RenewablesOffshore

The FERC-MMS Scuffle Continues

Update (11/4/08) - Here's a link to a Report by the Congressional Research Service evaluating the MMS and FERC regulatory systems.

As I remember, the provisions of the Energy Policy Act of 2005, which authorized the Mineral Management Service to lease property on the Outer Continental Shelf (OCS) for alternative energy projects, were intended to clarify who's the boss on the Outer Continental Shelf. Before EPAct of 2005, it wasn't one hundred percent clear how companies like Cape Windcould acquire definitive property rights for siting projects on the OCS and the new law closed that gap.

Except...in closing one gap, EPAct 2005 created another question about which agency, FERC or MMS (or both) have the power to authorize wave or tidal projects on the OCS. Without any further guidance from Congress, FERC and MMS have been duking it out ever since. Now, FERC has upped the ante even further, with this recent Order, staking claim to the entire Outer Continental Shelf, where previously, it was willing to settle for a mere twelve miles. So how does FERC's reasoning stack up in this decision? Read on after the jump...

California Nixes Wave Energy PPA

On the eve of tomorrow's presidential election, I won't tell you to vote early and often, but that quote comes to mind nonetheless in thinking about the California Public Utilities Commission's recent denial of PG&E's application for approval of a 2 MW PPA (power purchase agreement) with Finavera.  Essentially, the California Commission determined that wave energy remains too early stage to justify asking ratepayers to bear the high costs of the contract - 26 cents/kwh.  And because wave energy is an early-stage technology, some may predict that we'll see decisions like that of the California Commission fairly often unless we change our priorities.

Though naturally, I'd have preferred that the California Commission approved the contract, at the same time, I can't fully fault the Commission for the outcome based on the information before it. PG&E is investigating wave energy options through its Wave Connect Project, for which it recently received a $1.2 million water power grant from DOE. And Finavera had published its plans to site wave energy projects in a variety of locations throughout the world. In light of these factors, the California Commission apparently believed that Finavera and PG&E could move ahead with wave energy development without ratepayer subsidization.

While some in the industry are bemoaning the California Commission decision, Dan Englander of Greenwire explained to the San Jose Mercury News that the denial isn't all that much of a setback: "PG&E picked the wrong company," he said. "Finavera isn't a bad company, it's just that their technology isn't at a stage where it's ready to deliver power commercially." In the long run, marine renewables industry stands a better chance of achieving success and public support when the technology is required to make some showing of viability before qualifying for preferential rates. At the end of the day, ratepayers don't mind paying a healthy premium for green power, so long as it works.

$500 Million Market Forecast for Marine Renewables by 2015

Here's some good news for the marine renewables industry: Greenwire is forecasting a $500 million market by 2015. Although fewer than 10 MW of ocean power capacity has been installed to date worldwide, a recent Greenwire report finds that the market will grow two orders of magnitude to reach 1 GW of installed capacity over the next seven years.

The report examines the underlying fundamentals that will determine when ocean power technologies will become competitive with other renewable and traditional energy sources, what technologies will bring the industry to that point, and how investment, government policies and power sector buy-in will drive the growth of this industry.

Although investment to date in the ocean power market (just over $500 million since 2001) is relatively small compared to other renewable energy market segments, the report also finds that more than $2 billion will be invested to build commercial ocean wave power farms and another $2 billion will go towards research and development globally over the next six years.

Rising Insurance Poses Another Hurdle for Marine Renewables

As a new technology operating in a harsh environment, marine renewables can expect to pay considerable insurance premiums. And unfortunately, the cost of insurance is increasing for all renewable energy projects, which can expect a five to ten perent hike in premiums over the next two years, suggests this post from Wave and Tidal Energy.com. From the post:

With green issues being driven up the political agenda, says the company, the market for renewable energy insurance is tracking the growth enjoyed by the wider renewable energy sector and is expanding at a rate of about 28 percent, annually. "As a direct result of ongoing financial market instability, the liquidity difficulties experienced by the industry, and substantial losses arising from hurricane Ike in the US, renewable insurance premiums will almost certainly rise," comments Fraser McLachlan, Chief Executive Officer, GCube.

Oregon Wave Update

Once again, wave energy activity is picking up in Oregon, with Tillamook County being the latest player into the pool, reports ChiefEngineer.org. Though two years ago, companies were filing permits up and down segments of the Oregon coast, waters off Tillamook County remained developer free, thus enabling the county to obtain a FERC permit to evaluate six sites.

Despite questions about potential environmental effects, not to mention the FERC-MMS jurisdictional tussle, official are excited about potential economic opportunities that may result from wave energy. Already, the County is favoring the Pelamis Wave Power unit as the technology of choice for the project, referring to it affectionately as a "big red salami." Tillamook expects to rely on Columbia Energy Ventures to develop the project, but is exploring the option of retaining an equity interest in the project.

Open Hydro Wins Tidal Contract in France

These days, France doesn't merit much mention in discussions about tidal power. Which is odd because after all, France is home to the forty year old La Rance Project, the world's first electrical generating station powered with tidal energy.  But LaRance is a tidal barrage project -- essentially, a dam located at the convergence of a tidal basin and river -- which wouldn't stand a chance of getting sited these days, at least not in the United States or the UK.  In any event, then, it's only fitting that France will be host to a new generation tidal project.   This time, though, instead of a barrage,  EDF, the utility commissioning the project will use modular tidal turbines supplied by Dublin-based Open Hydro, reports Irish Independent News. The plant will be comprised of 10 tidal turbines and will generate up to 4 MW of electricity, or roughly enough for 6000 average European homes.

Wave and Tidal Powered Data Centers: Need for Space Launches A Futurist Concept

 

As reliance on computers increases, so too does the need for expansive data storage -- and today's major players are looking to the oceans to find that space. As you've probably already heard, Google is exploring the possibility of an offshore data facility , powered with Pelamis wave energy converter units. And now, Morgan Stanley is considering a plan to develop a tidal powered data center in Scotland’s Pentland Firth, which separates the Orkney Islands from the Scottish mainland.

Many of the pros and cons of wave or tidal powered data centers are considered in an article by Shawn McCarthy in Government Computer News.  In McCarthy's view, siting a data center offshore might prove less expensive than dealing with the costs of local property owners and onerous land based zoning requirements.  (Of course, as you probably know from reading this blog, siting a project offshore is hardly a cake-walk, and indeed, may prove more complicated than a space walk!).  McCarthy also makes the point that floating data centers can be floated out of harms way, so they may be less vulnerable to natural disasters than land based facility.

But the biggest benefit that would arise from floating data systems, in McCarthy's view, is that "they can help bring the idea of electricity generation from wave power and tidal power from early adolescence into maturity." Data centers are big ticket items that could attract substantial private investment, some of which could be used to support addition improvements to wave and tidal energy to power the data centers.  Morever, because the data centers would be located close to the power source, developers would save transmission costs and also avoid potential power losses that can arise when offshore power is transported over long distances.

So what's the catch?  Well, the lawyer in me hates to be a naysayer, but it's not entirely clear what regulatory scheme would govern offshore data centers, particularly those located beyond state submerged lands, on the Outer Continental Shelf.  If you're interested, I'm willing to share my thoughts on the likely regulatory regime that would apply to offshore data systems, but for now, that's a topic for a future post.

Wave and Tidal Power Roundup

 

It's been a while since I've posted, so here's the latest round up of articles from October 2008 dealing with wave and tidal energy development:

A Great Vortex of Power This Wired article (10/2008) examines research at University of Michigan on extraction of energy from vortex-induced vibrations. According to Michael Bernitsas, who has founded Vortex Hydro Energy to commercialize his idea, the advantage of vortex-induced vibrations is that they allow for extraction of energy even at relatively low current speeds down to 1 knot. It's an idea that's generated a good deal of interest; together, the National Science Foundation, the U.S. Navy, and the Department of Energy have contributed about $2 million to Vortex to further develop the concept.

State of Ocean Renewables Here's a pretty good round up of the current state of wave and tidal technology from Alternet.org. Among other things, the piece discusses Pelamis' recent commercial wave power project, the Agucadora Project, off the coast of Portugal. For another similarly-veined round-up, check out this piece as well.

At the Roger Williams Marine Energy Symposium

Both yesterday and today, I've been attending the Seventh Annual Marine Energy Symposiumat Roger Williams Law School in Bristol, Rhode Island. And as you might guess, the reason that I'm here, and the reason why I served on the conference planning committee is because this symposium is focused specifically on offshore renewables. These days, I'm a more frequent traveler in the wave and tidal world (though I do cover offshore wind in various categories, here and here. So what's been most interesting to me about this conference is the larger focus on offshore wind, and the ability to compare and contrast the emergence of offshore wind to wave and tidal.

I hope to post some of my impressions of the conference in the next few days, but if you just can't wait to get the scoop, then check out the Symposium's live blog by Dr. Michelle Portman, a postdoctoral fellow at the Woods Hole Marine Policy Center.

Show Me the Money - Federal and State Subsidies for Marine Renewables

Show Me the Money: Benefits for Marine Renewables

View SlideShare presentation or Upload your own. (tags: ocean energy)

Here's a power point presentation that I gave back in July at Hydrovision 2008. Essentially, it summarizes the different categories of federal and state programs available for marine renewables, and the pros and cons of each approach. The two charts included in the presentation didn't render very well, so if you're interested in receiving stand alone copies, drop me an email at [email protected].