Economic Analysis of Wave Energy Extraction

Will Thomas
December 13, 2012

Submitted as coursework for PH240, Stanford University, Fall 2012

Introduction to Wave Energy Extraction Technology

The fact that energy can be extracted from the oceans' waves has been known since the eighteenth century. [1] However, relatively little research has been conducted into constructing and deploying devices that perform this extraction, as compared to other sources of renewable energy such as solar or wind. [1] In fact, serious research into extracting energy from waves began in earnest only around 1970 during the oil crisis. [1,2] Despite this lack of interest, many scholars agree that extracting energy from waves has huge potential. [1,3] Indeed, it is estimated that between 2000 and 4000 terawatt hours per year of energy could be extracted from the world's waves. [4] To put this in perspective, consider that approximately 50 terawatt hours per year could be extracted from waves in the United Kingdom alone, which would constitute 15-20% of their current electricity demand. Furthermore, this paper will argue that this energy can be extracted in an economically competitive manner.


There are numerous benefits associated with extracting energy from waves that support the claim that wave energy has the potential to be economically competitive with other forms of renewable energy. Perhaps the most important benefit of wave energy extraction is that energy in waves is more concentrated than in other forms of renewable energy such as wind or solar. [1] Although both waves and wind are driven by the sun, the average power flow intensity of a wave is approximately ten times greater than in the sun's rays. [1] This means that a device that can efficiently extract energy from waves can extract more energy per unit time than a device that harnesses solar or wind energy. Furthermore, wave energy extractors have a relatively minimal environmental footprint, even with respect to other sources of renewable energy. In particular, wave energy devices do not produce liquid, solid, or gaseous emissions. [5] Additionally, waves travel large distances with minimal energy loss, meaning that the placement of wave energy extractors is flexible. [1] Whereas wind turbines and solar panels must be placed in optimal locations, wave energy extractors can be placed in a larger area and still extract energy efficiently from the environment. Finally, wave energy extractors can generate electricity for approximately 90% of the day on average, compared to 20-30% for wind turbines and solar panels. [1] Therefore, wave energy extractors have the potential to be a more consistent source of energy.


However, there are also many challenges which must be mitigated or overcome before cost-effective energy can be extracted from the waves. The most difficult engineering challenge facing the development of efficient wave energy extractors is that the energy extracted directly from waves is not suited to meet energy demands. Instead, the energy must be converted before it can be used. The motion of waves is slow, random, high-force, and oscillatory. [1] This energy needs to be converted to drive a generator and produce electricity. Furthermore, the power level of waves varies depending upon the height and period of the wave, meaning that the extractors need to be able to handle a wide range of power levels. [1] Additionally, the directions in which waves travel vary according to location and weather conditions, making it difficult to optimally position devices. [1] Finally, the devices need to be able to withstand the harsh ocean environment, including extreme wave conditions and the corrosive effects of salt water. [1]

Current Wave Extractor Technology

Although there are wave energy extractors currently in existence, the cost of producing energy is far too high to be economically competitive with other forms of renewable energy. In order to understand how further research has the potential to reduce the cost of extracting energy from waves, it is first necessary to understand how the current devices function. There are currently numerous devices being researched and developed, and there is no consensus about which design is the most promising. [1] Wave energy extractors are classified by location, type, and mode of operation.

Wave energy extractors are typically either classified as shoreline or offshore devices. Shoreline devices have the advantage of being closer to the market, reducing transportation costs. Also, they are easier to maintain and are less likely to be damaged by extreme weather conditions. [1] However, they generate less energy since the waves dissipate as they approach the shore. Also, they have the largest impact on the coastal scenery since they can often be easily seen from the shore. Finally, they must be engineered to fit a specific environment, meaning that they are difficult to effectively mass produce. [1] Offshore devices, on the other hand, have the potential to extract more energy from the environment, but must be engineered to withstand more extreme weather conditions. [1]

Finally, wave energy extractors are classified by the manner in which they convert the wave's energy into electricity. Point absorbers typically operate using a pressure differential under the surface of the water. [1] These devices consist of two air-filled cylinders, one fixed to the seabed and one floating on the surface. [1] When a wave passes through the device, it creates a pressure differential, causing the cylinders to move and create energy. Since these devices are fixed to the seabed, they are often located in shallow water. On the other hand, oscillating wave surge converters exploit the wave's horizontal momentum to move a deflector and create energy. [1] Another common device is called an oscillating water column. These devices consist of a chamber of air located below the waterline. [1] When a wave passes by, it forces water into the chamber, which drives air out. As the air leaves the chamber, it turns a turbine located on the water's surface and creates electricity.

Cost Analysis of Wave Energy Conversion

As stated above, wave energy extraction is currently too expensive to be a meaningful source of renewable energy. The cost of wave energy extraction can be divided into four primary categories: production, installation, maintenance, and connection to the grid. Because these costs vary so widely between different extractors, it is difficult to estimate the cost of production for a wave energy converter. For example, the cost of connection to the electrical grid is far less for shoreline extractors than for offshore ones since less cable must be installed and maintained. Similarly, installation and maintenance costs are much higher for offshore devices than for shoreline ones since the offshore sites are more difficult to access.

However, it is likely that future research will reduce most of these costs by a significant margin. Continued research will likely yield cheaper and more efficient extractors that will reduce production costs. Also, extractors are currently only produced in small batches for research. As they produced on a larger scale for widespread use, the production industry will benefit from an economy of scale that will also decrease production costs.


Wave energy conversion is not currently competitive with other renewable energy sources from an economic perspective. However, it is likely that with continued research, wave energy conversion will become competitive in the long term. Wave extraction technology is still in the preliminary stages of experimentation, and there are a wide range of devices currently be evaluated. As the technology improves and the energy production grows, the costs will decrease. There are many benefits to extracting energy from waves. The oceans are a largely untapped resource containing a vast amount of energy. However, there are also many challenges that must be overcome before wave energy can become a meaningful contributor to the world's energy portfolio.

© Will Thomas. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] B. Drew, A. Plummer, and M. Sahinkaya, "A Review of Wave Energy Converter Technology," J. Power Energy 223, 887 (2009).

[2] A. Falcao, "Historical Aspects of Wave Energy Conversion," in Comprehensive Renewable Energy, ed. by A. Sayigh, 8, 7 (2012).

[3] A. Falcao, "Wave Energy Utilization: A Review of the Technologies," Renew Sustain. Energy Rev. 14, 899 (2010).

[4] E. Bonifacio, "Wave Energy," Physics 240, Stanford University, Fall 2010.

[5] T. W. Thorpe, "A Brief Review of Wave Energy," UK Department of Trade and Industry, ETSU-R120, May 1999.