Harvest Wave Energy shares industry perspective

The following was originally posted on the Harvest Wave Energy blog.

In February of 1987 the New York Times published an article on the potential for electricity produced from ocean waves. Fast forward 30 years, and we have a more recent article by ABC musing, “Whatever happened to Wave Power?”. The easy scapegoat would be the unwillingness of public and private capital to take part in high risk endeavors. That position is dubious when you look at the following facts. US DOE funding of wave power research has totaled >$100M from 2008 - 2015. Available data indicates that cumulative European government funding was likely twice that amount during the same period. Other data points indicate that private capital funding of early stage research has easily surpassed public funding levels. So, with such a high level investment, why has the industry failed to progress?

We believe that private enterprises involved in wave energy have, over and over, made the critical mistake of ignoring market risk. That is, as Eric Ries states in his book “The Lean Startup”, such companies have failed to ask and answer the question of whether or not a product should even be built in the first place. Let us explain.

When launching new products, innovations or ventures, companies have a tendency to focus all their attention on technology risk. They barrel ahead, asking and resolving the important technological questions concerning “what is my innovation?”, “how can I build it?”, and “what resources will I need?” and then they set forth building it. At the end of the journey they finally get around to asking “How does my new product fill a market need?”. Unfortunately by now, so much time, energy, and resources have been plowed into the technical research and development process that companies experience an escalation of commitment to the new innovation and tend to brush over and sprint through the appropriate market research in order to bring it to market as fast as possible.

Based on progressive results over the past decade, solar and wind energies are now considered the de facto standards of sustainable power production. Even conventional hydropower is finding it hard to find a seat at the table. Therefore, now more than ever, wave energy device developers need to begin by asking “Who is going to be willing to pay for this technology if I spend the time and effort to develop it?”. Without the answer we may be doomed to repeat the mistakes of those that have come before us. So what’s our answer?

Stay tuned.