Pelamis Wave Energy Device Testing Again

NAO NAKANISHI, Reuters, October 5, 2009

A first attempt fell victim to the crisis: now in the docks of Scotland’s ancient capital, a second-generation scarlet Sea Snake is being prepared to harness the waves of Britain’s northern islands to generate electricity.

Dwarfed by 180 metres of tubing, scores of engineers clamber over the device, which is designed to dip and ride the swelling sea with each move being converted into power to be channelled through subsea cables.

Due to be installed next spring at the European Marine Energy Centre (EMEC) in Orkney, northern Scotland, the wave power generator was ordered by German power company E.ON, reflecting serious interest in an emerging technology which is much more expensive than offshore wind.

Interest from the utility companies is driven by regulatory requirements to cut carbon emissions from electricity generation, and it helps in a capital-intensive sector.

Venture capitalists interested in clean tech projects typically have shorter horizons for required returns than the 10-20 years such projects can take, so the utilities’ deeper pockets and solid capital base are useful.

“Our view … is this is a 2020 market place,” said Amaan Lafayette, E.ON’s marine development manager. “We would like to see a small-scale plant of our own in water in 2015-2017, built on what we are doing here. It’s a kind of generation we haven’t done before.”

The World Energy Council has estimated the market potential for wave energy at more than 2,000 terawatt hours a year — or about 10% of world electricity consumption — representing capital expenditure of more than 500 billion pounds ($790 billion).

Island nation Britain has a leading role in developing the technology for marine power, which government advisor the Carbon Trust says could in future account for 20% of the country’s electricity. The government is stepping up support as part of a 405 million pound investment in renewable energy to help its ambition of cutting carbon emissions by 80% by 2050 from 1990 levels, while securing energy supply. (The challenge is more about getting to a place where we are comparable with other renewable technologies… We want to get somewhere around offshore wind,” said Lafayette.)

Britain’s Crown Estate, which owns the seabed within 12 nautical miles of the coast, is also holding a competition for a commercial marine energy project in Pentland Firth in northern Scotland.

Besides wave power, Britain is testing systems to extract the energy from tides: private company Marine Current Turbines Ltd (MCT) last year opened the world’s first large-scale tidal turbine SeaGen in Northern Ireland.

DEVELOPING LIKE WIND

“We are often compared to the wind industry 20 years ago,” said Andrew Scott, project development manager at Pelamis Wave Power Ltd, which is developing the Sea Snake system, known as P2. Standing beside the train-sized serpent, Pelamis’ Scott said wave power projects are taking a variety of forms, which he said was similar to the development of the wind turbine. “You had vertical axis, horizontal axis and every kind of shapes before the industry consolidated on what you know as acceptable average modern day turbines.”

The Edinburgh Snake follows a pioneering commercial wave power project the company set up in Portugal last September, out of action since the collapse of Australian-based infrastructure group Babcock & Brown which held a majority share. “It’s easy to develop your prototypes and models in the lab, but as soon as you put them in water, it swallows capital,” said John Liljelund, CEO of Finnish wave energy firm AW-Energy, which just received $4.4 million from the European Union to develop its WaveRoller concept in Portugal.

At present, industry executives say marine power costs about double that from offshore wind farms, which require investment of around 2-3 million euros per megawatt. Solar panels cost about 3-4 million per megawatt, and solar thermal mirror power about 5 million.

UTILITY ACTION

Other utility companies involved in wave power trials include Spain’s Iberdrola, which has a small experimental wave farm using floating buoys called “Power Take- offs” off the coast of northern Spain. It is examining sites for a subsea tidal turbine project made by Norwegian company Hammerfest Strom.

Countries developing the technology besides Britain include Portugal, Ireland, Spain, South Korea and the United States: about 100 companies are vying for a share of the market, but only a handful have tested their work in the ocean.

Privately owned Pelamis has focussed on wave energy since 1998, has its own full-scale factory in Leith dock and sees more orders for the second generation in prospect.

Lafayette said E.ON examined more than 100 devices since 2001 before picking Sea Snake for its first ocean project, a three-year test: “They have a demonstrable track record … and commercial focus and business focus.”

A single Sea Snake has capacity of 750 kilowatts: by around 2015, Pelamis hopes each unit will have capacity of 20 megawatts, or enough to power about 30,000 homes.

Neither Pelamis nor E.ON would elaborate on the cost of the Sea Snake, but they said the goal is to bring it down to the level of offshore wind farms.

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More Sun for Less: Solar Panels Drop in Price

KATE GALBRAITH, The New York Times, August 27, 2009

When Greg Hare looked into putting solar panels on his ranch-style home in Magnolia, Tex., last year, he decided he could not afford it. “I had no idea solar was so expensive,” he recalled.

But the cost of solar panels has plunged lately, changing the economics for many homeowners. Mr. Hare ended up paying $77,000 for a large solar setup that he figures might have cost him $100,000 a year ago.

“I just thought, ‘Wow, this is an opportunity to do the most for the least,’ ” Mr. Hare said.

For solar shoppers these days, the price is right. Panel prices have fallen about 40% since the middle of last year, driven down partly by an increase in the supply of a crucial ingredient for panels, according to analysts at the investment bank Piper Jaffray.

The price drops — coupled with recently expanded federal incentives — could shrink the time it takes solar panels to pay for themselves to 16 years, from 22 years, in places with high electricity costs, according to Glenn Harris, chief executive of SunCentric, a solar consulting group. That calculation does not include state rebates, which can sometimes improve the economics considerably.

American consumers have the rest of the world to thank for the big solar price break.

Until recently, panel makers had been constrained by limited production of polysilicon, which goes into most types of panels. But more factories making the material have opened, as have more plants churning out the panels themselves — especially in China.

“A ton of production, mostly Chinese, has come online,” said Chris Whitman, the president of U.S. Solar Finance, which helps arrange bank financing for solar projects.

At the same time, once-roaring global demand for solar panels has slowed, particularly in Europe, the largest solar market, where photovoltaic installations are forecast to fall by 26% this year compared with 2008, according to Emerging Energy Research, a consulting firm. Much of that drop can be attributed to a sharp slowdown in Spain. Faced with high unemployment and an economic crisis, Spain slashed its generous subsidy for the panels last year because it was costing too much.

Many experts expect panel prices to fall further, though not by another 40%.

Manufacturers are already reeling from the price slump. For example, Evergreen Solar, which is based in Massachusetts, recently reported a second-quarter loss that was more than double its loss from a year earlier.

But some manufacturers say that cheaper panels could be a good thing in the long term, spurring enthusiasm among customers and expanding the market.

“It’s important that these costs and prices do come down,” said Mike Ahearn, the chief executive of First Solar, a panel maker based in Tempe, Ariz.

First Solar recently announced a deal to build two large solar arrays in Southern California to supply that region’s dominant utility. But across the United States, the installation of large solar systems — the type found on commercial or government buildings — has been hurt by financing problems, and is on track to be about the same this year as in 2008, according to Emerging Energy Research.

The smaller residential sector continues to grow: In California, by far the largest market in the country, residential installations in July were up by more than 50% compared with a year earlier. With prices dropping, that momentum looks poised to continue.

John Berger, chief executive of Standard Renewable Energy, the company in Houston that put panels on Mr. Hare’s home, said that his second-quarter sales rose by more than 225% from the first quarter.

“Was that as a product of declining panel prices? Almost certainly yes,” Mr. Berger said.

Expanded federal incentives have also helped spur the market. Until this year, homeowners could get a 30% tax credit for solar electric installations, but it was capped at $2,000. That cap was lifted on Jan. 1.

Mr. Hare in Texas cited the larger tax credit, which sliced about $23,000 from his $77,000 bill, as a major factor in his decision to go solar, in addition to the falling panel prices. Sensing a good deal, he even got a larger system than he had originally planned — going from 42 panels to 64. The electric bill on his 7,000-square-foot house and garage has typically run $600 to $700 a month, but he expects a reduction of 40-80%.

Mr. Berger predicts that with panel prices falling and the generous federal credit in place, utilities will start lowering rebates they offer to homeowners who put panels on their roofs.

One that has already done so is the Salt River Project, the main utility in Phoenix, which cut its homeowners’ rebate by 10% in June. Lori Singleton, the utility’s sustainability manager, said the utility had recently spent more than it budgeted for solar power, a result of a surge in demand as more solar installers moved into Arizona and government incentives kicked in.

California has been steadily bringing down its rebates. An impending 29% cut in rebates offered within the service area of Pacific Gas and Electric, the dominant utility in Northern California, means that “with the module price drop over the last few months, it is pretty much a wash,” Bill Stewart, president of SolarCraft, an installer in Novato, Calif., said in an e-mail message.

Even if falling rebates cancel out some of the solar panel price slump, more innovative financing strategies are also helping to make solar affordable for homeowners. This year about a dozen states — following moves by California and Colorado last year — have enacted laws enabling solar panels to be paid off gradually, through increased property taxes, after a municipality first shoulders the upfront costs.

Some installers have adopted similar approaches. Danita Hardy, a homeowner in Phoenix, had been put off by the prospect of spending $20,000 for solar panels — until she spotted a news item about a company called SunRun that takes on the upfront expense and recovers its costs gradually, in a lease deal, essentially through the savings in a homeowner’s electric bill.

“I thought well, heck, this might be doable,” said Ms. Hardy, who wound up having to lay out only $800 to get 15 solar panels for her home.

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American Progress Publishes Investment Plan for Low Carbon Economy

PODESTA, GORDON, HENDRICKS & GOLDSTEIN, Center for American Progress, September 21, 2009

With unemployment at 9.5%, and oil and energy price volatility driving businesses into the ground, we cannot afford to wait any longer. It is time for a legislative debate over a comprehensive clean energy investment plan. We need far more than cap and trade alone.

The United States is having the wrong public debate about global warming. We are asking important questions about pollution caps and timetables, carbon markets and allocations, but we have lost sight of our principal objective: building a robust and prosperous clean energy economy. This is a fundamentally affirmative agenda, rather than a restrictive one. Moving beyond pollution from fossil fuels will involve exciting work, new opportunities, new products and innovation, and stronger communities. Our current national discussion about constraints, limits, and the costs of transition misses the real excitement in this proposition. It is as if, on the cusp of an Internet and telecommunications revolution, debate centered only on the cost of fiber optic cable. We are missing the big picture here.

Let’s be clear: Solving global warming means investment. Retooling the energy systems that fuel our economy will involve rebuilding our nation’s infrastructure. We will create millions of middle-class jobs along the way, revitalize our manufacturing sector, increase American competitiveness, reduce our dependence on oil, and boost technological innovation. These investments in the foundation of our economy can also provide an opportunity for more broadly shared prosperity through better training, stronger local economies, and new career ladders into the middle class. Reducing greenhouse gas pollution is critical to solving global warming, but it is only one part of the work ahead. Building a robust economy that grows more vibrant as we move beyond the Carbon Age is the greater and more inspiring challenge.

Reducing greenhouse gas emissions to avert dangerous global warming is a moral challenge, but it is also an economic, national security, social, and environmental imperative. The “cap and trade” provisions, which will set limits on pollution and create a market for emissions reductions that will ultimately drive down the cost of renewable energy and fuel, represent a very important first step and a major component in the mix of policies that will help build the coming low-carbon economy. But limiting emissions and establishing a price on pollution is not the goal in itself, and we will fall short if that is all we set out to do. Rather, cap and trade is one key step to reach the broader goal of catalyzing the transformation to an efficient and sustainable low-carbon economy. With unemployment at 9.5%, and oil and energy price volatility driving businesses into the ground, we cannot afford to wait any longer. It is time for a legislative debate over a comprehensive clean energy investment plan. We need far more than cap and trade alone.

This is not just an exercise in rhetoric. Articulating and elevating a comprehensive plan to invest in clean energy systems and more efficient energy use will affect policy development and the politics surrounding legislation now moving through the Senate, as well as international negotiations underway around the globe. The current debate, which splits the issue into the two buckets of “cap and trade” and “complementary policies,” has missed the comprehensive nature of the challenge and its solutions. It also emphasizes the challenge of pollution control instead of organizing policy for increased development, market growth, reinvestment in infrastructure, and job creation through the transition to a more prosperous, clean energy economy.

This paper lays out the framework for just such an investment-driven energy policy, the pieces of which work together to level the playing field for clean energy and drive a transformation of the economy. Importantly, many elements of this positive clean-energy investment framework are already codified within existing legislation such as the American Clean Energy and Security Act, passed by House of Representatives earlier this year. But with all the attention given to limiting carbon, too little attention has been placed on what will replace it. These critical pieces of America’s clean energy strategy should be elevated in the policy agenda and political debate as we move forward into the Senate, and used to help move legislation forward that advances a proactive investment and economic revitalization strategy for the nation.

Read the full report here.

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LPPC Stresses Regional, Economic Choices for Grid

Electric Light & Power, June 11, 2009

As the Obama administration shapes its policy on transmission planning, siting and cost allocation, the Large Public Power Council (LPPC) has sent a joint letter voicing its transmission policy views and concerns to Energy Secretary Chu, Interior Secretary Salazar, Agriculture Secretary Vilsack, FERC Chairman Wellinghoff, White House Council on Environmental Quality Chair Sutley and Presidential Energy Advisor Carol Browner.

The letter was sent to the Obama policy makers by Bob Johnston, Chair of the 23 member not-for-profit utility organization. Members of the LPPC own and operate nearly 90% of the transmission investment owned by non-federal public power entities in the United States.

The LPPC told the Obama Administration that it is “most supportive of a framework for interconnection-wide planning that addresses the growing need to interconnect renewable resources to the grid.”

“Many of our members are leaders in renewable deployment and energy efficiency. We are committed to these policy goals and closely tied to the values of our local communities,” the LPPC emphasized. “But we also believe that creating a new planning bureaucracy could be costly and counterproductive in achieving needed infrastructure development.”

The LPPC voiced strong support for the region-wide planning process recently mandated by FERC Order 890 that directed implementation of new region-wide planning processes that the LPPC claims “require an unprecedented level of regional coordination, transparency and federal oversight.”

“It seems quite clear that federal climate legislation and a national renewable portfolio standard will further focus these planning processes, the LPPC asserted. “LPPC fully expects that the regional processes to which parties have recently committed will take on new urgency and purpose. Adding a planning bureaucracy to that mix will be time consuming and will likely delay rather than expedite transmission development.”

The LPPC also told the Obama policy makers that, “it would be unnecessary, inequitable and counterproductive to allocate the cost of a new transmission superhighway to all load serving entities without regard to their ability to use the facilities or their ability to rely on more economical alternatives to meet environmental goals.”

The LPPC contended, “that certain proposals it has reviewed to allocate the cost of new transmission on an interconnection-wide basis would provide an enormous and unnecessary subsidy to large scale renewable generation located far from load centers, at the expense of other, potentially more economical alternatives. Utilities, state regulators, and regional transmission organizations should determine how to meet the environmental goals established by Congress most effectively by making economic choices among the array of available options, without subsidy of one technology or market segment over others.”

The LPPC letter further claimed that the cost of a massive transmission build-out will be substantial and that cost estimates they had reviewed “appear to be meaningfully understated.” The LPPC estimates that nationwide costs for such a build-out “may range between $135 billion and $325 billion, equating to a monthly per customer cost between $14 and $35.  This is a critical matter for LPPC members, as advocates for the consumers we serve.”

The Large Public Power Council letter concluded by offering its support for additional federal siting authority for multi-state transmission facilities “in order to overcome the limited ability of individual states to address multi-state transmission projects to meet regional needs. LPPC is confident that such new authority can be undertaken in consultation with existing state siting authorities in a manner that capitalizes on existing expertise and ensures that state and local concerns are addressed in the siting process.”

The LPPC’s membership includes 23 of the nation’s largest publicly owned, not-for-profit energy systems. Members are located in 10 states and provide reliable, electricity to some of the largest cities in the U.S. including Los Angeles, Seattle, Omaha, Phoenix, Sacramento, San Antonio, Jacksonville, Orlando and Austin.

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NextLight Inks Solar Energy Deal with PG&E

UCILLA WANG, The Greentech Innovations Report, June 9, 2009

When Pacific Gas and Electric Co. announced a deal to buy solar power from a proposed 230-megawatt project last Friday, it shone a spotlight on a two-year-old company with a different business model than many startups who have inked similar deals with the utility.

The deal also raised the question: Who is NextLight?

NextLight Renewable Power, based in San Francisco, wants to be purely a power plant developer and owner. The deal with PG&E is the first power purchase agreement for the startup, which is funded by private equity firm Energy Capital Partners, said Jim Woodruff, vice president of regulatory and government affairs, in an interview Monday.

“We think the tech agnostic approach is a winning business model,” Woodruff said. “All the core skills that are necessary to develop power projects are the same” for solar or other types of power plants.

The company boasts managers who have experience developing power plants and transmission projects as well as negotiating renewable power purchases.

NextLight’s CEO, Frank De Rosa, worked for PG&E for 23 years and held various roles at the utility, including the director of renewable energy supply, before founding NextLight in 2007. Woodruff worked for Southern California Edison for more than 10 years, first as an in-house counsel and later as the manager of regulatory and legislative issues for the utility’s alternative power business.

NextLight has been developing other solar power projects on public and private land in western states, including a plan to install up to 150 megawatts of generation capacity in Boulder City, Nevada.

The Boulder City Council is slated to vote on whether to lease 1,100 acres of city land to NextLight tonight. The company would sell 3,000-megawatt hours of energy per year to the city if the project is built, Woodruff said.

PG&E signed the deal with NextLight after it had inked many power purchase agreements in recent years to buy solar power from startup companies with the ambition to both develop their own technologies as well as owning and operating solar farms.

Some of the projects seem to be moving along. A few have hit snags. The deal to buy power from Finavera, an ocean power developer in Canada, fell apart last year when the California Public Utilities Commission decided that the contract would be too costly to ratepayers (see California Rejects PG&E Contract for Wave Energy).

OptiSolar, which was supposed to build a 550-megawatt solar farm to sell power to PG&E, couldn’t raise enough money to operate its solar panel factory and develop solar farms.

First Solar, another solar panel maker based in Tempe, Ariz., bought OptiSolar’s project development business for $400 million in April this year. First Solar would use its own, cadmium-telluride solar panels, instead of the amorphous silicon solar panels OptiSolar was developing. PG&E has said that the power contract would remain in place.

NextLight, on the other hand, would pick different solar technologies instead of developing its own. The approach isn’t new – SunEdison was doing this before others joined the party.

But there is no guarantee that this approach would enable NextLight to deliver energy more cheaply, and neither NextLight nor PG&E would discuss the financial terms of their contract.

“Our priority is about diversification of the resources we use and the companies we work with,” said PG&E spokeswoman Jennifer Zerwer. “Contracting for renewable via [power purchase agreements] is beneficial because it helps grow that ecosystem of renewable development, and there is no risk to our customers.”

Rumors have been circulating about whether NextLight would use SunPower’s equipment for the 230-megawatt project, which is called AV Solar Ranch 1, particularly since the project’s website features a photo of SunPower panels.

Woodruff said NextLight hasn’t selected a panel supplier. The company and PG&E have agreed to use solar panels, but the utility wouldn’t have a final say on the supplier, Woodruff added.

Gordon Johnson, head of alternative energy research at Hapoalim Securities, also cast doubt on the SunPower rumor.  “Based on our checks, we do not believe [SunPower] won the PPA with NextLight,” Johnson wrote in a research note.

NextLight plans to start construction of the AV Solar Ranch project in the third quarter of 2010 and complete it by 2013. The company said it would start delivering power in 2011.

The project would be located on 2,100 acres in Antelope Valley in Los Angeles County, Woodruff said. The company bought the property last year for an undisclosed sum.

The company would need approval from the Los Angeles County to construct the solar farm. The California Public Utilities Commission would need to approve the power purchase contract between PG&E and NextLight.

NextLight also is developing a power project with up to 425 megawatts in generation capacity in southern Arizona.  The company is negotiating to a farmland for the Agua Caliente Solar Project, Woodruff said. The 3,800 acres are located east of the city of Yuma.

The company is negotiating with a utility to buy power from Agua Caliente, said Woodruff, who declined to name the utility.

NextLight hasn’t decided whether to install solar panels or build a solar thermal power plant for the Agua Caliente project. Solar thermal power plants use mirrors to concentrate the sunlight for heating water or mineral oils to generate steam. The steam is then piped to run electricity-generating turbines.

But solar panels appear to be a more attractive option than solar thermal for now, Woodruff said.

“We’ve concluded that, in the near term, PV is more cost effective,” he said.

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The Renewable Energy Vision of FERC Chairman Jon Wellinghoff

MARK CLAYTON, The Christian Science Monitor, June 8, 2009

When giving his slide presentation on America’s new energy direction, Jon Wellinghoff sometimes sneaks in a picture of himself seated in a midnight blue, all-electric Tesla sports car.

It often wins a laugh, but makes a key point: The United States is accelerating in a new energy direction under President Obama’s newly appointed chairman of the Federal Energy Regulatory Commission (FERC). At the same time, FERC’s key role in the nation’s energy future is becoming more apparent.

Energy and climate legislation now pending in Congress would put in FERC’s hands a sweeping market-based cap-and-trade system intended to lower industrial greenhouse-gas emissions.

Besides its role granting permits for new offshore wind power, the agency is also overseeing planning for transmission lines that could one day link Dakota wind farms to East Coast cities, and solar power in the Southwest to the West Coast.

“FERC has always been important to power development,” says Ralph Cavanagh, energy program codirector for the Natural Resources Defense Council, a New York-based environmental group. “It’s just that people haven’t known about it. They will pretty soon.”

That’s because Mr. Wellinghoff and three fellow commissioners share an affinity for efficiency and renewable energy that’s not just skin-deep, Mr. Cavanagh and others say.

Wellinghoff started his energy career as a consumer advocate for utility customers in Nevada before being appointed by President Bush in 2005 as a FERC commissioner. He was a key author of “renewable portfolio standards” that require Nevada’s utilities to incorporate more renewable power in their energy mix. Now he’s the nation’s top energy regulator.

It’s clear that FERC has a mandate to speed change to the nation’s power infrastructure, Wellinghoff says.

When it comes to the extra work and complexity FERC will encounter if Congress appoints FERC to administer a mammoth carbon-emissions cap-and-trade program, Wellinghoff is eager, yet circumspect.

“We believe we are fully capable of fulfilling that role with respect to physical trading [of carbon allowances],” he says during an interview in Washington. “We’ve demonstrated our ability to respond efficiently and effectively to undertake those duties Congress has given to us. Unfortunately, the result of that is they give you more to do.”

While the US Department of Energy controls long-term energy investment decisions, FERC’s four commissioners (a fifth seat is vacant) appear determined to ensure that wind, solar, geothermal, and ocean power get equal access to the grid.

The commissioners are also biased against coal and nuclear power on at least one key factor: cost.

Many in the power industry believe that renewable energy still costs too much. Not Wellinghoff, who says: “I see these distributed resources [solar, wind, natural-gas microturbines, and others] coming on right now as being generally less expensive.”

That might sound surprising. Yet, with coal and nuclear power plants costing billions of dollars – and raising environmental issues such as climate change and radioactive waste – others also see renewable power as the low-cost option.

Wellinghoff’s outspoken views have irritated some since his March selection as chairman.

Last month, for instance, he drew fire from nuclear-energy boosters in Congress after he characterized as “an anachronism” the idea of meeting future US power demand by building large new coal-fired and nuclear power plants.

“You don’t need fossil fuel or nuclear [plants] that run all the time,” Wellinghoff told reporters at a US Energy Association Forum last month. Then he added: “We may not need any, ever.”

That set off a salvo from Sen. Lind sey Graham (R) of South Carolina, a staunch nuclear-power advocate. “The public is ill-served when someone in such a prominent position suggests alternative-energy programs are developed and in such a state that we should abandon our plans to build more plants,” he said in a statement.

But to others, Wellinghoff is the epitome of what the US needs: a public servant zeroed in on energy security, the environment, efficiency, and keeping energy costs down.

“Wellinghoff has been a longtime supporter of efficiency and consumer interests,” says Steven Nadel, executive director of the American Council for an Energy Efficient Economy, an energy advocacy group. “I would call him a visionary. He’s not just content with the status quo.”

In Wellinghoff’s vision of the future, where the cost of carbon dioxide emissions is added to the price of coal-fired power plants and natural-gas turbines, it may be less expensive for consumers to set their appliances to avoid buying power at peak times. Or they may choose to buy power from a collection of microturbines, fuel cell, wind, solar, biomass, and ocean power systems.

“We’re going to see more distributed generation – and we’re already starting to see that happen,” Wellinghoff says. “Not only renewable generation like photovoltaic [panels] that people put on their homes and businesses, but also fossil-fuel systems like combined heat and power,” called cogeneration units.

To coordinate and harmonize this fluctuating phalanx of power sources, customers will need to know and be able to respond to the price of power, Wellinghoff says. They will also need a new generation of appliances that switch off automatically to balance power supply and demand peaks.

But there are huge challenges with a power grid that provides energy from a mix of wind, solar, and other renewable power.

“You’re going to have to upgrade this whole grid [along the East Coast], he says. “You can’t just move [wind and wave power] from offshore to load centers onshore without looking at the effect on reliability – Florida to Maine.”

As the percentage of renewable power rises toward 20 to 25% of grid power from around 3% today, there must be a backup to fill gaps when intermittent winds stop blowing or the sun doesn’t shine.

In a decade or more from now, Wellinghoff, says millions of all-electric or plug-in electric-gas hybrid vehicles could plug into the grid and supply spurts of power to fill in for dipping wind and solar output.

“There are new technologies,” he says, “that in the next three to five years will advance the grid to a new level.”

Gesturing to a drawing board on the wall, he hops up from his chair, his hands flicking across a sketch of the eastern half of the US with power lines fanning out from the Plains states to the East Coast.

“This is another grid option that would take a lot of power that’s now constrained in the Midwest, that can be developed – wind energy there – and move it to all the load centers [cities] on the East Coast,” he says.

Similarly, lines could be built across the Rockies to connect wind power in Montana and Wyoming to the West Coast. Instead of building power lines from the Midwest to the East Coast, “a lot of people would say, ‘No, no, let’s look first look at the wind offshore,’ ” he says.

Whether it’s wind from the Plains or the ocean, the resulting variability will have an impact on grid reliability if action isn’t taken, Wellinghoff says.

“You’re going to have to upgrade this whole grid here,” he says, gesturing to the East Coast. “You can’t just move [power] from offshore to load centers onshore without looking at the effect on reliability.”

Reliability of the grid remains paramount – Job No. 1 for the Federal Energy Regulatory Commission. But if boosting renewable power to 25% by 2025 – the Obama administration’s goal – means spreading Internet-connected controllers across substations and transmission networks, then cybersecurity to protect them from increasing Internet-based threats is critical.

Yet a recent review by the North American Electric Reliability Corporation overseen by FERC found more than two-thirds of power generating companies denied they had any “critical assets” potentially vulnerable to cyberattack. Those denials concern Wellinghoff.

“We are asking the responding utilities to go back and reveal what are the number of critical assets and redetermine that for us,” he says. “We want to be sure that we have fully identify all the critical assets that need to be protected.”

It would be especially troubling if, as was recently reported by The Wall Street Journal, Russian and Chinese entities have hacked into the US power grid and left behind malware that could be activated at a later time to disable the grid.

But Wellinghoff says he has checked on the type of intrusion referred to in the article and denies successful grid hacks by foreign nations that have left dangerous malware behind.

While acknowledging that individuals overseas have tried to hack the grid frequently, he says, “I’m not aware of any successful hacks that have implanted into the grid any kinds of malware or other code that could later be activated.”

But others say there is a problem. In remarks at the University of Texas at Austin in April, Joel Brenner, the national counterintelligence executive, the nation’s most senior counterintelligence coordinator, indicated there are threats to the grid.

“We have seen Chinese network operations inside certain of our electricity grids,” he said in prepared remarks. “Do I worry about those grids, and about air traffic control systems, water supply systems, and so on? You bet I do.”

In an e-mailed statement, Wellinghoff’s press secretary, Mary O’Driscoll, says the chairman defers to senior intelligence officials on some questions concerning grid vulnerability to cyberattack: “The Commission isn’t in the intelligence gathering business and therefore can’t comment on that type of information.”

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Worldwide Investments Increasing in Tidal, Wave and Hydrokinetic Energy

JAMES RICKMAN, Seeking Alpha, June 8, 2009

Oceans cover more than 70% of the Earth’s surface. As the world’s largest solar collectors, oceans generate thermal energy from the sun. They also produce mechanical energy from the tides and waves. Even though the sun affects all ocean activity, the gravitational pull of the moon primarily drives the tides, and the wind powers the ocean waves.

Wave energy is the capture of the power from waves on the surface of the ocean. It is one of the newer forms of renewable or ‘green’ energy under development, not as advanced as solar energy, fuel cells, wind energy, ethanol, geothermal companies, and flywheels. However, interest in wave energy is increasing and may be the wave of the future in coastal areas according to many sources including the International Energy Agency Implementing Agreement on Ocean Energy Systems (Report 2009).

Although fewer than 12 MW of ocean power capacity has been installed to date worldwide, we find a significant increase of investments reaching over $2 billion for R&D worldwide within the ocean power market including the development of commercial ocean wave power combination wind farms within the next three years.

Tidal turbines are a new technology that can be used in many tidal areas. They are basically wind turbines that can be located anywhere there is strong tidal flow. Because water is about 800 times denser than air, tidal turbines will have to be much sturdier than wind turbines. They will be heavier and more expensive to build but will be able to capture more energy. For example, in the U.S. Pacific Northwest region alone, it’s feasible that wave energy could produce 40–70 kilowatts (kW) per meter (3.3 feet) of western coastline. Renewable energy analysts believe there is enough energy in the ocean waves to provide up to 2 terawatts of electricity.

Companies to Watch in the Developing Wave Power Industry:

Siemens AG (SI) is a joint venture partner of Voith Siemens Hydro Power Generation, a leader in advanced hydro power technology and services, which owns Wavegen, Scotland’s first wave power company. Wavegen’s device is known as an oscillating water column, which is normally sited at the shoreline rather than in open water. A small facility is already connected to the Scottish power grid, and the company is working on another project in Northern Spain.

Ocean Power Technologies, Inc (OPTT) develops proprietary systems that generate electricity through ocean waves. Its PowerBuoy system is used to supply electricity to local and regional electric power grids. Iberdrola hired the company to build and operate a small wave power station off Santona, Spain, and is talking with French oil major Total (TOT) about another wave energy project off the French coast. It is also working on projects in England, Scotland, Hawaii, and Oregon.

Pelamis Wave Power, formerly known as Ocean Power Delivery, is a privately held company which has several owners including various venture capital funds, General Electric Energy (GE) and Norsk Hydro ADR (NHYDY.PK). Pelamis Wave Power is an excellent example of Scottish success in developing groundbreaking technology which may put Scotland at the forefront of Europe’s renewable revolution and create over 18,000 green high wage jobs in Scotland over the next decade. The Pelamis project is also being studied by Chevron (CVX).

Endesa SA ADS (ELEYY.PK) is a Spanish electric utility which is developing, in partnership with Pelamis, the world’s first full scale commercial wave power farm off Aguçadoura, Portugal which powers over 15,000 homes. A second phase of the project is now planned to increase the installed capacity from 2.25MW to 21MW using a further 25 Pelamis machines.

RWE AG ADR (RWEOY.PK) is a German management holding company with six divisions involved in power and energy. It is developing wave power stations in Siadar Bay on the Isle of Lewis off the coast of Scotland.

Australia’s Oceanlinx offers an oscillating wave column design and counts Germany’s largest power generator RWE as an investor. It has multiple projects in Australia and the U.S., as well as South Africa, Mexico, and Britain.

Alstom (AOMFF.PK) has also announced development in the promising but challenging field of capturing energy from waves and tides adding to the further interest from major renewable power developers in this emerging industry.

The U.S. Department of Energy has announced several wave energy developments including a cost-shared value of over $18 million, under the DOE’s competitive solicitation for Advanced Water Power Projects. The projects will advance commercial viability, cost-competitiveness, and market acceptance of new technologies that can harness renewable energy from oceans and rivers. The DOE has selected the following organizations and projects for grant awards:

First Topic Area: Technology Development (Up to $600,000 for up to two years)

Electric Power Research Institute, Inc (EPRI) (Palo Alto, Calif.) Fish-friendly hydropower turbine development & deployment. EPRI will address the additional developmental engineering required to prepare a more efficient and environmentally friendly hydropower turbine for the commercial market and allow it to compete with traditional designs.

Verdant Power Inc. (New York, N.Y.) Improved structure and fabrication of large, high-power kinetic hydropower systems rotors. Verdant will design, analyze, develop for manufacture, fabricate and thoroughly test an improved turbine blade design structure to allow for larger, higher-power and more cost-effective tidal power turbines.

Public Utility District #1 of Snohomish County (SnoPUD) (Everett, Wash.) Puget Sound Tidal Energy In-Water Testing and Development Project. SnoPUD will conduct in-water testing and demonstration of tidal flow technology as a first step toward potential construction of a commercial-scale power plant. The specific goal of this proposal is to complete engineering design and obtain construction approvals for a Puget Sound tidal pilot demonstration plant in the Admiralty Inlet region of the Sound.

Pacific Gas and Electric Company – San Francisco, Calif. WaveConnect Wave Energy In-Water Testing and Development Project. PG&E will complete engineering design, conduct baseline environmental studies, and submit all license construction and operation applications required for a wave energy demonstration plant for the Humboldt WaveConnect site in Northern California.

Concepts ETI, Inc (White River Junction, Vt.) Development and Demonstration of an Ocean Wave Converter (OWC) Power System. Concepts ETI will prepare detailed design, manufacturing and installation drawings of an OWC. They will then manufacture and install the system in Maui, Hawaii.

Lockheed Martin Corporation (LMT) – Manassas, Va., Advanced Composite Ocean Thermal Energy Conversion – “OTEC”, cold water pipe project. Lockheed Martin will validate manufacturing techniques for coldwater pipes critical to OTEC in order to help create a more cost-effective OTEC system.

Second Topic Area, Market Acceleration (Award size: up to $500,000)

Electric Power Research Institute (Palo Alto, Calif.) Wave Energy Resource Assessment and GIS Database for the U.S. EPRI will determine the naturally available resource base and the maximum practicable extractable wave energy resource in the U.S., as well as the annual electrical energy which could be produced by typical wave energy conversion devices from that resource.

Georgia Tech Research Corporation (Atlanta, Ga.) Assessment of Energy Production Potential from Tidal Streams in the U.S. Georgia Tech will utilize an advanced ocean circulation numerical model to predict tidal currents and compute both available and effective power densities for distribution to potential project developers and the general public.

Re Vision Consulting, LLC (Sacramento, Calif.) Best Siting Practices for Marine and Hydrokinetic Technologies With Respect to Environmental and Navigational Impacts. Re Vision will establish baseline, technology-based scenarios to identify potential concerns in the siting of marine and hydrokinetic energy devices, and to provide information and data to industry and regulators.

Pacific Energy Ventures, LLC (Portland, Ore.) Siting Protocol for Marine and Hydrokinetic Energy Projects. Pacific Energy Ventures will bring together a multi-disciplinary team in an iterative and collaborative process to develop, review, and recommend how emerging hydrokinetic technologies can be sited to minimize environmental impacts.

PCCI, Inc. (Alexandria, Va.) Marine and Hydrokinetic Renewable Energy Technologies: Identification of Potential Navigational Impacts and Mitigation Measures. PCCI will provide improved guidance to help developers understand how marine and hydrokinetic devices can be sited to minimize navigational impact and to expedite the U.S. Coast Guard review process.

Science Applications International Corporation (SAI) – San Diego, Calif., International Standards Development for Marine and Hydrokinetic Renewable Energy. SAIC will assist in the development of relevant marine and hydrokinetic energy industry standards, provide consistency and predictability to their development, and increase U.S. industry’s collaboration and representation in the development process.

Third Topic Area, National Marine Energy Centers (Award size: up to $1.25 million for up to five years)

Oregon State University, and University of Washington – Northwest National Marine Renewable Energy Center. OSU and UW will partner to develop the Northwest National Marine Renewable Energy Center with a full range of capabilities to support wave and tidal energy development for the U.S. Center activities are structured to: facilitate device commercialization, inform regulatory and policy decisions, and close key gaps in understanding.

University of Hawaii (Honolulu, Hawaii) National Renewable Marine Energy Center in Hawaii will facilitate the development and implementation of commercial wave energy systems and to assist the private sector in moving ocean thermal energy conversion systems beyond proof-of-concept to pre-commercialization, long-term testing.

Types of Hydro Turbines

There are two main types of hydro turbines: impulse and reaction. The type of hydropower turbine selected for a project is based on the height of standing water— the flow, or volume of water, at the site. Other deciding factors include how deep the turbine must be set, efficiency, and cost.

Impulse Turbines

The impulse turbine generally uses the velocity of the water to move the runner and discharges to atmospheric pressure. The water stream hits each bucket on the runner. There is no suction on the down side of the turbine, and the water flows out the bottom of the turbine housing after hitting the runner. An impulse turbine, for example Pelton or Cross-Flow is generally suitable for high head, low flow applications.

Reaction Turbines

A reaction turbine develops power from the combined action of pressure and moving water. The runner is placed directly in the water stream flowing over the blades rather than striking each individually. Reaction turbines include the Propeller, Bulb, Straflo, Tube, Kaplan, Francis or Kenetic are generally used for sites with lower head and higher flows than compared with the impulse turbines.

Types of Hydropower Plants

There are three types of hydropower facilities: impoundment, diversion, and pumped storage. Some hydropower plants use dams and some do not.

Many dams were built for other purposes and hydropower was added later. In the United States, there are about 80,000 dams of which only 2,400 produce power. The other dams are for recreation, stock/farm ponds, flood control, water supply, and irrigation. Hydropower plants range in size from small systems for a home or village to large projects producing electricity for utilities.

Impoundment

The most common type of hydroelectric power plant (above image) is an impoundment facility. An impoundment facility, typically a large hydropower system, uses a dam to store river water in a reservoir. Water released from the reservoir flows through a turbine, spinning it, which in turn activates a generator to produce electricity. The water may be released either to meet changing electricity needs or to maintain a constant reservoir level.

The Future of Ocean and Wave Energy

Wave energy devices extract energy directly from surface waves or from pressure fluctuations below the surface. Renewable energy analysts believe there is enough energy in the ocean waves to provide up to 2 terawatts of electricity. (A terawatt is equal to a trillion watts.)

Wave energy rich areas of the world include the western coasts of Scotland, northern Canada, southern Africa, Japan, Australia, and the northeastern and northwestern coasts of the United States. In the Pacific Northwest alone, it’s feasible that wave energy could produce 40–70 kilowatts (kW) per meter (3.3 feet) of western coastline. The West Coast of the United States is more than a 1,000 miles long.
In general, careful site selection is the key to keeping the environmental impacts of wave energy systems to a minimum. Wave energy system planners can choose sites that preserve scenic shorefronts. They also can avoid areas where wave energy systems can significantly alter flow patterns of sediment on the ocean floor.

Economically, wave energy systems are just beginning to compete with traditional power sources. However, the costs to produce wave energy are quickly coming down. Some European experts predict that wave power devices will soon find lucrative niche markets. Once built, they have low operation and maintenance costs because the fuel they use — seawater — is FREE.

The current cost of wave energy vs. traditional electric power sources?

It has been estimated that improving technology and economies of scale will allow wave generators to produce electricity at a cost comparable to wind-driven turbines, which produce energy at about 4.5 cents kWh.

For now, the best wave generator technology in place in the United Kingdom is producing energy at an average projected/assessed cost of 6.7 cents kWh.

In comparison, electricity generated by large scale coal burning power plants costs about 2.6 cents per kilowatt-hour. Combined-cycle natural gas turbine technology, the primary source of new electric power capacity is about 3 cents per kilowatt hour or higher. It is not unusual to average costs of 5 cents per kilowatt-hour and up for municipal utilities districts.

Currently, the United States, Brazil, Europe, Scotland, Germany, Portugal, Canada and France all lead the developing wave energy industry that will return 30% growth or more for the next five years.

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AB 811 Workshop in Sacramento on April 29th

MendoCoastCurrent, April 26, 2009

The California Energy Commission is conducting a workshop on Wednesday, April 29, 2009 in Sacramento, to discuss the American Recovery and Reinvestment Act (ARRA) provisions related to funding for energy projects.

The workshop will focus on Assembly Bill 811 (Levine, Chapter 159, Statutes of 2008) that finances the installation of energy efficiency improvements, distributed generation and renewable energy sources through contractual assessments to determine if and how ARRA money can advance these programs in local jurisdictions.

This workshop is intended to inform and discuss with the public and various stakeholders the types of projects that may be funded, eligible recipients of funds and application processes.

Wednesday, April 29, 2009 from 10 a.m. – 5 p.m.
California Energy Commission
1516 Ninth Street
First Floor, Hearing Room A
Sacramento, California

Remote Attendance
Webcast – Presentations and audio from this meeting will be broadcast over the Internet through Windows Media. For details, please go to [www.energy.ca.gov/webcast/].

Webcast participants will be able to submit questions on areas of interest during the meeting to be addressed by workshop participants via e-mail at [AB811@energy.state.ca.us].

Purpose
Energy Commission staff are exploring the efficacy of supporting AB 811 type programs with American Recovery and Reinvestment Act funds. These would promote the installation of energy efficiency and renewable energy sources or energy efficiency improvements that are permanently fixed to real property and are financed through the use of contractual assessments. Included in this discussion will be the costs and benefits of financing such a program, local and state barriers that may exist to implementing AB 811 related programs, and exploring other financing mechanisms that could be quickly implemented to achieve similar energy efficiency project installation and financing as described in AB 811.

Note that the following criteria for project priorities and expending ARRA funds will be taken into consideration when discussing AB 811 and/or other funding:

1. Effectiveness in stimulating and creating or retaining green jobs in California;
2. Achieve lasting and measureable energy benefits consistent with the “Loading Order” priority of energy efficiency systems;
3. Expend money efficiently, with accountability and minimal administrative burden;
4. Contribute to meeting California’s energy policy goals as defined by the Energy Commission’s Integrated Energy Policy Report, California Air Resources Board’s AB 32 Scoping Plan as well as other relevant energy policy documents; and
5. Leverage other federal, state, local and private financing to sustain the economy.

Background
ARRA of 2009 will provide nationally $787 billion in economic investment. The goals of ARRA are to jump start the economy and create jobs for Americans.

The Energy Commission is expected to administer three programs that include: the State Energy Program for approximately $226 million; the Energy Efficiency and Conservation and Block Grant Program for approximately $49.6 million; and the Energy Efficient Appliance Rebate Program estimated at approximately $30 million.

In addition, there is more than $37 billion available nationwide that the United States Department of Energy (DOE) will administer through competitive grants and other financing for energy- and climate change-related programs. The Energy Commission will work with other state agencies, utilities, and other public and private entities to identify ways to leverage these funds for California projects.

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Ocean Energy Surges Forward

MARK CLAYTON, The Christian Science Monitor, April 24, 2009

Three miles off the craggy, wave-crashing coastline near Humboldt Bay, California, deep ocean swells roll through a swath of ocean that is soon to be the site of the nation’s first major wave energy project.

Like other renewable energy technology, ocean energy generated by waves, tidal currents or steady offshore winds has been considered full of promise yet perennially years from reaching full-blown commercial development.

That’s still true – commercial-scale deployment is at least five years away. Yet there are fresh signs that ocean power is surging. And if all goes well, WaveConnect, the wave energy pilot project at Humboldt that’s being developed by Pacific Gas and Electric Co. (PG&E), could by next year deploy five commercial-scale wave systems, each putting 1 megawatt of ocean-generated power onto the electric grid.

At less than 1% of the capacity of a big coal-fired power plant, that might seem a pittance. Yet studies show that wave energy could one day produce enough power to supply 17% of California’s electric needs – and make a sizable dent in the state’s greenhouse gas emissions.

Nationwide, ocean power’s potential is far larger. Waves alone could produce 10,000 megawatts of power, about 6.5% of US electricity demand – or as much as produced by conventional hydropower dam generators, estimated the Electric Power Research Institute (EPRI), the research arm of the public utility industry based in Palo Alto, California, in 2007. All together, offshore wind, tidal power, and waves could meet 10% of US electricity needs.

That potential hasn’t gone unnoticed by the Obama administration. After years of jurisdictional bickering, the Federal Energy Regulatory Commission (FERC) and the Department of Interior — MMS last month moved to clarify permitting requirements that have long slowed ocean energy development.

While the Bush administration requested zero for its Department of Energy ocean power R&D budget a few years ago, the agency has reversed course and now plans to quadruple funding to $40 million in the next fiscal year.

If the WaveConnect pilot project succeeds, experts say that the Humboldt site, along with another off Mendocino County to the south, could expand to 80 megawatts. Success there could fling open the door to commercial-scale projects not only along California’s surf-pounding coast but prompt a bicoastal US wave power development surge.

“Even without much support, ocean power has proliferated in the last two to three years, with many more companies trying new and different technology,” says George Hagerman, an ocean energy researcher at the Virginia Tech Advanced Research Institute in Arlington, Va.

Wave and tidal current energy are today at about the same stage as land-based wind power was in the early 1980s, he says, but with “a lot more development just waiting to see that first commercial success.”

More than 50 companies worldwide and 17 US-based companies are now developing ocean power prototypes, an EPRI survey shows. As of last fall, FERC tallied 34 tidal power and nine wave power permits with another 20 tidal current, four wave energy, and three ocean current applications pending.

Some of those permits are held by Christopher Sauer’s company, Ocean Renewable Power of Portland, Maine, which expects to deploy an underwater tidal current generator in a channel near Eastport, Maine, later this year.

After testing a prototype since December 2007, Mr. Sauer is now ready to deploy a far more powerful series of turbines using “foils” – not unlike an airplane propeller – to efficiently convert water current that’s around six knots into as much as 100,000 watts of power. To do that requires a series of “stacked” turbines totaling 52 feet wide by 14 feet high.

“This is definitely not a tinkertoy,” Sauer says.

Tidal energy, as demonstrated by Verdant Power’s efforts in New York City’s East River, could one day provide the US with 3,000 megawatts of power, EPRI says. Yet a limited number of appropriate sites with fast current means that wave and offshore wind energy have the largest potential.

“Wave energy technology is still very much in emerging pre-commercial stage,” says Roger Bedard, ocean technology leader for EPRI. “But what we’re seeing with the PG&E WaveConnect is an important project that could have a significant impact.”

Funding is a problem. As with most renewable power, financing for ocean power has been becalmed by the nation’s financial crisis. Some 17 Wall Street finance companies that had funded renewables, including ocean power, are now down to about seven, says John Miller, director of the Marine Renewable Energy Center at the University of Massachusetts at Dartmouth.

Even so, entrepreneurs like Sauer aren’t close to giving up – and even believe that the funding tide may have turned. Private equity and the state of Maine provided funding at a critical time, he says.

“It’s really been a struggle, particularly since mid-September when Bear Sterns went down,” Sauers says. “We worked without pay for a while, but we made it through.”

Venture capitalists are not involved in ocean energy right now, he admits. Yet he does get his phone calls returned. “They’re not writing checks yet, but they’re talking more,” he says.

When they do start writing checks, it may be to propel devices such as the Pelamis and the PowerBuoy. Makers of those devices, and more than a dozen wave energy companies worldwide, will soon vie to be among five businesses selected to send their machines to the ocean off Humboldt.

One of the major challenges they will face is “survivability” in the face of towering winter waves. By that measure, one of the more successful generators – success defined by time at sea without breaking or sinking – is the Pelamis, a series of red metal cylinders connected by hinges and hydraulic pistons.

Looking a bit like a red bullet train, several of the units were until recently floating on the undulating sea surface off the coast of Portugal. The Pelamis coverts waves to electric power as hydraulic cylinders connecting its floating cylinders expand and contract thereby squeezing fluid through a power unit that extracts energy.

An evaluation of a Pelamis unit installed off the coast of Massachusetts a few years ago found that for $273 million, a wave farm with 206 of the devices could produce energy at a cost of about 13.4 cents a kilowatt hours. Such costs would drop sharply and be competitive with onshore wind energy if the industry settled on a technology and mass-produced it.

“Even with worst-case assumptions, the economics of wave energy compares favorably to wind energy,” the 2004 study conducted for EPRI found.

One US-based contestant for a WaveConnect slot is likely to be the PowerBuoy, a 135-five-foot-long steel cylinder made by Ocean Power Technology (OPT) of Pennington, N.J. Inside the cylinder that is suspended by a float, a pistonlike structure moves up and down with the bobbing of the waves. That drives a generator, sending up to 150 kilowatts of power to a cable on the ocean bottom. A dozen or more buoys tethered to the ocean floor make a power plant.

“Survivability” is a critical concern for all ocean power systems. Constant battering by waves has sunk more than one wave generator. But one of PowerBuoy’s main claims is that its 56-foot-long prototype unit operated continuously for two years before being pulled for inspection.

“The ability to ride out passing huge waves is a very important part of our system,” says Charles Dunleavy, OPT’s chief financial officer. “Right now, the industry is basically just trying to assimilate and deal with many different technologies as well as the cost of putting structures out there in the ocean.”

Beside survivability and economics, though, the critical question of impact on the environment remains.

“We think they’re benign,” EPRI’s Mr. Bedard says. “But we’ve never put large arrays of energy devices in the ocean before. If you make these things big enough, they would have a negative impact.”

Mr. Dunleavy is optimistic that OPT’s technology is “not efficient enough to rob coastlines and their ecosystems of needed waves. A formal evaluation found the company’s PowerBuoy installed near a Navy base in Hawaii as having “no significant impact,” he says.

Gauging the environmental impacts of various systems will be studied closely in the WaveConnect program, along with observations gathered from fishermen, surfers, and coastal-impact groups, says David Eisenhauer, a PG&E spokesman, says.

“There’s definitely good potential for this project,” says Mr. Eisenhauer. “It’s our responsibility to explore any renewable energy we can bring to our customers – but only if it can be done in an economically and environmentally feasible way.”

Offshore wind is getting a boost, too. On April 22, the Obama administration laid out new rules on offshore leases, royalty payments, and easement that are designed to pave the way for investors.

Offshore wind energy is a commercially ready technology, with 10,000 megawatts of wind energy already deployed off European shores. Studies have shown that the US has about 500,000 megawatts of potential offshore energy. Across 10 to 11 East Coast states, offshore wind could supply as much as 20% of the states’ electricity demand without the need for long transmission lines, Hagerman notes.

But development has lagged, thanks to political opposition and regulatory hurdles. So the US remains about five years behind Europe on wave and tidal and farther than that on offshore wind, Bedard says. “They have 10,000 megawatts of offshore wind and we have zero.”

While more costly than land-based wind power, new offshore wind projects have been shown in some studies to have a lower cost of energy than coal projects of the same size and closer to the cost of energy of a new natural-gas fired power plant, Hagerman says.

Offshore wind is the only ocean energy technology ready to be deployed in gigawatt quantities in the next decade, Bedard says. Beyond that, wave and tidal will play important roles.

For offshore wind developers, that means federal efforts to clarify the rules on developing ocean wind energy can’t come soon enough. Burt Hamner plans a hybrid approach to ocean energy – using platforms that produce 10% wave energy and 90% wind energy.

But Mr. Hamner’s dual-power system has run into a bureaucratic tangle – with the Minerals Management Service and FERC both wanting his company to meet widely divergent permit requirements, he says.

“What the public has to understand is that we are faced with a flat-out energy crisis,” Hamner says. “We have to change the regulatory system to develop a structure that’s realistic for what we’re doing.”

To be feasible, costs for offshore wind systems must come down. But even so, a big offshore wind farm with hundreds of turbines might cost $4 billion – while a larger coal-fired power plant is just as much and a nuclear power even more, he contends.

“There is no cheap solution,” Hamner says. “But if we’re successful, the prize could be a big one.”

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Wave Energy Not Yet Ready for Prime Time

COLIN SULLIVAN, The New York Times, April 14, 2009

Palo Alto — Technology for tapping ocean waves, tides and rivers for electricity is far from commercial viability and lagging well behind wind, solar and other fledgling power sectors, a panel of experts said last week during a forum here on climate change and marine ecosystems.

While the potential for marine energy is great, ocean wave and tidal energy projects are still winding their way through an early research and development phase, these experts said.

“It’s basically not commercially financeable yet,” said Edwin Feo, a partner at Milbank, Tweed, Hadley & McCloy, during a conference at Stanford University. “They are still a long ways from getting access to the capital and being deployed, because they are simply immature technologies.”

Ocean and tidal energy are renewable sources that can be used to meet California’s renewable portfolio standard of 10 percent of electricity by 2010. But the industry has been hampered by uncertainty about environmental effects, poor economics, jurisdictional tieups and scattered progress for a handful of entrepreneurs.

Finavera Renewables, based in British Columbia, recently canceled all of its wave projects, bringing to a close what was the first permit for wave power from the Federal Energy Regulatory Commission. And last fall, the California Public Utilities Commission (CPUC) denied Pacific Gas & Electric Co.’s application for a power purchase agreement with Finavera Renewables, citing the technology’s immaturity.

Roger Bedard, head of the Electric Power Research Institute’s wave power research unit, said the United States is at least five and maybe 10 years away from the first commercial project in marine waters. A buoy at a Marine Corps base in Hawaii is the only wave-powered device that has been connected to the power grid so far in the United States. The first pilot tidal project, in New York’s East River, took five years to get a permit from FERC.

Feo, who handles renewable energy project financing at his law firm, says more than 80 ocean, tidal and river technologies are being tested by start-ups that do not have much access to capital or guarantee of long-term access to their resource. That has translated into little interest from the investment community.

“Most of these companies are start-ups,” Feo said. “From a project perspective, that doesn’t work. People who put money into projects expect long-term returns.”

William Douros of the National Oceanic and Atmospheric Administration (NOAA) expressed similar concerns and said agency officials have been trying to sort through early jurisdictional disputes and the development of some technologies that would “take up a lot of space on the sea floor.”

“You would think offshore wave energy projects are a given,” Douros said. “And yet, from our perspective, from within our agency, there are still a lot of questions.”

‘Really exciting times’

But the belief in marine energy is there in some quarters, prompting the Interior Department to clear up jurisdictional disputes with FERC for projects outside 3 miles from state waters. Under an agreement announced last week, Interior will issue leases for offshore wave and current energy development, while FREC will license the projects.

The agreement gives Interior’s Minerals Management Service exclusive jurisdiction over the production, transportation or transmission of energy from offshore wind and solar projects. MMS and FERC will share responsibilities for hydrokinetic projects, such as wave, tidal and ocean current.

Maurice Hill, who works on the leasing program at MMS, said the agency is developing “a comprehensive approach” to offshore energy development. Interior Secretary Ken Salazar himself has been holding regional meetings and will visit San Francisco this week to talk shop as part of that process.

Hill said MMS and the U.S. Geological Survey will issue a report within 45 days on potential development and then go public with its leasing program.

“These next couple of months are really exciting times, especially on the OCS,” he said.

Still, Hill acknowledged that the industry is in an early stage and said federal officials are approaching environmental effects especially with caution.

“We don’t know how they’ll work,” he said. “We’re testing at this stage.”

‘Highly energetic’ West Coast waves

But if projects do lurch forward, the Electric Power Research Institute’s Bedard said, the resource potential is off the charts. He believes it is possible to have 10 gigawatts of ocean wave energy online by 2025, and 3 gigawatts of river and ocean energy up in the same time frame.

The potential is greatest on the West Coast, Bedard said, where “highly energetic” waves pound the long coastline over thousands of miles. Alaska and California have the most to gain, he said, with Oregon, Washington and Hawaii not far behind.

To Feo, a key concern is the length of time MMS chooses to issue leases to developers. He said the typical MMS conditional lease time of two, three or five years won’t work for ocean wave technology because entrepreneurs need longer-term commitments to build projects and show investors the industry is here to say.

“It just won’t work” at two, three or five years, Feo said. “Sooner or later, you have to get beyond pilot projects.”

Hill refused to answer questions about the length of the leases being considered by MMS.

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RenewableEnergyWorld “Ocean Energy 2009” Excerpts

MARSHA W. JOHNSTON, RenewableEnergyWorld.com, March 2009

One hundred and forty-one years ago, the relentless sea off Scotland’s coast inspired the following observation from native son and author George MacDonald:

I climbed the heights above the village, and looked abroad over the Atlantic. What a waste of aimless tossing to and fro! Gray mist above, full of falling rain; gray, wrathful waters underneath, foaming and bursting as billow broke upon billow…they burst on the rocks at the end of it, and rushed in shattered spouts and clouds of spray far into the air over their heads. “Will the time ever come,” I thought, when man shall be able to store up even this force for his own ends? Who can tell.”

In the United States, permitting may be an even bigger hurdle to marine energy deployment than financing. Between 25 and 35 different U.S. federal, state and local regulatory agencies claim some jurisdiction over marine power deployment. In the UK, two agencies handle permitting.

Today, we can certainly say, “Yes, the time will come.” The only question remaining is how long it will be before humankind routinely and widely uses electricity generated from the kinetic power of ocean tides, currents and waves.

If one defines “commercial ocean energy” as several tens of megawatts, the world cannot yet boast a commercial ocean energy installation. Indeed, only two installations of either wave, tidal or in-stream current devices are grid-connected and can generate over 1 megawatt (MW) of power. One is Pelamis Wave Power’s 2.25-MW Aguçadoura project off of Portugal’s northern coast and the other is Bristol-based Marine Current Turbines’ (MCT) SeaGen, a US $20-million commercial-scale tidal-energy project under development in Northern Ireland’s turbulent Strangford Narrows. In December, SeaGen boasted the first tidal turbine to hit a capacity of 1.2 MW.

(The biggest exception to commercial ocean energy production is the world’s longest running tidal power plant, the 240-MW La Rance, in France. But the plant’s barrage technology, which traps water behind a dam and releases it at low tide, has fallen out of favor due to its perceived higher environmental impact than underwater turbines. Nova Scotia has also been operating a 20-MW barrage Tidal Generating Station in the tidal-rich Bay of Fundy since 1984.)

The rest of the world’s wave, tidal and current installations, some of which have been in the water as far back as the 1990s, are experimental and prototype units ranging in size from 35 kilowatts (kW) to 400 kW. Because these units operate only intermittently and are not typically connected to any grid, it is not possible to determine their total power generation.

Many of these units are prototype demonstration units for the much bigger installations that are under development and that will begin to realize significant exploitation of the world’s ocean energy resource. For example, Ocean Power Technologies Inc. will use the 150-kW PowerBuoy it has been testing since the mid-90s as the “workhorse” for the 270-MW, four-site wave energy plant off California and Oregon coasts that it has partnered with Lockheed Martin to develop, says CEO George Taylor.

And Inverness, Scotland-based WaveGen expects to use 40 units of the 100-kw turbine it just installed off the Island of Islay for a 4-MW farm off of Scotland’s Isle of Lewis. Meanwhile, Pelamis says if its 750-kw “sea snake” devices, which were installed last year, make it through the winter, it will put 37 more of them in the water, generating 30 MW.

All of the wave, tidal, ocean and river current power around North America that can be practically extracted could together provide 10% of today’s electrical consumption in the U.S., says Roger Bedard, ocean energy leader at the Electric Power Research Institute (EPRI) in Palo Alto, CA. He adds that the total water resource could, it is sometimes said, possibly power the world twice over, but a lot of it is out of reach. “Hudson’s Bay, off the Arctic Circle, has HUGE tidal power, but it is thousands of miles from where anyone lives. We have HUGE wave resources off Aleutian Islands, but the same problem,” he says.  See EPRI’s U.S. Offshore Wave Energy Resource Map, below.

What will be the “magic” year for large-scale ocean energy deployment? Most developers indicate 2011-2012. Trey Taylor, co-founder and president of Verdant Power, which is moving into the commercial development phase of its 7-year-old Roosevelt Island Tidal Energy project, says the firm aims to have “at least 35 MW” in the water by the end of 2011.

Bedard is more circumspect. “I think it will be 2015 in Europe and 2025 in U.S. for big deployment,” he says, adding that the year cited depends entirely on the definition of “big” and “commercial,” which he defines as “many tens of megawatts.”

Verdant’s Taylor expects greater initial success in Canada. “The fundamental difference between Canada and the U.S. is that the underpinning of processes in Canada is collaborative and in the U.S. it is adversarial. It’s just the nature of Canadians, collaborating for community good, whereas in the U.S. people are afraid of being sued,” he said.

Bedard says the U.S. could catch up to Europe earlier, if the Obama Administration walks its big renewable energy infrastructure investment talk. “But if it’s business as usual, it could be later, depending on the economy,” he says.

Since the global economy began to melt down last September, many ocean energy companies have had to refocus their investment plans. With venture capital and institutional monies drying or dried up, firms are turning to public funds, strategic partners such as utilities and big engineering firms, and angel investors.

In November, MCT retained London-based Cavendish Corp Finance to seek new financing. Raymond Fagan, the Cavendish partner charged with MCT, said although tidal energy is not as advanced as wind or solar, he has seen a “strong level of interest so far from large engineering-type firms in MCT’s leading position.” Because MCT holds patents and is delivering power to the grid ahead of its competitors, Fagan thinks Cavendish can bring it together with such strategic partners.

In addition to the economic climate, he notes that the drop in oil and gas prices is further slowing renewable energy investment decisions. “Six to 12 months ago, people were leaping into renewable energy opportunities,” he says, adding that the UK government’s recent call for marine energy proposals for the enormous Pentland Firth zone north of Scotland will improve Cavendish’s chances of getting financing. Though it has yet to make a public announcement, MCT is widely viewed as a prime operator for the zone.

Monies are still available. Witness Pelamis Wave Power’s infusion of 5 million pounds sterling in November, which it says it will use for ongoing investment in core R&D and continuing development of its manufacturing processes and facilities.

In the U.S., permitting may be an even bigger hurdle to marine energy deployment than financing. Between 25 and 35 different U.S. federal, state and local regulatory agencies claim some jurisdiction over marine power deployment. In the UK, two agencies handle permitting. Bedard notes however, that streamlining the process in the U.S. may have begun with the recent opening of a new six-month process for licensing pilot marine energy plants.

Marine energy experts agree that there are more opportunities for wave power than for tidal, as there are simply fewer exploitable tidal sites. In technology terms, however, tidal turbines have benefited from a quarter century of wind turbine development, says Virginia Tech professor George Hagerman. Despite more widely available wave resource, wave energy developers face the challenge of needing many more devices than do tidal energy developers, and have a higher cabling cost to export the power.

As Christopher Barry, co-chair of the Ocean Renewable Energy panel at the Society of Naval Architects and Marine Engineers, explains: “The major challenge [to ocean energy] is not pure technology, but the side issues of power export and making the technology affordable and survivable.”

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Portugal’s Wave and Wind Energy Projects Dwindling

PATRICK BLUM, International Herald Tribune, March 15, 2009

LISBON: Projects for wind and wave energy beset by technical snags and dwindling investment

In July, a Pelamis wave power generator, an articulated steel machine like a giant semi-submerged sausage, was towed into the deep Atlantic, off the coast of Aguçadoura in northern Portugal, and attached to a floating mooring.

By September, two more Pelamis units, each capable of generating 750 kilowatts of electricity, had joined the first, about three miles, or five kilometers, off shore, and the Portuguese power utility Energias de Portugal was able to announce proudly that “the world’s first commercial wave power project,” was transmitting electricity to the national grid.

Costing about €9 million, or $11.5 million, the three machines were the first phase of a plan intended ultimately to be expanded to 28 units, with a total generating capacity of 21 megawatts — enough to power more than 15,000 homes and save more than 60,000 tons a year of carbon dioxide from being spewed into the skies by conventional power plants.

In mid-November all three were disconnected and towed back to land, where they now lie in Leixões harbor, near the city of Porto, with no date set for their return to operation.

So what went wrong?

First, there was a buoyancy problem, said Max Carcas, a spokesman for Pelamis Wave Power, the British company that designed and built the units and retained a 23% stake in the project. According to a report on ocean energy systems published by the International Energy Agency, foam-filled buoyancy tanks for the mooring installation leaked and needed to be replaced, delaying startup.

The buoyancy problem was resolved, Mr. Carcas said during a telephone interview this month, but other technical issues emerged, as could be expected in a prototype project. “Like all things new, you have niggles to work through, and we continue to do that.”

Then, the financial crisis kicked in.

The Aguçadoura wave farm was announced in September as a joint venture between Pelamis and a group of three promoters including EDP, the Portuguese electrical engineering company Efacec, and the asset manager Babcock & Brown, an Australia-based specialist in power and other infrastructure investments.

But, by November, as the global credit crunch and falling share markets took a deepening toll of highly leveraged investors, Babcock & Brown announced a major program of asset sales to pay down its debt: and the Portuguese partners pulled back from the venture.

“Babcock & Brown are in process of winding down and we’re looking at offers for all our assets,” Anthony Kennaway, a Babcock & Brown spokesman, said from London. “Pelamis is part of that. All our assets are for sale. We are not putting any more money into the project.”

Against that background, Mr. Carcas, of Pelamis, said that there was no timetable for returning the generators to sea.

“As soon as things are resolved,” he said. “Could be next week. Could be anything.”

Harnessing ocean power for energy seemed an ideal option for Portugal, a small country with no oil and limited resources, and a long Atlantic coastline south of the Bay of Biscay, famed for its fierce waves and storms.

Portugal now imports more than 80% of its energy supplies, far above the European Union average. Domestic power generation is heavily dependent on hydroelectric projects, which are vulnerable to big fluctuations in output, depending on seasonal weather conditions.

Ambitious government plans still aim for a radical transformation of Portugal’s energy profile, with as much as 60% of the country’s electricity to be generated from renewable sources by 2020. That compares with an EU target of 20% for the union as a whole.

But the Aguçadoura project points up the risks of a strategy relying on cutting-edge, and potentially costly, technology. Whether or not the target is achievable, particularly in current economic conditions, is a subject of debate among the country’s renewable energy specialists.

“We assumed there would be no critical technical issues,” to hinder deployment of offshore generators, said Antonio Sarmento, director of the Wave Energy Center, WavEC, a Portuguese nonprofit organization that promotes ocean wave power generation.

“Also we assumed there would be no environmental impact and that the energy would be relatively cheap. So we were optimistic,” Mr. Sarmento said. “It’s an educated guess. We are still guessing. When you pick up a new technology and look at the future it’s difficult to say what will be.”

On the cost side, investments in ocean-based technologies “are very high and operating costs are not entirely negligible because you have the problem of corrosion from salt water,” said Colette Lewiner, head of the global energy and utilities sector at the French consultancy and services company Capgemini.

While the Aguçadoura partners put the cost of the first phase at a relatively modest €9 million, the true cost of such developments is difficult to calculate, said Hugo Chandler, a renewable energy analyst at the International Energy Agency in Paris.

“Part of the problem is the absence of data,” he said. “Countries are still at an early stage and don’t want to reveal real costs.”

It’s a very young technology, Mr. Chandler said, but “the indications are that it is considerably more expensive than other technologies.”

Still, the Aguçadoura experience has not discouraged EDP from pursuing other high-tech ocean solutions. Last month it signed an agreement with Principle Power of the United States to develop and install a floating offshore wind farm off the Portuguese coast, one of the first projects of its kind in Europe.

The project would use proprietary Principle Power technology designed to allow wind turbines to be set in high-wind but previously inaccessible ocean locations where water depth exceeds 50 meters, or 164 feet. The agreement foresees commercial deployment in three phases, but sets no timetable.

Offshore wind power generation currently costs 50% to 100% more than equivalent onshore wind farms, according to a recent Capgemini report on clean technologies in Europe. But Portugal is eager to press ahead with the new technology. “Offshore wind is one of our key innovation priorities,” said the chief executive of EDP, António Mexia.

“The development of floating foundations for wind turbines is a prerequisite to the development of offshore wind farms world-wide, as areas in which the sea bed is less than 50 meters deep are scarce and fixed structures in deeper waters are economically not feasible,” he said.

Still, he noted, the agreement with Principle Power “is not a binding contract; there are a number of prerequisites, technical and financial, that need to be met.”

A €30 million first phase, covering development and infrastructure construction, could see a small, five megawatt floating generator in operation by the second half of 2012. But for that to happen, full funding would need to be in place “by the end of this semester,” Mr. Mexia said.

WavEC, meanwhile, has several wave power projects in the pipeline, including tests of prototype systems from three companies — WaveRoller, of Finland; Ocean Power Technologies of the United States; and Wavebob, of Ireland.

For sure, the economic recession and financial crisis are adding to the challenges facing such projects, as investors pull back. “There will be a pause, a slowdown, in renewable energy investment until we see the recovery,” said Ms. Lewiner, of Capgemini. But “these investments take time and you can’t sleep through the recession. These plants are needed.”

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UK Ocean Energy Quickly Churning Forward

PETER BROWN, EnergyCurrent.com, February 16, 2009

On a Monday morning in May last year, the Atlantic tide set a turbine in motion on the seabed off Orkney, and the energy captured was connected to the national grid. It was, said Jim Mather, Scotland’s Minister for Enterprise, Energy and Tourism, a “massive step forward”.

The amount of electricity generated may have been tiny, but for marine engineers the significance was huge. Their industry had stopped paddling and started to swim.

For small companies trying to get wave or tide devices off the drawing board and into the sea, many problems lie in wait. All turbines, whether they sit on the seabed or float, must withstand that once-in-a-century wave that could be a thousand times more powerful than the average. Conditions vary with the seasons and the seabed. A device that works in a fjord might not function in a firth. Rigorous, long-term testing is therefore vital.

“There are parallels with wind,” says Alan Mortimer, head of renewables policy at Scottish Power. “Many different types of turbine were proposed in the early Eighties. They boiled down to a small number of successful concepts. The same needs to happen with marine devices, but the difference is that they need to be full- size just to be tested.

“To get a reasonable number of prototypes into the water costs millions. What these small companies need is capital support.”

That, however, is hard to find. The Wave and Tidal Energy Support Scheme (Wates), which put GBP13.5 million into promising technologies, is now closed. Last year the Scottish Government offered the 10m Saltire Prize for a commercially viable scheme, but the Institution of Mechanical Engineers (IMechE), in its recent report Marine Energy: More Than Just a Drop in the Ocean?, called on the Government to provide another 40m.

This would go towards schemes to be tested at EMEC, the European Marine Energy Centre, which has two supported sites, with grid access, at Orkney. It was there that an Irish company, OpenHydro, made the grid breakthrough last year. “It’s desperately important that we grasp the nettle now,” says William Banks, IMechE’s president. “We have the micro-systems in place and I’d like to see them developed to the macro stage. However, unless we do that step by step, we’ll be in trouble.”

An estimated 50 teams are working around the world on marine energy. The danger is that Britain, and Scotland in particular, could lose the race, even though, as Alex Salmond, Scotland’s First Minister, says, “Scotland has a marine energy resource which is unrivalled in Europe.”

Scotland has a quarter of Europe’s tidal resources and a tenth of its wave potential.

Around 1,000 people work in Scottish marine energy, but that figure could billow. “You’re talking about an exercise that could transform the marine industry into something equivalent to oil and gas,” says Martin McAdam, whose company, Aquamarine Power, is growing fast.

Among his rivals in Scotland are AWS Ocean Energy, based near Inverness, with Archimedes, a submerged wave machine; Hammerfest UK, which wants to develop three 60MW tidal sites and is working with Scottish Power; Pelamis Wave Power, who are based in Edinburgh; and Scotrenewables, based in Orkney, who are currently developing a floating tidal turbine.

Politicians need to be educated about marine energy’s potential, says Banks. Indeed, IMechE has highlighted the need for sustained political leadership if what many see as the biggest problem – that of the grid – is to be solved. Why bring energy onshore if it can’t then reach homes?

“Grids were built to connect large power stations to cities. Now you’re going to have electricity generated all over the countryside. It’s a huge challenge,” says McAdam.

“We have had meetings with Ofgen and the national grid companies and we’re outlining the need to have grids to support at least 3,000MW of energy by 2020. That is definitely possible.” McAdam adds: “A European undersea grid is also being promoted and we’re very supportive of that.”

Such a system would help to overcome a frequent objection to renewables – their fickleness. If waves were strong in Scotland, Finland or France could benefit, and vice versa.

Another challenge is the cost of installation. “At the moment we’re competing with oil and gas for boats,” says McAdam. “We need to move away from using heavy-lift, jack-up vessels.” The answer might be devices that can be floated into position and then weighted down.

The race between suppliers is speeding up. Permission for a 4MW station at Siadar, off Lewis in the Western Isles, has just been granted to Wavegen, based in Inverness, and Npower Renewables. It could power about 1,500 homes, creating 70 jobs.

Among the success stories are the three 140-metre, red tubes developed by Pelamis (named after a sea serpent) which already float off the northern Portuguese coast at Aguadoura. More Pelamis turbines are to be installed at EMEC, along with Aquamarine’s wave device Oyster.

Oyster is basically a giant flap which feeds wave energy onshore to be converted to electricity. It has already been made, at a former oil and gas plant at Nigg, north of Inverness. A high- pressure pipeline was completed in December and a hydro-electric station will be installed this spring. In the summer, Oyster will finally be bolted to piles hammered into the seabed.

Unlike wave energy, tidal power needs a channel between two land masses – and in the roaring Pentland Firth, between Caithness and Orkney, Scotland has what has been called “the Saudi Arabia of marine power”, Europe’s largest tidal resource. To exploit it, a GBP2 million contract to build Aquamarine’s tidal power device, Neptune, was awarded last month. It will be tested at EMEC.

Elsewhere, SeaGen, an “underwater windmill” developed by a Bristol company, has just generated 1.2MW near the mouth of Strangford Lough, Northern Ireland.
But the most controversial of Britain’s tidal energy schemes is, of course, in the Severn Estuary, where a barrage could provide around 5% of Britain’s energy. Environmentalists fear irreparable damage to marshes and mudflats, but the Government is known to prefer the barrage to other, smaller options. The decision it takes next year is sure to be eagerly watched in Scotland.

Somewhat overshadowed by the Severn plan is Wave Hub, a project to build a wave-power station 10 miles off St Ives, on Cornwall’s north coast, using both Pelamis and a sea-bed device developed by ORECon of Plymouth. An application to create a safety area around it has just been submitted, part of the meticulous planning that precedes any marine trial.

“We have to have environmentalists looking at the impact on fisheries, flora and fauna,” says McAdam. “And we have to be completely open with the communities we’re going into. But most people realise that climate change and energy security are real things. We want to minimalise our environmental impact and give the country a means of isolating itself from the volatility of oil and gas.”

In theory, marine energy could generate a fifth of the UK’s electricity needs, but that would require a multitude of stations. Bill Banks believes nuclear power will be needed. “But we also need a variety of renewables,” he says. “Marine will take its place along with bio, hydro and wind energy. It’s available, it’s there at the moment, and if we get our act together I think we can lead Europe. We need a synergy of activity.”

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Wellinghoff on Energy Stimulus Funds, Removing Renewable Energy Obstacles and FERC

MendoCoastCurrent from Platts Energy Podium, February 12, 2009

The recently approved Economic Stimulus Plan includes expanding the US electric transmission grid and this may be the just the start of what will be a costly effort to improve reliability and deliver renewable energy to consumers from remote locations, Federal Energy Regulatory Commission (FERC) Acting Chairman Jon Wellinghoff told the Platts Energy Podium on February 12, 2009.

Wellinghoff defines the Stimulus energy funds as “seed money. But it really isn’t [enough] money to make huge advances in the overall backbone grid that we’re talking about to integrate substantial amounts of wind.”

While details of the plan compromises are unclear, the measure could provide $10 billion or more to transmission upgrades. Wellinghoff said backbone transmission projects could cost more than $200 billion. “And I think we’ll see that money coming from the private sector,” based on proposals already submitted to FERC.

Wellinghoff’s focused on Congress strengthening federal authority to site interstate high-voltage electric transmission lines to carry wind power to metropolitan areas and expects FERC to be heavily involved in formulation of either a comprehensive energy bill or a series of bills meant to address obstacles to increasing renewable wind, solar and geothermal energy, and other matters that fall within FERC’s purview. 

FERC plays a critical role “given the authorities we’ve been given in the 2005 and 2007 acts and our capabilities with respect to policy and implementation of energy infrastructure.”

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Obama Enlists Silicon Valley Doerr and Phillips

MendoCoastCurrent, February 11, 2009

President Obama chose two Silicon Valley notables as members of his new Economic Recovery Advisory Board.  The 15-member board shall advise Obama on decisions about the US economy and announced to spur Congress into passing legislation for his economic stimulus plan.

President Obama said he created a panel of outside advisers to enlist voices from “beyond the Washington echo chamber.”

Among his picks is Charles Phillips, president of Oracle and John Doerr, a Silicon Valley venture capitalist who serves on the boards of Google, Amazon, and Symantec.

“We will meet regularly so that I can hear different ideas and sharpen my own, and seek counsel that is candid and informed by the wider world.”

The board is headed by Paul Volcker, the former US Federal Reserve chairman and one of Obama’s top economic advisers.

“We’re also going to count on these men and women to serve as additional eyes and ears for me as we work to reverse this downturn,” said Obama. “Many of them have a ground-level view of the changes that are taking place.”

Phillips became president of Oracle in May 2003 and was previously with (the then-investment bank and now-bank holding company), Morgan Stanley.

Doerr is a venture capitalist associated with KPCB, who’s backed quite a few big names of Silicon Valley in their early years. Like Compaq, Sun Microsystems, Intuit, Netscape, and Amazon. He’s also been a major advocate for carbon trading and green tech causes.

Other names on the board include Martin Feldstein, professor of economics at Harvard University; Jeffery Immelt, CEO of General Electric; and Robert Wolf, CEO of investment bank UBS Group Americas.

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Finavera Sinks their own Wave Energy Projects

Publisher’s Note:  Feb 09, 2009 – Not only has Finavera surrendered their Makah Bay license noted below, they also announced surrendering the Humboldt County, California Preliminary Permit to explore wave energy:

“Finavera Renewables has filed applications to surrender its Federal Energy Regulatory Commission license for the Makah Bay Wave Energy Pilot Project in Washington and the Humboldt County Preliminary Permit for a proposed wave energy project in California.”

MendoCoastCurrent readers may recall Finavera’s inability to secure CPUC funding for the Humboldt project; noted below capitalization, financial climate as key reasons in these actions.

MendoCoastCurrent, February 6, 2009

Today Finavera Renewables surrendered their Federal Energy Regulatory Commission (FERC) Makah Bay, Washington wave energy project license, commenting that the Makah Bay Finavera project “never emerged from the planning stages.”

And “due to the current economic climate and the restrictions on capital necessary to continue development of this early-stage experimental Project, the Project has become uneconomic.  Efforts by Finavera to transfer the license were not successful.  Therefore, Finavera respectfully requests that the <FERC> Commission allow it to surrender its license for the Project. ”

Back in early 2007, Finavera’s Makah Bay project looked like it would become the first U.S. and west coast project deployment of wave energy devices.  And this project also had a unique status based on Native American Indian land/coastal waters, so the rules of FERC, MMS were different due to sovereign status.

Then AquaBuoy, Finavera’s premier wave energy device, sank off the Oregon coast due to a bilge pump failure in late October 2007.  

Recently noted was Finavera’s comment that they are currently focusing their renewable energy efforts toward wind energy projects closer to their homebase in British Columbia, Canada and in Ireland.

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Renewable Energy Now Looking for Economic CPR

KATE GALBRAITH, The New York Times, February 4, 2009

Wind and solar energy have been growing at a blistering pace in recent years, and that growth seemed likely to accelerate under the green-minded Obama administration. But because of the credit crisis and the broader economic downturn, the opposite is happening: installation of wind and solar power is plummeting.

Factories building parts for these industries have announced a wave of layoffs in recent weeks, and trade groups are projecting 30 – 50% declines this year in installation of new equipment, barring more help from the government.

Prices for turbines and solar panels, which soared when the boom began a few years ago, are falling. Communities that were patting themselves on the back just last year for attracting a wind or solar plant are now coping with cutbacks.

“I thought if there was any industry that was bulletproof, it was that industry,” said Rich Mattern, the mayor of West Fargo, N.D., where DMI Industries of Fargo operates a plant that makes towers for wind turbines. Though the flat Dakotas are among the best places in the world for wind farms, DMI recently announced a cut of about 20% of its work force because of falling sales.

Much of the problem stems from the credit crisis that has left Wall Street banks reeling. Once, as many as 18 big banks and financial institutions were willing to help finance installation of wind turbines and solar arrays, taking advantage of generous federal tax incentives. But with the banks in so much trouble, that number has dropped to four, according to Keith Martin, a tax and project finance specialist with the law firm Chadbourne & Parke.

Wind and solar developers have been left starved for capital. “It’s absolutely frozen,” said Craig Mataczynski, president of Renewable Energy Systems Americas, a wind developer. He projected his company would build just under half as much this year as it did last year.

The two industries are hopeful that President Obama’s economic stimulus package will help. But it will take time, and in the interim they are making plans for a dry spell.

Solar energy companies like OptiSolar, Ausra, Heliovolt and Sun Power, once darlings of investors, have all had to lay off workers. So have a handful of companies that make wind turbine blades or towers in the Midwest, including Clipper Windpower, LM Glasfiber and DMI.

Some big wind developers, like NextEra Energy Resources and even the Texas billionaire T. Boone Pickens, a promoter of wind power, have cut back or delayed their wind farm plans.

Renewable energy sources like biomass, which involves making electricity from wood chips, and geothermal, which harnesses underground heat for power, have also been slowed by the financial crisis, but the effects have been more pronounced on once fast-growing wind and solar.

Because of their need for space to accommodate giant wind turbines, wind farms are especially reliant on bank financing for as much as 50 percent of a project’s costs. For example, JPMorgan Chase, which analysts say is the most active bank remaining in the renewable energy sector, has invested in 54 wind farms and one solar plant since 2003, according to John Eber, the firm’s managing director for energy investments.

In the solar industry, the ripple effects of the crisis extend all the way to the panels that homeowners put on their roofs. The price of solar panels has fallen by 25% in six months, according to Rhone Resch, president of the Solar Energy Industries Association, who said he expected a further drop of 10% by midsummer. (For homeowners, however, the savings will not be as substantial, partly because panels account for only about 60% of total installation costs.)

After years when installers had to badger manufacturers to ensure they would receive enough panels, the situation has reversed. Bill Stewart, president of SolarCraft, a California installer, said that manufacturers were now calling to say, “Hey, do you need any product this month? Can I sell you a bit more?”

The turnaround reflects reduced demand for solar panels, and also an increase in supply of panels and of polysilicon, a crucial material in many panels.

On the wind side, turbines that once had to be ordered far in advance are suddenly becoming available.

“At least one vendor has said that they have equipment for delivery in 2009, where nine months ago they wouldn’t have been able to take new orders until 2011,” Mr. Mataczynski of Renewable Energy wrote in an e-mail message. As he has scaled back his company’s plans, he has been forced to cancel some orders for wind turbines, forfeiting the deposit.

Banks have invested in renewable energy, lured by the tax credits. But with banks tightly controlling their money and profits, the main task for the companies is to find new sources of investment capital.

Wind and solar companies have urged Congress to adopt measures that could help revive the market. But even if a favorable stimulus bill passes, nobody is predicting a swift recovery.

“Nothing Congress does in the stimulus bill can put the market back where it was in 2007 and 2008, before it was broken,” said Mr. Martin, the tax lawyer with Chadbourne & Parke. “But it can help at the margins.”

The solar and wind tax credits are structured slightly differently, but the House version of the stimulus bill would help both industries by providing more immediate tax incentives, alleviating some of their dependency on banks.

Both House and Senate would also extend an important tax credit for wind energy, called the production tax credit, for three years; previously the industry had complained of boom-and-bust cycles with the credit having to be renewed nearly every year.

Over the long term, with Mr. Obama focused on a concerted push toward greener energy, the industry remains optimistic.

“You drive across the countryside and there’s more and more wind farms going up,” said Mr. Mattern of West Fargo. “I still have big hopes.”

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OPT Oregon Wave Energy May Roll In Soon

SUSAN CHAMBERS, The World, February 4, 2009

Coos Bay, Oregon — The jobs are coming, so Ocean Power Technologies insists.

OPT spokesman Len Bergstein said Monday the company wants to get stimulus funds from the federal government.

“We have a strong interest in presenting a project that would be jobs-ready right now,” Bergstein said.

OPT wants to get a test buoy in the water soon. It recently formed an agreement with Lockheed Martin in which Lockheed would provide construction, systems integration and deployment work, according to a press release.

The announcement last week followed on a similar report from Oregon Iron Works in Clackamas and American Bridge in Reedsport that said they plan to share buoy construction work, if Oregon Iron gets OPT’s contract.

Bergstein said the Lockheed agreement is for higher level technical, systems integration work.

“It would not replace work on the coast,” he said.

OPT has said it hopes to get a buoy in the water this year and to submit plans to the Federal Energy Regulatory Commission and the federal government in March.

The Obama administration recently put together the White House Task Force on Middle Class Working Families, chaired by Vice President Joe Biden, to boost the living standards of the country’s middle class. Its first focus is green jobs, those that use renewable energy resources, reduce pollution, conserve energy and natural resources and reconstitute waste. The task force’s first meeting is Feb. 27.

If the community can get behind OPT’s plans, Bergstein said, the company could submit it to the task force.

“We want to demonstrate that wave energy projects are the kinds of things that can bring jobs to coastal communities,” he said. “Nothing could say that better than being part of a stimulus package.”

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Silicon Valley Looks Forward to Obama Stimulus Plan

SCOTT DUKE HARRIS and MATT NAUMAN, San Jose Mercury News, January 27, 2009

As President Barack Obama and Congress hammer out an economic stimulus package expected to be in the $825 billion range, Silicon Valley clean tech leaders are heartened by an energy agenda that starts with an emphasis on “smart grid” technologies that encourage energy conservation.That agenda will add jobs and bring dollars to several Silicon Valley companies, they say, especially those making smart grid components, solar panels, electric cars and green building materials.

It’s “a good start,” said venture capitalist Pascal Levensohn, whose portfolio includes clean tech investments. “There is a lot of optimism.”

Details of the new stimulus package are still being worked out, but talks suggest that about $60 billion will be applied toward promoting clean, efficient “energy independence” and creating jobs in the process.

Billions of dollars are expected to be applied to weatherizing government buildings, schools and homes. Billions more would go to loans and grants to promote renewable energy such as solar and wind. And still more billions would be spent upgrading the infrastructure of America’s power grids.

Bringing the power grid into the Internet age is a priority. The bill presented by House Democrats includes $11 billion to boost the IQ of electrical grids by employing sensors to maximize efficiency and minimize waste. An alternative bill introduced in the Senate would raise that sum to $16 billion.

“We’ve been swimming upstream,” said Peter Sharer, chief executive of Agilewaves, a Menlo Park maker of a product that monitors electricity, gas and water use in homes and businesses. “We’re finally swimming with the current. That’s what federal support means to us.” 

While initiatives like solar power have cosmic cachet, upgrading the power infrastructure is the logical place to start, some clean tech investors say. “We know that efficiency is the low-hanging fruit,” explained Levensohn, of Levensohn Venture Partners in San Francisco. 

America’s aging power grids now waste 10 to 30 percent of electricity from the generator to the plug, industry experts say. Foundation Capital partner Steve Vassallo likened the grid to a leaky bucket. Instead of simply putting more energy into the system, “the first thing you should do is fix the bucket,” he said.

The weaknesses in California’s energy grid and marketplace were starkly exposed in 2000 and 2001. Then, as Californians were hit by brownouts and ballooning electricity bills, President George W. Bush refused to support temporary price caps and blamed the energy crisis on environmental rules and a shortage of power plants. Only later was it discovered that energy dealers including Enron, a major supporter of Bush and adviser on Vice President Dick Cheney’s energy task force, were gaming California’s dysfunctional energy market, profiteering with schemes nicknamed “Death Star” and “Get Shorty.” Enron would later implode from its own culture of corruption.

The energy crisis inspired Silicon Valley entrepreneurs to seek solutions. Menlo Park’s Foundation started investing in clean tech in 2002, including smart grid companies Silver Spring Networks, based in Redwood City; eMeter, based in San Mateo; and EnerNOC, based in Boston.

The “smart grid” approach employs real-time monitoring and sensors to minimize waste and help identify parts of the grid that are leaking energy and need repairs. In an age of Internet connectivity, utilities typically remain unaware of outages until consumers call with problems, Vassallo said, and still rely on human meter readers walking door-to-door to check energy use “30 days in arrears.”

Pacific Gas & Electric plans to spend more than $2 billion to install 10.3 million smart electric and gas meters. Installations started in Bakersfield in late 2006, and are scheduled to reach the Bay Area by the end of this year.

This digital, wireless device will allow PG&E to get quicker notification of power outages, and also allow it to cut or reduce power during periods of high demand, if a customer agrees. Eventually, PG&E says, smart meters will allow it to better tap into energy that is put into the grid from solar panels installed on homes and businesses.

While California’s grid is “getting smarter,” Vassallo said, most states are served by power grids without the benefit of any information technology and, unlike California, have pricing structures that do not encourage conservation.

Valley companies are keenly scrutinizing the potentially devilish details. SunPower, the San Jose maker of solar modules, is pleased with the “wide, broad, deep effort” to promote cleaner energy as part of the stimulus, said Julie Blunden, a vice president. But she doesn’t think the effort will generate jobs until the second half of 2009.

SunPower, Blunden said, is ready to ramp up work in areas where it has expertise, such as putting solar systems on government buildings, as well as “beefing up areas where we don’t have strong, established channels.”

Weatherizing buildings and promoting new “green” development might benefit companies such as Serious Materials, a Sunnyvale maker of energy-saving building materials, such as heavily insulated windows and greener drywall.

Kevin Surace, the company’s chief executive, sees a lucrative market — 1 million to 2 million homes a year plus tens of thousands of government buildings. His company just bought two window factories, and Surace expects to grow his head count from 150 to 250 or 300 by year’s end.

Project Frog, a San Francisco company that builds green school buildings, is also encouraged. “We’re ready to help schools make use of these funds,” said Adam Tibbs, the company’s president.

Government support may help stimulate more private-sector investments in energy, says Agilewaves’ Sharer and other clean tech executives. But Lyndon Rive, chief executive of Solar City, which was expanding rapidly until the credit crunch hit, said the most important thing for clean tech is for financing to flow again.

“We want to get banks back into buying solar, wind and other renewable” energy assets, Rive said.

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Scotland’s Siadar Marine Energy Project Given Go-ahead

BBC News, January 22, 2009

One of the world’s largest wave stations is to be constructed in Scotland off the Isle of Lewis in the Western Isles.

The station will create up to 70 jobs and advance Scotland’s bid to lead the world in renewable energy, First Minister Alex Salmond said.

Ministers have granted consent for an application by npower renewables to operate a wave farm with a 4MW capacity at Siadar.

It is one of the first marine energy projects to be approved in the UK.

The technology used is called “oscillating water column”.

Ocean waves move air in and out of chambers in a breakwater, which in turn drives a turbine from Inverness-based Wavegen, known as the Wells turbine, to generate electricity.

Stephen Salter, a professor of engineering design at the University of Edinburgh and a leading expert on renewable energy said that wave power had the potential to provide 100kw of power for every metre of ocean — amounting to a big conventional power station for every 10km of shoreline.

At 4mw of power the Lewis wave farm will be able to power around 1800 homes — a thousand times less powerful than a conventional coal fired Drax power station.

Even so Prof Salter said he believed the Lewis project to be the largest wave farm in the world, adding: “It is still small but the longest journey starts with a single step.”

First Minister Alex Salmond said: “Today’s announcement is a significant step in Scotland’s journey to become a world leader in renewables.

“The Siadar wave farm will be one of the largest consented wave electricity generating station in the world.

“It is the first commercial wave farm in Scotland and is starting with a capacity to power around 1,800 homes.

“Nationally, this development will further strengthen our sector and locally, it has the potential to create up to 70 jobs in the Western Isles.

“This is good news for the Western Isles and for Scotland but its long-term potential is global.”

npower renewables’ managing director Paul Cowling said: “Scotland has immense potential in marine energy and the opportunity to be a world leader in marine renewables.

“This consent is an important milestone in the development of wave power technology and is to be celebrated.

“However, commercial demonstration projects such as Siadar still face significant economic challenges.”

Matthew Seed, chief executive officer of Wavegen said: “The Siadar Wave Energy Project will be a major step in the development of the wave energy industry in Scotland and worldwide.

“Wavegen’s proven technology will now be employed at full commercial scale, paving the way for real cost efficiencies which will bring the cost of wave energy closer to that of more established technologies.”

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Obama’s Clean, Green Energy Economic Recovery

MendoCoastCurrent, January 8, 2009

Key President-elect Barack Obama renewable energy quotes from his January 8, 2009 speech to the U.S. Congress and citizens, on his top economic priorities as he takes office.

“. . .the first question that each of us asks isn’t ‘what’s good for me?’ but ‘what’s good for the country my children will inherit?”

On creating new jobs and investing in America’s future:

“This plan must begin today. A plan I’m confident will save and create at least three million jobs over the next few years.”

The American Recovery & Reinvestment Program:

“It’s not just a public works program. It’s a plan that recognizes both the paradox and promise of the moment. The fact that there are millions of Americans trying to find work, even as all around the country there’s so much work to be done and that’s why we’ll invest in priorities like energy and education, healthcare and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector while our plan will save public sector jobs . . .”

“To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills.”

“In the process, we will put Americans to work in jobs that pay well and cannot be outsourced. Jobs building solar panels and wind turbines, constructing fuel efficient cars and buildings, and developing the new energy technologies that will lead to even more jobs, more savings and a cleaner, safer planet in the bargain.”

“The time has come to build a 21st century economy in which hard work and responsibility are once again rewarded.”

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Hawaii Poised to Become Leader in Wave Energy

CYNTHIA THIELEN, The Star Bulletin, December 21, 2008

Rep. Cynthia Thielen represents the 50th District (Kailua-Kaneohe Bay) in the State House

An unusual consortium comprised of large utilities, environmental groups, energy think tanks and ocean energy developers has just written to President-elect Barack Obama about the tremendous potential of wave energy and the role it can play in reducing our nation’s dependence upon oil.

The group includes utilities such as Pacific Gas & Electric, Portland General Electric and Florida Power & Light (the largest utilities in California, Oregon and Florida, respectively); environmental groups such as the Environmental Defense Fund, Surfrider Foundation and Natural Resources Defense Council; and academic entities Oregon State University and the New England Marine Renewable Energy Center. Taking the initiative on Hawaii’s behalf are Robbie Alm, COO of Hawaiian Electric Co., Virginia Hinshaw, chancellor of the University of Hawaii, and Ted Liu, director of the state Department of Business, Economic Development & Tourism. I encouraged these Hawaii leaders to participate in the important discussions with the new administration.

In its letter to the president-elect, the consortium is asking Obama to provide support for wave energy, citing “conservative estimates” that indicate wave energy could “supply at least 10% of the current U.S. demand.” That’s a staggering number for an economically imperiled nation that has spent $700 billion in the last two years on imported oil.

The consortium attached a white paper, titled “Ocean Renewable Energy: A Shared Vision and Call for Action,” to its letter. Among the guiding principles are encouraging pilot and demonstration scale projects, streamlining regulatory processes and cooperating in preparation of unified environmental documents.

Economic stimulation can’t take place at home if the U.S. ends up having to import wave energy conversion technology. The consortium stakeholders are making this a major focal point, stating that “without increased government action to encourage demonstration projects and to fund research and development, the promise of ocean renewable energy may never be realized, and the U.S. may see Europe corner the market on these technologies, in much the same way that it did with wind.”

The consortium also stresses the importance of pilot projects in determining the effects of wave energy technology on marine environments to ensure that we protect our ocean resources to the greatest degree possible while extracting energy from ocean waves.

I joined the stakeholders in the consortium and met with Obama’s transition team on December 16, 2008 in Washington, D.C., to discuss how best to integrate wave energy technology into the U.S. energy portfolio.

Hawaii is poised to become a leader. The Department of Energy designated the University of Hawaii as one of two national Marine Renewable Energy Centers. HECO, the administration and energy department signed a Memorandum of Understanding creating the Hawaii Clean Energy Initiative, an effort to meet 70% of Hawaii’s energy needs with clean energy by the year 2030. Since that time, Hawaii has seen bold plans in the renewable sector. Two of the more ambitious projects are Oceanlinx LLC’s wave energy project off Maui, and Better Place’s electric vehicles. But the electric vehicles must be able to obtain energy from clean, renewable resources, such as ocean waves.

The message I gave to Obama’s transition team is that Hawaii is one of the best places in the world for wave energy conversion, and we are ready. We have an abundance of year-round wave energy, a large, concentrated market on Oahu and our residents pay the highest electricity rates in the nation because our state exports up to $7 billion each year to import oil. With UH Chancellor Hinshaw, HECO executive Alm and economic director Liu joining the consortium’s call for action, our state will lead.

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U.S. Wave Energy Begins in Rough Waters

JOHN DRISCOLL, The Times-Standard, December 15, 2008

A white paper commissioned by the state of California says that tapping the ocean for power should be done carefully.

The report for the California Energy Commission and the Ocean Protection Council looked at the possible socio-economic and environmental effects of the infant industry, including what it might mean for fisheries and coastal habitat.

It also made recommendations on what research should be done to address those potential effects.

The waters remain murky in regard to what type of technology wave energy projects might use, and the scope of necessary development. The study finds that it will be key to fill in that missing information to determine what impacts they might have.

“Site selection and project scale are critical factors in anticipating these potential effects,” the report reads.

Depending on their size and location, the study reads, commercial and sport fisheries might be impacted, but new projects would yield construction and operations jobs for nearby communities.

But projects could also interfere with wave shoaling and beach building by stripping some energy out of waves, and that in turn could affect species from the high tide line out to the continental shelf.

The buoys or other structures designed to convert wave power to electricity are also likely to act like artificial reefs where reef-related fish would congregate, the report reads, a change from what would typically occur in the open ocean.

Birds and marine mammals may also be affected, but likely to a small degree, the study found.

Still, the report concludes that there aren’t any dramatic impacts expected, and recommends that the push to develop projects proceed carefully, listing a slew of research that should be done to help understand the potential for problems.

Greg Crawford, an oceanographer with Humboldt State University and an author of the paper, said that much depends on what type of wave projects are employed.

“This stuff needs to be approached holistically,” Crawford said.

While some wave energy projects are beginning to be used around the world, there is little information on how durable they are over the long term.

As Crawford pointed out, they are deployed in particularly difficult and treacherous environments.

The report recommends starting small, both in the laboratory and with small-scale projects to help begin to understand the effects they might have when deployed on an industrial scale.

The Pacific Gas and Electric Co. has won authorization from the federal government to study several areas off the Humboldt and Mendocino coasts, but the company recently ran into what appears to be an insurmountable obstacle from state utilities regulators on another project off Trinidad. In October, the California Public Utilities Commission denied the first wave power project it has ever considered, on the grounds that the Trinidad Head proposal isn’t viable, and the contract price to sell the power is too expensive.

A feud of sorts over final jurisdiction on wave energy projects persists between the Federal Energy Regulatory Commission (FERC) and the U.S. Mines and Minerals Service (MMS). And it’s not clear exactly what agency would make the determination of whether the costs of projects outweigh their benefits, said HSU economist Steve Hackett, another author of the study.

“I think it’s a very daunting situation for the public utilities or a power company to take on,” Hackett said.

While environmental issues will be hashed out in an environmental analysis, economic effects should also be considered, Hackett said. That includes the detriments to a struggling fishing fleet and the upside of jobs from energy projects, he said.

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Capturing Ocean Energy

Guardian.co.uk, December 3, 2008

Way back in Napoleonic Paris, a Monsieur Girard had a novel idea about energy: power from the sea. In 1799, Girard obtained a patent for a machine he and his son had designed to mechanically capture the energy in ocean waves. Wave power could be used, they figured, to run pumps and sawmills and the like.

These inventors would disappear into the mists of history, and fossil fuel would instead provide an industrializing world with almost all its energy for the next two centuries. But Girard et fils were onto something, say a growing number of modern-day inventors, engineers, and researchers. The heave of waves and the tug of tides, they say, are about to begin playing a significant role in the world’s energy future.

In the first commercial scale signal of that, last October a trio of articulated, cylinder-shaped electricity generators began undulating in the waves off the coast of Portugal. The devices look like mechanical sea snakes. (In fact, their manufacturer, Scotland’s Pelamis Wave Power Ltd., takes its name from a mythical ancient Greek sea serpent.) Each Pelamis device consists of four independently hinged segments. The segments capture wave energy like the handle of an old fashioned water pump captures the energy of a human arm: as waves rock the segments to and fro, they pump a hydraulic fluid (biodegradable, in case of spills) powerfully through a turbine, spinning it to generate up to 750,000 watts of electricity per unit. Assuming the devices continue to perform well, Portuguese utility Energis expects to soon purchase another 28 more of the generators.

The completed “wave farm” would feed its collective power onto a single high voltage sea-floor cable, adding to the Portuguese grid about 21 megawatts of electricity. That’s enough to power about 15,000 homes.

In a world where a single major coal or nuclear plant can produce more than 1,000 megawatts of electricity, it’s a modest start. But from New York’s East River to the offshore waters of South Korea, a host of other projects are in earlier stages of testing. Some, like Pelamis, rely on the motion of waves. Others operate like underwater windmills, tapping the power of the tides.

Ocean-powered technologies are in their infancy, still technologically well behind such energy alternatives as wind and solar. Necessarily designed to operate in an inherently harsh environment, the technologies remain largely unproven and — unless subsidized by governments — expensive. (Portugal is heavily subsidizing the Pelamis project, with an eye to becoming a major European exporter of clean green power in the future.) Little is known about the effects that large wave or tide farms might have on marine ecosystems in general.

Despite the uncertainties, however, proponents say the potential advantages are too striking to ignore. Eight hundred times denser than air, moving water packs a huge energy wallop. Like solar and wind, power from moving seas is free and clean. But sea power is more predictable than either wind or solar. Waves begin forming thousands of miles from coastlines and days in advance; tides rise and fall as dependably as the cycles of the moon. That predictability makes it easier to match supply with demand.

Roger Bedard, who leads ocean energy research at the U.S. utility-funded Electric Power Research Institute (EPRI) in Palo Alto, says there’s plenty of reason for optimism about the future of what he calls “hydrodynamic” power. Within a decade, he says, the U.S. could realistically meet as much as 10% of its electricity needs from hydrodynamic power. As a point of reference, that’s about half of the electricity the U.S. produces with nuclear power today. Although he acknowledges that initial sea-powered generation projects are going to be expensive, Bedard believes that as experience grows and economies of manufacturing scale kick in, hydrodynamic power will follow the same path toward falling costs and improving technologies as other alternatives.

“Look at wind,” he says. “A kilowatt hour from wind cost fifty cents in the 1980s. Now it’s about seven cents.” (That’s about the same as producing electricity with natural gas, and only about three cents more than coal, the cheapest — and dirtiest — U.S. energy choice. Any future tax on carbon emissions could narrow that gap even more, as would additional clean-power subsidies.)

For some nations, wave and tide power could pack an even bigger punch. Estimates suggest, for instance, that the choppy seas surrounding the United Kingdom could deliver as much as 25% of its electricity. British alternative energy analyst Thomas W. Thorpe believes that on a worldwide basis, waves alone could produce as much as 2,000 terawatt hours of electricity, as much as all the planet’s major hydroelectric plants generate today.

Although none are as far along as Pelamis, most competing wave-power technologies rely not on the undulations of mechanical serpents, but instead on the power captured by the vertical bobbing of large buoys in sea swells. Ocean Power Technologies (OPT), based in New Jersey, drives the generators in its PowerBuoy with a straightforward mechanical piston. A stationary section of the mostly submerged, 90-foot buoy is anchored to the ocean floor; a second section simply moves up and down with the movement of sea swells, driving pistons that in turn drive an electrical generator. The Archimedes Wave Swing, a buoy-based system developed by Scotland’s AWS Ocean Energy, harnesses the up-and-down energy of waves by pumping air to spin its turbines. Vancouver-based Finavera Renewables uses seawater as its turbine-driving hydraulic fluid.

Although Pelamis beat all of these companies out of the commercialization gate, OPT appears to be right behind, with plans to install North America’s first commercial-scale wave power array of buoys off the coast of Oregon as early as next year. That array — occupying one square-mile of ocean and, like other wave power installations, located far from shipping lanes — would initially produce 2 megawatts of power. OPT also announced last September an agreement to install a 1.4-megawatt array off the coast of Spain. An Australian subsidiary is in a joint venture to develop a 10-megawatt wave farm off the coast of Australia.

Meanwhile, Pelamis Wave Power plans to install more of its mechanical serpents — three megawatts of generating capacity off the coast of northwest Scotland, and another five-megawatt array off Britain’s Cornwall coast.

The Cornwall installation will be one of four wave power facilities plugged into a single, 20-megawatt underwater transformer at a site called “Wave Hub.” Essentially a giant, underwater version of a socket that each developer can plug into, Wave Hub — which will be connected by undersea cable to the land-based grid — was designed as a tryout site for competing technologies. OPT has won another of the four Wave Hub berths for its buoy-based system.

Other innovators are trying to harness the power of ocean or estuarine tides. Notably, in 2007, Virginia’s Verdant Power installed on the floor of New York’s East River six turbines that look, and function, much like stubby, submerged windmills, their blades — which are 16 feet in diameter — turning at a peak rate of 32 revolutions per minute. The East River is actually a salty and powerful tidal straight that connects Long Island Sound with the Atlantic Ocean. Although the “underwater windmills” began pumping out electricity immediately, the trial has been a halting one. The strong tides quickly broke apart the turbines’ first- (fiberglass and steel) and second- (aluminum and magnesium) generation blades, dislodging mounting bolts for good measure.

Undeterred, in September Verdant Power began testing new blades made of a stronger aluminum alloy. If it can overcome the equipment-durability problems, the company hopes to install as many as 300 of its turbines in the East River, enough to power 10,000 New York homes.

A scattering of similar prototype “underwater windmill” projects have been installed at tidal sites in Norway, Northern Ireland, and South Korea. (In addition, interest in moving into freshwater sites is growing. Verdant itself hopes to install its turbines on the St. Lawrence River. At least one other company, Free Flow Power of Massachusetts, has obtained Federal Energy Regulatory Commission permits to conduct preliminary studies on an array of sites on the Mississippi River south of St. Louis.)

The environmental benefits of hydrodynamic power seem obvious: no carbon dioxide or any other emissions associated with fossil-fuel-based generation. No oil spills or nuclear waste. And for those who object to wind farms for aesthetic reasons, low-profile wave farms are invisible from distant land; tidal windmill-style turbines operate submerged until raised for maintenance.

There are, however, environmental risks associated with these technologies.

New York state regulators required Verdant Power to monitor effects of their its turbines on fish and wildlife. So far, sensors show that fish and water birds are having no trouble avoiding the blades, which rotate at a relatively leisurely 32 maximum revolutions per minute. In fact the company’s sensors have shown that fish tend to seek shelter behind rocks around the channel’s banks and stay out of the central channel entirely when tides are strongest.

But a host of other questions about environment effects remain unanswered. Will high-voltage cables stretching across the sea from wave farms somehow harm marine ecosystems? Will arrays of hundreds of buoys or mechanical serpents interfere with ocean fish movement or whale migrations? What effect will soaking up large amounts of wave energy have on shoreline organisms and ecosystems?

“Environmental effects are the greatest questions right now,” EPRI’s Bedard says, “because there just aren’t any big hydrodynamic projects in the world.”

Projects will probably have to be limited in size and number to protect the environment, he says – that’s a big part of the reason he limits his “realistic” U.S. estimate to 10% of current generation capacity. But the only way to get definitive answers on environmental impact might be to run the actual experiment — that is, to begin building the water-powered facilities, and then monitor the environment for effects.

Bedard suggests that the way to get definitive answers will be to build carefully on a model like Verdant’s: “Start very small. Monitor carefully. Build it a little bigger and monitor some more. I’d like to see it developed in an adaptive way.”

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Finavera Plans US $1M Private Placement

RenewableEnergyWorld.com, November 10, 2008

Finavera Renewables Inc. has announced that it plans to raise US $1,002,000 through a non-brokered private placement of 20,040,000 units at a price of $0.05 per unit. Each unit consists of one common share and one-half of a share purchase warrant, with each full warrant exercisable at $0.10 for 12 months from the date of closing of the private placement.

Proceeds of the placement will be used for the continued development of Finavera Renewables’ wind energy projects, primarily for the B.C. Peace Region projects and for general working capital.

The company filed the US $0.05 price reservation with the TSX Venture Exchange on November 3, 2008. Proceeds of the placement will be used for the continued development of Finavera Renewables’ wind energy projects, primarily for the B.C. Peace Region projects and for general working capital, Finavera said.

The company also announced that is has applied to extend the term of all 21,000,000 share purchase warrants issued pursuant to a December 2007 private placement. The warrants, exercisable at US $0.15 per share and initially issued for a term of twelve months, have been extended an additional year.

The move to fund Finavera’s wind businesses comes after the California Public Utilities Commission (CPUC) decision to not allow a power purchase agreement between Finavera and PG&E for an ocean energy project to move forward. The CPUC cited concerns about the price of the electricity coming from the project specified under the PPA.

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BP Scraps British Renewables Plan to Focus on US

TERRY MACALISTER, The Guardian/UK, November 7, 2008

BP has dropped all plans to build wind farms and other renewable schemes in Britain and is instead concentrating the bulk of its $8bn (£5bn) renewables spending programme on the US, where government incentives for clean energy projects can provide a convenient tax shelter for oil and gas revenues.

The decision is a major blow to the prime minister, Gordon Brown, who has promised to sweep away all impediments to ensure Britain is at the forefront of the green energy revolution. BP and Shell – which has also pulled out of renewables in Britain – are heavily influential among investors.

BP has advertised its green credentials widely in the UK and has a representative on the ruling board of the British Wind Energy Association (BWEA). But it said difficulty in getting planning permission and lower economies of scale made the UK wind sector far less attractive than that of the US.

“The best place to get a strong rate of return for wind is the US,” said a BP spokesman, who confirmed the group had shelved ideas of building an onshore wind farm at the Isle of Grain, in Kent, and would not bid for any offshore licences.

BP has enormous financial firepower as a result of recent very high crude oil prices. Its move away from wind power in Britain follows a decision by Shell to sell off its stake in the London Array project off Kent, potentially the world’s largest offshore wind farm.

Shell gave the same reasons as BP for that move, saying the economics of UK wind were poor compared to those onshore across the Atlantic, where incoming president Barack Obama has promised to spend $150bn over 10 years to kick start a renewable energy revolution .

BP said about $1.5bn would be spent next year on US wind projects and the company expected to spend the $8bn up to the year 2015.

BP is still proceeding with some limited solar, biofuels and other schemes, but the vast majority of its time and energy is now being concentrated on wind. By the end of 2008, BP expects to have one gigawatt of US wind power installed and plans to have trebled this by 2010.

The BWEA shrugged off BP’s decision. “The offshore wind market is evolving and getting stronger. Different investors will come and go at different stages of the development cycle. But whoever the players are, we know that the offshore industry will be generating massive amounts of electricity for the UK market in the next few years,” said a spokesman.

Britain is not the only country to miss out on BP’s largesse. The company said yesterday it was also pulling out of China, India and Turkey, where it had also been looking at projects.

BP had formed a joint venture with Beijing Tianrun New Energy Investment Company, a subsidiary of Goldwind, China’s largest turbine maker. The two companies had signed a deal in January under which they planned 148.4MW of wind capacity in Inner Mongolia, China’s main wind power region. BP had also started building two wind farms in India and was considering schemes in Turkey. It is now expecting to sell off the Indian facilities and halt work in Turkey.

Green campaigners have been highly sceptical about BP’s plans to go “beyond petroleum” and feared that the company’s new chief executive, Tony Hayward, would drop this commitment, started under his predecessor, John Browne.

The company has always insisted it remained keen to look at green energy solutions and has been investing in biofuels operations in Brazil. BP is also in the middle of a major marketing campaign, with huge posters on the London Underground boasting of its moves to diversify into wind and other energy sources.

The Carbon Trust, a government-funded organisation established to help Britain move from carbon to clean energy, recently published a major report warning ministers that the costs of building wind farms offshore was too high. There was speculation that BP was a major influence on that study, which proposed that turbines should be allowed to be placed much nearer to the shore.

The Crown Estate, which has responsibility for UK inshore waters, is still confident that a long-awaited third offshore wind licensing round in the North Sea will attract a record number of bidders. It has already registered 96 companies, although it has not released names and BP and Shell will clearly be absent.

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What Obama Presidency Means for Clean Tech

MARTIN LAMONICA, CNET, November 5, 2008

Energy and environmental policy is poised for dramatic change under an Obama administration even with a slumping economy.

With the incoming administration and Congress, renewable energy advocates and environmentalists said they anticipate a comprehensive national energy plan focused on fostering clean-energy technologies.

“The election is over. Now the hard work begins,” wrote Dan Farber, a professor of law at the University of California at Berkeley and a member of the lobbying group Cleantech & Green Business for Obama. “Change is on the way.”

Obama’s energy plan, detailed fully earlier this year, is ambitious. It calls for a $150 billion investment in clean technologies over 10 years, aggressive targets for greenhouse emission reductions, and programs to promote energy efficiency, low-carbon biofuels, and renewable energies.

But a troubled economy–among other barriers–means that bold, new energy legislation, notably caps on greenhouse gas emissions, is unlikely to pass in the first years of an Obama administration, according to experts.

Instead, the Obama presidency is expected to first push for smaller yet significant measures, such as efficiency and renewable energy mandates, and then lay the groundwork for far-reaching climate initiatives, they said.

“One of the biggest setbacks is trying to find the money to pay for all of this. This isn’t free,” said David Kurzman, managing director of Kurzman CleanTech Research. “Reality will set in and trying to find money…is really going to temper the possibilities over the next 12 months.”

Winners and losers
Cleantech company executives note that during the campaign, Obama articulated his belief that environmental protection and economic development can be closely related. During Obama’s acceptance speech Tuesday night, his reference to “new energy to harness and new jobs to be created” could be read in two ways–a call for political involvement or for alternative-energy sources.

In an interview with Time magazine in October 2008, he said, “From a purely economic perspective, finding the new driver of our economy is going to be critical. There is no better potential driver that pervades all aspects of our economy than a new energy economy.”

Cleantech professionals expect that energy and the environment, which were hot-button issues during the campaign, to continue to command the attention of politicians and the electorate. And the combination of a Democratic-controlled Congress and Obama administration means that government stimulus spending targeted at the energy business is a strong possibility.

“There’s a growing sense that investing in infrastructure, even if it means more deficit spending, is a good thing because it will help economic growth in the short and long term,” said Ethan Zindler of research firm New Energy Finance. “And green energy has come to be regarded as a 21st-century infrastructure play.”

Some technologies stand to benefit more than others if Obama’s administration is successful in implementing its proposals.

Renewable energies. Obama has called for a national renewable portfolio standard to mandate that utilities get 10% of electricity from renewable sources–wind, solar, and geothermal–by 2012, and 25% by 2025. “That’s the backbone the country needs to invest in,” said Rhone Resch, president of the Solar Energy Industry Association.

Although more than half the states already have renewable portfolio standards, many southern states have balked at national standards because they say they do not have sufficient renewable energy resources.

In this case, having an activist federal government, as Obama’s proposals suggest, may meet resistance from the states because electric utilities are regulated by a mix state and federal agencies. “It’s not just a question of money. It’s also a question of governance and public policy,” said Jim Owen, a representative for the Edison Electrical Institute.

In the recently passed financial bailout package, solar energy received an eight-year extension of federal tax credits, while wind received only a one-year extension. The election increases the chances that wind energy will be extended further.

Efficiency and smart grid technology. Obama’s plan calls for a power grid modernization program and stricter building efficiency codes in federal buildings. That means efficiency products such as demand response, advanced metering and sensors to monitor usage should further benefit from government incentives, said Kurzman.

A federal initiative to establish interconnection standards and bulk up interstate transmission lines would make power generation of all kinds more efficient and allow utilities to use more renewable sources. “A 50-state role to transmission just doesn’t get the job done. You need a federal planning and facilitation,” said Rob Church, vice president of research and industry analysis at the American Council on Renewable Energy (ACORE).

Biofuels. Hailing from the corn-producing state of Illinois, Obama is expected to continue supporting ethanol. However, Brooke Coleman, executive director of the New Fuels Alliance, noted that Obama appears to understand that the biofuels industry needs to transition to nonfood feedstocks, such as wood chips or algae, in order to be sustainable.

Coleman said that strong federal policies are required for biofuels to crack into the fossil fuel industry.

“There is not a free market in the fuel sector. There’s no real competition in the wholesale supply chain–it’s completely owned by oil,” Coleman said. “You have to be pretty heavy-handed to fundamentally correct this market.”

Auto. Obama has called for increasing fuel efficiency, tax credits for plug-in hybrid cars, and loan guarantees so that automakers can “retool.”

But struggling auto makers–said to be running dangerously low on cash–will need government aid in the coming months to prevent larger harm to the economy, argued David Cole, the chairman for the Center for Automotive Research. For that reason, he expects government leaders of all kinds to be supportive.

“Politically, the issue here is pretty stark and cost of keeping the auto industry in game is whole lot less than of a major failure,” Cole said.

Fossil fuels and nuclear. During the campaign, Obama said he would allow increased domestic oil and gas drilling as well as investments in so-called clean coal technology where carbon emissions are stored underground. Companies that have coal gasification technologies stand to benefit because they are cleaner source of electricity, said Kurzman.

In the campaign, Obama voiced caution on storing nuclear waste. But during the second presidential debate, Obama said he backs nuclear power “as one component of our overall energy mix.”

Skip Bowman, president of the Nuclear Energy Institute, said Tuesday he expects the new Congress and administration to continue its support of nuclear because it addresses energy and climate change.

Counting carbon
Longer term, the broadest policy change on energy and environment will be climate-change regulations. Obama has called for an 80 percent reduction of greenhouse gas emissions from 1990 levels by 2050 through a federal cap and trade system. Pollution rights would be auctioned, at least partially, which would create a fund for clean technology programs.

Large polluters, like chemical companies and utilities that rely heavily on coal, are the ones that will be most affected. But given that there is stronger political will to tackle energy security than climate change, policies to promote domestic energy production and efficiency are likely to take precedence over cap and trade, said New Energy Finance’s Zindler.

Still, the new administration can accomplish a great deal on renewable energy without having to pass multibillion-dollar legislation, said Scott Sklar, a renewable energy lobbyist and president of the Stella Group. Using only the federal government’s purchasing power to integrate green building technologies and addressing grid interconnection issues, for example, can be done without passing laws.

“Existing programs can be tweaked to accommodate the new vision,” Sklar said. “Depending on how you structure things, you could have a quick and profound impact on new technologies.”

New Fuel Alliance’s Coleman said that the biggest danger to the Obama administration and new Congress is not “overplaying their hand” and pushing more extreme environmental policies.

“I firmly believe that the linchpin to this entire game is allowing agriculture to play a role in diversifying our energy, whether it be wind, solar, using rural areas for geothermal or wind corridors,” he said. “More extreme positions like trying to end coal result in failure and missed opportunities.”

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California Rejects PG&E Contract for Wave Energy

MATT NAUMAN, San Jose Mercury News, October 27, 2008

The California Public Utilities Commission rejected a Pacific Gas & Electric contract for wave energy, saying the utility was going to pay too much for a technology that’s still largely experimental.

Last December, PG&E said it would be the first utility in the nation to get energy from ocean waves after signing a power purchase agreement with Finavera Renewables, which planned to operate a “wave farm” about 21/2 miles off the coast of Eureka. The deal was for 2 megawatts of power starting in 2012.

But the California PUC this month nixed the deal, saying wave energy technology was “in a nascent stage” and that Finavera’s system was “not currently viable.” The commission noted that a prototype buoy deployed by Finavera off the Oregon coast in 2007 sank before its six week test period was concluded.

The CPUC, which oversees power deals and rate hikes from the state’s big utilities, also said the San Francisco utility was going to pay too high a price for the wave-energy contract. The financial terms of power deals are not released publicly.

“We respectfully disagree with the decision,” PG&E spokeswoman Jennifer Zerwer said. The utility will continue to pursue wave energy projects, she said, including through its Emerging Renewables Resource Program proposal that would fund two wave projects off the Mendocino County and Humboldt County coast that’s currently waiting PUC approval.

In a letter to the PUC, Brian Cherry, PG&E’s vice president of regulatory relations, said the rejection of the deal would have “a chilling effect on wave development in California.” The rejection will send wave companies to states other than California, he wrote.

Finavera Renewables, based in Vancouver, British Columbia, said the decision puts California “out of step” with the policies of the federal government, other states and cities. CEO Jason Bak said Finavera would try to form a private wave-energy consortium to diversify the risk and attract more funding for wave-energy technology. He also said the company would now focus on its wind projects in Canada and Ireland.

A report released Monday suggested that wave energy has great potential to be a source of renewable power. While only about 10 megawatts of ocean power have been installed worldwide to date, a report by researcher Greentech Media and the nonprofit Prometheus Institute found that could grow to 1 gigawatt (1,000 megawatts) of power by 2015. In California, 1 megawatt of power is enough to provide electricity for 750 homes.

More than $4 billion will be invested in ocean-wave research and the construction of wave farms over the next six years, the report says.

Daniel Englander, co-author of that report, doesn’t see the CPUC decision as a death blow for wave energy projects. “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.”

Still, he expects several companies will have production-ready ocean power systems capable of delivering 2 megawatts or more within five years.

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Mighty Wind: How Long Will Economics Work in Favor of Clean Energy?

Keith Johnson, Environmental Capital in WSJ, September 15, 2008

Most of the renewable-energy business is busy fretting about the extension of federal tax credits, which expire at the end of this year. But the real story, it seems, is how clean energy’s biggest historical handicap is coming to be seen as one of its biggest selling points: its predictable cost.

Take offshore wind power, the holy grail of big renewable-energy projects. There’s lots of wind a few miles out at sea; go out far enough, and even Kennedys will stop complaining about eyesores. The U.S. Minerals Management Service, lately notorious for opening other things up, is opening up chunks of the U.S. coastline for wind-farm development.

The problem with offshore wind has always been the cost: The turbines cost more, and installing them and maintaining them costs more than their onshore cousins. That helped torpedo efforts in the U.S. to build offshore wind farms in the past. Or, as the NYT phrased it in its lengthy review of Delaware’s battle to become the first U.S. state to embrace offshore wind with the Bluewater Wind Park:

Offshore marine construction was wildly, painfully expensive — like standing in a cold shower and ripping up stacks of thousand-dollar bills.

How did a cold shower turn into an offshore wind farm blessed by same the local power company that had actively lobbied against it? Two words: energy prices.

From the NYT: “Energy markets went significantly higher — and scarily so, particularly in the last six months,” [Bluewater Wind boss Peter Mandelstam] said. Indeed, oil has skyrocketed, and the price of Appalachian coal has more than doubled this year. Tom Noyes, a Bluewater supporter, blogger, and Wilmington-based financial analyst, says that a year ago, “the numbers that both sides of this debate were throwing around were largely academic. Now, those numbers are visceral.” Against this backdrop of steadily climbing energy prices, Bluewater’s offer of stable-priced electricity — an inflation-adjusted 10 cents per kilowatt hour for the next 25 years — became something that no utility, it seems, could credibly oppose. “A few decision-makers got it early on,” Mandelstam said, “some got it slightly later and [local power company] Delmarva finally got it.”

Wind power is suddenly becoming more attractive because the fuel is free; what makes it expensive is the up-front capital costs of the turbines and wind farm installation. That’s almost the opposite case with power sources like natural gas, where the upfront costs are pretty low, and the fuel bill is the main variable.

At a time of wildly volatile oil, coal, and gas prices around the world, that kind of long-term price predictability is a big advantage. The city of Houston is saving money on its power bill after switching one-quarter of its municipal power needs to fixed-price wind-power contracts.

It worked on Delmarva, too. President Gary Stockbridge told Delaware state authorities one of the main reasons he was able to finally agree to purchase power from the Bluewater wind farm was that ratepayers wouldn’t get stuck with much higher utility bills—which is what Delmarva had initially warned about when it opposed the wind farm.

In just the last two months, though, oil prices have collapsed; crude fell below $100 Monday. So the question for Bluewater and every other embryonic offshore wind farm in the U.S. remains the same: Will fossil fuels stay pricey enough to keep renewable energy attractive, or are fresh subsidies the sector’s only hope?

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University of Hawaii Awarded Five-Year Project in Wave Energy Research

MendoCoastCurrent, September 19, 2008

The University of Hawaii (UH) has won an intensely sought-after award, being selected as one of two National Marine Renewable Test Centers, with Oregon State University as the other.

As a test center, UH will receive federal funding to study and encourage the implementation of wave energy systems in Hawaiian waters. The strong wave climate, combined with the highest use of fossil fuel and electricity rates in the nation, make Hawaii an ideal location for the development of lower-cost wave power.

It has been a banner year for renewable energy in Hawaii. After Congress passed the “Energy Independence and Security Act of 2007,” the U.S. Department of Energy signed a Memorandum of Understanding with the state of Hawaii in January, seeking to produce 70% of Hawaii’s electricity needs from renewable resources by 2030.

In February, Oceanlinx, one of the world’s leading wave energy developers, announced plans for a wave energy facility off Maui’s northern coast.

The extent to which wave energy companies are drawn to Hawaii will ultimately determine how many jobs are created by their presence. However, given the large market and available resources, the potential is tremendous. Wave energy converters require engineers, consultants, commercial divers, maintenance crews, marine transport services, technicians and shipyard services. In other words, a vibrant wave energy industry will create well-paying jobs while keeping billions of dollars in our state economy instead of shipping them primarily to foreign countries to pay for oil.

With the recent surge in oil prices, renewable energy systems have been experiencing a renaissance. Investors who wanted nothing to do with renewable energy companies a few years ago are now scrambling to get their money invested in leading technologies. Those investors now can compete to catch the wave.

While the UH’s designation as a National Marine Renewable Test Center will certainly make Hawaii a more attractive destination, it’s important to note that Hawaii lacks a mechanism to connect wave energy systems to its power grid. Enter the Wave Hub, an undersea “outlet” that enables multiple wave energy systems to hook into the grid.

Construction of a Wave Hub about 10 miles off the southwest coast of England is creating a real-world testing ground. That Wave Hub should prove a commercial success, as there is already intense competition between rival wave energy companies seeking berths allowing their systems to plug into the Wave Hub.

In conjunction with the UH Marine Test Center, we must develop a Wave Hub here in Hawaii, so wave energy systems can compete to prove their commercial viability. Once an optimal location is selected, then the state can prepare the necessary environment and permit documents and install the seabed device and cable. Wave energy companies will be able to “plug in” their devices, without each spending years in the application phase.

In addition to the vibrant wave energy climate, federal, state and academic support can make Hawaii the premier destination for wave energy development in the United States, not to mention the Pacific theater. This is an innovation economy by definition – one that will make Hawaii more secure and environmentally protected.

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Colorado Renewable Energy Growth Presages National Debate

PETER SLEVIN, The Washington Post, August 18, 2008

DENVER — When Colorado voters were deciding whether to require that 10% of the state’s electricity come from renewable fuels, the state’s largest utility fought the proposal, warning that any shift from coal and natural gas would be costly, uncertain and unwise.

Then a funny thing happened. The ballot initiative passed, and Xcel Energy met the requirement eight years ahead of schedule. And at the government’s urging, its executives quickly agreed to double the target, to 2%.

In Colorado — a state historically known for natural gas and fights over drilling — wind and solar power are fast becoming prominent parts of the energy mix. Wind capacity has quadrupled in the past 18 months, according to Gov. Bill Ritter (D), and Xcel has become the largest provider of wind power in the nation.

The politics and economics of energy are shifting here in ways that foretell debates across the country as states create renewable-energy mandates and the federal government moves toward limiting carbon emissions. One advocate calls Colorado “ground zero” for the looming battle over energy.

Despite a continuing boom, oil and gas companies here are on the defensive. They are spending heavily as they try to prevent the repeal of as much as $300 million in annual tax breaks that would be shifted to investment in renewables and other projects.

The industry, already facing a rebellion among some longtime supporters angered by its toll on the environment, also finds itself in a fight against new regulations designed to protect wildlife and public health from the vast expansion in drilling. Beyond the merits, the proposals reflect the strengthened hand of environmentalists and their friends who feel that the fossil-fuel companies have held sway too long.

“Now is a terrific time for renewables to launch. I hope they get all the capital they need, and all the great minds and talent. But I don’t want it to come at the expense of the oil and gas industry,” said Meg Collins, president of the Colorado Oil & Gas Association. “As goes Colorado, so goes the West, as far as this energy policy debate.”

State leaders are thrilled with the economic benefits that have come with the hundreds of new research and manufacturing jobs in pursuit of alternative power. Yet the fledgling renewables industry is also facing challenges, from a desire for tax credits of its own to a need for a stronger transmission grid that will make power more portable.

“The future in Colorado is building wind farms in wheat fields,” said Ritter, a former Denver prosecutor, recalling the 2006 campaign pitch that helped carry him into the governor’s office. “Quite frankly, it’s how we should have been thinking for 10 years.”

Ten years ago, Xcel began offering wind-generated electricity, but it was a niche market for eco-conscious customers willing to pay extra. That changed in a significant way after 2004, when Xcel lost the referendum fight.

After legislative efforts failed, proponents of renewable energy turned to the ballot that year. The initiative, Amendment 37, required the state’s biggest utilities to generate 10% of their electricity from renewable sources. Advocates found themselves facing off against Xcel, which said it feared for its bottom line.

“We ended up opposing that amendment. In retrospect, I wish we hadn’t,” said Frank Prager, Xcel’s vice president for environmental policy. He said utility companies are inherently conservative, yet find themselves facing a transformation in an industry that, as he put it, has changed little since Thomas Edison’s time.

Voters rejected the utility industry’s arguments and approved the measure, making Colorado the first state to mandate renewable-energy use at the ballot box. Today, legislatures in more than 25 states have set prescribed levels, known formally as “renewable portfolio standards.”

“It was one of those cases where the public was ahead of the politicians,” said Tom Plant, Ritter’s top energy strategist.

Once Xcel executives began to come to terms with the new rules, they discovered that federal tax credits made wind power affordable, especially in relation to rising natural gas prices. The cost of wind power is relatively constant and provides a hedge against future emissions regulation, such as the cap-and-trade approach favored by presidential candidates Barack Obama (D) and John McCain (R).

“It was good for the system,” Xcel’s Prager said, referring to the utility’s mix of energy sources, “and it was good for the customer.”

By the end of 2007, Xcel had met Amendment 37’s goal and endorsed Ritter’s request to double it to 20% by 2020. That measure passed the Colorado legislature easily: With the utility on board and public sentiment clear, the bill collected 50 sponsors in the 65-member House.

Executives at publicly traded Xcel stress their twin desires to make money and to insulate the company from the risks of unproven technology. As Prager put it during an interview in the company’s downtown Denver headquarters: “It’s absolutely essential that the state offer us something that makes it worth our while to be green.”

Amendment 37 allows utilities to collect a fee from customers to invest in renewable fuels; it averages $12.72 a year for a typical homeowner with a monthly bill of $73. When the renewables goal doubled last year, so did the fee. Prager said the fee has provided Xcel $37.6 million between March 2006 and July 2008 for capital investment in wind and solar.

Colorado is adding wind-power capacity at a higher rate than any other state, its hundreds of turbines delivering one gigawatt of generating power at the end of 2007. That is triple the total of 12 months earlier. Six states produce more than one gigawatt with wind, with Texas far in front and California second.

Solar power remains a small part of the equation in Colorado, in part because concentrated solar generation is expensive. Xcel is sponsoring an 80-acre field of photovoltaic panels in the San Luis Valley, a project expected to provide 8.2 megawatts of electricity, enough to power about 1,500 homes. But only 4% of Xcel’s renewable megawattage is required to come from solar.

Meanwhile, Xcel’s latest plan, filed with the Colorado Public Utilities Commission, calls for retiring two of its aging coal-fired power generators.

“We’ve reached this critical point where we’re seeing the deployment of these technologies accelerate,” said John Nielsen, an energy analyst with the nonprofit environmental group Western Resource Advocates. “There was slow progress over the last decade, and you’re now seeing this tipping point.”

Among the signs is the arrival of Vestas, a Danish wind turbine company, which announced Friday the construction of two more manufacturing plants and 1,350 new jobs, bringing the company’s total in Colorado to 2,450. Conoco Phillips announced this year that it will locate its alternative-fuels research operation in the state. The Colorado-based National Renewable Energy Laboratory is adding 100 jobs.

Colorado’s growing political and economic commitment to renewables is causing fear in the oil and gas industry, which is fighting to keep its tax breaks and its influence over state rulemaking.

“We’re not feeling very cherished,” said Collins, whose oil and gas association represents more than 30 companies. The group objects to an initiative on the ballot in November; it would eliminate the industry’s 87.5% property tax exemption, estimated to cost the state treasury $230 million to $320 million a year.

If the ballot rule passes, the tax money will be channeled to renewable fuels, wildlife conservation and education. The industry also objects to proposed rules that would require greater public health and environmental protection in areas where drilling takes place.

“It could have been done in a different way, and things wouldn’t have gotten so heated,” Collins said.

Alice Madden, the Democratic majority leader in the Colorado House, looks at the oil and gas industry today and recalls Xcel before the passage of Amendment 37. She has little sympathy for Collins’s arguments, especially at a time when oil and gas profits are soaring.

“It’s Chicken Little all over again: ‘The sky is going to fall,’ ” said Madden, who also chairs Western Progress, an advocacy group. “The oil and gas companies see the writing on the wall, the shift to renewables. They want to make as much money as they can, right now.”

Looking ahead, supporters of alternative fuels are counting on securing some advantages their fossil-fuel predecessors have enjoyed. One request is the renewal of a federal tax credit set to expire this year. Another, Prager said, is “some clear rules on the national level, especially on climate policy.”

With 34,000 active gas wells in Colorado and 28 new permits issued each day, there is no chance that the oil and gas industry will fade away soon. And, as powerfully as the wind blows and the sun shines, the transmission grid for renewable energy is limited and the strength of the current is unsure.

“Unlike a coal plant or a gas plant,” Prager said, “you can’t flip a switch and make the wind blow.”

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Exeter Scientist Leads Major European Wave Energy Project

Atom.ex.ac.uk, July 21, 2008

As Europe’s largest ocean energy research programme launches, one of its participants speaks of the huge potential for the South West to become a leader in wave energy development.

Professor George Smith of the University of Exeter is a member of EquiMar, a group of 62 scientists from 11 European countries working together to combine knowledge and expertise in marine energy. They aim to drive forward research so that the potential of renewable energy from waves and tides can be realised. EquiMar will be officially launched at the World Renewable Energy Conference (WREC) in Glasgow on July 22, 2008.

Professor Smith is the Scottish and Southern Energy Associate Professor in renewable energy. He leads the renewable energy group, which is part of the School of Geography, Archaeology and Earth Resources on the University of Exeter’s Cornwall Campus and says: “The South West of England has a strong commitment to increasing its renewable energy generation as demonstrated by the proposed Wave Hub project off the North Cornwall Coast. Marine Renewable Energy, both wave and tidal, has the potential to provide a significant contribution to the UK’s “green energy” and to the EU target for reduction in carbon emissions. Surrounded by sea, the South West is clearly in a strong position to contribute to this. One of the main barriers to realising the potential is that we still don’t have enough information on the amount of energy that can be realistically extracted from the devices available. EquiMar seeks to produce guidelines that will allow fair evaluation of the potential of the many different technologies. EquiMar has the potential to guide the way forward from demonstration projects like the Wave Hub to the next stage of fully commercial projects. We must act now to ensure that marine renewable can achieve the undoubted potential and contribution to the UK energy mix.”

According to the Dr David Ingram, the Scottish scientist launching EquiMar, marine energy has 10 years to prove itself as a viable technology or risk being eclipsed by other energy sources. Dr Ingram will tell delegates at the WREC conference in Glasgow that time is running out for marine solutions to the world’s energy crisis unless scientists and environmentalists work together.

Dr David Ingram of the University of Edinburgh is coordinator of the European Commission funded project, a €5.5 million programme linking European top research centres and leading device developers to examine the potential of, and identify the barriers to establishing, a marine energy industry. The project has been given three years support by the European Commission to come up with templates to identify viable wave and tidal energy devices and optimal locations so marine energy can be developed commercially and to help to meet the ambitious supply targets set by governments for renewable energy.

According to Dr Ingram: “Every day scientists, inventors and keen amateurs are applying for grants to test their prototypes. Some are promising – many will never work outside the limited test environment of the bath or kitchen sink. Governments need yardsticks by which they can measure the likely success of marine energy systems before backing them. At present we know more about the surface of the moon than parts of the sea bed – both environments demand scientific precision and the toughest possible equipment. Improved national and European funding will help resolve these problems and support the pioneering developers, to progress from testing devices to placing them in the open ocean environment. Good policies are as important as good science at this stage of Ocean Energy development.”

The EquiMar (“Equitable Testing and Evaluation of Marine Energy Devices in terms of Performance, Cost and Environmental Impact”) project is one of two projects funded in the first round of Framework Programme 7, by the European Commission. EquiMar is a €5.5M project, involving 23 partners from 11 different countries, coordinated by the University of Edinburgh including major developers, universities, test sites, research laboratories, a certification agency, a utility and a journalist, bringing together international expertise across a wide range of disciplines. The project will run for three years from mid April 2008. EquiMar’s primary aim is to deliver guidelines so funding agencies, policy makers and investors can fairly judge different technologies and sites.

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World’s First Large Scale Wave Farm Aims to Lower Costs

EnvironmentalResearchWeb.org, Jul 22, 2008

Of all the renewable technologies, wave and tidal energy is currently the most expensive way of producing energy. But a project in the UK hopes to help this technology move along the learning curve and bring down costs.

When installed in 2010, Wave Hub will be the world’s first large-scale wave farm. Just off the coast of Cornwall in south-west England, Wave Hub will consist of four berths, each with a maximum capacity of 5 MW. These four berths will be connected to onshore electrical equipment via a 25 km long sub-sea cable. The water at the deployment site is approximately 50 metres deep and the project will cover an area of sea measuring 4 km by 2 km.

Wave Hub is designed to be a place where companies and researchers can develop and test their marine energy devices as a final stage towards commercialisation. Each wave device developer will be granted a lease of between five and 10 years in an area of approximately two square kilometres. The total number of devices to be deployed at Wave Hub is not expected to exceed 30.

“Getting planning consent for marine energy devices can be a lengthy and challenging process which often slows down their development,” says Nick Harrington, general manager for the Wave Hub project at the South West Regional Development Agency (SWRDA). “Wave Hub provides companies with a consented sea area in which to test their devices. It also provides a grid connection, monitoring and testing support, a power purchase agreement, access to suppliers and a research base, and opportunities to collaborate with other companies.”

In order to get planning consent for Wave Hub, the SWRDA carried out a detailed environmental impact assessment. This involved an analysis of the potential impacts of the project on different parts of the environment. This includes the effects of laying the cable (most of which will be offshore) and the impacts of the likely arrays of wave energy devices on marine ecology, fisheries, recreational users and navigation.

“The environmental impact of the Wave Hub will be much lower than other proposed schemes such as the Severn Tidal Barrage,” says Harrington. “The devices float on the water and will have very little impact on waves reaching the shore. There will be very little terrestrial land-take, with only one cable coming ashore, terminating near the site of a disused power station.”

Harrington believes the construction of Wave Hub could be very quick, taking about eight weeks to complete, but admits there are still some major challenges ahead before Wave Hub is finally installed. “We are conscious that the economic environment is quite challenging. The rising cost of oil has led to a boom in oil and gas exploration, which has increased substantially the cost of hiring vessels needed to install Wave Hub. Volatile markets have also seen significant increases in the cost of copper, which has increased the cost of the cable that will be laid between Wave Hub and the mainland.”

The first four berths have already been allocated to Oceanlinx, Ocean Power Technologies, Fred Olsen and WestWave, a consortium of E.On and Ocean Prospect.

“Wave and tidal energy is currently in the same position on the learning curve that wind energy was a few years ago,” says Harrington. “Doing anything at sea is costly and difficult but Wave Hub will help companies bring those costs down and help make wave energy a viable renewable energy solution for the future. The UK has one of the largest wave energy resources in Europe. Allowing for technical, practical and environmental limitations, according to The Carbon Trust, wave energy could generate up to one sixth of the UK’s electricity consumption. By 2020 the wave energy market in the UK could by worth £0.2 billion.”

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NY Regulators: Make Iberdrola Commit to Wind Energy Development

JIM STINSON, Gannett News Service, July 2, 2008

The staff of the state Public Service Commission has again advised its five-member board to disapprove the $4.5 billion sale of Energy East Corp. to Iberdrola SA, but staffers have added a big “however” on wind farms.

In a brief filed in the long-running case, the PSC staff has offered alternatives if the five public service commissioners approve the sale, according to James Denn, PSC spokesman.

Iberdrola, the European utility giant and global leader in wind turbine farms, would be allowed to own and operate wind farms within Energy East territory, but with public benefits attached to the agreement.

The staff recommended that Iberdrola’s $2 billion proposal to invest in New York be tied to possible ratepayer rebates. The PSC staff said that to ensure the promise to build more wind farms in New York, the state could set aside $200 million of Iberdrola cash to be returned to ratepayers if the investment never happens.

The alternative proposal, known as Exception 6 in the PSC reply brief, comes after months of criticism and speculation regarding PSC’s opposition to letting Iberdrola buy Energy East.

Energy East owns Rochester Gas and Electric and New York State Electric & Gas. Iberdrola’s plans to keep and build wind farms in the service area have brought controversy but also support from public officials and environmentalists.

The PSC has disallowed distributors of electricity from owning sources of electricity.

In a June 16 ruling by Administrative Law Judge Rafael Epstein, the five-member board of the PSC was encouraged to disapprove the deal, a decision which backed up PSC staff but brought howls from such leaders as Sen. Charles Schumer, D-N.Y.

“Done correctly, this merger can reduce costs and make New York a leader in providing clean, cheap wind power,” Schumer said. “The acquisition can reduce rates for customers and help to create jobs and billions of dollars of investment in upstate New York. I am glad the PSC staff has recognized this win-win-win, and hope the PSC Commissioners will quickly follow suit.”

Energy East made the offer in May 2007.

Iberdrola officials said the Madrid-based company would walk away from the bid if New York enforced the rule.

The sale of Energy East has already been approved by the federal government and every other state Energy East operates in.

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California Unveils Draft Carbon Cap and Trade Plan

LAURA MANDARO, MarketWatch, June 26, 2008

SAN FRANCISCO – California released a draft plan on Thursday to reduce the state’s projected greenhouse gas emissions by nearly one-third, in part by creating a cap and trade program that could serve as a blueprint for a national carbon emissions market.

The 77-page “climate change draft scoping plan” lays out the framework for California to meet the goals of a 2006 law signed by Gov. Arnold Schwarzenegger that requires the state to slash its greenhouse gas emissions to 1990 levels by 2020.

This target means electric utilities, industrial users, fuel refiners such as Chevron Corp. and ConocoPhillips and builders will have to lower their combined output of carbon dioxide by one-tenth from today’s levels and 30% from projected 2020 emissions of the gas thought to contribute to global warming.

The success of California’s efforts to scale back greenhouse gas emissions using a mix of regulations and market mechanisms could provide a roadmap for a national standard, largely thanks to the state’s size and the aggressive goals it has set.

“It certainly paves the way,” said Milo Sjardin, head of the North American division of New Carbon Finance, a carbon emissions research and analysis firm. “Any federal program may take some of California’s experience on board,” he said.

The California plan also seeks to expand the amount of electricity utilities such as PG&E Corp. and Edison International generate from renewable resources to 33% by 2020. Today, just 12% of the state’s electricity comes from wind, solar, geothermal and other renewable sources.

Cap and trade to launch in 2012

The nation’s most populous state says it will achieve these ambitious goals by putting in place strict limits on greenhouse gas emissions, caps that give users of fossil fuel a financial incentive to put in place heavier pollution controls.

A key part of this plan is the establishment of a market to allow companies to trade their carbon allowances with companies from neighboring Western states and Canadian provinces that are producing less than their allowed emissions — or that engage in an activity, such as planting trees, that lowers emissions.

The head of the panel charged with implementing the state’s global warming law said board members are using as a model the cap-and-trade program established by the U.S. government to restrict emissions that cause acid rain, which was part of the 1990 Clean Air Act.

“When industry knew they had to come under a cap, they came up with measures that were much cheaper than anyone thought,” said Mary Nichols, chairman of the California Air Resources Board. “Having a cap out there spurs the innovation,” she said in a conference call with reporters.

California’s cap and trade program, set for launch in 2012, will also present national companies with a second set of standards with which to comply. A group of Northeastern states is planning to launch a smaller cap and trade program next year.

The addition of another set of regulations “puts increasing pressure on the federal government to put something in place to level the playing field,” said New Carbon Finance’s Sjardin.

Sens. Joseph Lieberman, an independent from Connecticut and John Warner, a Republican from Virginia, last year introduced a national climate bill – which the Senate tabled in June — designed to cut greenhouse-gas emissions by 70% by 2050.

Both major-party presumptive presidential candidates, Republican Sen. John McCain and Democratic Sen. Barack Obama have said they support a national standard for carbon emissions.

Development of a U.S. carbon-trading market is following the rapid growth of the now $50 billion carbon-trading market in Europe, where corporations have been trading emissions-reductions credits as part of meeting the Kyoto Protocol. California’s market will likely start at a much smaller level. New Carbon Finance’s Sjardin estimates it could reach $10 billion by 2015.

If the entire country were to incorporate such a program, the size of the market could hit $1 trillion by 2020, he says.

Bringing to fruition California’s plan, let alone a national version, faces stumbling blocks.

In the state’s Senate, the Republican caucus is pushing for a delay of certain parts of the 2006 bill it says make it too expensive for businesses in a time of economic duress.

Nonetheless, the state’s largest utilities are preparing for the state to push through the caps, which will cover 85% of California’s greenhouse gas emissions.

San Francisco-based utility PG&E says 13% of its power comes from renewable energy sources. By 2012, that level should reach about 22%, said Keely Wachs, a spokesman for the utility, which serves 15 million customers in Northern and Central California.

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Iberdrola’s Stalled Sale Seeks Power From Wind

NICOLAS CONFESSORE, The New York Times, June 4, 2008

ALBANY — One of the world’s largest energy companies proposed on June 3rd to build hundreds of wind turbines in New York, significantly raising the stakes in a nine-month battle with state regulators over its intended purchase of a power company.

Executives of the company, Iberdrola S.A., of Spain, said it would invest $2 billion in wind turbines upstate if the state’s Public Service Commission, which regulates utilities in New York, approves its purchase of Energy East, which has three million customers in five states, including New York. The new turbines would more than double state energy production from wind and make New York one of the larger producers of wind power in the country.

“Iberdrola has helped many countries meet their renewable energy goals and benefit from our high-tech investments and ‘green-collar’ jobs that result from this kind of investment,” said Xabier Viteri, the chief executive of Iberdrola’s renewable energy division.

The purchase of Energy East has been approved by federal regulators and officials in other states. But in New York, where Energy East owns two utilities, Rochester Gas & Electric and New York State Electric & Gas, Iberdrola has run afoul of state rules meant to discourage what is known as vertical market power, when a single company owns power-generating plants as well as transmission and distribution lines.

In negotiations over the last several months, the commission staff has extracted several concessions out of Iberdrola, including a promise of $201 million in rate subsidies to existing Energy East customers to ensure that they do not pay more for electricity as a result of the sale.

But the commission staff is also insisting that Iberdrola agree to sell off Energy East’s existing wind turbine facilities, arguing that owning them would violate the vertical power rules.

An administrative law judge is expected to issue a recommendation on the deal within weeks, though neither the judge’s recommendations nor those of the commission staff are binding on the five-member commission itself.

James Denn, a spokesman for the commission, said the added investment would not allay the commission’s concern, adding, “On this deal, they would be able to produce, transmit, and distribute power within their region.” . Mr. Denn also noted that Iberdrola had not formally submitted the new proposal to the commission; the current plan has the company making only a binding commitment of $100 million worth of investment in the state.

The commission staff also wants Iberdrola to increase the subsidies, known as ratepayer benefits, to $644 million, as well as to agree to provisions in the merger that would insulate any New York facilities from potential financial problems at Iberdrola.

Iberdrola is one of several foreign-owned energy companies that have entered the United States market, where rising gas prices and a spate of state laws requiring more energy from renewable sources have made wind, solar and hydroelectric power increasingly attractive.

The company’s acquisition of Energy East — and the promise of clean power in an era of high demand — has drawn support from leading business and environmental groups, as well as lawmakers of both parties, though the state power producers association has filed a brief supporting the commission staff.

In a statement on Tuesday, Senator Charles E. Schumer urged the commission to allow Iberdrola to acquire Energy East without divesting its wind power holdings, while keeping careful watch on whether rates increased as a result. Mr. Schumer and some other critics believe that the rules against simultaneous production, transmission and distribution, which date back to efforts in the 1990s to break up the state’s energy market, have failed to help lower energy costs.

“The Public Service Commission ought to get out of the way when it comes to investing in renewable power, and instead concentrate on making sure consumers don’t get burned by rate hikes as a result of this merger,” Mr. Schumer said in a statement.

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Bush Asks Congress to Clear Way for Offshore Oil Drilling

ED HENRY, RICHARD GREENE, BRIANNA KEILER, HUSSEIN SADDIQUE, ALI VELSHI, CNN, June 18, 2007

Washington — President Bush asked Congress Wednesday to permit drilling for oil in deep water off America’s coasts to combat rising oil and gas prices.

“There is no excuse for delay,” the president said in a Rose Garden statement.

Bush also renewed his demand that Congress allow drilling in Alaska’s Arctic National Wildlife Refuge, or ANWR, clear the way for more refineries and encourage efforts to recover oil from shale in areas such as the Green River Basin of Colorado, Utah and Wyoming.

Bush said that the basin potentially contains more than three times as much recoverable oil as Saudi Arabia’s proven reserves, and that the high price of oil makes it profitable to extract it.

“In the short run, the American economy will continue to rely largely on oil, and that means we need to increase supply here at home,” said Bush, adding there is no more pressing issue than gas prices for many Americans.

The White House estimates there are 18 billion barrels of oil offshore that have not been exploited because of state bans, 10 billion to 12 billion in the Alaska National Wildlife Reserve, and 800 billion barrels of recoverable oil in the Green River Basin. However, much of the U.S. oil is difficult or impossible to extract under current law.

As for gas prices, resuming offshore exploration would not be a quick fix.

“If we were to drill today realistically speaking we should not expect a barrel of oil coming out of this new resource for three years, maybe even five years, so let’s not kid ourselves,” said Fadel Gheit, oil and gas analyst with Oppenheimer & Co. Equity Capital Markets Division. But it almost certainly would be profitable.

Candida Scott, an oil industry researcher at Cambridge Research Associates, said oil needs to be priced at $60 a barrel or more to justify deep-shelf drilling. With oil now selling for $134 a barrel, companies are almost assured of profiting from offshore drilling, Scott said.

“For years, the president has pushed Congress to expand our domestic oil supply, but Democrats in Congress have consistently blocked such action,” White House Press Secretary Dana Perino told CNN before Bush spoke. She added, “As with several existing Republican congressional proposals, he wants to work with states to determine where offshore drilling should occur, and also for the federal government to share revenues with the states. The president believes Congress shouldn’t waste any more time.” Democrats were quick to reject Bush’s proposal.

“After eight years, President Bush and [Vice President] Dick Cheney have turned the GOP into the Gas and Oil Party. That’s the legacy that they are going to leave,” said Rep. Edward Markey of Massachusetts, chairman of the House Select Committee on Energy Independence and Global Warming.

“The White House has become a ventriloquist for the oil and gas industry, repeating the requests of the oil and gas industry — that they be allowed to destroy the most pristine areas of our country,” Markey added.

Congressional Democrats last week introduced a bill to compel oil companies to begin utilizing federal land they already lease.

“Oil companies are sitting on 68 million acres they have already leased from the American people for the purpose of oil and natural gas production,” said Sen. Bob Menendez, D-New Jersey.

“It is about time they use these resources already at their disposal instead of waiting for more federal handouts and pushing to drill in the Arctic National Wildlife Refuge or up and down our coasts,” he added.

Bush’s request came a day after presumed Republican presidential nominee John McCain issued the same call at a campaign event in Houston, Texas.

“We have proven oil reserves of at least 21 billion barrels in the United States,” he said. “But a broad federal moratorium stands in the way of energy exploration and production. And I believe it is time for the federal government to lift these restrictions and to put our own reserves to use.” He said lifting the ban could be done “in ways that are consistent with sensible standards of environmental protection.”

Opponents of offshore drilling say it would harm aquatic ecosystems by eroding wetlands, contaminating the water with chemicals, polluting the air, killing fish and dumping waste.

McCain made clear that he favors continuing the ban on drilling in the Arctic National Wildlife Refuge.

“Quite rightly, I believe, we confer a special status on some areas of our country that are best left undisturbed. When America set aside the Arctic National Wildlife Refuge, we called it a “refuge” for a reason,” he said.

McCain’s plan would let individual states decide whether to explore drilling possibilities.

According to his campaign, presumptive Democratic nominee Barack Obama wants to invest $150 billion over the next 10 years to establish a green energy sector, create a national low-carbon fuel standard to ensure that the fuel is more efficient, and invest in clean energies +50 miles off the Florida coast – by Cubans, not Americans, with help from China and other allies. A rich undersea oil field stretches into Cuban waters near the Florida Keys.

“The people I represent can’t understand how we can possibly let China end up with rights to our oil and gas in the Gulf of Mexico because we say we’re not going to do it and they say, ‘OK, we’ll do it and we’ll work with Cuba, if we have to, to do it,'” said U.S. Rep. Zach Wamp, R-Tennessee. “That’s really asinine.”

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McCain and Obama: Green Energy on Their Side

Green Energy News, June 10, 2008

Whether it’s John McCain or Barack Obama who moves into the Oval Office next January he’ll have have a deskful of problems to cope with: the biggest foreign policy blunder in the nation’s history, a lackluster economy, and what appears to be a peaking of the world’s oil supply.

All of which are related, of course.

As ominous as those problems may seem there’s a bright side: The new president will have a growing and vibrant industry — the green energy industry — on his side that may very well help solve those three problems.

Oil is about fuels for transportation. Peak oil, if that’s what the planet is now beginning to experience, is about fuel being too expensive to get us from here to there at a reasonable cost. Though trying to convince automakers to build more efficient cars and trucks has been an ongoing battle for decades, high priced fuel has forced at least one automaker’s hand.

The news this week that GM would shut four truck and SUV factories and pursue more efficient vehicles, like the hyper-efficient Chevrolet Volt, was a final recognition by the world’s largest automaker that they need to change. Now that GM is on board, the trend towards highly energy efficient vehicles that began with the hybrids from Japan should continue at a brisker pace. Further, perhaps with a little help from the next occupant of the White House, the push for more efficient vehicles could lead to a renaissance — a green renaissance — for Detroit.

In a speech in Des Moines, Iowa, in October 2007 Obama said this,” I went to Detroit, I stood in front of a group of automakers, and I told them that when I am president, there will be no more excuses — we will help them retool their factories, but they will have to make cars that use less oil.”

Perhaps the automakers should take him up on his word.

John McCain wants to create a cap and trade system to cut greenhouse gas emissions that would encompass transportation fuels and to “reform federal government research funding and infrastructure to support the cap and trade emissions reduction goals and emphasize the commercialization of low-carbon technologies.”

(Obama also supports cap and trade policies.)

A reduction in greenhouse gas emissions from cars and trucks also means better conventional fuel economy and/or a switch to alternative fuels. (The temporary suspension of the federal gasoline tax as a way to ease the pain at the pump, supported by McCain, has already been shelved by Congress.)

In coping with a sluggish economy green energies are clearly the next big thing.

The vast central part of the country is ripe for wind energy development. Nearly all the world’s major wind turbine manufacturers have already or are planning to build production facilities on US soil. The huge cost of shipping makes it cheaper to build the massive machines here than overseas.

The desert southwest is just gearing up for a wave of concentrating solar thermal power plants. Plans to build components for solar thermal power plants here are also underway. Solar thermal power, though proven for years, is, as an industry, just taking baby steps.

Biofuels, if they are to be the future of fuels for transportation, are gaining traction again as interest grows with algae as a source of diesel fuel and cellulose as feedstock for ethanol. The brewing of biodiesel and cellulosic ethanol are most certainly to be domestic enterprises that will help the economy.

Again cap and trade ideas would help these industries. Obama adds more ideas among them to “Invest $150 billion over 10 Years in Clean Energy”; “Invest in a Skilled Clean Technologies Workforce”, start a “Clean Technologies Deployment Venture Capital Fund” and “Convert our Manufacturing Centers into Clean Technology Leaders.”

Hyper-efficient cars, biofuels, wind and solar power and other green technologies could repair an ailing economy and dampen the worst effects of high oil prices related to peak oil. But what about Iraq? Can green energies help out there too? Perhaps.

Much of the Iraq’s troubles are related to high unemployment. Yet to their south in the Persian Gulf region at least one state is using what remains of its oil wealth to pursue sustainable technologies and the industries and jobs that will follow. The Masdar Initiative in the emirate of Abu Dhabi in the United Arab Emirates is that example.

The objectives of Masdar are to position Abu Dhabi as a world-class research and development hub for new sustainable energy technologies and drive the commercialization and adoption of these and other technologies. Commercialization and adoption means jobs and opportunity, just what Iraq needs. The next president could encourage Iraqis only to look around in the neighborhood to see what is possible for their nation.

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Running in Circles Over Carbon

MATTHEW L. WALD, The New York Times, June 8, 2008

Washington — Cutting carbon dioxide emissions is a fine idea, and a lot of companies would be proud to do it. But they would prefer to be second, if not third or fourth.

This is not a good way to get started in fighting global warming.

As efforts to pass a global warming bill collapsed in the Senate last week, companies that burn coal to make electricity were looking for a way to build a plant that would capture its emissions. There is a will and a way — several ways, in fact — to do just that.

Capturing carbon from these plants may become a lot more important soon. Emissions from coal-fired power plants already account for about 27% of American greenhouse emissions, but as prices for other fuels rise, along with power demand, utilities will burn more coal. And if cars someday run on batteries, a trend that $4-a-gallon gasoline will accelerate, then the utilities will burn even more fuel to generate the electricity to recharge those batteries.

This could be good news, because controlling emissions from a few hundred power plants is easier than controlling them from tens of millions of house chimneys, or hundreds of millions of tailpipes. And in the laboratory, at least, there are three very promising systems for capturing carbon dioxide before pumping it underground.

But supplying electricity is not like most other businesses. Unlike the companies that make microchips, clothing for teenagers or snack foods, the companies that make electricity can see no advantage in going first. This is true for the traditionally regulated utilities that can charge everything to a captive class of customers (if regulators approve), and it is also true for the “merchant generators,” who build power plants and sell their output on the open market.

“No one wants to go into the new world,” said Armond Cohen, executive director of the Clean Air Task Force, a nonprofit group that favors stringent controls on power plant emissions. “We have very few takers because of the price premium.”

By price premium, Mr. Cohen meant not only the costs of going first, with the high probability of mistakes that others can learn from, but the costs of the new technology itself. The problem is, the premium is of unknown size, which makes everyone in the industry especially wary.

The point was illustrated by a recent decision by the Virginia State Corporation Commission, which regulates utilities, to turn down an application by the Appalachian Power Company to build a plant that would have captured 90% of its carbon and deposited it nearly two miles underground, at a well that it dug in 2003. The applicant’s parent was American Electric Power, one of the nation’s largest coal users, and perhaps the most technically able. But the company is a regulated utility and spends money only when it can be reimbursed.

The Virginia commission said that it was “neither reasonable nor prudent” for the company to build the plant, and the risks for ratepayers were too great, because costs were uncertain, perhaps double that of a standard coal plant. And in a Catch-22 that plagues the whole effort, the commission said A.E.P. should not build a commercial-scale plant because no one had demonstrated the technology on a commercial scale.

Thus an approach that makes collective sense — trying out technologies that could be helpful over the long term — is unattractive to individual participants.

That is not the only where-to-get-started problem. Another is that building a plant might make sense to a utility regulator, or to a company that builds power plants on speculation, if it generated pollution credits that the company could then sell to other polluters, for instance, or could help the plant meet emissions quotas. But there are, as yet, no credits to buy or sell and no quota to meet.

When Congress debates the idea, one of the drawbacks is that no one is sure where to set the caps on emissions, because no one is sure what the carbon regulation would cost. So there is no regulation, no plant built to meet the regulation, and thus no plant for lawmakers to look at to determine how strict a regulation to pass.

Carbon capture is not the only field in which nobody wants to go first; another is nuclear power. Builders in that industry also recognize that the first to build a next-generation reactor (the last one ordered that was actually built was in 1973) will pay a lot more than the builders who follow. But Congress has tried, at least, to solve that problem by offering generous loan guarantees and risk insurance for the first few reactors. There was a plan to heavily subsidize a single capture-and-storage coal plant, but when the estimated construction price nearly doubled, to $1.8 billion, the Energy Department dropped the plan.

And without full-scale tests, nobody knows what all this would cost.

“The estimates are accurate to within plus 20% to plus 100%,” said John Rowe, the chief executive of Exelon, which burns coal and also operates nuclear reactors, and leans toward the latter for new projects. “These are very complicated projects, with a great deal of both science and engineering and of public acceptability tests that have simply not happened yet,” he said. In contrast, he argued, nuclear is easier.

While others differ, or argue that solar or wind would be a better bet, the failure to get started does have a certain circularity to it. Companies will not run to build plants that sequester their carbon because Congress has not set a price for emitting the pollutant. Without the early plants, Congress has little clue how many tons the economy can afford to capture and sequester.

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Shell Pulls Out of Thames Estuary Wind Farm

LEWIS PAGE, The Register, May 1, 2008

Oil giant Shell has pulled out of the world’s biggest wind farm project, in a move which has cast doubt over the scheme’s future. The £2bn London Array, intended to be built in the Thames Estuary, will need to find a new backer in order to proceed.

For the London Array Project, Shell was partnered with UK power operator E.ON and Dong Energy, the firm behind much of the substantial Danish wind power base. E.ON chief Paul Golby has suggested that Shell’s pullout could torpedo the scheme. “Shell has introduced a new element of risk into the project which will need to be assessed,” said Golby. “The current economics of the project are marginal at best,” he added, citing steel costs and supply bottlenecks – and this despite the fact the UK government renewable energy quota system is currently said to be offering a bonanza for wind power operators.

Offshore wind farm projects like the London Array are thought by renewables advocates to be the main answer to the UK’s energy needs. They could allow the construction of taller windmills than would be practical ashore; and would potentially be able to reap the benefit of more predictable winds, less affected by terrain and surface phenomena.

The London Array would be the biggest ever, filling the channel in the outer Thames Estuary between the Kentish Knock and Long Sands banks with up to 341 turbines. This is one of the few areas of the estuary where it wouldn’t be in the middle of a heavily used shipping lane, though looking at typical vessel movement in the immediate area you’d have to say there’s still some risk of collisions.

When fully operational, it would make a substantial contribution to the UK Government’s renewable energy target of providing 10 per cent of the UK’s electricity from renewable sources by 2010… it is expected that the project would represent nearly 10 per cent of this target. The entire Array would generate one per cent of the UK’s electricity. Wind farm planners like to describe their capacity in terms of maximum possible output, assuming all turbines spinning at best speed – this is the 1,000 megawatts referred to above.

In reality, the wind is seldom blowing at just the right speed. Sometimes the turbines stop altogether, due to flat calms or strong gales; mostly they run at much less than max output. The Array, on average the project would put out 3,100 gigawatt-hours per annum, equating to average output of 354 megawatts rather than 1,000. The London Array at full power could have delivered 0.88 per cent of that; on current trends, by the time it’s built you’d be looking at 0.77 or so.

Still, it sounds better to say “we will deliver nearly 10 per cent of the government’s target” than “we will deliver a fraction of a percentage point of the UK’s electricity”.

And electricity is just one of the ways we use energy. There’s also transport fuel, gas, heating oil, etc. The UK actually used a total of 2,700 terawatt hours of energy in 2006. The conversions between tons of oil and gigawatt-hours are at the back.) That’s a ballpark figure for how much we’d need in order to switch to electric or hydrogen transport, stop using gas heating, to generally stop emitting carbon and be ready for the inevitable post-fossil-energy future.

In other words, the mighty London Array, fully operational, would deliver roughly a thousandth of Blighty’s energy needs. You can see why Shell doesn’t view it as a critical part of its future business.

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Centrica Warns on U.K. Wind Farm Costs

BBC, May 8, 2008

Centrica, one of the UK’s biggest energy generators, has warned that the prospect of making money from wind farms is looking “marginal”.

The company says that the rising cost of off-shore wind farms could end up ruining the government’s renewable energy targets. The comments come a week after Shell withdrew from a project that was set to become the world’s largest wind farm. The government wants 33 gigawatts of offshore wind capacity built by 2020.

Mr Sambhi, Centrica’s director of power business unit, says the firm is still planning to build three new wind farms in the UK, but believes that current conditions are making the government’s renewable plans look very ambitious. “The economics at the moment make the returns marginal.” “The worrying trend is that if the manufacturing costs continue to increase, then I think that the wind target is under threat,” said Mr Sambhi.

Wind Farm Expansion

This week Centrica’s Lynn and Inner Dowsing project will deliver power to the National Grid.

The opening of the wind farm comes at a time when the economics of off-shore wind generation are coming into question. But the wind farm off the coast of Skegness has doubled in price in the last three years because of the rising cost of steel and copper. There are effectively only two companies that produce wind farms for the UK market – Vestas of Denmark and the German company Siemens. Both have a huge order book, with Vestas alone having nearly £4bn worth of orders yet to be delivered. The turbine manufacturers point to the rising cost of raw materials and the difficulty they have in securing the parts they need.

Big Projects

Uncertainty over the future of the 1,000 megawatt London Array wind farm off the coast of Kent has increased tension in the industry.

Shell, one of the three major partners in the London Array – meant to be the world’s largest wind farm, last week pulled out of the project.

Lynn & Inner Dowsing Facts:

• Each turbine can power 2,500 homes
• Turbines are 100m high and nearly 100m in diameter
• Each turbine weighs approximately 260 tonnes
• The 54 turbines have a combined generating capacity of 180 MW

After Shell’s decision, one of the other partners – E.ON – said that the economics of the project were “marginal at best”. The cost of the project is thought to have doubled since 2003, when it was estimated at £1bn.

The BBC has learnt that just one turbine manufacturer made a tender for the project, increasing the impression amongst some in the industry that manufacturers are able to choose their price for the projects they take on. High costs have forced the energy companies to look elsewhere for funding.

Centrica is aiming to build another three wind farms with a total capacity of around 1250 megawatts but does not want to fund the projects alone. In a bid to keep the projects on track the company is looking for investment from City institutions, including from private equity firms.

Government Policy

But this innovative tactic might not have the desired results according to Dieter Helm, Professor of Energy Policy at Oxford University. “Investors are saying that the current policy for wind energy in the UK is not fit for purpose.” “Unless the government wants to revamp and rebase its wind structure, it isn’t going to get what it wants from wind,” said Mr Helm.

This view is echoed by Charles Anglin from the British Wind Energy Association, who says that a lack of clarity has affected investment. “The fact that the government was slow to wake up to the opportunity of wind did push up uncertainty, and that has affected prices and meant that manufacturers have delayed investment,” he said.

But the government believes that the future for wind power in the UK is secure. It says that there are financial incentives in place to encourage energy companies to invest in wind farms. It also points to the fact that Britain is due to over take Denmark as the largest wind energy generator by the end of the year.

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