Wave Energy Market Assessment, By Technology, [Oscillating Water Column, Oscillating Body Converters, Overtopping Converters], By Application [Power Generation, Desalination, Others], By Region, Opportunities and Forecast, 2017-2031F

Wave Energy Market Assessment, By Technology, [Oscillating Water Column, Oscillating Body Converters, Overtopping Converters], By Application [Power Generation, Desalination, Others], By Region, Opportunities and Forecast, 2017-2031F

Global wave energy market is expected to observe a CAGR of 16.11% during the forecast period 2024-2031, rising from USD 53.96 million in 2023 to USD 178.25 million in 2031. The growing emphasis on lowering greenhouse gas emissions and switching to greener and more sustainable energy sources drive the growth of the global wave energy market. Wave energy offers several advantages, including a low environmental impact and high predictability, which enhances energy security. These factors contribute to an increasing share of wave energy in the overall energy mix.

The process of moving and absorbing wave energy is used for a variety of purposes, including desalination, environmental preservation, and power generation. Wave energy technology is designed to capture power from onshore, nearshore, or deep-water offshore locales. One of the main sources of power generated by renewable energy is the abundance of ocean waves.

For instance, in January 2024, a Finnish company, AW-ENERGY, created WaveRoller, a technology that converts ocean wave energy into electricity. This device operates on nearshore locations, approximately 0.3 to 2 km from the coast, at depths ranging from 8 to 20 meters. Depending on tidal conditions, it is primarily or completely submerged and securely anchored to the seabed.

Rising Grid Integration of Wave Energy to Drive the Market Growth

With the integration of wave energy with current electrical infrastructures, the production through wave energy has become more predictable and reliable. The smoother integration of variable energy sources, such as tides and waves, into the grid is made possible using modern grid integration technology. Integration guarantees a more steady and reliable power supply and reduces intermittency-related problems. Advances in grid integration assist in reducing energy production fluctuations by managing the inherent uncertainty of renewable energy sources.

The performance of wave energy systems is greatly improved by energy storage technology. The capture and storage of extra energy created during periods of peak output is made possible by solutions such as pumped hydro storage and modern battery systems. The stored energy could be subsequently released during times of low output. Through the strategic management of both production and storage, integrated systems enhance the overall energy efficiency and strengthen the dependability of wave energy as a sustainable renewable energy source.

For instance, in December 2023, in the Faroe Islands, Minesto put Dragon 12, the first tidal power plant into service, feeding the national grid of the United Kingdom with electricity produced by the sea.

Rapid Development in Renewable Energy Sector is Driving the Market Growth

Due to the rapid depletion of fossil fuels and growing environmental concerns, the wave energy market size is rising. Countries such as the United Kingdom have started initiatives for the expansion of clean energy, such as cutting technological costs, lowering carbon emissions, and developing technologies to evaluate the feasibility of a new source of electricity. Numerous technologies have been highlighted for their significance in lowering carbon emissions, including solar, wind, wave, and tidal energy.

For instance, in June 2024, the United Kingdom had over 30 GW of unused tidal stream and wave energy capacity, which could supply over one-third of its electricity needs. By 2028, the nation hopes to have more than 100 MW of tidal stream capacity, which will support green jobs and account for 80% of supply chain content expenditures. The United Kingdom's transition to net zero emissions depends on the outcome of the next parliament, which will convene from 2024 to 2029.

Government Initiatives Acting as a Catalyst

Government initiatives are pivotal in driving the growth and creating opportunities for the wave energy market. The government offers financial support, regulatory frameworks, and infrastructure development to overcome challenges associated with the commercialization of wave energy, which is fostering the long-term potential of wave energy as a reliable renewable energy source.

In several countries, governments offer tax incentives or credits for companies and investors that are involved in wave energy projects. The benefits reduce the financial burden on developers and make wave energy projects more attractive to private investors. Moreover, governments of developing countries are often establishing funds for specialized test facilities and demonstration projects for wave energy. The facilities provide developers with access to controlled environments to test wave energy technologies and evaluate their performance in real-world conditions.

Thus, government initiatives such as financial support, regulatory frameworks, investments in infrastructure, and facilitating international collaboration create the opportunities for energy market.

For instance, in September 2024, the United States Department of Energy decided to invest in marine energy, making USD 112.5 million available for the commercialization of wave energy technologies.

Power Generation Sector Holds the Highest Market

In the global wave energy market, the power-generating sector commands the largest market share, fueled by rising investments and advancements in technology. Wave energy is increasingly recognized as a viable renewable energy source that harnesses the kinetic energy of ocean waves to produce electricity. This technology is particularly advantageous for shallow waters near the shores, as it provides a non-invasive and low-profile solution for power generation.

One of the key benefits of submerged wave energy systems is their ability to operate without obstructing marine traffic or impacting coastal views, making them more acceptable to local communities and stakeholders. Additionally, these systems can be integrated into existing marine infrastructure, further enhancing their appeal.

While Europe has historically been a leader in wave energy technology, recent developments show that countries such as China and Israel are at the forefront of expanding their wave energy capacities. In 2022, China outpaced Europe in adding wave energy capacity, due to significant government investments and a growing commitment to renewable energy. This shift underscores a broader trend in which nations are increasingly focusing on sustainable power generation to meet their energy needs and combat climate change.

As wave energy technology continues to evolve, ongoing research and development efforts are expected to improve efficiency and reduce costs, creating it as an attractive option for energy generation. The combination of technological innovation, supportive government policies, and a growing global awareness of the need for sustainable energy solutions is expected to bolster the wave energy market further, positioning it as a critical component of the future energy landscape.

Europe to Hold the Largest Market Share

Europe holds the largest market share in the global wave energy market. The region is amongst the early adopters of technology and continuous investments in renewable energy. Scotland, Portugal, and Sweden have become important players in the European wave energy scene. The European Marine Energy Centre (EMEC) in Scotland has played a crucial role in the development and testing of wave energy technology. An ecosystem of innovative businesses, government-backed programs to increase wave energy production, and research institutes sustain Europe's share in the wave energy market.

For instance, in May 2024, Ocean Energy Europe (OEE) announced that EU funding and domestic revenue support were expected to facilitate the deployment of 137 MW of tidal and wave energy projects over the next five years.

Future Market Scenario (2024 – 2031F)

North America is investigating marine renewable sources in partnership with government, business, and academic institutions, which will uplift the wave energy market in the region.

Wave projects are being supported by Asia-Pacific countries, such as China and India, with government backing for the actual implementation. China has made significant R&D investments and established its turbine makers.

Technological developments, including better materials and energy converters, are expected to reduce prices and increase the viability of wave energy in comparison to other renewable energy sources.

Government regulations and financial incentives will remain crucial, with North America, Europe, and some parts of Asia-Pacific leading the way in the deployment of wave energy projects.

Key Players Landscape and Outlook

The global wave energy market is driven by the key players investing in research and development (R&D) and infrastructure. Companies are focused on employing innovative technologies to harness the energy of ocean waves. With increasing investments in renewable energy and government incentives, the market outlook is positive. However, high costs and technological constraints present challenges to the growth of the market, which is expected to be fueled by advancements in energy storage and grid integration. Europe currently leads the market, followed by North America and Asia-Pacific.

For instance, in March 2024, Orcas Power and Light Cooperative (OPALCO) in Washington State confirmed its partnership with Orbital Marine Power, a Scottish renewable energy company. This collaboration follows the selection of two marine energy projects by the United States Department of Energy (DOE), which awarded USD 6 million for the development of a pilot site for tidal energy research, development, and demonstration in 2021.

Similarly, in October 2023, researchers at the Indian Institute of Technology Madras (IIT Madras) patented a hybrid power generation system that harnesses tidal and wind energy. According to IIT Madras, this innovative energy conversion device can be deployed in coastal areas based on specific energy needs.