Feasibility of investment in Blue Growth multiple-use of space and multi-use platform projects; results of a novel assessment approach and case studies

Gordon Dalton,Tamás Bardócz,Mike Blanch,David Campbell,Kate Johnson,Gareth Lawrence,Theodore Lilas,Erik Friis-Madsen,Frank Neumann,Nikitakos Nikitas,Saul Torres Ortega,Dimitris Pletsas,Pedro Diaz Simal,Hans Christian Sørensen,Afroula Stefanakou,Ian Masters

doi:10.1016/j.rser.2019.01.060

Abstract

Blue Growth is the creation of economic activity and jobs at sea, while multiple use of space makes efficient use of the available sea area by combining industries. Clearly there are many combinations and many value propositions. However, most technologies to date are considered blue sky concepts, with little robust techno-economic analysis demonstrating profitability.The paper begins by providing a comprehensive review of Blue Growth and multi-use in Blue Growth; both in policy as well as the wide range of current technologies, including ocean energy, offshore wind energy, offshore aquaculture and desalination.The Maribe H2020 project provides the vehicle for the research element of the paper. The major contribution is a new methodology for selecting, filtering, developing and ranking business propositions for multiple-use of space (MUS) and multi-use platforms (MUP). Application of the method for the first time identified three case studies where Blue Growth combination projects can be economically viable, with attractive internal rate of return (IRRs). Results presented for the case studies report standard investment metrics and show the relative contribution of each product (energy, food, water) to the system profitability, as well as socio-economic impact. Existing companies were fully engaged in the process. Co-creation between sector experts and industry led to both improved business value propositions and robust assessment of investment readiness. In contrast to the presumption that large scale platforms are commercially attractive, the highest ranking case study companies required smaller capital expenditure (CAPEX) and operated in niche subsectors.In conclusion, the positive economic performance of the case studies should provide confidence for the EC as well as investors that MUS and MUP have viable economic futures leading towards commercialisation. The macro and micro assessment methods will be particularly useful in other Blue Economy contexts and in other multiple product contexts.

Highlights

Over 70% of the world's surface is the ocean, with more than 40% of the global population inhabiting the coastal areas [1]
The high capital expenditure (CAPEX) and additional costs associated with operation offshore makes many of these systems non-competitive with land based competitors
Strategic roadmap to commercialisation for case study 3 The commercial development plan for the technology has three key stages, currently planned off the coast of Chios Island (Fig. 10): (I) The first stage is a 800 kW demonstration multi-use platforms (MUP) platform. (II) The stage will see the construction of a 2 MW Pilot MUP (2nd generation MUP). (III) At commercial level, the 2 MW MUP will be optimised with a maximum output of 3360 m3 per day

Summary

Introduction

Over 70% of the world's surface is the ocean, with more than 40% of the global population inhabiting the coastal areas [1]. With an evergrowing population and uses of land areas reaching their limit, it is timely to focus on the ocean to solve some of the world's major issues such as security of food, water supply and energy. Significant areas of the ocean remain unused and can potentially provide opportunity for economic growth and resource use. The demand for ocean resources is an important driver of economic growth It provides natural resources, access to trade, and opportunities for leisure activities [2]. Blue Growth sectors (ocean energy, aquaculture, biotechnology, deep-sea mining and coastal tourism) present an opportunity to generate economic growth and jobs, enhance the security of energy supply and support local produce whilst boosting competitiveness through technological innovation. The European Commission estimates that there will be approximately 5.4 million jobs and almost €500 billion of Gross Value Added (GVA) from Blue Growth in the medium term [3]

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