Adjusting the financial risk of tidal current projects by optimising the ‘installed capacity/capacity factor’-ratio already during the feasibility stage

One of the key challenges in marine energy is to achieve funding for commercial-scale project implementations. Apart from government regulations and technological risks, the likelihood that projects will be implemented depends on transparent information about the necessary capital investment, the expected profit margins, and the corresponding cost of capital. The paper examines this relationship for tidal current schemes and provides a method to effectively de-risk early-stage project initiatives. The possibility to select a preferred ratio of ‘capital investment’ to ‘profit’ widens the circle of potential investors and accelerates the commercialisation of the sector. Based on fundamental insight gained during an in-depth investigation on the performance characteristics of an envisaged large-scale tidal array in Korea, the conceptual design of new projects can be realised in close coordination with investor-specific risk/reward preferences.