1. Dr Sandy Kerr – International Centre fro Island Technology – Heriot Watt University.

2. You speaker: Dr Sandy Kerr Profile Land Economist and Resource Management Heriot-Watt University /ICIT multidisciplinary team Marine resource management/ marine renewable energy Orkney Highest concentration of Marine Energy RD&D in world.

3. ORKNEY 59 o N 4 o W

6. EMEC: Wave Test Facility Emec Oyster Berth Scapa Flow

7. EMEC Pelamis in Orkney

9. Pentland Firth and Orkney Waters 1.6 GW by 2020 Approx 1,500 devices

10. Marine Energy development as a transformation system Marine energy development Inputs Outputs Human resource Materials Information Knowledge Energy Resource Sea space Electricity Profit (markets/costs) Economic growth Community benefits Stakeholder relations Environmental impact Feedback (licence to operate)

11. Cost of Electricity Levelised costs ECG = ∑ [(I t + M t + F t ) (1 + r) -t ] / ∑ [E (1 + r) -t ] Cost of manufacture Major component of cost of wind relatively easy to estimate learning curves

12. Cost of Installation Cost of installation and maintenance ??? Almost all developers in Orkney have run into problems Design for cheap installation and maintenance

13. Cost of electricity Keeping devices working is a priority Reliability Breakdowns probably not random Maintenance turn around Scheduling

14. Colin’s Story (rational economic man) Land/sea interface Grid and development

15. Distribution of Benefits. Who benefits? Environmental and social impacts Lessons from Shetland North Sea oil Compulsory Purchase “Fair share” Crown Estate reform “We conclude that the only way in which to address these fundamental issues is that the CEC’s responsibilities for the administration and revenues of the ancient Crown property, rights and interests in Scotland be ended.” Sullom Voe

16. Fisheries Effects uncertain Refuge Reef effects Loss of access Species and location specific Surplus Yield Model showing fishing effort and sustainable yield in black, with closed area effects in red (high dispersive rate relative to growth rate) and blue (low dispersive rate relative to growth rate)

17. Development/Development impacts Hydrodynamic models Effects of one device on another Array Spacing and cost Licensing

18. Competition for sea space Who gets access to the resource Best strategies Game Theory – early mover advantage. UK Wave Resource UK Tide Resource

19. A Final Word Marine energy development as a platform for economics research OR Economics research to help Marine energy development

20. Dr Sandy Kerr – International Centre fro Island Technology – Heriot Watt University.