USA Tidal Energy Market Outlook to 2028

USA Tidal Energy Market Overview

• The USA Tidal Energy Market is valued at USD 187 million, based on a five-year historical analysis. This market is primarily driven by increasing governmental support for renewable energy projects, technological advancements in tidal turbines, and rising demand for sustainable energy solutions across coastal states. The steady decline in operational costs for tidal power and its ability to provide predictable energy generation further propel the market.

• The states of Alaska and Maine dominate the USA tidal energy market due to their favorable geographic locations and strong tidal currents. Alaska, with its vast tidal resources, is considered a key player, driven by governmental support and the need for clean energy solutions to supply power to remote communities. Maine has made significant advancements in harnessing tidal energy, supported by pilot projects and its proximity to the Bay of Fundy, known for its large tidal range, making it an ideal region for tidal energy generation.
• The California Renewables Portfolio Standard (RPS) program, mandates that a growing portion of the state's electricity be sourced from renewable resources. By 2030, 60% of electricity must come from renewables, with an ultimate goal of 100% carbon-free energy by 2045. The California Public Utilities Commission oversees compliance for retail sellers, while the California Energy Commission certifies renewable resources. This initiative supports the development and expansion of tidal energy projects, contributing to California's broader renewable energy goals.

USA Tidal Energy Market Segmentation

By Technology: The USA Tidal Energy market is segmented by technology into horizontal axis tidal turbines, vertical axis tidal turbines, oscillating water column, tidal barrages, and dynamic tidal power. Horizontal axis tidal turbines currently dominate the technology segment. The dominance of horizontal axis turbines stems from their widespread adoption due to their higher efficiency in harnessing energy from tidal currents. This technology has proven to be more cost-effective in delivering consistent energy output, especially in regions like Alaska, where strong tidal flows are prevalent.

By Application: The USA tidal energy market is segmented by application into utility-scale energy generation, industrial power supply, coastal and island communities, and offshore infrastructure powering. Utility-scale energy generation holds a dominant position under the application segment. The focus on large-scale projects, coupled with government incentives for renewable energy production, has contributed to the growing demand for tidal energy for grid integration.

USA Tidal Energy Market Competitive Landscape

The market is dominated by a few key players, primarily due to the high entry barriers in terms of capital investment, technological expertise, and regulatory compliance. These players have established strong positions through strategic partnerships with government agencies, advanced R&D efforts, and pilot projects. Companies like Ocean Power Technologies and Verdant Power have led the market, supported by global collaborations and innovative technology deployments.

USA Tidal Energy Industry Analysis

Growth Drivers

• Renewable Energy Mandates: Federal and state renewable energy mandates, including tax incentives, have supported the growth of the USA's tidal energy sector. Many states, including coastal regions, have established Renewable Portfolio Standards (RPS) or clean energy goals, requiring utilities to increase their renewable energy share. As of late 2023, several states aim for 100% renewable or clean electricity by 2050 or earlier, indirectly promoting tidal energy development within broader clean energy initiatives.
• Technological Advancements: Technological innovation is advancing the USA's tidal energy market with more efficient turbines capable of capturing energy at low tidal flows and improved energy storage solutions ensuring continuous power supply. In 2021, the U.S. Department of Energy announced federal funding to support research and development in ocean wave energy conversion, further boosting the sector's potential and fostering progress in renewable energy technologies.
• Rising Energy Demand: Rising energy demand in coastal states like California, New York, and Massachusetts is being driven by both population growth and increasing industrial activity. These regions are home to major cities and manufacturing hubs, which require significant energy resources. The industrial sector, in particular, is turning toward renewable energy sources to meet its growing needs. As a result, tidal energy is emerging as a viable option to help satisfy this demand, especially in areas where energy consumption is concentrated.

Market Challenges

• High Initial Capital Costs (Infrastructure, Equipment): Tidal energy projects require significant upfront investments due to the need for specialized infrastructure and equipment. Constructing a tidal power plant involves expenses for underwater turbines, grid integration systems, and transmission networks. These high capital costs can discourage private investors and slow down the scaling of projects, even though renewable energy production offers long-term benefits. The substantial financial commitment required for initial setup is a major barrier to wider adoption of tidal energy.
• Regulatory Barriers (Permitting, Environmental Assessments): Tidal energy development in the U.S. is governed by complex regulatory frameworks, which can slow down project timelines. Multiple permits are required from federal and state agencies, adding layers of bureaucracy to the process. Developers also need to complete environmental impact assessments to ensure that marine ecosystems are protected, further complicating project approval. These regulatory hurdles, along with the time-consuming permitting process, make it challenging for tidal energy projects to move forward quickly.

USA Tidal Energy Market Future Outlook

Over the next five years, the USA tidal energy market is expected to show substantial growth driven by continuous technological advancements in tidal power technologies, expanding government incentives for renewable energy sources, and increasing environmental regulations to curb carbon emissions. Coastal states like Maine, Washington, and Alaska are projected to remain at the forefront of the market, backed by favorable tidal conditions and strong support from federal and state governments.

Market Opportunities

• Expanding Offshore Tidal Projects: Offshore tidal energy projects are seeing significant growth in the U.S., with new initiatives focused on exploring deep-water potentials. These projects aim to harness more consistent tidal currents found in deeper waters, which can support year-round energy production. Efforts are underway to expand these projects along the coasts, tapping into untapped areas that offer strong tidal flows. Collaborations with various sectors, including the military, are also exploring ways to utilize these offshore resources for energy production, particularly in strategic locations.
• Government Subsidies and Grants: Government subsidies and grants play a critical role in supporting the development of tidal energy projects in the U.S. Financial incentives, such as Renewable Energy Credits (RECs) and tax breaks, help to reduce the initial capital required for infrastructure and equipment. These programs are designed to encourage private investment and accelerate the growth of renewable energy sources like tidal power. By alleviating some of the financial burdens, these subsidies contribute to making tidal energy projects more viable and attractive to developers.