Tidal Energy ROI Calculator

Tidal generation turns the movement of water into electricity, either from the rise and fall of the tide behind a barrage or from currents driving submerged turbines. What separates it from other renewables is that the resource is astronomical rather than meteorological. Tide tables are computed from harmonic constants and published years ahead, which is why services like NOAA's tides and currents predictions can give a time and height for a specific station in a future year. Sunshine and wind cannot be scheduled that way.

That predictability is why tidal projects can quote a capacity factor with more confidence than a wind or solar developer can, and the capacity factor is what this calculator turns into energy. It does not hold any cost or price data of its own: installation cost, electricity price, maintenance and project life are all yours to enter, so the arithmetic stays valid as the technology and the market move. For where the sector actually stands, the Ocean Energy Systems annual reports, published by an International Energy Agency technology collaboration programme, track deployments, costs and policy across member countries.

A worked example

The defaults model a 1,000 kW installation costing 10,000,000, running at a 35% capacity factor, selling at 0.15 per kWh, with maintenance at 3% of the install cost a year over 20 years. Generation is 1,000 x 8,760 x 0.35, or 3,066,000 kWh a year, worth 459,900. Maintenance takes 300,000, leaving 159,900 net. Across 20 years that is 3,198,000 against a 10,000,000 build, so the tool reports -68.02%. Read that as recovering just under 32% of the capital over the period: at 159,900 a year, simple payback would take about 62 years, three times the analysis window.

What moves the number most

Install cost and electricity price, because everything else scales off them. Holding the other defaults, the project breaks even over 20 years at a price of about 0.261 per kWh, or at a build cost of about 5,748,750, which is 5,749 per kW. Maintenance is quieter but not small: dropping it from 3% to 2% of install cost lifts the result from -68.02% to -48.02%, because a percentage point of a 10,000,000 build is 100,000 a year against net revenue of only 159,900. Capacity factor pulls in the same direction as price, and moving it from 35% to 45% gives -41.74%.

The formula behind this

Annual generation is capacity multiplied by 8,760 hours and the capacity factor. Revenue is that figure multiplied by the price per kWh. Maintenance is the install cost multiplied by the maintenance percentage. Net is revenue less maintenance, held flat for every year of the analysis, and the return is total net across the period less the install cost, divided by the install cost. Nothing is discounted, so a unit of revenue in year 20 counts the same as one in year 1, which flatters any long project. Nothing degrades either: real output falls over a project's life, and marine equipment does not spend every scheduled hour available.

Beyond the number

Grid connection, consenting, insurance, financing costs, decommissioning and any support mechanism sit outside this calculation. Support schemes matter most of all for this technology, since much of what has been built runs under contracts that pay above the market price for electricity, and the price box is where such a contract would be entered rather than the wholesale rate. Carbon displaced, local supply chains and air quality do not appear either. The financial figure is one input to a decision rather than the decision.