Sun, wind, waves

The wave and tidal energy we may use in our homes one day will start in space.

Uneven bursts of heat travel more than 91 million miles from the sun, causing winds in the earth's atmosphere. Waves kick up as the wind currents travel over open water.

Water with higher energy density has a greater potential to yield electricity. Graphic courtesy of George Hagerman.

The transfer of solar energy to waves is most powerful in the middle latitudes, which have the strongest wind currents, as well as near the equator's persistent trade winds. That means the United States -- the bulk of which sits between the Northern Hemisphere's 30th and 50th parallels -- has significant potential for ocean energy development, says the federal Minerals Management Service, which is developing the industry's first comprehensive environmental assessment (see related story).

The total annual average wave energy potential off the nation's coasts is about 2,100 terawatt-hours (TWh). Harnessing just a fifth of this wave energy at 50 percent efficiency would be comparable to the electricity produced by all of the nation's hydropower dams, according to the Electric Power Research Institute (EPRI), a Palo Alto, Calif., think tank.

Virginia Tech University researcher George Hagerman, who has helped EPRI conduct seminal analyses of North America's offshore hydropower potential, says the "sweet spot" for a wave energy device is in water that's about 60 meters, or 197 feet, deep.

"The farther you go offshore, the wave energy density is higher," he notes, "but you also need longer, more expensive transmission lines."

During the past several years, Hagerman and EPRI officials have mapped areas that could emerge as North America's first commercial tidal energy sites, including Nantucket Sound, Puget Sound, San Francisco Bay, Alaska's Cook Inlet and Nova Scotia's Bay of Fundy.

Their analyses show even greater potential for energy development from ocean waves. Alaska's southern coast, for example, could produce up to 1,250 TWh annually, while the waves off California, Oregon and Washington could produce up to 440 TWh per year.

'A land rush'

As the EPRI findings circulate, companies with and without readily deployable hydropower technologies are lining up for federal permits that would give the firms first dibs on licenses to develop offshore sites.

The Electric Power Research Institute has studied the tidal energy potential of five North American sites. Graphic courtesy of George Hagerman.

The danger, Hagerman warns, is that companies with immature technologies could tie up the most promising sites for several years, stunting the industry's growth at a critical stage. "It seems to me that it's not in the public's interest to have a site locked up by an experimental technology," he says.

Such concerns have spurred the Federal Energy Regulatory Commission to re-evaluate how it regulates wave and tidal wildcatters in the new frontier.

So far, FERC has issued preliminary permits to study the energy potential of 19 wave and tidal sites, mostly off Florida, San Francisco and the Olympic Peninsula. Prospective developers of another 35 sites are seeking permits, which do not authorize construction but grant their holders exclusive rights to study the sites' energy potential for 36 months.

In order to promote competition, FERC last month opted to apply stricter scrutiny of the applicants on an interim basis. If FERC decides to enforce the tougher policy indefinitely, the agency could also apply deadlines for filing a license application, FERC spokesman Bryan Lee says.

"There's been a land rush in industry interest in permits to study potential wave and tidal energy sites," explains Lee, whose agency will take public comments on its interim policy through mid-April. "The commission wants to evaluate its traditional site-licensing process to see how to accommodate these new technologies."

Environmental impacts

Indeed, the offshore hydropower industry is in its infancy and full of many environmental unknowns.

Edinburgh, Scotland-based Ocean Power Delivery Inc. is deploying the world's first commercial-scale wave farm, dubbed the Pelamis project, off the Portuguese coast.

So far, three massive tube-and-hinge devices are generating about 2.5 megawatts from the linear motion of the waves (see related story). The company plans to install at least 30 more of the snake-like "attenuators" at the site to generate up to 30 MW of electricity, said Roger Bedard, who runs EPRI's ocean energy research efforts.

Half a world away, the U.S. Navy and Pennington, N.J.-based Ocean Power Technologies Inc. (LSE: OPT.L), are testing a floating "point-absorber" buoy off the Hawaiian island of Oahu.

This summer, company officials plan to deploy a new iteration of the PowerBuoy, which is tethered to the seafloor and designed to move up and down with waves to generate electricity, says John Baylouny, the company's senior vice president for engineering.

Going forward, company officials hope to raise $100 million for a Nasdaq initial public offering, as well as deploy additional PowerBuoy devices off the coasts of New Jersey, Oregon, Spain, France and Scotland, Baylouny adds.

While such surface wave and underwater tidal devices don't raise aesthetic issues associated with towering wind turbines, for example, the prospects of deploying hydropower devices in already-stressed offshore environments warrants thorough scrutiny from resource managers, Department of Energy officials wrote in a report last spring.

However, DOE underscored that it will be especially difficult to extrapolate the environmental impacts from small pilot projects to those associated with a full-scale build-out.

EPRI's Bedard says this challenge is particularly daunting with wave-energy projects.

"If you have one device out there, it's not necessarily going to reduce the height of waves," he notes. "If you have a thousand devices? ... We don't know yet."

John Phillips, who directs The Ocean Conservancy's regional office in Portland, Maine, says he would support wave energy development in areas with low biological productivity.

Phillips' advocacy group is lobbying Massachusetts legislators to pass a bill that would create a comprehensive plan for state waters up to three miles offshore. All activities, including the development of emerging energy technologies, would have to be consistent with the plan's area-based management.

"(Wave energy) is exactly the sort of technology this bill is designed to address," Phillips notes.

Eyes on the East River, Puget Sound

To be sure, tidal energy proponents and opponents will be watching Verdant's East River project closely throughout the next year.

The turbines' vertical rotors take about two seconds to make a full turn, which should give fish sufficient time to pass safely, co-founder Taylor says. To test that assumption, the company will use sonar to monitor fish movements.

Verdant Power is testing two tidal turbines in New York's East River. The company will install four more turbines in April 2007. Photo courtesy of George Hagerman.

If the testing goes well, Verdant hopes to obtain a FERC license for the project by August 2008 and eventually install as many as 300 turbines throughout the East River.

"We're confident we'll eventually have a whole suite of technologies that will capture water energy without harming the environment," adds Taylor, whose company is mulling additional tidal energy projects in Long Island Sound and the St. Lawrence River.

Officials along the banks of Washington's Puget Sound have even bigger plans.

Snohomish County, which sits just north of energy-hungry Seattle and surrounding King County, has received seven FERC permits to study the tidal energy potential of the sound's deep, swift channels and passages.

In coming months, the Snohomish County Public Utility District will work with the University of Washington and EPRI to study tidal flows, as well as determine how best to connect the underwater turbines to the electrical grid.

Like Verdant Power, the utility will also consider the potential effects of tidal development on marine life, shipping and recreation.

Steve Klein, the utility's general manager, estimates that the county could generate as much as 100 average megawatt-hours annually from up to 1,000 tidal turbines -- enough power for about 60,000 homes -- and get at least 15 percent of its load from renewable resources, in accordance with a new state law.

"We're growing leaps and bounds and have a very aggressive conservation program," explains Klein, whose rate-payer base is growing by about 10,000 customers annually. "Our principal aim is to look at our backyard first."

Susan Berta, co-founder of the environmental group, Orca Network, is among the plan's early opponents.

She worries that underwater turbines would disturb the seabed and unleash sediments full of toxins harmful to salmon and marine mammals. What's more, she worries that the noise from the construction, operation and maintenance of the turbines would affect the sensitive echolocation systems of the sound's resident Orca whales.

"The amount of energy obtained by these sites is minimal compared to the destruction that would be caused in implementing the systems," Berta contends.

Push for tax credits

Environmental concerns might not be the biggest hurdles facing offshore hydropower. Industry pioneers are learning fast that you need money to make some in the energy business.

Unlike wind and solar energy -- renewable energy sectors whose installed capacity is growing exponentially on the strength of public and private investments -- the upstart offshore hydropower industry gets no federal tax incentives.

Seeking to level the playing field, Rep. Jay Inslee (D-Wash.) says he will introduce a bill this spring that would create a $100 million fund to support wave and tidal energy research.

The bill would also create an investment tax credit for offshore hydropower, as well as help companies navigate the complex permit process, adds Inslee, whose district encompasses parts of King and Snohomish counties.

"We went through the whole Enron energy debacle a few years ago, so the more domestic power we can get, the better," Inslee adds. "We also want it to be CO2-neutral."

Oregon Sens. Gordon Smith (R) and Ron Wyden (D) are pushing similar legislation, which would make offshore hydropower eligible for the highly coveted production tax credit that applies to wind and other renewables.

Hydropower lobbyist O'Neill said the production tax credit (PTC) is essential to securing the private capital necessary to build the industry's first commercial-scale projects offshore.

"If we don't get the PTC like wind and other folks, then maybe Wall Street thinks we're not a good bet," O'Neill added.

'The next Google'?

To be sure, the concept of generating carbon-free power from buoys and turbines has piqued the interest of venture capitalists. But that has not necessarily translated into big investments.

John Doerr, a partner with Kleiner Perkins Caufield & Byers, says his venture capital firm has invested millions in "greentech" startups, including Altra Biofuels, fuel-cell developer Bloomenergy and solar power developer Miasole.

Kleiner Perkins' portfolio does not include any offshore hydropower companies, but Doerr says the firm has looked at several wave and tidal projects around the world.

"There's tremendous energy there, and the advantage is it's not intermittent," Doerr says. "With carbon constraints, which I think we'll have, these will be even more economically attractive."

Mark Heesen, president of the National Venture Capital Association, suspects that other energy-savvy investors are also watching offshore hydropower industry developments as closely and quietly.

"What you're seeing is a huge amount of interest in the clean energy space, and there are a lot of toes being dipped in a lot of different waters," adds Heesen, whose association reported more than $1.1 billion in greentech venture capital investments last year -- almost triple the amount invested in 2005. "No one really knows what the next prime energy sector will be."

What's clear, he says, is that public subsidies would give the new wave of hydropower startups a better chance of survival in the increasingly competitive energy sector, where fossil fuels have long dominated.

"You always see companies fail," he adds. "But you don't want to be the one who misses out on the next Google."

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