1.1 In a long term situation of rising energy prices convention al economic appraisal of energy technologies has a number of shortcomings. It is not possible to determine the inflationary effects of energy price rises on costs and also it is a very uncertain guide in R & D planning. By using energy analysis the energy element in costs and the inflationary effects of price rises can be determined directly . Also the net energy requirement is an index of merit which is available during the R & D phase and can be related theoretically to the economics of a technology. It provides a good indicator, during R & D, of economic potential. 1.2 The calculations reported here for wave energy systems are based mainly on information contained in RPT 1978 draft report and hence relate to the reference designs as then conceived. 1.3 The modal net energy requirements (energy input/energy output) for the 1978 Reference Designs on a primary energy basis are as follows National Engineering Laboratories (NEL) 2.79 GJ₍ₜ₎/GJ₍ₑ₎ Wavepowe r Limited ( WPL) 1.45 GJ₍ₜ₎/GJ₍ₑ₎ Hydraulics Research S t ation (HRS) 3.27 GJ₍ₜ₎/GJ₍ₑ₎ Sea Energy Associates (SEA) 2.89 GJ₍ₜ₎/GJ₍ₑ₎ French Flexible Bag (FFB) 0.46 GJ₍ₜ₎/GJ₍ₑ₎ 1.4 On the basis of this information only the FFB satisfies the basic criteria of energetic viability. This criteria is that the net energy requirement of a wave energy system should be less than one. 1.5 While it is not possible as yet to establish the precise relationships between energy requirement and economic viability, clearly the 'energy returns' of the FFB are so low as to make it doubtful that this device would ever be economically viable in this form. 1.6 It is possible to model simply the relationship between energy requirements and costs. This indicates that a technology with a high energy requirement will suffer rapid cost inflation as energy prices rise. Depending on estimates of the value of output electricity (compared with the value of firm electricity) it seems that energy prices will have to rise 13 times before the FFB becomes economically viable. This is far beyond the limits of current medium term and even long-term planning horizons . l.7 It is difficult to imagine any realistic economic circumstances which may develop in the medium and long term which would make wave energy, in this form, economically viable. 1.8 To radically alter this assessment will r e quire a reduction in net energy requirement by factors ranging from 2.3 (FFB) to 16 (HRS). These improvements can only be achieved by substantial reductions in masses of structural and mooring materials per unit output together with improvements in the average load factor of all installed machinery. 1.9 Energy analysis raises serious questions about the wave energy programme. These must be answered convincingly before a rational case for committing major funds to the further development of these designs can be made. In particular the current emphasis on design for production would seem to be premature when basic problems of device size remain unresolved. 1.10 Further work is required constructing models of the net energy requirement of all devices in the prograrmme in terms of major system parameters (structural size, peak/average power ratings etc . ). Also energy analysis of new concepts and generic studies of wave energy devices is required. In this way established devices and new concept s will be analysed in a systematic way and it may be possible to identify directions of development which will offer the possibility of wave energy devices with low net energy requirements and with the ultimate potential to be economically viable