applying fundamental science and exploratory research, while industrial firms excel at product development, manufacturing, project deployment and financing. Bringing these complementary strengths together in partnerships maximizes the chances of successful technology demonstration and validation.

Wave Energy Converter Market Trends:

Increasing focus on small and modular systems: The increasing focus on small and modular systems is having a significant influence on the wave energy converter market. There is a growing recognition that larger, more monolithic systems have historically faced challenges in terms of high costs and long development timelines. In contrast, modular and scalable designs allow for incremental improvement and deployment, which helps drive down costs over time. Manufacturers and project developers are increasingly opting for modular set-ups that can be tested, validated and improved at smaller pilot scales before full commercial roll-out.

Modular systems also offer more flexibility in terms of installation and maintenance. Arrays of smaller wave energy devices can be placed closer to shore at sites with variable wave climates and sea conditions. They can be installed and serviced individually using smaller vessels and cranes, bringing significant cost savings compared to servicing larger single unit systems. For example, the Mocean Energy Wave Converter deployed off the coast of Leith in Scotland uses modular 'Blue X' devices that are 10 meters long each and can be installed and maintained independently. This modular, scalable approach was a key factor in the project receiving a £4 million grant from Wave Energy Scotland in 2022. For instance, AWS Ocean Energy, a wave energy converter company, announced plans to pursue a multi-MW commercial array deployment off the coast of Portugal using multiple independent modules.

Emergence of ocean observation technologies: The emergence of advanced ocean observation technologies is greatly influencing the wave energy converter market by enabling more accurate forecasting and site assessment capabilities. New technologies like ocean buoys equipped with wave sensors, current meters and weather monitoring devices are providing real-time hydrodynamic data from remote offshore locations. This data is valuable for wave energy technology developers during the design, testing, and optimization phases of their products. Developers can better understand the wave climate profiles at potential installation sites which helps minimize risks for demonstration projects.

One such example is the European Marine Energy Centre (EMEC) located off the coast of Orkney Islands, Scotland which has been one of the leaders in facilitating wave and tidal testing. EMEC operates an extensive ocean monitoring network of over 20 wave buoys and current meters in coastal waters around the islands. The high-fidelity wave and current data collected since 2004 has supported over 80 wave and tidal projects hosted at their testing facilities. This data is publicly available to developers and has been widely used in validating wave energy conversion design tools and performance models against real sea conditions. The improved site characterization abilities have bolstered developer confidence in waves technologies and accelerated the pipeline of wave energy converter designs moving from scale models to full-scale prototypes. For instance, the US Department of Energy estimates that wave power capacity along U.S. coastlines alone could potentially meet over 20% of the nation's current electricity needs.

Wave Energy Converter Market Restraints

• High initial investment costs:  High initial capital investment costs required for establishing wave energy converter infrastructure have been a major barrier impeding the development and scaling of the wave energy converter market. Setting up commercial scale wave energy converter farms involves huge upfront costs for procurement and installation of specialized equipment needed to harness energy from ocean waves. This includes costly devices like buoys, attenuators, point absorbers, etc. that are moored to the seabed and connected via undersea cables to transmit generated power back to onshore grids. Additionally, investing in specialized vessels, deployment machinery and ocean engineering services also drives initial project capitalization higher. For instance, as per a 2021 report by the US Department of Energy, out of 28 wave energy projects supported during 2010-2015 under the agency's funding program, as many as 15 projects could not secure follow-on private funding or slipped into delays due to financing issues related to high capital costs .
• Counter balance: Teaming up with other industry players, such as manufacturers, energy companies, or research institutions, can help distribute the cost burden. Joint ventures can also lead to shared technology development, reducing overall R&D expenses.
• Intermittency in wave energy resource availability: Intermittency in the availability of wave energy resource poses a significant challenge for the growth of the wave energy converter market. Waves are formed due to the wind blowing over the ocean surface and the strength and periodicity of waves depends a lot on weather conditions such as wind speed and direction. Unlike solar and wind energy which have some predictability, wave conditions are quite variable and intermittent in nature. The waves could be strong in one part of the day and almost non-existent during other parts depending on shifts in weather fronts. This makes the power output from wave energy converters also variable and non-dispatchable to match the demand. Addressing the intermittency issue requires developing cost-effective large-scale energy storage solutions or having other flexible generation sources to compensate for the variability in wave power generation. Both these options increase the overall cost of wave energy, making it less competitive vis-a-vis other renewable sources at the moment. For instance, as per the International Renewable Energy Agency (IRENA) report published in 2022, the total recoverable wave power potential of just the top 10 wave power dense coastal states is estimated to be over 726 TWh/year, which is equivalent to the annual electricity demand of countries like Mexico.
• Counter balance: Pair wave energy converters with other renewable energy sources such as wind or solar power to create a hybrid system. The complementary nature of different renewable resources can provide a more continuous energy supply.

Recent Developments:

• In January 2022, Ocean Power Technologies announced its collaboration with Eco Wave Power to work on a number of projects, including knowledge sharing, joint grant submissions, and collaborative assistance in entry to new markets Moreover, cooperative solutions can be created for Eco Wave Power's applicable projects by combining the offshore and onshore technologies of each company, as well as OPT's offshore engineering and recently acquired robotics skills. Ocean Power Technologies (OPT) is a U.S. publicly owned renewable energy company that provides electric power and communications solutions, services, and related technologies for remote offshore applications. The company's PowerBuoy wave energy conversion technology is theoretically scalable to hundreds of megawatts. OPT has been involved in several large PowerBuoy projects around the world, including a 19-megawatt wave power station in Australia and a successful deployment in Scotland.
• Eco Wave Power (EWP) is an Israeli company that has developed an innovative technology to generate clean electricity from ocean and sea waves.
• In December 2021, Carnegie Clean Energy was awarded a contract by EuropeWave PCP with a funding amount of US$ 20 million. Subject to contract signing, Carnegie Clean energy has been granted USD 294 thousand for phase 1 to provide a CETO tank testing campaign and a CETO concept design for sites in Scotland and the Basque Country. Phase 1 commenced on January 3, 2022, and will last for seven months. Carnegie Clean Energy is an Australian technology company focused on the development and commercialization of its CETO technology, which captures energy from ocean waves and converts it into electricity . The company is listed on the Australian Securities Exchange (ASX) under the ticker symbol CCE and on the US OTC market under the ticker symbol CWGYF
• In October 2021, Carnegie and Hewlett Packard Enterprise Company (HPE) had signed a collaboration agreement under which the parties will collaborate on a project to develop a reinforcement learning-based controller for CETO wave energy technology

Figure 2. Wave Energy Converter Market Share (%), by Application, 2024

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Top Companies in the Wave Energy Converter Market

• Marine Power Systems
• Eco Wave Power
• SINN Power GmbH
• NEMOS GmbH
• INGINE Inc.
• Carnegie Clean Energy
• CorPower Ocean
• AW-Energy Oy
• AWS Ocean Energy
• Wello Oy
• HavKraft AS
• Wave Dragon
• Wave Swell
• Aquanet Power

Definition: A wave energy converter is a device or plant that converts wave energy into useful energy, such as electricity, or provides power for other purposes, such as seawater desalination. It is a technology that harvests the kinetic and potential energy associated with a moving ocean wave and converts it into useful mechanical or electrical energy.