Entering the Wave Energy Industry

Entering the wave energy industry

The main problem for this case is finding out how RME can best position itself in the renewable wave energy industry. RME must find a way to successfully enter the industry. Through research and strategic planning, RME must find a niche in the market where they can develop a competitive advantage. RME will need to find the right approach in order to find investors to fund the project.

Secondary Problems

Commercial failures: The industry had experience several commercial failures, due mostly in part to environmental factors like bio-fouling and severe weather. Because of these failures, there was not enough data, or sufficient data to study the effects of wave energy. This brings us to problem number 2

Environmental concerns: There is a concern that this technology could disrupt marine ecosystems. Since this is a new technology, we do not yet know how this will impact marine wildlife. Equipment will have to be placed in ocean waters, and on land to extract wave energy. This could disrupt the local marine habitat, and the migratory patterns of migrating animals.

Competition: Although this is a relatively new technology, the wave energy space is crowed. There are several companies, mainly from Europe and Australia. These companies include Ocean Power Technologies (OPT), Pelamis, Wave Dragon, Carnegie Wave Energy,Aquamarine, and Oceanlinx.

Cost: Because this is a new technology, wave energy is still expensive when you compare it to gas and coal. It will be a while before wave energy can compete with gas and coal prices.

Solutions

Approach 1: Develop a wave-driven desalination system that will produce electricity to power a desalination plant

RME could apply for US gov. grants to cover development and testing cost

This approach requires a desalination partner

Approach 2: Using hydraulic power to operate the desalination plant

Requires significant private investor funding (might be difficult to find because wave technology is new in the US and not investor tested)

This was the original strategy in RME’s business plan because margins on water production are higher than in electricity production

Requires a desalination partner

Approach 3: RME would own both the wave energy conversion system and the desalination plant

RME would be able to market the water production and electricity production

No partner

Requires more funding/investment because there would be no desalination partner,