PG&E, Air Force Sign Wave Energy Pact

DAVID R. BAKER, San Francisco Chronicle, December 12, 2009

The waves off of Vandenberg Air Force Base on the central California coast could one day generate electricity, if Pacific Gas and Electric Co. has its way.

The utility reported Friday that it has signed an agreement with the U.S. Air Force to study the area’s potential for a wave power project. If approved by the Federal Energy Regulatory Commission, the project could one day generate as much as 100 megawatts of electricity. A megawatt is a snapshot figure, roughly equal to the amount of electricity used by 750 average homes at any given instant.

Wave power technologies have the potential to provide large amounts of electricity. But they have been slow to leave the lab.

The typical wave power system consists of buoys that generate electricity as they bob up and down on the ocean’s surface. But the ocean has proven tougher than some of the systems.

PG&E two years ago agreed to buy electricity from a proposed “wave park” near Eureka to be built by Canadian company Finavera. But Finavera’s prototype buoy sank during a test, and California energy regulators killed the deal.

Under its $6 million WaveConnect program, PG&E is still studying potential wave park sites off Humboldt County. The utility, based in San Francisco, also examined the Mendocino County coast before ruling it out.

Vandenberg makes an attractive test site. It occupies a bend in the coast of Santa Barbara County where some of the beaches face west, some face southwest and others face south. PG&E in particular wants to study the area between Point Arguello and Point Conception.

“Generally, that piece of the coast is very active for waves,” said PG&E spokesman Kory Raftery. “It picks up swells from different directions.”

If the company wins federal approval, it will study the area for three years before making a decision on whether to test wave power devices there. The company wants to test several different devices but has not yet picked which ones, Raftery said.

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California CPUC Considering PG&E’s Space Solar Energy Project

CASSANDRA SWEET, Dow Jones Newswires, November 20, 2009

California regulators have proposed approving a long-term contract between PG&E and Solaren, developers of a speculative technology that would beam 200 megawatts of solar power to earth from outer space.

Under the 15-year contract, Solaren Corp., of Manhattan Beach, Calif., would ship 850 gigawatt-hours of solar power a year starting in 2016, doubling that amount in later years. The power would be sent by radio frequency from an earth-orbiting satellite to a receiving station in Fresno, California. The energy-conversion technology has been used by communications satellites for 45 years on a much smaller scale, Solaren said.

PG&E wouldn’t disclose the cost of the proposed 15-year contract but said it would be above-market, more than 12.9 cents a kilowatt-hour, according to documents filed with the California Public Utilities Commission, or CPUC.

PG&E among other California utilities are required to use renewable sources for a fifth of the power they sell by 2010, ramping up to one-third of their retail power by 2020. The requirements are part of the state’s 2006 plan to combat climate change.

Because Solaren’s technology is untested, raising “concerns regarding the viability of the project,” PG&E can’t rely on the contract to comply with its renewable energy requirements until construction begins on the project and the CPUC gives additional approval, the agency said in a proposed decision.

The CPUC could make a decision as early as December 3, 2009.

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Wave Energy Setbacks for PG&E in California

TODD WOODY, The New York Times, August 12, 2009

Pacific Gas & Electric has quietly dropped one of two planned 40-megawatt wave-farm projects.
Stroll through San Francisco and you can’t miss California utility Pacific Gas & Electric’s latest ad campaign. Posters plastered around town read: “Wave Power: Bad for sandcastles. Good for you.”

But PG&E recently dropped one of its two 40-megawatt wave-farm projects planned for the Northern California coast, according to documents filed with the Federal Regulatory Energy Commission.

“During the past year, PG&E undertook agency consultation and public outreach and commenced an examination of the technical and environmental feasibility of the proposed project,” wrote utility attorney Annette Faraglia in a June 9 letter to the commission. “Based on the results of this examination, PG&E has concluded that the harbor at Fort Bragg, Noyo Harbor, is not suitable for certain aspects of the project.”

In 2007, the utility had applied for federal permits to explore the feasibility of placing wave energy generators in the Pacific Ocean off the coast of Humboldt and Mendocino counties.

The scuttling of the project is just the latest setback for wave energy. Last year, California regulators also declined to approve a PG&E contract to buy a small amount of electricity from a Northern California wave farm to be built by Finavera Renewables, on the grounds the project was not viable.

Despite the difficulties, PG&E is pushing forward with a similar wave project in Humboldt county. The utility has cut that project’s size from 136 square miles to 18 square miles as it zeroes in on the most productive areas of the ocean. Ms. Morris said that the utility expects to file a license application for the pilot project in the spring of 2010.

However, the National Marine Fisheries Service has identified a plethora of protected species that may be affected by the Humboldt project, ranging from endangered coho salmon to the northern elephant seal and long-beaked common dolphin.

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Ocean Energy Moving Toward Commercialization

PETER ASMUS, Pike Research, June 17, 2009

The earth is the water planet, so it should come as no great surprise that forms of water power have been one of the world’s most popular “renewable” energy sources. Yet the largest water power source of all – the ocean that covers three-quarters of earth – has yet to be tapped in any major way for power generation. There are three primary reasons for this:

• The first is the nature of the ocean itself, a powerful resource that cannot be privately owned like land that typically serves as the foundation for site control for terrestrial power plants of all kinds;
• The second is funding. Hydropower was heavily subsidized during the Great Depression, but little public investment has since been steered toward marine renewables with the exception of ocean thermal technologies, which were perceived to be a failure.
• The third reason why the ocean has not yet been industrialized on behalf of energy production is that the technologies, materials and construction techniques did not exist until now to harness this renewable energy resource in any meaningful and cost effective way.

Literally hundreds of technology designs from more than 100 firms are competing for attention as they push a variety emerging ocean renewable options. Most are smaller upstart firms, but a few larger players – Scottish Power, Lockheed Martin and Pacific Gas & Electric — are engaged and seeking new business opportunities in the marine renewables space. Oil companies Chevron, BP and Shell are also investing in the sector.

In the U.S., the clear frontrunner among device developers is Ocean Power Technologies (OPT). It was the first wave power company to issue successful IPOs through the London Stock Exchange’s AIM market for approximately $40 million and then another on the U.S. Stock Exchange in 2007 for $100 million. OPT has a long list of projects in the pipeline, including the first “commercial” installation in the U.S. in Reedsport, Oregon in 2010, which could lead to the first 50 MW wave farm in the U.S. A nearby site in Coos Bay, Oregon represents another potential 100 MW deployment.

While the total installed capacity of emerging “second generation” marine hydrokinetic resources – a category that includes wave, tidal stream, ocean current, ocean thermal and river hydrokinetic resources – was less than 10 MW at the end of 2008, a recent surge in interest in these new renewable options has generated a buzz, particularly in the United Kingdom, Ireland, the United States, Portugal, South Korea, Australia, New Zealand and Japan, among other countries. It is expected that within the next five to eight years, these emerging technologies will become commercialized to the point that they can begin competing for a share of the burgeoning market for carbon-free and non-polluting renewable resources.

The five technologies covered in a new report by Pike Research are the following:

• Tidal stream turbines often look suspiciously like wind turbines placed underwater. Tidal projects comprise over 90 percent of today’s marine kinetic capacity totals, but the vast majority of this installed capacity relies upon first generation “barrage” systems still relying upon storage dams.
• Wave energy technologies more often look more like metal snakes that can span nearly 500 feet, floating on the ocean’s surface horizontally, or generators that stand erect vertically akin to a buoy. Any western coastline in the world has wave energy potential.
• River hydrokinetic technologies are also quite similar to tidal technologies, relying on the kinetic energy of moving water, which can be enhanced by tidal flows, particularly at the mouth of a river way interacting with a sea and/or ocean.
• Ocean current technologies are similar to tidal energy technologies, only they can tap into deeper ocean currents that are located offshore. Less developed than either tidal or wave energy, ocean current technologies, nevertheless, are attracting more attention since the resource is 24/7.
• Ocean thermal energy technologies take a very different approach to generating electricity, capturing energy from the differences in temperature between the ocean surface and lower depths, and can also deliver power 24/7.

While there is a common perception that the U.S. and much of the industrialized world has tapped out its hydropower resources, the Electric Power Research Institute (EPRI) disputes this claim. According to its assessment, the U.S. has the water resources to generate from 85,000 to 95,000 more megawatts (MW) from this non-carbon energy source, with 23,000 MW available by 2025. Included in this water power assessment are new emerging marine kinetic technologies. In fact, according to EPRI, ocean energy and hydrokinetic sources (which includes river hydrokinetic technologies) will nearly match conventional new hydropower at existing sites in new capacity additions in the U.S. between 2010 and 2025.

The UN projects that the total “technically exploitable” potential for waterpower (including marine renewables) is 15 trillion kilowatt-hours, equal to half of the projected global electricity use in the year 2030. Of this vast resource potential, roughly 15% has been developed so far. The UN and World Energy Council projects 250 GW of hydropower will be developed by 2030. If marine renewables capture just 10% of this forecasted hydropower capacity, that figure represents 25 GW, a figure Pike Research believes is a valid possibility and the likely floor on market scope.

The demand for energy worldwide will continue to grow at a dramatic clip between 2009 and 2025, with renewable energy sources overtaking natural gas as the second largest source behind coal by 2015 (IEA, 2008). By 2015, the marine renewable market share of this renewable energy growth will still be all but invisible as far as the IEA statistics are concerned, but development up to that point in time will determine whether these sources will contribute any substantial capacity by 2025. By 2015, Pike Research shows a potential of over 22 GW of all five technologies profiled in this report could come on-line. Two of the largest projects – a 14 GW tidal barrage in the U.K. and a 2.2 GW tidal fence in the Philippines — may never materialize, and/or will not likely be on-line by that date, leaving a net potential of more than 14 GW.

By 2025, at least 25 GW of total marine renewables will be developed globally. If effective carbon regulations in the U.S. are in place by 2010, and marine renewable targets established by various European governments are met, marine renewables and river hydrokinetic technologies could provide as much as 200 GW by 2025: 115 GW wave; 57 GW tidal stream; 20 GW tidal barrage; 4 GW ocean current; 3 GW river hydrokinetic; 1 GW OTEC.

About the author: Peter Asmus is an industry analyst with Pike Research and has been covering the energy sector for 20 years. His recent report on the ocean energy sector for Pike Research is now available, and more information can be found at http://www.pikeresearch.com. His new book, Introduction to Energy in California, is now available from the University of California Press (www.peterasmus.com).

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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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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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OPT Leaving California for Oregon Wave Energy

Excerpts from FRANK HARTZELL’s article in the Mendocino Beacon, June 4, 2009

Ocean Power Technologies’ subsidiary California Wave Energy Partners in it’s “wave energy project proposed off Cape Mendocino has surrendered its Federal Energy Regulatory Commission (FERC) preliminary permit, making two major companies that have abandoned the area in the past two weeks.

The moves come at a time when President Obama’s energy policy has cut funding for wave energy in favor of solar and wind energy development.

The withdrawals leave GreenWave Energy Solutions LLC, with a permit off Mendocino, as the only local wave energy project.

Pacific Gas and Electric Company announced earlier this month they would not seek to develop wave energy off Fort Bragg. However, PG&E has not yet legally abandoned its FERC preliminary permit.

California Wave Energy Partners did just that on May 26, telling FERC their parent company, Ocean Power Technologies (OPT) was pulling out of California in favor of developing wave energy more seriously in Oregon.

The project was proposed near Centerville off Humboldt County, south of Eureka on the remote coast of Cape Mendocino.

“OPT subsidiaries are also developing two other projects at Coos Bay and Reedsport,” wrote Herbert Nock of OPT. “During the process of developing these projects, OPT has learned the importance of community involvement in the project definition and permitting process.

“OPT therefore feels it is in the best interests of all parties to focus its efforts (in Oregon) at this time. This will allow the time and resources necessary to responsibly develop these sites for the benefit of the coastal community and the state,” Nock wrote.

The Cape Mendocino project was to be situated in a prime wave energy spot, but with connections to the power grid still to be determined. The project was never the subject of a public meeting in Mendocino County and stayed under the radar compared to several other Humboldt County projects. PG&E still plans to develop its WaveConnect project off Eureka.

Brandi Ehlers, a PG&E spokeswoman, said PG&E plans to relinquish the preliminary permit for the Mendocino Wave Connect project soon.

She said the utility spent $75,000 on the Mendocino County portion of Wave Connect before stopping because Noyo Harbor was ill-equipped to deal with an offshore energy plant.

“PG&E is not currently pursuing applications for new FERC hydrokinetic preliminary permits, but it is important that we continue to explore other possibilities,” Ehlers said in response to a question.

Secretary of the Interior Ken Salazar has announced that his department will host 12 public workshops this month to discuss the newly-issued regulatory program for renewable energy development on the U.S. Outer Continental Shelf.

All the meetings are to be held in large cities — in Seattle June 24, Portland on June 25, and San Francisco on June 26.

Salazar restarted the process of building a framework for energy development in the ocean, which had been started in the Bush Administration but never finished.

The new program establishes a process for granting leases, easements, and rights-of-way for offshore renewable energy projects as well as methods for sharing revenues generated from OCS renewable energy projects with adjacent coastal States. The rules for alternative energy development in the oceans become effective June 29.

Most of the actual ocean energy development figures are for the Atlantic and Gulf of Mexico. The Pacific Ocean’s near-shore slopes are too steep and too deep for current wind energy technology. Wave and tidal energy are still in their infancy, not seen as able to help with President Obama’s energy plan.

The Obama administration has proposed a 25% cut in the research and development budget for wave and tidal power, according to an in-depth report in the Tacoma, Wash., News Tribune.

At the same time the White House sought an 82% increase in solar power research funding, a 36% increase in wind power funding and a 14% increase in geothermal funding. But it looked to cut wave and tidal research funding from $40 million to $30 million, the News Tribune reported.

Interior’s Minerals Management Service, the agency charged with regulating renewable energy development on the Outer Continental Shelf [and specifically wind energy projects], is organizing and conducting the workshops, which will begin with a detailed presentation and then open the floor to a question and answer session. All workshops are open to the public and anyone interested in offshore renewable energy production is encouraged to participate.”

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BrightSource, PG&E Strike Up Largest Solar Deal Ever

TRACY SEIPEL, MercuryNews.com, May 15, 2009

Declaring it a record total, PG&E on Wednesday announced an expansion of solar-power contracts with Oakland’s BrightSource Energy for a total of 1,310 megawatts of electricity — enough to power 530,000 California homes.

The power purchase agreements, which will now include seven power plants, add to a previous contract the two companies struck in April 2008 for up to 900 megawatts of solar thermal power.

BrightSource called it the largest solar deal ever. The company now has 2,610 megawatts under contract, which it said is more than any other solar thermal company and represents more than 40 percent of all large-scale solar thermal contracts in the United States.

“The solar thermal projects announced today exemplify PG&E’s commitment to increasing the amount of renewable energy we provide to our customers throughout Northern and central California,” John Conway, senior vice president of energy supply for PG&E, said in a statement. “Through these agreements with BrightSource, we can harness the sun’s energy to meet our customers’ power requirements when they need it most — during hot summer days.”

John Woolard, chief executive of BrightSource Energy, said the additional contracts came about after BrightSource demonstrated its technology in Israel with results that were “at or above all the specifications. It proved to them that our technology works,” Woolard said. “They saw us executing and delivering” efficient production of solar energy.

BrightSource, which designs, builds and operates solar thermal plants, will construct the plants at a cost of at least $3 billion in the southwestern deserts of California, Nevada and Arizona. The company anticipates the first plant, a 110-megawatt facility at Ivanpah in eastern San Bernardino County, to begin operation by 2012.

Its technology uses sunlight reflected from thousands of movable mirrors to boil water to make steam. The steam then drives a turbine to generate electricity. BrightSource founder and Chairman Arnold Goldman’s previous company, Luz International, built nine solar plants in the Mojave Desert between 1984 and 1990, all of which are still operating.

In March, BrightSource reached an agreement with Southern California Edison to purchase 1,300 megawatts, then the largest solar contract ever, BrightSource said.

Investor-owned California utilities such as PG&E are required to get 20% of their power from renewable sources by 2010, or to by then have contracts for power from projects that go online by 2013. PG&E already has contracts in hand that exceed that 20% goal.  PG&E generates 12% of its energy from renewable sources now, and expects that to increase to 14% by the end of the year.

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PG&E Cancels Mendocino WaveConnect Project

Editors Note:  On June 9, 2009, PG&E filed with the Federal Energy Regulatory Commission (FERC) a petition to release the Mendocino WaveConnect preliminary permit.

MendoCoastCurrent, May 11, 2009

In early May 2009, PG&E’s WaveConnect team decided to cancel the Mendocino WaveConnect project because the Noyo Harbor didn’t pass muster and was deemed insufficient in several engineering aspects, therefore unable to support PG&E’s Mendocino WaveConnect pilot wave energy program offshore.

PG&E summarily rejected re-situating the launch site to the Fort Bragg Mill Site, only a short distance from the Noyo Harbor, where PG&E could construct a state-of-the-art launch for Mendocino WaveConnect.

PG&E plans to report their decision to the Federal Energy Regulatory Commission and anticipates surrendering the Mendocino WaveConnect FERC pilot wave energy permit. The City of Fort Bragg, County of Mendocino and the FISH Committee were brought up to speed by PG&E on May 11th.

PG&E had raised $6mm in funding from CPUC and DOE for WaveConnect, allocated to both Mendocino and Humboldt projects. This remaining funds will now be directed to only Humboldt WaveConnect.

And PG&E notes that Humboldt WaveConnect, at Humboldt Bay and its harbor, offers WaveConnect the required spaciousness and the industrial infrastructure as well as a welcoming, interested community.

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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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PG&E Exploring Space Solar Energy

MendoCoastCurrent, April 17, 2009

San Francisco — PG&E has begun exploring renewable energy from space as it seeks approval from California state regulators, the CPUC, to purchase power from Solaren Corporation offering 200 megawatts over 15 years.

Solaren’s technology uses solar panels in Earth orbit, converting the energy to radio frequency for transmission to an Earth-based receiving station. The received radio frequency is converted into electricity and fed into the power grid. 

Solaren envisions deploying a solar array into space to beam an average of 850 gigawatt hours the first year of the term and 1,700 gigawatts per year over the remaining term according to their filing to the CPUC.

A clear advantage of solar in space is efficiency. From space, solar energy is converted into radio frequency waves, which are then beamed to Earth. The conversion rate of the RF waves to electricity is in the area of 90%, said Solaren CEO Gary Spirnak, citing U.S. government research. The conversion rate for a typical Earth-bound nuclear or coal-fired plant, meanwhile, is in the area of 33%. And space solar arrays are also 8-10 times more efficient than terrestrial solar arrays as there’s no atmospheric or cloud interference, no loss of sun at night and no seasons.

So space solar energy is a baseload resource, as opposed to Earth-based intermittent sources of solar power. Spirnak claims that space real estate is still free although hard to reach. Solaren seeks only land only for an Earth-based energy receiving station and may locate the station near existing transmission lines, greatly reducing costs.

While the concept of space solar power makes sense on white boards, making it all work affordably is a major challenge. Solar energy from space have a long history of research to draw upon. The U.S. Department of Energy and NASA began seriously studying the concept of solar power satellites in the 1970s, followed by a major “fresh look” in the Clinton administration.

The closest comparison to the proposed Fresno, California deployment is DirecTV, the satellite TV provider, Spirnak explained. DirecTV sends TV signals down to earth on solar-powered RF waves. However, when they reach the Earth, the solar energy is wasted, he said, as all the receivers pick up is the TV programming. 

Solaren claims they’ll be working with citizen groups and government agencies to support the project’s development. Solaren is required to get  all necessary permits and approvals from federal, state and local agencies.

At onset, in exploring space solar energy as in exploring all nascent technologies, explorers shall have to show and prove their renewable technology safe.

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PG&E Scores $6M for Mendocino, Humboldt Wave Energy Projects

Editors Note:  On May 11, 2009, PG&E pulled-out of Mendocino WaveConnect, read it here: http://tinyurl.com/qwlbg6 . The remains of the $6M are now solely allocated to Humboldt WaveConnect.

MendoCoastCurrent, January 29, 2009

PG&E caught a major renewable energy wave today as the California Public Utilities Commission approved $4.8 million in funding their centerpiece wave energy project, WaveConnect. The program also received an additional $1.2 million in matching funds from the Department of Energy. PG&E’s WaveConnect, a project already two years in the making, launches with a $6M kitty.

WaveConnect is chartered with exploring wave energy development off the coasts of Mendocino and Humboldt counties in Northern California. The stakeholders in this region are dyed-in-the-wool political activists, living in environmentally-centric coastal communities and have reacted protectively, sounding alarms that PG&E and the Federal government’s wave energy plans may foul, diminish and destroy the Pacific Ocean and marine life.

Over the two years that PG&E and the Federal Energy Regulatory Commission (FERC) advanced WaveConnect, only recently have environmental concerns and study become part of the discussion. The opportunity for Mendocino and Humboldt coastal communities and local governments to embrace wave energy development and connect with WaveConnect has not gone well, especially as the Federal Energy Regulatory Commission (FERC) has disallowed the City of Fort Bragg and local fishermen to be party in the WaveConnect FERC Preliminary Permitting.

Jonathan Marshall, publisher of Next100, a PG&E blog, wrote “PG&E’s first step will be to conduct meetings with local stakeholders and agencies to learn about their issues and concerns. After completing appropriate environmental reviews and permit applications, which could take a couple of years, PG&E then plans to build an undersea infrastructure, including power transmission cables, to support wave energy demonstration projects. The utility will then invite manufacturers of wave energy devices to install them offshore for testing and comparison.”

“The anticipated cost of wave power compares favorably to the early days of solar and wind,” says William Toman, WaveConnect project manager at PG&E. “It will take several stages of design evolution to lower costs and increase reliability.” The CPUC and the DOE are betting on this evolution as in this funding scenario engineered by PG&E, the CPUC awards $4.8M in ratepayer funds while the DOE $1.2M is a matching grant.

Wave energy may become a key source of renewable energy in California. It’s proposed that the 745-mile coastline could produce 1/5th of California’s energy needs if, admittedly a big if, economic, environmental, land use and grid connection issues — and community issues — don’t stand in the way.

Marshall wrote in closing “Making ocean power technology work reliably and at a competitive price will be the first big challenge. Serving offshore installations with power transmission lines will be another economic and engineering hurdle. Finally, ocean power developers must also convince local communities and government regulators that their installations will not destroy marine life, cause boating collisions or navigational hazards, or degrade ocean views.”

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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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Mendocino Energy

MendoCoastCurrent, January 17, 2009

Here’s the post from MendoCoastCurrent in the Citizen’s Briefing Book at President-elect Barack Obama’s change.gov site:

Renewable Energy Development (RED) federal task force

Immediately establish and staff a Renewable Energy Development (RED) federal task force chartered with exploring and fast-tracking the development, exploration and commercialization of environmentally-sensitive renewable energy solutions in solar, wind, wave, green-ag, et al.

At this ‘world-class incubator,’ federal energy policy development is created as cutting-edge technologies and science move swiftly from white boards and white papers to testing to refinement and implementation.

∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

If you wish to support this, please vote up this post at :

Renewable Energy Development (RED) federal task force.

∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

Mendocino Energy:

Renewable energy incubator and campus on the Mendocino coast exploring nascent and organic technology solutions in wind, wave, solar, green-ag, bioremediation and coastal energy, located on the 400+ acre waterfront G-P Mill site.

Mendocino Energy may be a Campus in Obama’s Renewable Energy Development (RED) federal task force.

Vision:

Mendocino Energy is located on the Mendocino coast, three plus hours north of San Francisco/Silicon Valley.  On the waterfront of Fort Bragg, a portion of the now-defunct Georgia-Pacific Mill Site shall be used for exploring best practices, cost-efficient, environmentally-sensitive renewable and sustainable energy development – wind, wave, solar, bioremediation, green-ag, among many others. The end goal is to identify and engineer optimum, commercial-scale, sustainable, renewable energy solutions.

Start-ups, universities (e.g., Stanford’s newly-funded energy institute), the federal government (RED) and the world’s greatest minds working together to create, collaborate, compete and participate in this fast-tracked exploration.

The campus is quickly constructed of green, temp-portable structures (also a green technology) on the healthiest areas of the Mill Site as in the past, this waterfront, 400+ acre created contaminated areas where mushroom bioremediation is currently being tested (one more sustainable technology requiring exploration). So, readying the site and determining best sites for solar thermal, wind turbines and mills, wave energy, etc.

To learn more about these technologies, especially wave energy, RSS MendoCoastCurrent.

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PG&E, FERC Brief Fort Bragg on Mendocino Wave Energy

FRANK HARTZELL’s article with MendoCoastCurrent edits, January 15, 2009

After nearly two years of local pleas for specifics on the WaveConnect project, PG&E representatives surprised Fort Bragg and Mendocino County representatives with many new details.

Those included the promise by PG&E that all environmental studies would be public, not private information. In the recent past, PG&E had been resisting calls by competitors and ratepayer advocates before the California Public Utilities Commission to make public more information learned during the WaveConnect study.

Another surprise was that PG&E has found about 10 different viable wave energy technologies — far more than first envisioned. The utility will choose the top three or four wave energy devices and test those under a pilot project license.

On Tuesday, the pilot license process became the biggest issue for wave energy officials gathered at Town Hall to hear two top officials explain the roles of the Federal Energy Regulatory Commission, or FERC, and the California Coastal Commission.

Both Tom Luster, who will oversee all wave energy projects for the California Coastal Commission and 23-year FERC veteran Ann Miles, FERC Director of Hydropower Licensing said Fort Bragg has had more interest in wave energy than anywhere else in California.

Miles said PG&E would need to file for a conventional license by this March under FERC rules. Using the “faster” pilot license gives them until March 2010 to get started.

Miles provided lengthy and knowledgeable explanations of convoluted FERC processes during the three-hour meeting. But PG&E’s new announcements, which came in private meetings last week, overshadowed the presentations by the top state and federal officials.

Luster explained how the California Coastal Commission would work with the State Lands Commission to review any wave energy project within three miles of shore.

PG&E is now saying their 40-megawatt powerplant will be located “well beyond” that three-mile state limit. The powerplant would likely come after the five-year pilot project license.

That announcement unexpectedly changed the game for the state.

Luster said the big power cable that extends to shore would be regulated by the Coastal Commission, but development beyond three miles would be regulated only for “federal consistency.”

While planning for an eventual project many miles from shore, PG&E will give up on areas more than three miles from shore for now, they have told FERC.

PG&E told Fort Bragg they would site the pilot project much closer to shore, to avoid the jurisdictional conflict between FERC and fellow federal agency Minerals Management Service, or MMS.

FERC claims the authority to be the regulatory authority for all water energy projects in the United States. MMS claims authority for ocean federal waters, which are those more than three miles from shore.

PG&E’s 68-square-mile preliminary permit area, which runs from Point Cabrillo to Cleone and to more than three miles offshore, will be trimmed down to eliminate areas beyond the federal-state jurisdiction line.

PG&E representatives are now promising significant help to local governments.

It was reported that all of the power generated by the 40 megawatt WaveConnect would be consumed in Mendocino County and would provide for nearly all of Fort Bragg’s electric demand when WaveConnect is generating.

Additionally, PG&E intends to pay their expenses, including reviewing, permitting and the community process for public participation.

Miles said FERC has no requirements in place to determine that a developer be able to pay for removal of devices in case of bankruptcy or disaster.

Luster said the State Lands Commission handles financial arrangements, such as bonding of projects.

Miles was making her first ever visit to Northern California. She was set to answer questions from the general public at a Town Hall forum Tuesday night.

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PG&E Signs Solar PV Contract with El Dorado Energy

MendoCoastCurrent, December 22, 2008

Pacific Gas and Electric Company (PG&E) announced today that it has entered into a long-term agreement with El Dorado Energy, LLC, a wholly-owned subsidiary of Sempra Generation, to purchase 10 megawatts of renewable, photovoltaic solar energy from Sempra Generation’s new El Dorado Energy Solar facility in Nevada. 

“Solar energy is a reliable and environmentally-friendly way to help meet California’s peak energy demands,” said Jack Keenan, chief operating officer for PG&E. “Through our partnership with Sempra Generation, we will significantly increase the amount of solar energy we provide to our customers in 2009.” 

The El Dorado Energy solar facility is located on 80 acres adjacent to Sempra Generation’s existing gas-fired power plant in Boulder City, Nevada. Power deliveries to PG&E are expected to begin by January 1, 2009. The project will generate up to 23.2 gigawatt-hours of renewable energy annually. That is equivalent to the amount of energy needed to serve more than 3,360 residential homes annually. 

”We commend Pacific Gas and Electric Company and its decision to encourage and sustain new renewable energy installations such as El Dorado Energy Solar,” said Michael W. Allman, president and chief executive officer of Sempra Generation. “Our mutual, long-term commitment to solar energy will benefit western U.S. power customers for generations to come.”

Since 2002, PG&E has entered into contracts for more than 20% of its future electric power deliveries from renewable sources. On average, more than 50% of the electricity PG&E delivers to its customers comes from generating sources that emit no carbon dioxide, making the company’s energy among the cleanest in the nation.

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation, is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with 20,000 employees, the company delivers some of the nation’s cleanest energy to 15 million people in northern and central California.

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FERC Official Appearing in Fort Bragg January 13, 2009

Excerpts from article by FRANK HARTZELL, The Mendocino Beacon, December 24, 2008

On January 13, 2009, from 5-7p.m. at Fort Bragg Town Hall, a “top official from the Federal Energy Regulatory Commission (FERC) will appear to explain the agency’s strategy on developing what it calls “hydrokinetic” power as an alterative energy source.

Ann F. Miles, FERC’s director of the Division of Hydropower Licensing, will meet with county and city officials before attending the public meeting in Fort Bragg.

“The FISH Committee is looking forward to FERC’s visit, and welcomes the opportunity to learn about the different FERC licensing processes for wave energy, and how fishermen and other affected people can participate and have their voices heard,” said attorney Elizabeth Mitchell, who represents the Fisherman Involved for Safe Hydrokinetics.

Ocean waters off the Mendocino Coast, from Little River to Cleone, are now claimed under exclusive study permits by two different wave energy developers. GreenWave LLC claims 17 square miles of waters from Little River to Point Cabrillo, while PG&E claims 68 square miles from Point Cabrillo to Cleone.

Preliminary permits granted by FERC give not only exclusive study rights to the claimants, but also licensing priority to develop wave energy upon successful completion of the three-year studies.

Fort Bragg has become ground-zero for wave energy regulation. The federal Minerals Management Service, which is involved in an open feud with FERC over wave energy regulation, has sought to make Fort Bragg its test case.

FERC drew local ire by denying local efforts to intervene in the study process. At one point, protesters carried signs targeting the obscure federal agency with messages such as “Don’t FERC with us.”

One FERC insider said commissioners had complained that more fuss had been made in tiny Fort Bragg than the entire rest of the nation.

FERC later relented and on appeal granted intervener status to Mendocino County, for the PG&E project. The period to intervene and comment on GreenWave’s permit closes Friday, Feb. 6. As yet, nobody has filed anything with FERC, according to its Website.

“The commission’s existing procedures are well-established and well-suited to address this expansion of conventional hydropower with new technologies,” Miles told Congress last year, “and we are prepared to learn from experience in this rapidly evolving area and to make whatever regulatory adjustments are appropriate in order to help realize the potential of this renewable energy resource.”

FERC expanded its domain into all tidal, wave, river flow and ocean current study and licensing with its novel concept of a unified “hydrokinetic” regulation.

From the Yukon River in Alaska to the ocean currents off the Florida Keys, FERC has grown its regulatory territory dramatically since the start of the Bush administration. The agency is now explaining how dam regulation and wave energy innovation can go together. FERC recently granted the first hydrokinetic plant permit for production of energy in the Mississippi River in the state of Minnesota.

The independent agency has moved quickly with Neo-Con era disdain for regulation, eschewing calls from fellow federal and state agencies for a conventional rulemaking process. Instead FERC has adjusted its process as it goes along.

In her presentation to Congress, Miles focused on wave energy, not the more prevalent river current energy plans. She said wave energy projects will likely occur close to shore, not far out in federal waters.

“The cumulative costs of development … make it advantageous to locate projects nearer to the shore,” Miles told Congress.

Locals have complained that FERC has no intelligible process for public input. Governments and critics of FERC have been frustrated in efforts to get details.

FERC is a uniquely independent federal agency. It is under the Department of Energy but does not report to DOE, a structure that was created during the Great Depression. The president appoints FERC commissioners.

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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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GreenWave Granted Wave Energy Permit in Mendocino

Excerpts from FRANK HARTZELL’s article at the Mendocino Beacon, December 11, 2008

On December 9, 2008  “the Federal Energy Regulatory Commission (FERC) granted a Southern California development company exclusive rights to 17 square miles off the town of Mendocino for a wave energy study.

GreenWave LLC’s intent is to eventually produce a 100 megawatt wave energy power plant, more than twice as big as the 40 megawatt project Pacific Gas & Electric plans off Fort Bragg.

Due to redefining of the preliminary permit process by FERC, the new preliminary permit does not encourage in-water testing. It does give sole claim and study rights to GreenWave, blocking any local study of the same area.

More valuable, the preliminary permit gives GreenWave exclusive first rights to a license to build a wave energy farm, upon completion of the three-year study.

The preliminary permit came more than a year after GreenWave, of Thousand Oaks, filed for two preliminary permits. FERC had initially rejected the GreenWave application as too sketchy.

GreenWave also was granted a preliminary permit on Tuesday for a nearly identical proposal off San Luis Obispo.

GreenWave is a partnership which consists of five men including Tony Strickland, a leading Republican politician in California, who was recently narrowly elected to the state Assembly. Strickland made his wave energy venture a key point of his campaign. His opponent in a heavily Republican district attacked this as “greening” of one of the most conservative politicians in the state.

That race, one of the closest in California this year, was decided this week in favor of Strickland, who prevailed over Democrat Hannah-Beth Jackson by less than 1,000 votes.

FERC had criticized GreenWave for too few details about who was behind the venture and for not having information about the technology to be used.

GreenWave responded by emphatically stating that they weren’t ready to name any particular technology.

“Given the time-horizon for getting through the permitting process and the uncertainties of what the technologies will actually look like, GreenWave believes that it would be misleading to provide detailed specifications of a technology at this stage of the development process. GreenWave intends to select the most suitable commercially ready technology as part of the process once preliminary permits have been issued by FERC to further study the site,” the Green Wave filing states.

However, FERC’s permit says GreenWave will be using the Pelamis device in the permit issued on Tuesday. The Pelamis, which resembles a series of giant redwood log segments on a string, is the only currently viable commercial technology. The company has said it would use only the most seasoned technology.

The issuance is apparently based on an about face made by GreenWave in documents submitted to FERC but not available on the public Website with the rest of the filings.

The permit says 10 to 100 Pelamis devices will be used, having a total installed capacity of 100 megawatts. Connecting the project to shore will be a 2- to 3-mile-long, 36 kilovolt transmission line,

The project site begins a half mile offshore and extends to 2.6 miles from shore in water depths that range from 120 to 390 feet, the GreenWave application says.

Local governments, groups and even residents now have a chance to file motions of intervention, which allows the intervener to play an official role in the process.

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EnXco Secures Wind Turbine Funding for Shiloh II

SolanoCountyBusinessNews.com, November 27, 2008

Escondido-based EnXco, a subsidaiary of EDF Energies Nouvelles Co., recently announced that it has closed on the project financing for the Shiloh II Wind Energy Project under construction in the Montezuma Hills area of Solano County, California.

Lenders to the projects are Nord/LB as lead administrative agent, Dexia and Credit Industriel et Commercial; equity arranged by JP Morgan as lead investor with Wells Fargo and New York Life rounding out the investor group.

Construction of the 150-megawatt wind farm, consisting of 75 REpower 2 MW turbines, began in May, with commercial operation expected in December 2008. Pacific Gas & Electric will purchase the power generated under a 20-year power purchase agreement. The Shiloh II wind farm will be operated and maintained by EnXco Service Corporation.

“Bringing the financing to completion during this current financial crisis is testimony to the quality of our projects as well as to the long-term relationship with our financial partners,” said Tristan Grimbert, president and CEO of EnXco in a press release announcing the financing deal. “Even though funding is scarce, this further confirms that first class, high-quality projects will succeed.”

EnXco, Inc. develops, constructs, operates and manages renewable energy projects throughout the United States.

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PG&E Adds 103MW Wind Energy Project to Portfolio

MendoCoastCurrent, November 21, 2008

San Francisco — Pacific Gas and Electric Company (PG&E) announced that it has entered into a long-term agreement with Hatchet Ridge Wind LLC, a subsidiary of Babcock & Brown, to purchase up to 103 megawatts (MW) of wind energy. The project will generate up to 303 gigawatt-hours of renewable energy annually. This is equivalent to the energy needed to serve nearly 44,000 homes on an annual basis.

“This wind energy will provide our northern and central California customers with clean, emission-free power,” said Fong Wan, Sr. VP of Energy Procurement for PG&E. He added that, “our agreement with Hatchet Ridge Wind is another important step to increasing our diverse renewable energy portfolio.”

The Hatchet Ridge Wind project will be located on a portion of Hatchet Mountain in Burney, California. Babcock & Brown said that deliveries from the project are expected to begin by December 31, 2009. Since 2002, PG&E has entered into contracts for more than 24% of its future deliveries from renewable sources. On average, more than 50% of the energy PG&E delivers comes from generating sources that emit no carbon dioxide, making PG&E’s energy among the cleanest in the nation.

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Concerns Emerge About Environmental Effects of Wave Energy

MICHELLE MA, Seattle Times, November 17, 2008

What started out as a mad dash to extract energy from the ocean’s waves and tides has slowed to a marathoner’s pace — complete with a few water breaks and sprained ankles along the way.

In the past three years, more than 100 preliminary permits have been issued nationally for wave and tidal energy projects, and nearly 100 more are pending approval. But only one has won a license to operate — a small wave energy development off Washington’s northwest coast.

That project is still awaiting state and federal permits, and its British Columbia-based developer, Finavera Renewables, doesn’t know when the first devices will go in the water. It doesn’t help that a wave power buoy the company was testing off the Oregon coast unexpectedly sank last year.

Tapping the power of waves and tidal currents to generate electricity is promoted as one of many promising alternatives to the fossil fuels that contribute to global warming.

But no one knows exactly how the technologies will behave in the water, whether animals will get hurt, or if costs will pencil out. The permitting process is expensive and cumbersome, and no set method exists for getting projects up and running.

“The industry is really young, and everything is hodgepodged right now,” said Jim Thomson, an oceanographer at the University of Washington’s Applied Physics Lab who is involved in tidal research.

A new report that collected findings from dozens of scientists raises concerns about the impact wave energy developments could have on the ocean and its critters. Wave energy buoys could alter the food chain or disrupt migrations, the report says.

Still, developers, regulators and researchers are moving forward. A 2.25-megawatt project off the coast of Portugal went on line this fall, becoming the world’s first commercial wave energy development in operation. It can supply 1,500 households with electricity.

The first commercial wave energy park in the U.S. could go in off Reedsport, Ore., within the next two years.

Tidal energy has yet to go commercial, but devices have been tested in Ireland and Canada. Turbines have been placed in New York’s East River, and a demonstration project is planned for the Bay of Fundy off Northeastern U.S.

In the Northwest, the Snohomish County Public Utility District (PUD) has narrowed its search for tidal power sites in Puget Sound, although the PUD doesn’t expect to have a test project in the water for another two years.

Race to develop

Dozens of developers have staked claim to plots in the ocean and in waterways that could provide wave and tidal energy. But despite the jostle for space, getting projects off dry land has proved difficult.

Wave power generators use the up-and-down motion of the ocean’s swells to produce electricity. Tidal generators act like underwater windmills, spinning as the tides move in and out.

To get small projects in the water quicker federal regulators recently created a five-year pilot license for tidal and wave developments. That’s meant to help developers gather data they need to launch future projects, said Federal Energy Regulatory Commission spokeswoman Celeste Miller.

Yet even with a more streamlined process, no one has applied for the pilot license, Miller said. Finavera received its license for the 1-megawatt Makah Bay wave project before this option became available.

Given the unknowns in a young industry, it’s not surprising projects are taking longer than some developers would like, said Myke Clark, senior vice president of business development for Finavera.

His company encountered another hurdle when Pacific Gas and Electric’s agreement to buy power from a planned Finavera wave energy project off California was rejected last month by the state’s Public Utilities Commission.

Regulators said the rates were too high and the buoy technology not yet ready.

Clark said the decision wouldn’t affect Finavera’s Makah Bay project.

Research under way

Researchers from the University of Washington and Oregon State University hope that a new national marine renewable energy research center in the Northwest will help answer questions about tidal and wave energy.

A federal grant provides $1.25 million annually for up to five years. The UW will continue research on tidal energy in Puget Sound, while OSU will focus on wave energy.

“The feeling is that a lot of questions being asked now are only questions that can be answered with a responsible pilot [project],” said Brian Polagye, who is pursuing his doctorate in mechanical engineering at the UW.

Locally, researchers want to see where marine life in Puget Sound congregates and to create a standard way to evaluate sites around the country to determine which would be good candidates for tidal energy projects.

Admiralty Inlet, between Whidbey Island and Port Townsend, is the likely spot for the Snohomish County PUD’s small test project set to launch at least two years from now, said Craig Collar, the PUD’s senior manager of energy resource development.

The inlet’s tides are strong, and the area is large enough to accommodate a tidal project without interfering with other activities such as diving and ferry traffic.

Finavera wants to install four wave energy buoys in Makah Bay in the Olympic Coast National Marine Sanctuary to test its technology. Developers also plan to monitor the project for effects on wildlife and shoreline habitat, keeping an eye on federally listed species such as the marbled murrelet, a small bird that dives for food.

Finavera doesn’t intend to continue the project after its five-year license expires. Still, if the company can negotiate a purchasing agreement with the Clallam County Public Utility District, homes in the area could use the wave generated power while the project is in the water, Clark said.

The Makah Nation wants to see what effect the project might have on the environment before deciding whether wave energy is a viable long-term option, said Ryland Bowechop, tourism and economic-development planner for the tribe.

The buoys would sit just offshore from the tribal headquarters in Neah Bay.

“We are always concerned because our livelihood is the ocean,” Bowechop said.

Concerns linger

The environmental effects of wave and tidal energy are largely unknown and require more studies, dozens of scientists concluded after meeting a year ago at OSU’s Hatfield Marine Science Center in Newport, Ore.

The group was concerned that electromagnetic cables on the ocean floor could affect sea life, and that buoys could interfere with whale and fish migration.

Large buoys might actually attract more fish, but the marine ecosystem could be altered if more predators move in. Buoys also could disrupt natural currents and change how sediment is moved. Shorelines might be affected as energy is taken from the waves.

Even if environmental concerns are checked, costs to extract the power remain high. Wave energy costs at least 20 cents per kilowatt hour to generate, compared with 4 cents per kilowatt hour for wind power, said Annette von Jouanne, leader of OSU’s wave energy program. Wind energy used to be much more expensive 20 years ago.

In comparison, coal-generated power costs about 5 cents per kilowatt hour, and power from dams can be as low as 3 cents, said Roger Bedard, ocean energy leader with the nonprofit Electric Power Research Institute.

Tidal energy costs are harder to determine because there aren’t any projects trying to sell electricity, Bedard said.

Fishermen have their own worries. They fear that wave and tidal projects could further reduce access to fishing grounds, said Dale Beasley, a commercial fisherman in Ilwaco, Pacific County, and president of the Columbia River Crab Fisherman’s Association.

“There’s so many things coming at the ocean right now,” he said.

Beasley says the industry wants a say in how wave and tidal energy projects are developed.

“Coastal communities are going to have to figure out a way to deal with this, and if they don’t, the character of the coast will change dramatically,” he said.

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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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Frank Hartzell’s Coverage of Mendocino Wave Energy Wins Awards

MendoCoastCurrent, November 9, 2008

MendoCoastCurrent applauds Frank Hartzell’s reporting in the Fort Bragg Advocate-News and the Mendocino Beacon, and in winning reporting awards from the California Newspaper Publishers Association’s Better Newspapers Contest for work published in 2007. The awards were recently announced at CNPA’s annual awards luncheon in late October 2008.

Reporter Frank Hartzell’s on-going, in-depth and insightful coverage of the Mendocino coast’s wave energy development projects won First Place for Environmental & Agricultural Resource Reporting among weeklies with small circulations.

Mr. Hartzell is a key community forerunner in informing and deciphering both technological and governmental policies, developments and environmental impact(s) of the forward-moving ocean power technology developments on the Mendocino coast.  Many now consider Fort Bragg and the Mendocino coast “Ground Zero” in U.S. wave energy commercial development.

Mark Massara, head of the California Coastal Program for the Sierra Club, credited Mr. Hartzell’s coverage as the only in-depth information about wave energy being written.  And local people have generated the only viable criticism of the process, he said.

The Federal Energy Regulatory Commission (FERC), a key player in federal energy policy, has extensively quoted Mr. Hartzell’s coverage, even cataloging and creating timelines from his authored newspaper articles.

Thank you, Frank Hartzell, for your superb work in researching and educating the Mendocino coast community in wave energy developments and in supporting us to act from knowledge in our role as environmental stewards.

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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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Mendocino County Granted FERC Role as FERC Asserts Position in Mendocino Wave Energy

MendoCoastCurrent, October 16, 2008

The Federal Energy Regulatory Commission (FERC) claimed that it has jurisdiction over hydroelectric projects located on the Outer Continental Shelf (OCS), pointing to laws that define its role.

FERC addressed the jurisdictional question, raised by the U.S. Department of the Interior, Mineral Management Service (MMS), in the context of a rehearing order on two preliminary permits issued to PG&E to study the feasibility of developing wave energy projects in the OCS off the California coast. The projects are the Humboldt Project off the coast of the Samoa Peninsula in Humboldt County near Eureka, and the Mendocino Project off the coast of Fort Bragg in Mendocino County.

Commissioner Philip Moeller said the development of viable hydrokinetic resources needs a streamlined process like FERC’s. “It is indisputable that renewable energy is a valuable resource and hydrokinetic projects could harness a vast resource of new hydropower,” he said. “Instead of legal battles, my preference, and this Commission’s, has been to reach out to federal agencies and states to work in a cooperative manner to the same goal: timely development of a new renewable power resource in a responsible manner after input from all affected stakeholders.”

MMS has asserted that FERC only has jurisdiction to issue licenses and preliminary permits for projects within state waters, which for most states is defined as extending three miles offshore. Projects beyond state waters are considered to be located in the OCS.

But FERC says the Federal Power Act (FPA) gives it two bases of authority to issue preliminary permits and licensees for hydroelectric projects located on the OCS. First, the law expressly grants FERC jurisdiction to license in “navigable waters” without limitation as well as in “streams or other bodies of water over which Congress has jurisdiction.” 

The second authority is for those projects located on “reservations” of the United States. FERC concludes that the OCS is land owned by the United States, qualifying it to be a “reservation” under the FPA. “The Supreme Court of the United States has consistently held that the United States owns the submerged lands off its shores, beginning from the low-water mark,” FERC said.

Finally, FERC addressed comments by MMS about the meaning of the Federal Energy Policy Act of 2005 (EPAct 2005) as it relates to the jurisdiction question for hydroelectric projects located on the OCS. MMS asserted that EPAct 2005 intended for MMS to be the lead federal regulatory authority over wave and ocean current energy projects in the OCS.

In this order, FERC notes that EPAct 2005 does not limit the scope of its authority over hydroelectric power or withdraw FERC jurisdiction over projects in the OCS. “To the contrary, Congress expressly preserved the Commission’s comprehensive hydroelectric licensing authority under the FPA by including two saving clauses….,” FERC said.

FERC Chairman Kelliher stressed today that FERC recognizes the role of Interior, which through the Minerals Management Service (MMS) manages lands on the OCS. There is no conflict with FERC’s role as the licensing agency, he said.

“We have proposed a Memorandum of Understanding (MOU) with MMS that carefully delineates the roles of the two agencies in a manner that respects both our licensing, and Interior’s resource, roles,” Kelliher said. “We stand ready to enter into the MOU to clarify those roles.”

A preliminary permit gives the holder of a permit priority over the site for three years while the holder studies the feasibility of developing the site. It does not authorize construction of any kind. A license authorizes construction and operation of a hydroelectric facility.

FERC’s order also finds that although two local governments, the City of Fort Bragg and Mendocino County, asserted that they did not receive personal notification from FERC of the filing of the preliminary permit applications, only Mendocino County acted in a timely manner once it received actual notice of the application in order to preserve its right to intervene. As a result, Mendocino County’s request for late intervention is granted. However, the order finds that Mendocino has not provided grounds for the Commission to revoke the Mendocino Project permit or to reopen that proceeding. The order also denies motions for late intervention in both proceedings by FISH Committee.

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Power From the Restless Sea Stirs the Imagination

KATE GALBRAITH, The New York Times, September 23, 2008

For years, technological visionaries have painted a seductive vision of using ocean tides and waves to produce power. They foresee large installations off the coast and in tidal estuaries that could provide as much as 10% of the nation’s electricity.

But the technical difficulties of making such systems work are proving formidable. Last year, a wave-power machine sank off the Oregon coast. Blades have broken off experimental tidal turbines in New York’s turbulent East River. Problems with offshore moorings have slowed the deployment of snakelike generating machines in the ocean off Portugal.

Years of such problems have discouraged ocean-power visionaries, but have not stopped them. Lately, spurred by rising costs for electricity and for the coal and other fossil fuels used to produce it, they are making a new push to overcome the barriers blocking this type of renewable energy.

The Scottish company Pelamis Wave Power plans to turn on a small wave-energy farm — the world’s first — off the coast of Portugal by year’s end, after fixing the broken moorings. Finavera Renewables, a Canadian company that recently salvaged its sunken, $2.5 million Oregon wave-power machine, has signed an agreement with Pacific Gas & Electric to produce power off the California coast by 2012. And in the East River, just off Manhattan, two newly placed turbines with tougher blades and rotors are feeding electricity into a grocery store and parking garage on Roosevelt Island.

“It’s frustrating sometimes as an ocean energy company to say, yeah, your device sank,” said Jason Bak, chief executive of Finavera. “But that is technology development.”

Roughly 100 small companies around the world are working on converting the sea’s power to electricity. Many operate in Europe, where governments have pumped money into the industry. Companies and governments alike are betting that over time, costs will come down. Right now, however, little electricity is being generated from the ocean except at scattered test sites around the world.

The East River — despite its name, it is really a tidal strait with powerful currents — is the site of the most advanced test project in the United States.

Verdant Power, the company that operates it, was forced to spend several years and millions of dollars mired in a slow permit process, even before its turbine blades broke off in the currents. The company believes it is getting a handle on the problems. Verdant is trying to perfect its turbines and then install 30 of them in the East River, starting no later than spring 2010, and to develop other sites in Canada and on the West Coast.

Plenty of other start-ups also plan commercial ocean-power plants, at offshore sites such as Portugal, Oregon and Wales, but none have been built.

Ocean-power technology splits into two broad categories, tidal and wave power. Wave power, of the sort Finavera is pursuing, entails using the up and down motions of the waves to generate electricity. Tidal power — Verdant’s province — involves harnessing the action of the tides with underwater turbines, which twirl like wind machines.

(Decades-old tidal technologies in France and Canada use barrage systems that trap water at high tide; they are far larger and more obtrusive than the new, below-waterline technologies.)

A third type of power, called ocean thermal, aims to exploit temperature differences between the surface and deep ocean, mainly applicable in the tropics.

Ocean power has more potential than wind power because water is about 850 times denser than air, and therefore packs far more energy. The ocean’s waves, tides and currents are also more predictable than the wind.

The drawback is that seawater can batter and corrode machinery, and costly undersea cables may be needed to bring the power to shore. And the machines are expensive to build: Pelamis has had to raise the equivalent of $77 million.

Many solar start-ups, by contrast, need as little as $5 million to build a prototype, said Martin Lagod, co-founder of Firelake Capital Management, a Silicon Valley investment firm. Mr. Lagod looked at investing in ocean power a few years ago and decided against it because of the long time horizons and large capital requirements.

General Electric, which builds wind turbines, solar panels and other equipment for virtually every other type of energy, has stayed clear of ocean energy. “At this time, these sources do not appear to be competitive with more scalable alternatives like wind and solar,” said Daniel Nelson, a G.E. spokesman, in an e-mail message. (An arm of G.E. has made a small investment in Pelamis.)

Worldwide, venture capital going to ocean-power companies has risen from $8 million in 2005 to $82 million last year, according to the Cleantech Group, a research firm. However, that is a tiny fraction of the money pouring into solar energy and biofuels.

This month the Energy Department doled out its first major Congressionally-funded grants since 1992 to ocean-power companies, including Verdant and Lockheed Martin, which is studying ocean thermal approaches.

Assuming that commercial ocean-power farms are eventually built, the power is likely to be costly, especially in the near term. A recent study commissioned by the San Francisco Public Utility Commission put the cost of harnessing the Golden Gate’s tides at 85 cents to $1.40 a kilowatt-hour, or roughly 10 times the cost of wind power. San Francisco plans to forge ahead regardless.

Other hurdles abound, including sticky environmental and aesthetic questions. In Oregon, crabbers worry that the wave farm proposed by Ocean Power Technologies, a New Jersey company, would interfere with their prime crabbing grounds.

“It’s right where every year we deploy 115,000 to 120,000 crab pots off the coast for an eight-month period to harvest crab,” said Nick Furman, executive director of the Oregon Dungeness Crab Commission. The commission wants to support renewable energy, but “we’re kind of struggling with that,” Mr. Furman said

George Taylor, chief executive of Ocean Power Technologies, said he did not expect “there will be a problem with the crabs.”

In Washington State, where a utility is studying the possibility of installing tidal power at the Admiralty Inlet entrance to Puget Sound, scuba divers are worried, even as they recognize the need for clean power.

Said Mike Racine, president of the Washington Scuba Alliance: “We don’t want to be dodging turbine blades, right?”

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PG&E Awarded $1.2M by DOE for Mendocino & Humboldt Wave Energy

Excerpts from FRANK HARTZELL’s article in the Fort Bragg Advocate-News, September 18, 2008

PG&E “expects to be granted $1.2 million this week by the U.S. Department of Energy to study wave energy off Fort Bragg and Eureka” and is seeking “the new money earlier this summer to move its local wave energy study under a Federal Energy Regulatory Commission (FERC) preliminary permit to the commercial stage. In order to complete that study and get test equipment into the water, the Department of Energy grant is needed, PG&E says.”

“The most recent news of the federal Department of Energy grant will be a study undertaken by the utility as part of a team that includes Humboldt State University and the University of Texas at Austin. PG&E hopes the money will eventually make the project commercially viable.”

“PG&E believes there is potential to generate renewable, emission free, environmentally benign, and cost effective energy from wave energy at selected sites in the PG&E service territory in Northern California, and that successful wave energy demonstration may enable significant commercial development resulting in important benefits for both the Northern California region and the country,” the grant application by the utility states.”

“Clearly, PG&E needs to do in-water testing for wave energy to be viable. FERC’s preliminary permit process no longer allows for that to happen. FERC anticipates issuing a license to PG&E for wave energy off Humboldt next spring. A license would allow in-water testing and even legal power generation.”

PG&E’s objective is “to conduct in-water testing and evaluation of commercial/near-commercial WEC [wave energy converter] technology representative of what would be expected to be used in a commercial-scale power plant. This will enable PG&E to make an informed evaluation of WEC technology as to whether, and to what extent, wave energy should be included in PG&E’s energy portfolio, while simultaneously facilitating the commercial development of this new industry,” the PG&E application states.

“PG&E is the primary proposing organization and its project team includes CH2MHill, EPRI, University of Texas at Austin, Humboldt State University and other contractors to be named later.”

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Fort Bragg Sues FERC Over Wave Energy

MendoCoastCurrent, September 9, 2008

Fort Bragg, California City Council has filed a lawsuit against the Federal Energy Regulatory Commission (FERC) in the Washington D.C. Circuit Court of Appeals.

Concerns escalated last August when FERC denied Fort Bragg’s second request for a rehearing on FERC’s national licensing policies for wave energy or hydrokinetic energy projects. The community stakeholders, Fort Bragg, Mendocino County, Lincoln County (Oregon) and Fishermen Interested in Safe Hydrokinetics (FISH), were also denied rehearing by FERC. Under the Federal Power Act, there are no administrative appeals left and the only recourse is a lawsuit.

Fort Bragg contests FERC’s energy development process for national licensing of wave energy projects, including the proposed Pacific Gas & Electric wave energy pilot project off the coast of Fort Bragg.

The contested policies were established in two informal documents issued by FERC in April 2008 entitled “Staff Guidance on Hydrokinetic Pilot Procedures” and “Staff FAQs on Conditional Licenses.”

Fort Bragg contends that FERC established these policies without complying with a number of federal laws including the Coastal Zone Management Act, Clean Water Act, National Environmental Policy Act and the Administrative Procedure Act.

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Making Wave Energy on Sonoma & Marin Coasts?

GABE MELINE, Bohemia.com, September 3, 2008

While presidential candidates call for alternative forms of energy and “sustainable” is the word of the year, the idea of ocean-wave buoys along the Sonoma and Marin coast continues to attract attention as a potentially viable form of energy.

Though no firm proposal is in place, the wheels have been turning toward what some are already calling a “West Coast wave energy gold rush.” The county of Sonoma, in fact, has already submitted an application to the Federal Energy Regulatory Commission to lease an area of the ocean off the Sonoma Coast to oversee wave-energy development.

Dan Howard, superintendent of the Cordell Bank National Marine Sanctuary, agrees that ocean waves, like the wind and the sun, are a natural energy source which until recently has gone widely untapped. Still, the rush may be a long way off. “I would call it an experimental technology,” he says. “It’s safe to say, I think, it’s years away from any kind of implementation.”

Earlier this year, the Cordell Bank Sanctuary held a panel discussion with representatives from the buoy energy industry, the marine fisheries and environmental groups. “You start running into issues related to migrations—the grey whales, of course, are the first that come to mind,” Howard says. “The fishing industry, certainly, you’d have to work something out with the local commerce if it affected vessel traffic in any way. There are lots of conversations that need to occur.”

The concept of the wave-energy buoy has been implemented most successfully in Portugal, where the Aguçadora Wave Park, with its snakelike buoys, built in 2005 near Póvoa de Varzim, has been widely hailed a commercial success. Last year in Oregon, a different prototype of buoy was tested off the coast, measuring 72 feet tall and weighing 35 tons. Using a fixed coil with a floating magnetic field, the device would generate voltage with the rising and falling of the waves as the coil moves up and down inside the magnetic field.

The idea has been gaining currency. On Sept. 23, the West Coast Governors’ Agreement—a collaborative group between the governors of California, Oregon and Washington united to preserve ocean health—will host a meeting in Portland, Ore., to discuss with the public the development of wave and tidal energy activities on the West Coast. PG&E has already eyed the Mendocino Coast as a location to study hydrokinetic projects.

With all eyes on renewable energy, and with engineers working on different types of buoys, could we be on the crest of new source of energy? “I think the vast majority of people in the United States would support development of alternative-energy sources, certainly,” Howard says. “How we go about doing that, and doing it in the most environmentally sensitive and safe way, is the trick.”

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Mendocino Coast Wave Energy Plans Continue to Raise Concerns

MADDALENA JACKSON with MendoCoastCurrent edit, The Sacramento Bee, August 11, 2008

Oil companies, some politicians and commuters paying $4 for a gallon of gas might look at California’s coast and think of crude oil pooled below the sea floor.

California’s North Coast, however, holds promise of another energy bounty.

In less time than it would take to fire up new offshore oil drills, waters off our coast could host undulating buoys driven by waves, producing abundant electricity for a power-thirsty state.

The Electric Power Research Institute estimates enough wave power can be extracted from coastal waters to account for about 15% of California’s electricity production.

Offshore wave technology is promising, but it’s untried. They also raise concerns about potential damage to the coast’s prized vistas and fish industry.

One proposal that’s progressing is to draw electricity from waves off the Mendocino coast already has generated problems for developers, government agencies and coastal residents.

Moreover, the potential for waves depends on someone building transmission lines to connect offshore power to the state’s grid.

Northern California’s biggest utility company, Pacific Gas and Electric Co., may be that someone.

Out at sea, the ocean’s surface ripples rhythmically, and the up-and-down motion can be harnessed to produce electrical energy, via bobbing buoys, jointed snakes and undulating tubes.

PG&E plans to capture some of that potential. It has preliminary permits for two projects – one off Fort Bragg in Mendocino County and one off Eureka.

The Fort Bragg project, expected to yield 40 megawatts of electricity, would be “an undersea power plug,” said PG&E project manager Bill Toman. It “would provide about 20% of electricity consumption of Mendocino County.”

PG&E would build the expensive transmission lines. The utility would select three or four developers to test their power generators.

Results will lead to “a decision about whether we would build our own wave energy farm,” he said.

Mendocino coast residents are examining PG&E’s plans with cautious concern.

“Wave energy sounds like a good idea, as long as it doesn’t harm the environment,” said Bruce Lewis, a nature photographer and volunteer light-keeper at the Point Cabrillo Light Station. “Using the power of the waves seems like a better way of generating power than building oil platforms off the coast.”

Others are wary. “When you first hear about it, you think, ‘That’s a great idea!’ ” said Jim Martin, director of the Recreational Fishing Alliance.

He’s concerned wave power may interfere with fisheries. He wonders if electrical signatures from the devices also might disturb fish.

His biggest complaint right now, however, is that local fishermen and residents have had no say in the planning.

Martin is also associated with Fishermen Interested in Safe Hydrokinetics, or FISH. With local lawyer Elizabeth Mitchell, FISH is battling for a role in the planning.

A federal deadline has passed for gaining an official voice in the legal planning for the wave projects, alongside PG&E and federal energy regulators.

Mitchell has filed a request for a belated entree with the Federal Electric Regulatory Commission. She argues that an isolated community, with limited high-speed Internet service, and few residents who even know what FERC is, could not have met the deadline.

Mitchell said she’s concerned that permits have been granted without environmental analysis or even identified technology. “We are guinea pigs for a worldwide science experiment without any rational planning.”

PG&E’s permit comes from FERC. But there is a question over wave power jurisdiction. The federal Minerals Management Service has jurisdiction from three to 200 miles offshore, and by years end hopes to have rules in place for alternative energy leases, said spokesman John Romero.

FERC, however, oversees onshore hydropower applications and has claimed jurisdiction for wave technology up to 12 miles offshore, based on its reading of legal documents.

“It’s a problem for anyone in charge of proposing a project,” PG&E’s Toman said. “At some point, it will hold things up.”

A delay would be welcome, Martin said. “A huge reason people come up here is to look at the ocean, and to reconnect with nature.”

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US Wave Energy Having Temporary Setbacks

Platts/McGraw-Hill, August 2008

Ocean Power Technologies (OPT) is looking to generate power from Scottish waters as well. Nasdaq-listed OPT reported July 28 that it had signed a berth agreement with the European Marine Energy Center (EMEC) in Orkney, Scotland. OPT can, under the berth agreement, deploy and operate its unit as well as hook up to EMEC’s dedicated 2-MW subsea cable connected to the Scottish grid and will sell power to the grid up to the unit’s 2-MW capacity limit, using the EMEC berth for other deployments.

Across the Atlantic, wave energy development in the United States, another country looking to assume market leadership, suffered a temporary setback in late June 2008 when Finavera Renewables scuttled plans for a wave energy project off the Oregon coast to focus on developing the technology needed for other projects.

Finavera let preliminary permits granted by the Federal Energy Regulatory Commission (FERC) expire by not filing required reports. FERC cancelled Finavera’s preliminary permit on June 26 for the proposed 100-MW Coos Country project, saying the company had failed to file six-month progress reports on studies that the company was required to perform for the project to move forward. The preliminary permit allowed for further site assessment and so-called micro siting to determine the best location for the proposed wave park, and allowed studies on such topics as oceanographic conditions, marine mammal resources, shoreline conditions, and public safety. “We had to focus some of our resources on a couple [of] other high priority projects,” said Myke Clark, vice president of corporate development for Finavera.

These include a planned 2-MW wave energy initiative at Makah Bay, California, which has already secured a long-term power purchase contract in December 2007 with California utility Pacific Gas & Electric – the first commercial PPA for a wave project in North America. In developing the new technology, engineers are tackling such challenges as the intermittency of waves and how to produce electricity from new types of equipment cheaply enough to make it profitable, he said. “We’re definitely in an intensive phase right now in terms of this technology,” Clark said, adding that the company is cancelling the project because “we need to focus a bit more on the technology development.”

The marine energy industry in America faces policy as well as technology obstacles.

As FERC promotes development of hydrokinetic energy and companies seize opportunities, the agency has issued preliminary permits that allow environmental assessments and other studies to be performed – only to have its regulatory authority questioned by other federal agencies.

The US Department of the Interior in April 2008 asserted that FERC lacked the authority to issue leases for hydrokinetic projects on the Outer Continental Shelf and called on FERC to rehear its decisions to issue two preliminary permits for wave electricity projects being considered off the coast of California.

FERC issued a license to Finavera in December 2007 for a 1-MW wave energy project in Clallam County, Washington, but several parties sought rehearing of the decision, claiming FERC violated the Clean Water Act by issuing a license before the state ecology department had issued a water quality certificate and other state permits and authorizations. In a March 20 order FERC said the rehearing requests are moot since the state issued the necessary permits to Finavera in February 2008. FERC said that its initial order was a conditional license that did not authorize construction or installation of facilities and “expressly stated that no such authority would be granted until Finavera obtained all necessary authorizations.”

The US wave energy industry received a boost in late July 2008, though, when the US Minerals Management Service, the federal agency that regulates offshore energy development, said it intends to issue leases for thirteen alternative energy research projects in the federal waters of the Outer Continental Shelf, including wave-energy projects off the California coast.

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Northern California Wave Energy Authorization Inches Forward

JOHN DRISCOLL, The Times-Standard, July 24, 2008

The Pacific Gas and Electric Co. has cleared another hurdle toward developing wave energy projects off the Humboldt and Mendocino county coasts.

Recently the U.S. Minerals Management Service announced that it would go forward with analyzing limited leases for alternative energy projects on the outer continental shelf. It follows a decision by the Federal Energy Regulatory Commission to grant preliminary permits to PG&E for the project, which envisions eight to 200 wave energy devices somewhere from two to 10 miles offshore.

FERC oversees such projects within three miles of the coast, while the Minerals Management Service has jurisdiction beyond that.

The process for issuing limited leases under an interim policy formed in November 2007 will entail “thorough environmental analysis under the National Environmental Policy Act and related laws, as well as close consultation with federal, state and local government agencies,” the service said in a press release.

The Pacific Fisheries Management Council wrote to the Minerals Management Service in June expressing concern that multiple wave test projects could have cumulative effects on sea life and the commercial fishing fleet. The potential effects should be evaluated at an “ecosystem scale” before projects are installed, the letter reads.

The Mineral Management Service leases will allow PG&E to collect information for potential commercial projects in the future.

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Finavera Renewables Updates at Mid-2008

MendoCoastCurrent, July 27, 2008

Finavera Renewables CEO Jason Bak provides this overview of 2008 activities to date and an outlook for the remainder of the year.

“The first half of 2008 has been an exciting period for Finavera Renewables,” commented CEO Jason Bak. “Our strategy [in] wind projects is to develop an approximate one gigawatt pipeline with partners that can provide balance sheet strength. Our plan is to maintain majority ownership interests that will provide us with revenues. We have seen significant interest in our British Columbia and Ireland wind projects and we are confident we’ll be able to enter into development agreements with partners that will not result in undue shareholder dilution. We will be focusing our efforts and resources on our most valuable assets in order to demonstrate their value to the market and move them towards production.”

Finavera Renewables’ wind projects have been the focus of much activity in the first half of 2008. Aggressively pursuing partners for projects in British Columbia, Canada and in Ireland. After assessing a number of various partners, a proposal letter has been executed from a potential investor for the equity financing of four projects in British Columbia to be bid into the upcoming BC Hydro Clean Power Call. In addition, in Ireland, preliminary discussions have identified a potential project partner following a detailed review of groups expressing an interest in the project pipeline. The strategy for all of these projects is to maintain a significant ownership interest in the projects in order to provide a revenue stream.

Progress is also being made in the ocean energy division. The planned development of the next generation of its wave energy converter, the AquaBuOY 3.0, is continuing in order to improve the power output and economics of the device. This includes an analysis of advanced composite materials in the manufacturing of the device and discussions with potential technology development partners in an effort to enhance the core hose pump technology. This continued technology development builds on significant progress in wave energy projects including the signing of North America’s first commercial power purchase agreement for a 2 MW wave energy project in California with Pacific Gas & Electric.

Highlights of selected Finavera projects and milestones for 2008:

Wind Project Updates

British Columbia, Canada

Discussions with a potential corporate investor, receiving non-binding indicative financing proposal, in connection with four wind projects currently being developed in the Peace Region of British Columbia, Canada. The proposal contemplates the investor would invest 100% of the equity requirements for each of the four projects awarded an electricity purchase agreement by BC Hydro pursuant to the BC Hydro Clean Power Call. Specific details of the proposal, including the name of the proponent, will be released on signing of a definitive agreement, yet expects to the agreement in place well in advance of the Clean Power Call bid submission deadline November 2008. Finavera is working to prepare bids for the call, and is confident in its ability to secure a contract from the call. Also continuing is the greenfield development of its other permitted areas in the Cascade Mountains area of south central British Columbia, and soon expects to install meteorological monitoring towers on those sites.

Alberta, Canada

Continuing to evaluate development options in order to extract the maximum value from the 75MW Ghost Pine wind project. All of the significant environmental field work has been completed on the project which is located approximately 150km northeast of Calgary. The field work included wildlife, vegetation and land use studies, historical resource investigations and approvals, avian and raptor surveys, and preliminary geotechnical surveys. The project’s final detailed design is close to conclusion. Permitting and interconnection provisions are in place to allow for construction and wind turbine erection would take place in 2009 with a targeted in-service date of December 2009. Wind resource assessment is underway for the nearby 75MW Lone Pine wind project, intending to make an interconnection application for this second Alberta project soon.

Cloosh Valley, Ireland

Discussions are ongoing with a potential partner in order to development prospects for the 105 MW Cloosh Valley wind project. The project has received planning permission for meteorological tower installation for wind data collection from Galway County Council. As well, an application for interconnection has been submitted to Eirgrid, the independent electricity transmission system operator in Ireland, and grid queue position has been established. The next stages of development include the submission of an application for planning permission to An Bord Pleanala, the Irish federal planning authority, under newly established streamlined guidelines for strategic infrastructure projects.

Ocean Energy Updates

Development continues on the next generation AquaBuOY 3.0 design in order to reduce the levelized cost of electricity production and move the technology towards commercialization. Now undertaking an advanced composite materials analysis to lower the construction cost of the device and provide a stronger, lighter housing for the core hose pump technology. Finavera is also in discussion with potential technology development partners in an effort to enhance the hose pump technology and acquire or develop additional IP related to the hose pump technology. The next state of the AquaBuOY design phase will build on the information gathered from the deployment of the prototype AquaBuOY 2.0 technology off the coast of Oregon in 2007. The mathematical and power output modeling was verified during the test phase. The exact timing of future deployments and specific development milestones will be released as research and development objectives are met.

Narrowing its project development focus to the West Coast of North America and South Africa to direct resources to the most valuable project assets. This enhanced focus will help provide clean, renewable and cost effective electricity by 2012 from the project in Humboldt County, California. A long-term Power Purchase Agreement (PPA) has been signed with Pacific Gas & Electric (PG&E) for 2 MW wave energy project off the coast of California. This is the first commercial PPA for a wave energy project in North America.

“The second half of 2008 presents a tremendous opportunity for Finavera Renewables as we are poised to complete a number initiatives undertaken during the first half of the year. Our plan is to focus our efforts and resources on our highest value assets while investigating additional partnerships and joint ventures in the renewable energy sector,” said Jason Bak, CEO.

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MMS Now Driving Wave Energy on Northern California Coast

DAVID R. BAKER, Village Green/SFGate.com, July 23, 2008

Drilling for undersea oil along the east and west coasts has quickly turned into one of America’s loudest political fights, as anyone reading the comments on SFGate can attest. But it’s not the Bush administration’s only plan for offshore energy.

For the past few years, the administration has been studying how to open the coasts to renewable energy projects, things like wave farms and underwater turbines designed to generate electricity by harnessing the tides. The Minerals Management Service — the same federal agency that sells offshore oil leases — has quietly pieced together a program to grant leases for testing renewable energy projects at sea.

On July 23, 2007, the service reported that it would move forward with the lease program, which will include two locations along the northern California coast.

Pacific Gas and Electric Co., California’s largest utility, wants a lease to study wave power off of Humboldt and Mendocino counties. Oil giant Chevron proposed a similar study along Mendocino but later dropped the project. A smaller company, Marine Sciences of San Diego, is seeking a lease that would cover some of the same offshore areas as PG&E’s Humboldt proposal.

The Minerals Management Service wants PG&E and Marine Sciences to collaborate on the project, rather than grant the two companies overlapping leases. Each lease will cover a specific patch of the ocean and will run for five years. Companies receiving the leases will be allowed to test equipment at sea — equipment such as buoys that generate electricity as they bob up and down on the waves. But the companies will not be allowed to set up commercial operations there.

Before any leases are handed out, the service will continue studying potential environmental pitfalls. Some north coast residents worry that a cluster of power-generating bouys tethered to the seafloor could interfere with fishing or the migration of whales. The service would like to start handing out leases as early as this fall and may be able to do so with some sites on the east coast. But the California leases could easily take longer, said service spokesman John Romero.

“The hope is we can do these things sooner than later, but bottom line, we’re not going to compromise the environmental review process,” he said.

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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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FERC Rejects Fort Bragg, FISH & Mendocino Requests for Rehearing

Publisher’s Note: This May 21, 2008 FERC ruling rejects requests of FISH, Fort Bragg, Mendocino County and local stakeholders’ to rehear their right to participate in this wave energy development project. It is noted since onset of the Mendocino wave energy agenda, FERC and PG&E continue to swiftly move toward their goals while intentionally blocking all local, public participation. As wave energy development projects on the U.S. coasts progress, Americans are discovering that FERC’s convoluted wave energy licensing process is ill-defined, biased and discriminates against public participation.

123 FERC ¶ 61,194

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

NOTICE REJECTING REQUEST FOR REHEARING

(May 21, 2008)

On November 30, 2007, the Commission issued a Policy Statement on Conditioned Licenses for Hydrokinetic Projects (Policy Statement) in Docket No. PL08-1-000.1 In the Policy Statement, the Commission set forth a new policy, applicable only to certain hydrokinetic projects, where the Commission will, in appropriate cases, and after the Commission completes its own licensing process, issue conditioned licenses pending action by other entities under federal law. On April 14, 2008, to address questions raised in response to the Policy Statement, the Commission staff issued prepared responses to the list of frequently asked questions (FAQs on Conditioned Licenses) under Docket No. PL08-1-000. Staff also issued Guidance on Hydrokinetic Pilot Projects (the Guidance), on April 14, 2008, in Docket AD07-14-000, in an effort to support the advancement and orderly development of hydrokinetic technologies.

On May 12, 13, and 14, 2008, Elizabeth R. Mitchell and Fisherman Interested in Safe Hydrokinetics (FISH Committee), the City of Fort Bragg, and the Concerned Citizens of Fort Bragg, respectively, filed requests for rehearing of the FAQs on Conditioned Licenses and the Guidance. On May 13 and 15, 2008, Lincoln County, Oregon and Mendocino County, California, respectively, filed requests for rehearing joining Ms. Mitchell and FISH Committee. All parties argue that: the Commission should have issued the Guidance only after initiating a public notice and comment rulemaking pursuant to section 553 of the Administrative Procedures Act;2 the Commission did not comply with the National Environmental Policy Act (NEPA) by failing to prepare a programmatic Environmental Impact Statement on the Guidance; and the Commission failed to comply with other laws applicable to the Commission’s licensing process.

As has been previously explained, an order is final, and thus subject to rehearing, only when it imposes an obligation, denies a right, or fixes some legal relationship as the consummation of the administrative process.3 The Guidance and the FAQs on Conditioned Licenses represent only informal advice from Commission staff and do not apply to the specific facts of any particular case, nor do they purport to resolve any specific controversy.4 Indeed, they are not orders of any kind. Therefore, no aggrievement exists and rehearing does not lie.5 Accordingly, the requests for rehearing of the Commission’s Guidance and the FAQs on Conditioned Licenses are rejected.

This notice constitutes final agency action. Requests for rehearing by the Commission of this rejection must be filed within 30 days of the date of issuance of this notice, pursuant to 18 C.F.R. § 385.713 (2007).

Kimberly D. Bose,

Secretary.

1 The Policy Statement was published in the Federal Register on December 7, 2007 (72 Fed. Reg. 68,887).

2 5 U.S.C. § 553 (2000) (prescribing notice and comment procedures for informal rulemaking).

3 See City of Fremont v. FERC, 336 F.3d 910, 913-14 (9th Cir. 2003); Papago Tribal Utility Authority v. FERC, 628 F.2d 235, 239 (D.C. Cir. 1980).

4 Parties are free to raise concerns in a specific proceeding when the policy is applied, and the Commission will consider their concerns with respect to the particular facts of the proceeding.

5 Project Decommissioning at Relicensing and Use of Reserved Authority in Hydropower Licenses to Ameliorate Cumulative Impacts, 70 FERC ¶ 61,151 at 61,450 (1995).

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The Coming Wave

The Economist, June 5, 2008

You only have to look at waves pounding a beach, inexorably wearing cliffs into rubble and pounding stones into sand, to appreciate the power of the ocean. As soaring oil prices and concern over climate change give added urgency to the search for new, renewable sources of energy, the sea is an obvious place to look. In theory the world’s electricity needs could be met with just a tiny fraction of the energy sloshing around in the oceans.

Alas, harnessing it has proved to be unexpectedly difficult. In recent years wind farms have sprouted on plains and hilltops, and solar panels have been sprinkled across rooftops and deserts. But where the technology of wind and solar power is established and steadily improving, that of wave power is still in its infancy. The world had to wait until October 2007 for the first commercial wave farm, consisting of three snakelike tubes undulating with the Atlantic swell off the coast of Portugal.

In December Pacific Gas & Electric, an American utility, signed an agreement to buy electricity from a wave farm that is to be built off the coast of California and is due to open in 2012. Across the world many other wave-power schemes are on the drawing board. The story of wave power, however, has been one of trials and tests followed by disappointment and delays. Of the many devices developed to capture wave energy, none has ever been deployed on a large scale. Given wave power’s potential, why has it been so hard to get the technology to work—and may things now be about to change?

The first patents for wave-power devices were issued in the 18th century. But nothing much happened until the mid-1970s, when the oil crisis inspired Stephen Salter, an engineer at the University of Edinburgh, in Scotland, to develop a wave generator known as Salter’s Duck. His design contained curved, floating canisters, each the size of a house, that would be strung together and then tethered to the ocean floor. As the canisters, known as Ducks, were tossed about by the waves, each one would rock back and forth. Hydraulics would convert the rocking motion to rotational motion, which would in turn drive a generator. A single Duck was calculated to be capable of generating 6 megawatts (MW) of electricity—enough to power around 4,000 homes. The plan was to install them in groups of several dozen.

Initial estimates put the cost of generating electricity in this way at nearly $1 per kilowatt hour (kWh), far more than nuclear power, the most expensive electricity at the time. But as Dr Salter and his team improved their design, they managed to bring the cost-per-kWh down to the cost of nuclear power. Even so, the research programme was shut down by the British government in 1982. The reasons for this were not made public, but it is widely believed to have happened after lobbying by the nuclear industry. In testimony to a House of Lords committee in 1988, Dr Salter said that an accurate evaluation of the potential of new energy sources would be possible only when “the control of renewable energy projects is completely removed from nuclear influences.”

Salter’s Duck never took to the seas, but it sparked interest in the idea of wave power and eventually helped to inspire other designs. One example is the Pelamis device, designed by some of Dr Salter’s former students, who now work at Pelamis Wave Power, a firm based in Scotland. Three such devices, each capable of generating up to 750kW, have been deployed off the coast of Portugal, and dozens more are due to be installed by 2009. There are also plans for installations off Orkney in Scotland and Cornwall in England.

As waves travel along the 140-metre length of the snakelike Pelamis, its hinged joints bend both up and down, and from side to side. This causes hydraulic rams at the joints to pump hydraulic fluid through turbines, turning generators to produce electricity. Pelamis generators present only a small cross-section to incoming waves, and absorb less and less energy as the waves get bigger. This might seem odd, but most of the time the devices will not be operating in stormy seas—and when a storm does occur, their survival is more important than their power output.

Oh Buoy

The Aquabuoy, designed by Finavera Renewables of Vancouver, takes a different approach. (This is the device that Pacific Gas & Electric hopes to deploy off the California coast.) Each Aquabuoy is a tube, 25-metres long, that floats vertically in the water and is tethered to the sea floor. Its up-and-down bobbing motion is used to pressurise water stored in the tube below the surface. Once the pressure reaches a certain level, the water is released, spinning a turbine and generating electricity.

The design is deliberately simple, with few moving parts. In theory, at least, there is very little to go wrong. But a prototype device failed last year when it sprang a leak and its bilge-pump malfunctioned, causing it to sink just as it was due to be collected at the end of a trial. Finavera has not released the results of the trial, which was intended to measure the Aquabuoy’s power output, among other things. The company has said, however, that Aquabuoy will be profitable only if each device can generate at least 250kW, and that it has yet to reach this threshold.

Similar bobbing buoys are also being worked on by AWS Ocean Energy, based in Scotland, and Ocean Power Technologies, based in Pennington, New Jersey, among others. The AWS design is unusual because the buoys are entirely submerged; the Ocean Power device, called the PowerBuoy, is being tested off the coast of Spain by Iberdrola, a Spanish utility.

The Oyster, a wave-power device from Aquamarine Power, another Scottish firm, works in an entirely different way. It is an oscillating metal flap, 12 metres tall and 18 metres wide, installed close to shore. As the waves roll over it, the flap flexes backwards and forwards. This motion drives pistons that pump seawater at high pressure through a pipe to a hydroelectric generator. The generator is onshore, and can be connected to lots of Oyster devices, each of which is expected to generate up to 600kW. The idea is to make the parts that go in the sea simple and robust, and to keep the complicated and delicate bits out of the water. Testing of a prototype off the Orkney coast is due to start this summer.

The logical conclusion of this is to put everything onshore—and that is the idea behind the Limpet. It is the work of Wavegen, a Scottish firm which is a subsidiary of Voith Siemens Hydro, a German hydropower firm. A prototype has been in action on the island of Islay, off the Scottish coast, since 2000. The Limpet is a chamber that sits on the shoreline. The bottom of the chamber is open to the sea, and on top is a turbine that always spins in the same direction, regardless of the direction of the airflow through it.

As waves slam into the shore, water is pushed into the chamber and this in turn displaces the air, driving it through the turbine. As the water recedes, air is sucked back into the chamber, driving the same turbine again. The Limpet on Islay has three chambers which generate an average of 100kW between them, but larger devices could potentially generate three times this amount, according to Wavegen. Limpets may be built into harbour breakwaters in Scotland and Spain.

Dozens of wave-energy technologies are being developed around the world: ideas, in other words, are not what has held the field back. So what has? Tom Thorpe of Oxford Oceanics, a consultancy, blames several overlapping causes. For a start, wave energy has lagged behind wind and solar, because the technology is much younger and still faces some big technical obstacles. “This is a completely new energy technology, whereas wind and photovoltaics have been around for a long time—so they have been developed, rather than invented,” says Mr Thorpe.

The British government’s decision to shut its wave-energy research programme, which had been the world’s biggest during the 1970s, set the field back nearly two decades. Since Britain is particularly well placed to exploit wave energy (which is why so many wave-energy companies come from there), its decision not to pursue the technology affected wave-energy research everywhere, says Mr Thorpe. “If we couldn’t do it, who could?” he says.

Once interest in wave power revived earlier this decade, practical problems arose. A recurring problem, ironically enough, is that new devices underestimate the power of the sea, and are unable to withstand its assault. Installing wave-energy devices is also expensive; special vessels are needed to tow equipment out to sea, and it can be difficult to get hold of them. “Vessels that could potentially do the job are all booked up by companies collecting offshore oil,” says Trevor Whittaker, an engineer at Queen’s University in Belfast who has been part of both the Limpet and Oyster projects. “Wave-generator installation is forced to compete with the high prices the oil industry can pay.”

Another practical problem is the lack of infrastructure to connect wave-energy generators to the power grid. The cost of establishing this infrastructure makes small-scale wave-energy generation and testing unfeasible; but large-scale projects are hugely expensive. One way around this is to build a “Wave Hub”, like the one due to be installed off the coast of Cornwall in 2010 that will provide infrastructure to connect up wave-energy arrays for testing.

Expect Flotations

But at last there are signs of change. Big utilities are taking the technology seriously, and are teaming up with wave-energy companies. Venture-capitalists are piling in too, as they look for new opportunities. Several wave-energy companies are thought to be planning stockmarket flotations in the coming months. Indeed, such is investors’ enthusiasm that Mr Thorpe worries that things might have gone too far. A big failure could tarnish the whole field, just as its prospects look more promising than ever.

Whether one wave-energy device will dominate, or different devices will suit different conditions, remains to be seen. But wave energy’s fortunes have changed. “We have to be prepared for some spectacular failures,” says Mr Thorpe, “but equally some spectacular successes.”

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Harnessing Energy from the Oceans

GLOBE-NET NEWS, May 29, 2008

Forever moving – our restless oceans have enough energy to power the world. As long as the Earth turns and the moon keeps its appointed cycle, the oceans will absorb and dissipate vast amounts of kinetic energy – a renewable energy resource of enormous potential. But harnessing this resource has proven more difficult than first thought. In this the latest installment of the GLOBE-Net Series on Renewable Energy – we look at how the power of the oceans might eventually find its place among other forms of renewable energy.

Ocean Energy – What is it?

According to the United Nations, 44% of the world’s population lives within 150 km of an ocean coast. In Canada and Australia the number is much higher at 80%. In the United States 53% of the population lives in close proximity to an ocean.

Thus it is only natural that many countries look to the oceans as a source of energy to be harnessed. How they seek to exploit this resource varies according to factors of geography and available technologies.

The two main forms of energy associated with our oceans are tidal power and wave power – born of the same source, but different in how they turn energy into electricity.

Tidal Power

Tidal power coverts the energy of tides into electricity utilizing the rise and fall of the ocean tides. The stronger the tide, either in water level height or tidal current velocities, the greater the potential for tidal electricity generation.

Tidal generators act in much the same way as do wind turbines, however the higher density of water (832 times that of air) means that a single generator can provide significant power at velocities much lower than those associated`with the wind power generators.

Tidal power can be classified into two main types; Tidal Stream Systems and Barrages.

Barrages are similar to hydro-electric dams but are placed in an estuary bay or river mouth, where they act as barriers that create artificial tidal lagoons. When water levels outside the lagoon changes relative to water levels inside, turbines in the barrages are able to produce electrical power. There are only three such structures in the world: the Rance River in France, Canada’s Bay of Fundy, and Kislaya Guba, Russia.

Tidal stream systems make use of the kinetic energy of moving water to power turbines. This technology simply relies on individual turbines which are placed in the water column; moored to be suspended, floating or anchored to the ocean floor. As the tide flows in or out, electrical energy is produced as water moves through the turbine.

Tidal power boasts several advantages over other types of renewable energy technology, because tides are more predictable and reliable than wind energy or sunny days for solar power. Tidal energy has an efficiency ratio of approximately 80% in terms of converting the potential energy of the water into electricity. Tidal stream system turbines are only a third the diameter of wind rotors of the same power output.

As with wind power, location is important factor in terms of being able to harness the earth’s natural energy. Tidal stream systems must be located in areas with fast currents where natural flows are concentrated between natural obstructions, for example at the entrances to bays and rivers, around rocky points or headlands, or between islands and other land masses.

Wave Power

Ocean surface waves are also a considerable source of energy potential, but energy that is not as restricted in terms of location as tidal energy systems. Typically wave energy is captured using buoys which generate mechanical energy as they oscillate vertically from wave motion.

Terminator devices extend perpendicular to the direction of wave travel and capture or reflect the power of the wave. Water enters through a subsurface opening into a chamber with air trapped above it and wave action causes the captured water column to move up and down like a piston to force the air though an opening connected to a turbine.

A point absorber is a floating structure with components that move relative to each other due to wave action (e.g., a floating buoy inside a fixed cylinder). The relative motion is used to drive electromechanical or hydraulic energy converters.

Attenuators are long multi-segment floating structures oriented parallel to the direction of the waves. The differing heights of waves along the length of the device causes flexing where the segments connect, and this flexing is connected to hydraulic pumps or other converters.

Overtopping devices have reservoirs that are filled by incoming waves to levels above the average surrounding ocean. The water is then released, and gravity causes it to fall back toward the ocean surface. The energy of the falling water is used to turn hydro turbines.

Wave power varies considerably in different parts of the world, and wave energy can’t be harnessed effectively everywhere. According to the Ocean Renewable Energy Group, a Vancouver based organisation that promotes the development of ocean energy in Canada, regions considered to have “good” wave energy resources are generally those found within 40 to 60 degrees of latitude, where the strongest winds are found. Wave-power rich areas of the world include the western coasts of Scotland, northern Canada, southern Africa, Australia, and the northwestern coasts of the United States.

Projects Underway

Ocean energy company Clean Current Power Systems estimates a potential global market for 67,000 Megawatts (MW) of tidal and wave action equipment worth $200 billion. At 20 cents/kW hour, the market for tidal electricity could be $27 billion annually. According to Finavera, world-wide wave energy could provide up to 2,000 TWh/year, 10% of world electricity consumption.

It comes as no surprise then, that interest in ocean energy has been building momentum in the past few years as these nations scramble to meet renewable energy targets.

For instance, in November 2007, British company Lunar Energy announced that it would be building the world’s first deep-sea tidal-energy farm off the coast of Pembrokshire in Wales. Eight underwater turbines, each 25 metres long and 15 metres high will provide electricity for 5,000 homes. Construction is due to start in the summer of 2008 and the proposed tidal energy turbines, described as “a wind farm under the sea”, should be operational by 2010.

Plans for a ten-mile barrage across the River Severn, which could generate 5% of the UK’s electricity needs, are currently under development. According to the UK Sustainable Development Commission, a barrage across the Severn would produce clean and sustainable electricity for 120 years. This would have a capacity of 8,640MW and an estimated output of 17 terawatt hours a year.

Scotland boasts roughly 25% of the entire European Union’s tidal power potential and 10% of its wave energy potential and could produce more than 1,300 megawatts by 2020, enough to power a city the size of Seattle. In 2007, Scotland announced $26 million worth of funding packages to develop marine power in the nation. So far $8 million has been procured to develop 3 MW of tidal power.

UK based Marine Current Turbines is developing a tidal stream system off the coast of Ireland. The 1.2-megawatt turbine will be tested for 12 weeks before feeding power into the Northern Ireland grid where it will operate for up to 20 hours per day, producing enough electricity to power 1,000 homes.

Both Scotland and England are planning wave energy projects. Scotland will be developing a 3MW array and England will be developing a 20 MW Wave Hub off the north coast of Cornwall, England. The Cornwall project will power up to 7,500 homes.

Canada has the world’s longest coastline and has always been serious about harnessing ocean energy. In early 2008 the Government of Nova Scotia gave the green light to three tidal energy testing projects in the Bay of Fundy to help establish a permanent tidal energy farm (see GLOBE-Net Article Nova Scotia to fund tidal power research). Irving Oil is also studying 11 potential sites in the Bay of Fundy to develop tidal energy farms.

The Government of British Columbia estimates there are more than 6,000 megawatts of potential wave energy that have been identified so far in the province and projects are already underway to develop wave energy systems. In 2006 Vancouver based Clean Current Power Systems began developing a pilot tidal power project near Victoria to demonstrate the potential for tidal power.

PG&E and Vancouver-based Finavera Renewables is developing America’s first commercial wave power plant off the coast of Northern California. The plant is scheduled to begin operating in 2012, generating a maximum of 2 megawatts of electricity.

In March, 2008, the U.S. Department of Energy announced would be offering up to $7.5 million in grants for hydro-kinetic energy such as wave and tidal power. The department is seeking partnerships with companies and universities to develop the technologies and plans to award up to 17 grants.

Portugal is planning the world’s first commercial wave farm, the Aguçadora Wave Park near Póvoa de Varzim. If successful, a further 70 million euro is likely to be invested before 2009 on a further 28 machines to generate 72.5 MW.

The Challenges

Despite the enormous potential of ocean energy, there remain many pitfalls (if such a word can be used in a watery context) that have proven difficult to overcome, and which explains why ocean energy remains the least developed of all forms renewable energy. Problems still exist regarding cost, maintenance, environmental concerns and our still imperfect understanding of how power from the oceans will impact on the world’s energy infrastructure.

For example, turbines are susceptible to bio-fouling; the growth of aquatic life on or in the turbine. This can severely inhibit the efficiency of energy production and is both costly and difficult to remove. Turbines are also prone to damage from ocean debris.

In the Bay of Fundy, project developers are particularly concerned with ice floes the size of small apartments, and cobblestones the size of watermelons constantly being tossed across the Bay’s terrain by the power of the Bay’s water flows.

Turbines may also be hazardous to marine life and the impacts on marine life are still largely unknown, but concern is warranted.

Barrage systems are affected by problems of high initial infrastructure costs associated with construction and the resulting environmental problems. For example, independent research on the economics of building the proposed Severn Barrage in the UK revealed that, taking environmental costs into account, the structure could cost as much as $12 billion to create – $4 billion more than previously estimated.

Barrage impacts include a decrease in the average salinity and turbidity within a barrage, significantly altering associated ecosystems.

Wave power systems present their own set of challenges. Most electric generators operate at higher speeds, and most turbines require a constant, steady flow. Unfortunately wave energy is slow and ocean waves oscillate at varying frequencies.

The rough realities of the marine environment have also proven difficult to deal with, especially for companies seeking to remain cost-effective. Constructing wave devices that can survive storm damage and saltwater corrosion add to development costs.

The Future

Modern advances in ocean energy technology may eventually see large amounts of power generated from the ocean, especially tidal currents using the tidal stream designs. The technology is still in its infant stage and most projects that exist or are that are in project development stages are mainly pilot projects. But the promise remains.

“It’s not as well-established as solar, thermal, wind and biomass, but it [ocean power] shows a lot of promise,” said Philip Jennings, professor of energy studies at Western Australia’s Murdoch University.

“As the technology develops and becomes more affordable, which it will over time, we can continue to expand pretty much anywhere where there is an ocean,” said Chief Executive Officer Phil Metcalf of Pelamis Wave Power.

The market potential for tidal power still remains unclear [says who?]. Sector analysts believe Initial Public Offerings (IPO) for wave and tidal power projects will be much harder to price than for comparable wind power projects, because wave firms cannot give exact estimates on the scale of benefits and few have technologies that are up and running.

Regardless, both ocean wave and tidal power have attracted growing interest from investors and power utilities looking for the next long-term play in renewable energy.

“Water covers more than 70 percent of the Earth’s surface,” said Andy Karsner, assistant secretary for energy efficiency and renewable energy at the DOE. “Using environmentally responsible technologies, we have a tremendous opportunity to harness energy produced from ocean waves, tides or ocean currents, free-flowing water in rivers and other water resources to…provide clean and reliable power.”

According to Jennings ocean power could not match fossil fuels for electricity production but could be competitive with other forms of renewable energy.

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Mendocino Responds to PG&E on Wave Energy Project

Publisher’s Note: On May 21, 2008 FERC rejected the Requests for Rehearing from Fort Bragg, Mendocino County & FISH. The article below was written before that decision was handed down.

MendoCoastCurrent, May 6, 2008

On May 5, 2008, Mendocino County filed their response to PG&E’s comments related to Mendocino County’s Request for Rehearing on the Wave Energy project off the Mendocino coast. This is the latest filing at FERC in response to PG&E’s bid to explore wave energy on the Mendocino coast near Fort Bragg, California.

Mendocino County’s position is that PG&E brought no new information in their comment about Mendocino’s Request for Rehearing, although the issues around the initial notification on the wave energy preliminary permit are highlighted. Mendocino makes the case that PG&E had no statutory requirement or obligation to notify as the Federal Powers Act places the written notice obligation “squarely with the Commission.”

Originally, PG&E’s commented that there was an ‘extreme delay’ in Mendocino’s seeking the rehearing and Mendocino claims their Motion to Intervene “was filed as soon as possible after the Mendocino County Board of Supervisors was presented with the details of the WaveConnect permit application at its September 19, 2007 meeting.”

So due to the Commission’s failure to meet their own standards with regard to written notice and no basis for PG&E’s position of ‘extreme delay’ in requesting Intervener status, the “only reasonable resolution at this time is rescission” of the preliminary permit.

Mendocino addresses PG&E’s vagueness of the wave energy project description (proposed project locations, number of wave energy converters) in the preliminary permit application and adds that “the local community was denied both the opportunity to investigate the feasibility of a competing applications and a voice regarding the terms and execution of the permit itself.”

Additionally, Mendocino has requested their own requirements for any wave energy project off the Mendocino coast, essentially defining its own process to include more checks and balances as well as transparency of plans and findings to local governments and the public:

• Within one year of permit issue, PG&E shall submit a plan to FERC and Mendocino that details type, number and location of devices for study within the next five years;
• PG&E shall provide local government with access to all consultant reports, findings and communications related to environmental impact and other impacts resulting from construction, operation and removal of the proposed project;
• PG&E shall promptly notify Mendocino if it sets up any obstruction, measuring devices, observable towers or other equipment in permit area;
• PG&E shall notify Mendocino if it decides to surrender the permit;
• After consultation with Mendocino, PG&E shall remove any and all equipment constructed or installed within the permit area if it decides to surrender their permit;
• Within one year of permit issue, PG&E shall submit a plan to FERC and Mendocino detailing removable of all equipment at the end of permit period;
• PG&E shall give Mendocino all evaluation and monitoring from the proposed research projects and provide regular updates of findings, also making this available to the public;
• Upon submitting Notice of Intent or Pre-Application Document to [license] the project, PG&E shall provide Mendocino a full description of all alternative project proposals under consideration by PG&E as well as related studies and reasons for accepting or rejecting.

Mendocino states “had the County had an opportunity to intervene in the preliminary permit proceedings, the County would have not only had an opportunity to determine the feasibility of a competing project but the County would have also raised its concerns about the vagueness of the project description and to propose additional permit conditions to clarify the project.”

Mendocino adds its wish to have had ample time to intervene and consider partnering with adjacent counties or private entities regarding a competing application as well as ample time to propose additional permit conditions to meaningfully participate.

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PG&E Chief’s Green Crusade

From Green Wombat, May 1, 2008

“Years ago we came to the conclusion that global warming was a problem, it was an urgent problem and the need for action is now. The problem appears to be worse and more imminent today, and the need to take action sooner and take more significant action is greater than ever before” – PG&E Chairman and CEO Peter Darbee

The head of one of the nation’s largest utilities seemed to be channeling Al Gore when he met with a half-dozen environmental business writers in the PG&E boardroom in downtown San Francisco. While a lot of top executives talk green these days, for Darbee green has become the business model, one that represents the future of the utility industry in a carbon-constrained age.

As Katherine Ellison wrote in a feature story on PG&E that appeared in the final issue of Business 2.0 magazine last September, California’s large utilities — including Southern California Edison and San Diego Gas & Electric — are uniquely positioned to make the transition to renewable energy and profit from green power.

First of all, they have no choice. State regulators have mandated that California’s investor-owned utilities obtain 20 percent of their electricity from renewable sources by 2010 with a 33 percent target by 2020. Regulators have also prohibited the utilities from signing long-term contracts for dirty power – i.e. with the out-of-state coal-fired plants that currently supply 20 percent of California’s electricity. Second, PG&E and other California utilities profit when they sells less energy and thus emit fewer greenhouse gases. That’s because California regulators “decouple” utility profits from sales, setting their rate of return based on things like how well they encourage energy efficiency or promote green power.

Still, few utility CEOs have made green a corporate crusade like Darbee has since taking the top job in 2005. And the idea of a staid regulated monopoly embracing technological change and collaborating with the likes of Google and electric car company Tesla Motors on green tech initiatives still seems strange, if not slightly suspicious, to some Northern Californians, especially in left-leaning San Francisco where PG&E-bashing is local sport.

In a wide-ranging conversation, Darbee, 54, sketched a future where being a successful utility is less about building big centralized power plants that sit idle until demand spikes and more about data management – tapping diverse sources of energy — from solar, wind and waves to electric cars — and balancing supply and demand through a smart grid that monitors everything from your home appliances to where you plugged in your car. “I love change, I love innovation,” says Darbee, who came to PG&E after a career in telecommunications and investment banking.

Renewable Energy

“On renewable energy what we’ve seen is the market is thin,” says Darbee. “Demand just from ourselves is greater than supply in terms of reliable, well-funded companies that can provide the service.”

PG&E so far has signed power purchase agreements with three solar startups — Ausra, BrightSource Energy and Solel — for up to 1.6 gigawatts of electricity to be produced by massive solar power plants. Each company is deploying a different solar thermal technology and uncertainty over whether the billion-dollar solar power stations will ultimately be built has prompted PG&E to consider jumping into the Big Solar game itself.

“We’re looking hard at the question of whether we can get into the business ourselves in order to do solar and other forms of renewables on a larger scale,” Darbee says. “Let’s take some of the work that’s been done around solar thermal and see if we can partner with one of the vendors and own larger solar installations on a farm rather than on a rooftop.”

“I like the idea of bringing the balance sheet of a utility, $35 billion in assets, to bear on this problem,” he adds.

It’s an approach taken by the renewable energy arm of Florida-based utility FPL, which has applied to build a 250-megawatt solar power plant on the edge of the Mojave Desert in California.

For now, PG&E is placing its biggest green bets on solar and wind. The utility has also signed a 2-megawatt deal with Finavera Renewables for a pilot wave energy project off the Northern California coast. Given the power unleashed by the ocean 24/7, wave energy holds great promise, Darbee noted, but the technology is in its infancy. “How does this technology hold up against the tremendous power of the of the Pacific Ocean?”

Electric Cars

Darbee is an auto enthusiast and is especially enthusiastic about electric vehicles and their potential to change the business models of both the utility and car industries. (At Fortune’s recent Brainstorm Green conference, Darbee took Think Global’s all-electric Think City Coupe for a spin and participated in panels on solar energy and the electric car.)

California utilities look at electric cars and plug-in hybrids as mobile generators whose batteries can be tapped to supply electricity during peak demand to avoid firing up expensive and carbon-spewing power plants. If thousands of electric cars are charged at night they also offer a possible solution to the conundrum of wind power in California, where the breeze blows most strongly in the late evenings when electricity demand falls, leaving electrons twisting in the wind as it were.

“If these cars are plugged in we would be able to shift the load from wind at night to using wind energy during the day through batteries in the car,” Darbee says.

The car owner, in other words, uses wind power to “fill up” at night and then plugs back into the grid during the day at work so PG&E can tap the battery when temperatures rise and everyone cranks up their air conditioners.

Darbee envisions an electricity auction market emerging when demand spikes. “You might plug your car in and say, ‘I’m available and I’m watching the market and you bid me on the spot-market and I’ll punch in I’m ready to sell at 17 cents a kilowatt-hour,” he says. “PG&E would take all the information into its computers and then as temperatures come up there would be a type of Dutch auction and we start to draw upon the power that is most economical.”

That presents a tremendous data management challenge, of course, as every car would need a unique ID so it can be tracked and the driver appropriately charged or credited wherever the vehicle is plugged in. Which is one reason PG&E is working with Google on vehicle-to-grid technology.

“One of the beneficiaries of really having substantial numbers of plug-in hybrid cars is that the cost for electric utility users could go down,” says Darbee. “We have a lot of plants out there standing by for much of the year, sort of like the Maytag repairman, waiting to be called on for those super peak days. And so it’s a large investment of fixed capital not being utilized.” In other words, more electric and plug-in cars on the road mean fewer fossil-fuel peaking power plants would need to be built. (And to answer a question that always comes up, studies show that California currently has electric generating capacity to charge millions of electric cars.)

Nuclear Power

Nuclear power is one of the hotter hot-button issues in the global warming debate. Left for dead following the Three Mile Island and Chernobyl disasters, the nuclear power industry got a new lease on life as proponents pushed its ability to produce huge amounts of carbon-free electricity.

“The most pressing problem that we have in the United States and across the globe is global warming and I think for the United States as a whole, nuclear needs to be on the table to be evaluated,” says Darbee.

That’s unlikely to happen, however in California. The state in the late 1970s banned new nuclear power plant construction until a solution to the disposal of radioactive waste is found. PG&E operates the Diablo Canyon nuclear plant, a project that was mired in controversy for years in the ’70s as the anti-nuke movement protested its location near several earthquake faults.

“It’s a treasure for the state of California – It’s producing electricity at about 4 cents a kilowatt hour,” Darbee says of Diablo Canyon. “I have concerns about the lack of consensus in California around nuclear and therefore even if the California Energy Commission said, `Okay, we feel nuclear should play a role,’ I’m not sure we ought to move ahead. I’d rather push on energy efficiency and renewables in California.”

The Utility Industry

No surprise that Darbee’s peers among coal-dependent utilities haven’t quite embraced the green way. “I spent Saturday in Chicago meeting with utility executives from around the country and we’re trying to see if we can come to consensus on this very issue,” he says diplomatically. “There’s a genuine concern on the part of the industry about this issue but there are undoubtedly different views about how to proceed and what time frames to proceed on.”

For Darbee one of the keys to reducing utility carbon emissions is not so much green technology as green policy that replicates the California approach of decoupling utility profits from sales. “If you’re a utility CEO you’ve got to deliver earnings per share and you’ve got to grow them,” he says. “But if selling less energy is contradictory to that you’re not going to get a lot of performance on energy efficiency out of utilities.”

“This is a war,” Darbee adds, “In fact, some people describe [global warming] as the greatest challenge mankind has ever faced — therefore what we ought to do is look at what are the most cost-effective solutions.”

Thanks to Green Wombat for this post!

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CPUC Offers Only Partial Funding to PG&E Wave Energy

April 29, 2008 – CALIFORNIA PUBLIC UTILITY COMMISSION’S DRAFT INTERIM OPINION AUTHORIZING EMERGING RENEWABLE RESOURCE PROGRAMS

Excerpts of CPUC Decisions RE PG&E Wave Energy Conversion Project Funding

Summary — Today’s decision authorizes Emerging Renewable Resource Programs (ERRP) for Pacific Gas and Electric Company (PG&E) and San Diego Gas & Electric Company (SDG&E) (Joint Applicants). The adopted ERRP allows PG&E and SDG&E to expend up to $30 million and $15 million, respectively, on external costs for a period of two years. ERRP expenses will be recorded in each utility’s Energy Resource Recovery Account (ERRA).

The adopted ERRP includes project approval and oversight through the Commission’s Energy Division (ED) assisted by consultants using our adopted Technical Review Process (TRP). In addition, an independent evaluator (IE) will review ERRP project solicitations.

Although this decision authorizes Joint Applicants’ ERRP funding request, it provides that ratepayers will only fund up to 80% of the estimated costs for an ERRP project. Thus, ratepayers do not bear all of the risk of ERRP projects but rather share these risks with those providing the 20% in matching funds. The decision does not adopt intellectual property (IP) policies for IP produced from ERRP projects. Instead, IP will be addressed on a project-by-project basis until it is addressed through the workshop process. PG&E’s request for $2 million for the University of California Merced Solar Center (Solar Center) and $3.2 million for SDG&E’s request for a Wastewater Biomethane Demonstration (WBD) project are authorized. However, only $2 million of PG&E’s requested $6 million for its wave energy project is authorized at this time pending further review by the TRP consultants and approval by ED.

Because ERRP is a new utility program addressing the development of new renewable energy technologies, we will closely monitor and evaluate the program results during the next two years, and then decide whether the program should be continued, modified, or cancelled. This proceeding is closed.

RPS Background — The California Renewables Portfolio Standard (RPS) Program was established by Senate Bill (SB) 10782 and codified by California Public Utilities Code Section 399.11, et seq. The statute required that a retail seller of electricity such as PG&E purchase a certain percentage of electricity generated by Eligible Renewable Energy Resources (ERR). Originally, each utility was required to increase its total procurement of ERRs by at least 1% of annual retail sales per year until 20% is reached, subject to the Commission’s rules on flexible compliance, no later than 2017.

The State’s Energy Action Plan I (EAP I) called for acceleration of this RPS goal to reach 20 percent by 2010. This was reiterated again in the Order 2 Chapter 516, statutes of 2002, effective January 1, 2003 (SB 1078). The Energy Action Plan I was jointly adopted by the Commission, the California Energy Resources Conservation and Development Commission (CEC) and the California Power Authority. The Commission adopted the EAP I on May 8, 2003. Instituting Rulemaking (R.04-04-026) issued on April 28, 2004, which encouraged the utilities to procure cost-effective renewable generation in excess of their RPS annual procurement targets (APT), in order to make progress towards the goal expressed in the EAP. On September 26, 2006, Governor Schwarzenegger signed Senate Bill (SB) 107, which accelerates the State’s RPS targets to 20% by 2010, subject to the Commission’s rules on flexible compliance. During the past four years, California utilities including PG&E and SDG&E have sought to increase the amount of eligible renewable energy procurement to meet RPS targets.

In addition to the 2010 mandate, in 2005 the EAP II set a more ambitious goal to reach 33% renewable energy by 2020. In 2005, the Governor called for an acceleration of the RPS to 33 percent by 2020. While the state is not mandated by legislation to reach this more ambitious goal, the Commission is working with the investor-owned utilities (IOUs) to evaluate to what extent this goal can be achieved.

Regarding PG&E’s Wave Energy Conversions Projects — PG&E proposes to document the feasibility of a facility that converts wave energy into electricity by using wave energy conversion (WEC) devices in the open ocean adjacent to PG&E’s service territory. PG&E explains that WEC devices have been tested in Europe and Hawaii but have not demonstrated for commercial viability. PG&E believes that wave power is a viable energy source along California’s coast, and received preliminary Federal Energy Regulatory Commission (FERC) permits in March 2008. PG&E proposes that WaveConnect will be funded in three stages. The first stage includes all of the feasibility and licensing work for the two wave sites and is estimated to cost $6 million over 3 to 5 years. These costs include fees for consultants, legal services, engineering and technical consultants, environmental studies, design and planning for WEC devices and costs for the deployment of a limited number of WEC devices for testing. The second stage, estimated to cost between $15-$20 million per site over 2-4 years, includes development of infrastructure, undersea cabling, and greater numbers of WEC devices. During stage three, the most promising WEC devices will be deployed in larger quantities up to 40 Megawatts per site and connected to the grid. PG&E does not have a cost estimate for Stage 3. In the Application, PG&E is only requesting funding for Stage 1. PG&E states it will request funding for Stages 2 and 3 either in separate applications or through subsequent ERRP AL filings.

Although interested parties do not object to either the Solar Center or WBD ERRP projects discussed above, IEP (Independent Energy Producers Assoc.) contends that WaveConnect should be denied ERRP funding. IEP argues that PG&E’s WaveConnect project would provide project development costs and give PG&E an unfair advantage over independent power producers in a competitive solicitation. IEP recommends that if PG&E wishes to pursue wave energy, it should do so through a competitive wave energy RPS solicitation. In response, PG&E argues that the results of the WaveConnect project will not be known for 3 to 5 years, at which time a commercial plant may or may not be proposed. Furthermore, PG&E notes the immediate aim of WaveConnect is not to develop a commercial generating facility to compete against other project developers, but to evaluate the feasibility of extracting energy from ocean waves. PG&E states that wave energy has tremendous potential as a renewable energy source since California has over 750 miles of coastline, or over 37,000 MW of potential, of which an upper limit of about 20% could be converted into electricity. PG&E estimates that an average 7460 MW might be expected to generate up to 65 terawatt hours (TWh) per year from California’s ocean waves. California’s 2005 total energy generated was 288 TWh. Thus, wave energy could potentially provide 23% of California’s current electricity consumption. It should be noted, however, that this estimate is an upper limit, since environment impacts, land-use, and grid interconnection constraints will likely impose limits on development. The wave potential along the 600 miles of Pacific Ocean coastline in PG&E’s service territory is also very good, and has a higher wave energy climate than further south.

Other states and countries are in various stages of testing wave energy projects. Recently PG&E filed an AL for approval of a PPA from a potential wave energy provider. The State of Oregon has also begun exploring wave energy projects. While these developments suggest wave energy may become a more common energy source, the question remains as to whether we should wait until other possible wave energy developers enter the market, or approve the WaveConnect project as a means of furthering wave energy development now. It is apparent that legislation encouraging renewable power and reductions in GHG strongly support all reasonable cost effective means to achieve these ends. Furthermore, as proposed by PG&E, the commercial development of wave energy is not an immediate goal but rather a lengthy study necessary to prove or disprove the potential for wave energy from various WEC devices. On that basis we believe it important to begin expanding our knowledge and understanding of whether wave energy is a reasonable means for achieving these goals now rather than waiting to see how this market may develop. We will conditionally authorize PG&E to begin the WaveConnect project as part of its ERRP. However we are less certain about the WaveConnect project as proposed over the many years outlined in the Application and WaveConnect information provided in PG&E’s Response. We desire to allow PG&E to move forward with the tasks to complete the goals and milestones in year one, including steps necessary to file the Pre-Application Document by March 2009, which is the next milestone in the FERC licensing process. While PG&E is conducting these activities, ED and its TRP consultants will review the other activities proposed in Stage 1 from years two through five. As a result, we only authorize PG&E to spend up to $2 million in ERRP funds to cover the expenditures necessary to complete the tasks for Year 1.

Once the TRP is established, it will review WaveConnect and recommend to ED whether, and how much additional spending is reasonable. Following this review, and upon receipt of a letter from the Energy Division directing PG&E on how to proceed, PG&E may file a Tier 2 or Tier 371 AL requesting additional funds for the WaveConnect project. In this AL filing, PG&E must demonstrate that it has acquired additional funds covering at least 20% of the total amount requested for Stage 1.72 PG&E shall record and recover these costs as described in Section 5.11.

In addition to seeking funding for Stage 1, PG&E indicated that it would seek funding for Stages 2 and 3 through subsequent ERRP AL filings or through applications. Since the maximum ERRP funding for one project is $7 million dollars, PG&E cannot exceed this limit over the life of WaveConnect. Thus, if PG&E is authorized to expend up to $6 million for Stage 1 through ERRP, WaveConnect will only be eligible for $1 million in additional funding for future stages. PG&E cannot request over $7 million in ratepayer funding for WaveConnect through subsequent ERRP funding periods nor through a separate application.

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FERC Grants Rehearings in Mendocino & Humboldt Coast PG&E Wave Energy Projects

Publisher’s Note: On May 21, 2008 FERC Rejected Mendocino’s Request for Rehearing so the granting of the Rehearing was short-lived and only because FERC required more time to consider the rehearing further. Interesting that FERC doesn’t suffer from ‘out of time’ issues!

MendoCoastCurrent, May 1, 2008

Learned today the Federal Energy Regulatory Commission (FERC) granted a Rehearing related to its March 4, 2008 Notice Denying Late Intervention and, additionally, FERC granted a Rehearing related to the Issued Orders for PG&E’s Wave Energy Development Preliminary Permits of March 13, 2008…both Humboldt and Fort Bragg coastal areas are affected by these actions. Cited reasons for rehearings: further consideration.

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On the Mendocino Coast, PG&E Surfs Every Angle of Wave Energy

MendoCoastCurrent, April 24, 2008

Since late 2007 PG&E has dispatched government relations and program managers to broadcast their pledge and intention to work with Mendocino County Supervisors, Fort Bragg Councilpersons, FISH (Fishermen Interested in Safe Hydrokinetics) and Concerned Coastal Residents as they move swiftly to explore wave energy development off the Mendocino Coast. Based on current actions, PG&E is working all sides of the Mendocino Coast, the Federal Energy Regulatory Commission’s (FERC) and PG&E renewable energy corporate goals to move their agenda forward.

Mendocino Coast Citizens, County, FISH and Fort Bragg reactions have been leery and FERC indicates ‘a little too late.’ Local government asserts that when Mendocino, FISH and Fort Bragg missed important response dates in the FERC proceedings, it was due to FERC and PG&E failing to provide the required timely, local, written notice of PG&E’s Application for the Preliminary Permit.

Meanwhile in public meetings, letters and in conversations, PG&E has voiced support of Fort Bragg’s, FISH’s and the County of Mendocino’s move to Intervene in FERC/PG&E Preliminary Permit going so far as to express ‘surprise’ of the FERC/PG&E Preliminary Permit issuance (on March 13, 2008 ) in a comment at a Town Hall meeting. Then PG&E sent letters (Ft. Bragg, Mendocino County, FISH) of concern when FERC denied their efforts to Intervene on March 5, 2008.

The Mendocino public requested PG&E to file Letters of Support for Intervener Status in the FERC docket. PG&E lawyers decided to reject that request when they filed an Answer to Mendocino County’s Request for Re-Hearing, opposing Mendocino’s Request for Re-Hearing on the FERC Denial of Intervener status, mostly supporting that their notice was correct when they failed to provide the required local, written notice as required by FERC.

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Minerals Management Service Nomination on April 18, 2008

MMS nominated both Humboldt and Mendocino lease areas last Friday. See following for full details, emphasis added.

Federal Register: April 18, 2008 (Volume 73, Number 76)
———————————————————————–

DEPARTMENT OF THE INTERIOR

Minerals Management Service – Docket No. MMS-2008-OMM-0020

Notice of Nominations Received and Proposed Limited Alternative Energy Leases on the Outer Continental Shelf (OCS) and Initiation of Coordination and Consultation

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Announcement of nominations and processing priorities, inquiry on competing nominations for proposed limited alternative energy leases, and request for comments from interested and affected parties.

———————————————————————–

SUMMARY: On November 6, 2007, the Minerals Management Service (MMS) published in the Federal Register (72 FR 214, pp. 62673-62675) a request for information and nominations of areas for leases authorizing alternative energy

[[Page 21153]]

resource assessment and technology testing activities pursuant to
subsection 8(p) of the OCS Lands Act, as amended.
We received over 40 nominations of areas for limited leases
authorizing such activities relating to wind, wave, and ocean current
energy resources on the OCS. The MMS has considered the nominations in
light of relevant criteria for proceeding with the issuance of leases.
As required by subsection 8(p), MMS must issue such leases on a
competitive basis unless we determine after public notice that there is
no competitive interest. Subsection 8(p) also requires MMS to
coordinate and consult with relevant Federal agencies and affected
State and local governments concerning the issuance of OCS alternative
energy leases. This Notice provides the required public notice of
proposed leases by announcing the nominations that MMS has decided to
process as a priority and inquiring as to the existence of any
competitive interest in these nominated areas. Also, with this
announcement we intend to inform all interested and affected parties of
these nominations and invite comments and information–including
information on environmental issues and concerns–that will be useful
in our consideration of the nominated areas for the issuance of limited
alternative energy leases.

DATES: The MMS requests any competing nominations and relevant comments and information by May 19, 2008. As it pertains to nominations, this is a strict deadline, and nominations received after the deadline will be not be considered by MMS for the purpose of determining competitive interest in the areas originally nominated. Other comments may be submitted within 60 days.

ADDRESSES: You may submit your comments by one of two methods:
(1) Federal eRulemaking Portal: http://www.regulations.gov. Under
the tab “More Search Options,” click “Advanced Docket Search,” then
select “Minerals Management Service” from the agency drop-down menu,
then click “submit.” In the Docket ID column, select MMS-2008-OMM-
0020 to submit public comments and to view supporting and related
materials available for this rulemaking. Information on using
Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site’s “User Tips” link. The
MMS will post all comments.
(2) Mailing your comments to the following address: Minerals
Management Service, Offshore Minerals Management, Alternative Energy
and Alternate Use Team, 381 Elden Street, Herndon, Virginia 20170-4817.

FOR FURTHER INFORMATION CONTACT: Ms. Maureen Bornholdt, Minerals
Management Service, Offshore Minerals Management, 381 Elden Street,
Mail Stop 4080, Herndon, Virginia 20170-4817, (703) 787-1300.

SUPPLEMENTARY INFORMATION:
Public Comment Policy. Before including your address, phone number,
e-mail address, or other personal identifying information in your
submission, you should be aware that your entire submission–including
your personal identifying information–may be made publicly available
at any time. While you may ask us in your comment to withhold your
personal identifying information from public review, we cannot
guarantee that we will be able to do so.
Background. Under the interim policy described in the November 6,
2007, Federal Register Notice referenced above, MMS stated its
intention to issue limited OCS alternative energy leases for a term of
5 years that would authorize resource assessment and technology testing
activities, subject to specific terms and conditions. That Notice
invited respondents who wish to acquire limited OCS alternative energy
leases to nominate areas of interest by January 7, 2008. On December
14, 2007, MMS published in the Federal Register (72 FR 240, pp. 71152-
71157) a Notice of new information collection that presented a proposed
“Lease of Submerged Lands for Alternative Energy Activities on the
OCS” and requested comments by February 12, 2008.
In addition to the nominations submitted by prospective lessees,
MMS received numerous comments from proponents of OCS alternative
energy development, including industry associations. Several of those
comments stated that the interim policy should be revised to provide a
right to commercial development for those who acquire leases for
resource assessment and technology testing. As MMS stated in the
November 6, 2007, Federal Register Notice, the interim policy is
intended to permit the collection of resource assessment and technology
testing data in support of future development activity without any
priority right for future commercial development. It is designed to
begin the process in the acquisition of needed information about a
variety of OCS conditions under a relatively simple authorizing
process. Conveyance of full commercial development rights would entail
a much lengthier and complicated process than MMS is willing to
undertake at this time under the interim policy.
Therefore, MMS reiterates and reaffirms its interim policy as
originally formulated and proposed. Further, in the absence of
promulgated rules, MMS does not plan to revise the interim policy or
adopt a new policy to authorize commercial development of OCS
alternative energy. We will continue to defer consideration of
commercial OCS alternative energy projects until regulations governing
alternative energy activities on the OCS are in place, except with
respect to the two proposed projects that are the subject of the
savings provision of section 388 of the Energy Policy Act of 2005.
Prospective lessees, both the original nominators and those
responding to this Notice, must show that they are qualified to hold an
OCS lease before MMS will consider their proposals. The qualifications
for holders of OCS oil and gas leases set forth at 30 CFR 256.35
provide useful guidance in this regard to prospective limited
alternative energy lessees. Limited alternative energy lease holders
must also comply with all terms and conditions of their lease (see the
December 14, 2007, Federal Register Notice of the proposed lease form).
As stated in the November 6, 2007, Federal Register Notice proposing
the interim policy, a limited lease will grant the lessee the exclusive
right to conduct the activities identified in the lease on the
designated lease area. Acquisition of a limited lease will not grant
the lessee any rights with respect to the future acquisition of
commercial development rights for the leased site.
Nominations. We received nominations on the Atlantic and Pacific
Coasts. Most of the Atlantic Coast nominations are for meteorological
and oceanographic data collection facilities that would support wind
energy projects off of the coasts of Massachusetts, New York, New
Jersey, Delaware, Maryland, Virginia, South Carolina, and Georgia.
There also are nominations for areas off of the coast of Florida
focused on ocean current information collection and technology testing.
On the Pacific coast, the main interest is in wave energy, and nominations were received for areas off California, Oregon and Washington.
The MMS has decided to give priority consideration to issuing
limited leases for: (1) Data collection activities relating to wind
resources off of the coasts of New Jersey, Delaware, and Georgia; (2)
data collection and technology testing activities relating to current
resources off of the coast of Florida; and (3) data

[[Page 21154]]

collection and technology testing activities relating to wave resources off of the coast of Northern California. These locations of proposed OCS alterative energy limited leasing are described as follows:

—————————————————————————————————————-
Official protraction
Adjacent state diagram Block(s) Resource
—————————————————————————————————————-
1. New Jersey………………….. Hudson Canyon NJ 18-03. 6451………………….. Wind.
2. New Jersey………………….. Wilmington NJ 18-02…. 6936 and 7131………….. Wind.
3. New Jersey………………….. Wilmington NJ 18-02…. 6931………………….. Wind.
4. New Jersey………………….. Wilmington NJ 18-02…. 6738………………….. Wind.
5. New Jersey………………….. Wilmington NJ 18-02…. 7033………………….. Wind.
6. Delaware……………………. Salisbury NJ 18-05….. 6325………………….. Wind.
7. Georgia…………………….. Brunswick NH 17-02….. 6074………………….. Wind.
8. Georgia…………………….. Brunswick NH 17-02….. 6174………………….. Wind.
9. Georgia…………………….. Brunswick NH 17-02….. 6126………………….. Wind.
10. Florida……………………. Bahamas NG 17-06……. 7103………………….. Current.
11. Florida……………………. Bahamas NG 17-05……. 7040 and 7090………….. Current.
Bahamas NG 17-06……. 7001, 7002, 7003, 7004, ………………..
7005, 7006, 7007, 7051,
7052, 7053, 7054, 7055,
7056, 7057, 7104, 7105,
7106, and 7107.
12. Florida……………………. Bahamas NG 17-06……. 6702, 6703, 6704, 6705, Current.
6706, 6707, and 6708.
13. Florida……………………. Miami NG 17-08……… 6040………………….. Current.
14. Florida……………………. Bimini NG 17-09…….. 6001………………….. Current.
15. California…………………. Ukiah NJ 10-02……… 6405, 6455, 6456, 6504, Wave.
6505, 6506, 6554, 6555,
6604, 6605, 6654, 6655,
6704, and 6705.
16. California…………………. Eureka NK 10-10…….. 6031, 6032, 6033, 6080, Wave.
6081, 6082, 6083, 6130,
6131, 6132, 6133, 6179,
6180, 6181, 6182, 6229,
6230, 6231, 6232, 6279,
6280, 6281, 6330, and 6331.
—————————————————————————————————————-

The above locations refer to areas identified on the Official
Protraction Diagrams that are available from each MMS regional office
and online at http://www.mms.gov/ld/Maps.htm, and the areas are
identified as OCS blocks that are generally nine square miles in size.
The nominated areas may be located on those maps or on a map viewer
maintained by MMS at http://www.mms.gov/offshore/RenewableEnergy/
WebMappingViewer.htm.
The MMS reviewed in detail all nominations we received and
established our priority areas for initial leasing in light of
considerations such as technological complexity, timing needs,
competing use issues, and relationships to relevant state-supported
renewable energy activities, as well as considerations relating to
limited available MMS staff and budget resources for processing and
managing limited leases. We also took into consideration the
desirability of authorizing the advancement of activities relating to
each of the alternative energy resource types cited in the
nominations–wind, current, and wave.
We chose proposed leasing locations off of the New Jersey and
Delaware coasts primarily because the installation of data collection
facilities relating to wind would support the concurrent efforts by
those States to foster commercial development of wind power on the
adjoining OCS. We also selected the area off of the coast of Georgia as
a site for limited leasing related to wind because of the ongoing
efforts of Southern Company and the Georgia Institute of Technology
Strategic Energy Institute to acquire wind data to determine the
technical and economic feasibility of locating an OCS wind energy
project off of the coast of Georgia. Their efforts include the use of
existing U.S. Navy meteorological and oceanographic data collection
platforms and other lower elevation facilities for several years. They
now propose to gather critical data at a substantially higher height.
We chose proposed leasing locations off of the coast of Florida,
because the data collection and technology testing activities relate to
ocean currents. The State of Florida has supported ocean current
research through the Florida Atlantic University Center of Excellence
in Ocean Energy Technology, which includes several academic, Federal
Government, and private industry participants.
We chose two proposed leasing locations off of the coast of Northern California, specifically offshore Humboldt and Mendocino Counties, because the data collection and technology testing activities relate to ocean wave activities. The areas were nominated to conduct alternative energy resource assessment and technology testing with respect to the WaveConnect Projects proposed by Pacific Gas and Electric Company in each area. The Pacific Gas and Electric Company has sought or obtained permits from other Federal agencies and has applied to the California Public Utilities Commission for funds to conduct studies related to these projects.
It is important to note that MMS has not made any final decision to
award leases in the areas identified in this Notice. We have identified
these areas as our priorities for potentially authorizing limited
leases under this interim policy, and through this Notice we are
soliciting comments to determine if competitive interest exists in
these areas. Nominations that were not selected for processing as a
priority, as well as additional nominations received in the future, may
be processed by MMS at a later date. We have chosen to process a lease
or group of leases relating to each type of alternative energy resource
in accordance with our staff and budget resources and associated timing
considerations. Many of the nominations that were not selected for
priority processing appear to entail complex technology (e.g., new
deeper-water designs) or environmental or conflicting use concerns that
would make processing them more difficult and time consuming.
Request for Competing Nominations. As stated above, the areas that
have been nominated for proposed alternative energy limited leases are
identified as blocks on the OCS Official Protraction Diagrams. While we
received some nominations for areas smaller than OCS blocks, we have
decided that the minimum size for limited leases issued under the
interim policy will be a block or aggregation of blocks but will not be
smaller than a block. Upon acquisition of such a lease, a lessee may
contract the

[[Page 21155]]

original lease area by relinquishing aliquot parts of the lease, a part
as small as \1/16\ of a block.
We request respondents who wish to compete for limited leases for
the areas identified in this Notice to submit a nomination identifying
the block(s) in which you are interested, the resource(s) you want to
assess (e.g., wind, current, wave) and the technology you want to test.
Also, provide a general description of the type and number of
installations or technologies you would use and a project schedule for
the activities you propose. Your nomination of an area must be
consistent with the type of alternative energy resource identified for
that area (e.g., a nomination off of the coast of New Jersey must
pertain to data collection activities relating to wind resources). A
nomination that is not consistent with the resource identified for a
specific area will not be considered. The block(s) you wish to nominate
should be identified using the information on Official Protraction
Diagrams available as described above. Also, if you submit such a
nomination, please provide the name, telephone number, and e-mail
address of an individual for the MMS to contact.
With this request MMS is inviting nominations from parties who have
not previously submitted nominations for the areas identified in this
Notice and are interested in acquiring leases only for one or more of
the blocks listed above. Those who have already submitted nominations
for these areas should not resubmit the same nomination. A nomination
received in response to the November 6, 2007, Federal Register Notice
will be considered active unless the original nominator notifies MMS in
writing that the nominator is no longer interested in obtaining a lease
for the area originally nominated. If an original nominator is
interested in competing for a lease area identified in this Notice and
it was not the original nominator of that site, it must submit a new
nomination for that lease area as provided in this Notice. If you have
not already submitted a nomination and wish to submit one for an area
listed above, you must submit by the deadline stated above. Late
submissions will not be considered.
MMS Analysis of Nominations. The MMS will consider the nominations
received in response to this Notice along with the original
nominations. We will determine that there is competitive interest for
any proposed lease area that receives more than one nomination and that
there is no competitive interest for any area that receives only one
nomination. In instances where our analysis determines that there is
competitive interest, we will contact the competing nominators to
explore options for collaboration or refinements of proposals before
considering options for proceeding with a competitive auction. If we
receive a competing nomination that only partially overlaps a multiple-
block original nomination, we may determine that there is no
competition, because in such a case the proposed lease area subject to
competition would comprise the entire multiple-block original
nomination. However, based on the information we receive in response to
this notice, MMS may decide to issue a subsequent public notice
requesting expressions of interest in the partial area where the
competing nominations overlap separate from the remainder of the
multiple-block area proposed for lease.
In instances where our analysis concludes that there is no
competitive interest in a previously nominated area, we will contact
the nominators and proceed with noncompetitive lease issuances as time
and resources allow. However, we may first choose to explore options
for collaboration in the interest of optimizing efficiency. The MMS
will publicly announce the results of its analyses to determine
competitive interest and its intentions to proceed with the issuance of
leases.

Coordination and Consultation

The MMS invites all interested and affected parties to submit comments and information pertaining to the nominated areas listed above. We believe such input would be useful as we consider these areas for limited leasing, and we especially welcome information concerning geographic characteristics and environmental resources, as this will assist us in our environmental review processes. We seek information on the nominated areas relating to other ocean and seabed uses, relationships to onshore energy markets of the nominated areas, and applicable State and local laws and policies. We also request comments and suggestions on how we may best coordinate and consult comprehensively and efficiently to comply with applicable Federal, State, and local laws and policies. Officials of MMS intend to contact Federal, State, and local government counterparts during the comment period to discuss the nominations and the process for issuing limited OCS alternative energy leases under the interim policy. Such discussions may explore methods to foster intergovernmental coordination, including whether to establish intergovernmental task forces with Federal, State, and local entities for this purpose.

Dated: April 2, 2008.
Randall B. Luthi,
Director, Minerals Management Service

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FISH Files FERC Request for Rehearing to Intervene

April 1, 2008

Interesting reading…A Request for Rehearing has been filed related to FERC’s Denial of FISH’s Motions to Intervene in PG&E’s Mendocino and Humboldt Wave Energy Projects (read Filing : fish-request-for-rehearing.pdf).

FISH, Fishermen Interested in Safe Hydrokinetics, has become a steering committee led by Mendocino coast locals, John Innes and Jim Martin, as Co-Coordinators and Elizabeth Mitchell as FERC Coordinator.

FISH has polled the fishing community for much of the information in this Request for Rehearing, and it is clear that there is substantial, if not total, overlap between the fishing grounds and the proposed wave energy project areas.

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Mendocino Wave Energy Moratorium March

From the Mendocino Wave Energy Moratorium March held on March 29, 2008 to voice public concerns about the recent issuance of a Federal Energy Regulatory Commission’s (FERC’s) Preliminary Permit to PG&E off the Mendocino Coast, Fort Bragg, California. The three-year permit allows for deployment of eight to 200 wave energy devices as early as May 1, 2008. Mendocino Coast stakeholders claim that FERC’s permitting policies intentionally limit and bypass resident input as well as local government input. They are calling for a moratorium on deployment of wave energy devices off the Mendocino Coast now.

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Mendocino Wave Energy Moratorium March Recap

In Fort Bragg, California on the Mendocino Coast, March 29, 2008 from 11-NOON

Mendocino Wave Energy Moratorium March

THE FACTS:

PG&E’s Wave Energy Preliminary Permit was Approved & Issued by the Federal Energy Regulatory Commission (FERC) on March 13, 2008.

FERC DENIED The City of Fort Bragg, FISH and the County of Mendocino Motions to Intervene in Mendocino’s Wave Energy Development.

Both PG&E and FERC are NOW Swiftly Moving Forward to “TEST” Off the Mendocino Coast.

WHAT WE’RE SEEKING:

PUBLIC PARTICIPATION in FERC AND PG&E DECISION-MAKING about Wave Energy off the Mendocino Coast

HALT DEPLOYMENT of Wave Energy Test Buoys until further completion of non-deployment studies

PG&E — BE A REAL PARTNER. File Letters in Support of Fort Bragg’s, Mendocino’s and FISH’s re-hearings to Intervene at FERC.

MORATORIUM on MENDOCINO WAVE ENERGY DEVELOPMENT NOW!

NEXT STEPS:

FORMING a Mendocino Coast Wave Energy stakeholder group in early April 2008.

JOIN US for the First Meeting of he Mendocino Coast Wave Energy stakeholders group on TUESDAY, APRIL 8TH, 7PM in Fort Bragg at the FIRST PRESBYTERIAN CHURCH, 367 S. SANDERSON WAY near Dana Grey.

Thank you for your participation!

For more info, go to MendoCoastCurrent; http://MendoCoastCurrent.wordpress.com;

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It Came From the Sea–Renewable Energy, That Is

LARRY GREENEMEIER, Scientific American, March 10, 2008

Thirty feet (nine meters) below Manhattan’s East River, next to Roosevelt Island, six turbines—each 16 feet (five meters) in diameter, churning at a peak rate of 32 revolutions per minute—stand at attention on the riverbed. The turbines—which belong to New York City-based Verdant Power, Inc., —are built on a swiveling platform that keeps their nose cones facing the tide, whether it’s coming in or going out. Resembling an underwater wind farm, these kinetic hydropower systems use gearboxes and speed increasers—which convert the slower rotating rotor into a faster rotating generator—to transform each turbine’s mechanical power into electricity.

Verdant’s turbines require tides that move at least six feet per second in order to generate enough energy for them to be cost-effective, and the East River is more than obliging. “The East River is a good tidal channel that links the Long Island Sound to the ocean,” says Trey Taylor, the company’s president and head of market development. “Plus, New York is an expensive place to buy power, so it would be easier here to prove that this could help.”

A few dozen feet away from the closest turbine, an onshore control room gets a feed of the energy created by the entire cluster. To prove that this energy could be usable for local businesses, Verdant last year sent a test transmission of electricity to a supermarket and parking garage on Roosevelt Island that were willing to participate in the Roosevelt Island Tidal Energy project.

The Earth’s oceans, pushed by wind and tugged by the moon and sun, ebb and flow over more than 70 percent of the planet, but only recently has technology emerged to finally harness some of that kinetic energy as usable power for us landlubbers. Underwater turbines, submerged “wind” farms and wave-riding electrical generators are being tested around the world, with new advances in technology promising relief for overworked energy utilities. “We consider wave energy to be more predictable than wind,” says Phil Metcalf, CEO of Edinburgh-based Pelamis Wave Power, Ltd., a company taking a different approach than Verdant in developing ocean power–utilizing devices. “You look at the ocean 1,000 miles out, you’ll get a good idea of what to expect over the next 24 to 48 hours. We think it’s actually going to be easier to dispatch to the grid.”

Pelamis’s devices are big red tubes, each 426.5 feet (130 meters) long, 13 feet (about four meters) in diameter, weighing around 750 tons (635 metric tons), and with a life expectancy of up to 20 years. They flex as the ocean swells around them. The wave-induced motion of the tubes’ joints is resisted by hydraulic rams, which pump high-pressure fluid through hydraulic motors that drive electrical generators to produce electricity. Power from all the joints is fed down a single umbilical cable to a junction on the seabed. Three of the tubes, which work best at a depth of 165 to 230 feet (50 to 70 meters) and roughly 3.7 miles (six kilometers) from the shore, can produce up to 2.25 megawatts.

Pelamis—which until September had been called Ocean Power Delivery—has taken its prototype through about 2,000 hours of testing at the European Marine Energy Center’s wave test site near Scotland’s Orkney Islands. Three additional machines will form the initial phase of Agucadoura, the world’s first commercial wave farm, in April off the coast of Portugal, a project developed by Portuguese utility Enersis, a subsidiary of Babcock and Brown. Pelamis is negotiating with other utilities and governments as well, with future deployments depending on how well the Portuguese project is able to turn waves of water into currents of electricity.

The waters around Scotland are also host to tidal turbine testing by several organizations, including Lunar Energy, Ltd., in East Yorkshire, England, which in March 2007 announced a deal with Germany-based power utility E.On UK, to develop a tidal stream power project of up to eight megawatts off Scotland’s west coast.

Meanwhile, Florida researchers may soon be testing both wave- and tide-powered energy technologies that could take advantage of the Gulf Stream, which flows north-northeastward about 15 miles (25 kilometers) off Florida’s southern and eastern shores at more than eight billion gallons (30 billion liters) per second. Researchers at Florida Atlantic University’s Center of Excellence in Ocean Energy Technology in Dania Beach, Fla., are using a $5-million state research grant awarded in late 2006 to develop air-conditioning technologies that tap into the powerful Gulf Stream and large water temperature differences off Florida’s shores. The researchers envision thousands of underwater turbines producing as much energy as 10 nuclear power plants and supplying one third of the state’s electricity. The university is working with academic, government and industry partners on the project, including the University of Central Florida in Orlando, the U.S. departments of Navy and Energy, Lockheed Martin, Oceaneering International, Inc., in Hanover, Md., and Verdant Power, which has provided them with a 10-foot (three-meter) diameter rotor system that they used during 2002 East River tests.

Verdant first began testing its three-blade, horizontal-axis turbines from the surface of the East River in 2002. There have been some hitches: Some of the turbines’ fiberglass blades broke under the tidal force. (The fiberglass blades will be replaced by the end of April with ones made of a magnesium alloy.)

Still, the site has produced nearly 50,000 kilowatt-hours of energy from December 2006 to May 2007. Verdant’s East River testing spot has the potential to support as many as 300 turbines and nearly 10 megawatts of installed capacity. Verdant has been working for the past several years to tweak its tidal turbines so that by the end of 2010 they can deliver up to 1.5 megawatts to the city’s electrical grid (800 households use about one megawatt).

The East River is not Verdant’s only site. The company is also testing its technology in Canada’s St. Lawrence River near Cornwall, Ontario, with the hope of creating a turbine infrastructure capable of producing an output of 15 megawatts. The company is also looking at sites in China and India.

It is unclear just how much it will cost to tap into energy from large bodies of water, since there is no tidal or wave power industry. Verdant’s Taylor says his company is at least two years away from being able to quote costs to potential customers. That said, a rough cost estimate for Verdant’s marine renewable energy technology is up to $3,600 per kilowatt hour—a higher price tag than wind power, fossil fuels or hydroelectric dams today, he says. However, he also points out that Verdant will be able to lower its costs over time through the mass production of its technology and the reduction of inefficiencies in the licensing and implementation processes.

The next step for Verdant in the U.S. is to apply for a Federal Energy Regulatory Commission (FERC) license that would allow the company to continue its pilot project attempting to prove tidal turbines can be a reliable source of energy for the city’s grid. It took four years to secure the necessary permits from the New York State Department of Environmental Conservation and the U.S. Army Corps of Engineers.

That bureaucratic delay speaks to the difficulty of navigating the regulatory processes required to get such turbines into the water. Verdant’s Taylor says his company has spent about $9 million getting its East River project to its current state, with one third of that cost going toward studies gauging how the turbines might affect vessel navigation, aquatic life and fish migration. Although the New York State Energy Research and Development Authority (NYSERDA) chipped in $3 million toward the East River project, Taylor says the time and money spent to secure changing, and sometimes redundant, regulatory approval wastes precious time that could be used testing new technologies. “That’s got to change,” he adds. “The world is burning up, and we’re fiddling.”

For its part, FERC doesn’t see itself as fiddling as much as trying to find the right tune when it comes new hydroelectric technologies. Chairman Joseph Kelliher last year noted, “these technologies present some challenges relating to reliability, environmental and safety implications, and commercial viability.”

More projects:

In August 2007 nonprofit research and development firm SRI International and Japanese wave-powered generator maker Hyper Drive Corporation, Ltd., tested a prototype ocean wave–powered generator mounted on a buoy in Florida’s Tampa Bay. As the unit bobbed up and down, absorbing energy from the waves, an accordionlike device made of artificial muscle expanded and contracted, creating mechanical energy that was converted into electricity. In the fall SRI will test its more powerful and durable next-generation prototype wave-powered generator.

Finavera Renewables, a Vancouver, British Columbia, renewable-energy technology company, recently signed a contract to deliver power for San Francisco–based Pacific Gas & Electric (PG&E) by 2012. The deal is North America’s first commercial power purchase agreement for a two-megawatt wave-energy project. The PG&E project will be built about 2.5 miles (four kilometers) off the coast of Humboldt County, Calif., for electricity delivery to PG&E’s customers throughout the company’s northern and central California service territory. Finavera’s technology is the AquaBuOY, a floating structure that converts the up-and-down motion of waves into electricity.

The company was also granted a five-year operating license for its one-megawatt Makah Bay Offshore Wave Pilot Project in Washington State by the U.S. Federal Energy Regulatory Commissionthe first-ever FERC license issued for a wave, tidal or current energy project in the U.S. Finavera is also looking to develop wave-power projects off the coast of Oregon and South Africa, and is determining the feasibility of a five-megawatt wave energy project off the coast of Ucluelet, British Columbia.

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Wave Energy Proposals Alarm Locals

FRANK HARTZELL, Contributor to The Christian Science Monitor, March 4, 2008

Fort Bragg, Calif. – From roadless villages in Alaska to remote bends in the Mississippi River, developers are staking claim to thousands of miles of America’s oceans and rivers to test devices that use waves and currents to produce electric power.

Their experiments are launching a new industry that has the potential to supply up to 10 percent of America’s electric needs. But critics say rapid federal approval of the exclusive right to conduct these experiments amounts to a private seizure of communities’ waterfronts.

“This process, especially in Oregon, feels like a new Klondike gold rush,” says environmentalist Richard Charter, a longtime leader in ocean-protection efforts. “There are people filing claims, people jumping claims, and nobody looking at the big picture. The most amazing part of this power gold rush is that it seems to be happening entirely under the national radar.”

Many state and federal agencies, as well as surprised local communities, argue that the permitting process under the Federal Energy Regulatory Commission (FERC) is too rapid and prevents local input.

In Fort Bragg, Calif., Mayor Doug Hammerstrom was surprised last year to find that waters off his town had been claimed by a major utility with a preliminary permit application. The city filed legal motions to participate in the novel process.

“We fear that FERC, as a distant agency, may not consider local concerns,” says Mr. Hammerstrom.

The fast-emerging technology, known as hydrokinetics, is vital to US renewable-energy efforts, supporters say.

“Hydrokinetic technologies, with their great promise and potential to harness abundant supplies of renewable power … fit that bill,” says FERC Commissioner Philip Moeller. He points to Oregon as an example of state and federal collaboration, where Gov. Theodore Kulongoski (D), as well as state and federal lawmakers, have invited researchers, entrepreneurs, and developers into state waters.

As of Feb. 4, FERC had granted 47 permits for ocean, wave, and tidal projects and another 41 were pending. FERC had issued 40 river permits and 55 more were pending.

Experts expect the process to continue to accelerate. Developers are rushing into hydrokinetics because recent innovations in wireless technology and robotics have improved communication between the devices and the shore and narrowed the price gap with wind and solar power. Although it costs an estimated 20 cents to produce a kilowatt hour with hydrokinetics – still about three times too expensive to be commercially viable, more research could lower the price, supporters say. An Idaho study for the US Department of Energy has estimated that hydrokinetics could double the output of conventional dams by using rivers, currents, and waves at some 130,000 sites in all 50 states.

Congress and the Bush administration have not weighed in directly on the process, which has received major government funding all over Europe.

Fifty miles off Vero Beach, Fla., a developer seeks a claim on 1,050 square miles of the Atlantic Ocean to try to harness the Gulf Stream. Tides are already powering hydrokinetic turbines in New York City.

Most of the permits now being sought and issued are for river projects, some of them massive and virtually unknown to local communities, On Jan. 31, for example, FERC issued a preliminary permit for a 3,100-turbine project in the Mississippi River near Cape Girardeau, Mo. On Feb. 1, it granted 15 similar permits for projects on the Mississippi, each featuring more than 1,000 generators to be sunk into the muddy water.

That move provoked criticism from Janet Sternburg, policy coordinator at the Missouri Department of Conservation. “We are very concerned with the potential adverse environmental impacts from this technology on the natural resources of the Mississippi River,” she wrote in a letter to FERC, noting that the applications on file would affect more than 70 miles of the river.

FERC is mulling a plan by a Houston start-up to harness the Yukon River to deliver power to the Alaskan villages of Nulato and Galena, which are not connected by any road to the outside world, much less an electrical grid. While FERC insists it merely issues permits and does not make policy, critics portray the independent entity as more maverick than bureaucrat.

“FERC has a John Wayne self-image, in which it talks only to itself and not to the public it is supposed to serve,” says Elizabeth Mitchell, a retired National Oceanic and Atmospheric Administration attorney, who has taken a lead in challenging FERC’s proposed hydrokinetic energy procedures. “As a result, FERC often shoots from the hip to the detriment of the resources it is meant to protect.”

Some fellow federal and state regulators and experts are calling for FERC to create an entirely new permitting process.

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PG&E to Fund Garcia Valley & Santa Cruz Forest Projects with ClimateSmart

DAVID R. BAKER, The San Francisco Chronicle, February 26, 2008

Last year, Pacific Gas and Electric Co. gave its customers the option of going carbon neutral, voluntarily paying a little extra on their monthly bills to fund projects that reduce greenhouse gas levels. Today, the utility announced which projects will get the money.

San Francisco’s PG&E will use cash from its ClimateSmart program to fund the restoration and management of two California forests, one in Santa Cruz County, the other on the state’s North Coast. The trees – mostly coastal redwoods – will soak up carbon dioxide from the air, offsetting some of the gases produced by the power plants that provide PG&E customers with electricity.

The amount of money changing hands is small by the standards of the utility industry – only about $2 million. That cash, however, should help remove 214,000 metric tons of greenhouse gases from the air. That’s roughly equivalent to taking almost 40,000 cars off the road for a year.

It also means that the 17,500 PG&E customers who have signed up for the ClimateSmart program will have offset all the carbon dioxide emissions associated with the electricity and natural gas they consume. Participating customers pay an average of $5 per month over and above their regular bill. They receive nothing in return, except the satisfaction of helping the environment.

“What’s the customer getting? First and foremost, they’re being made climate neutral,” said Wendy Pulling, PG&E’s Director of Environmental Policy. “Second, they’re getting to participate in restoring some of California’s beautiful native forests.”

Becoming climate neutral or carbon neutral has become a badge of honor among some environmentalists and has spawned a small industry of companies that offer similar services to ClimateSmart. Typically, such companies allow consumers to calculate the amount of greenhouse gases produced by their cars or homes or air travel plans. Consumers can then pay to offset those emissions, with the money going to fund windmill farms or reforestation projects.

The industry also has its critics, who view offset programs as a form of cheap penance for environmental sins. They note that some offset programs have spent money on environmental projects that would have happened anyway.

ClimateSmart tries to avoid that pitfall. The contracts PG&E signed with the owners of the two forests stipulate that the money must fund activities that wouldn’t have happened otherwise. The forest projects must be certified by the nonprofit California Climate Action Registry, using criteria approved by the California Air Resources Board, a state government agency.

At the Garcia River Forest in Mendocino County, the cash will pay for the restoration of a woodland that was clear-cut at least twice in the past 100 years. The Conservation Fund, a non-profit group specializing in environmental land management, bought the forest from a timber company in 2004 and planned to continue some tree harvesting to pay for restoration and management.

Now, the ClimateSmart money will allow the fund to continue its work while removing fewer trees, said Chris Kelly, the fund’s California program director. And the trees that will be harvested will be smaller trees that are crowding the forest and preventing the redwoods from growing to their full size. In the end, removing the smaller trees will help the forest produce bigger trees and absorb more carbon dioxide, Kelly said.

The ClimateSmart cash also will help maintain some roads in the forest and remove others, he said. Kelly said other forest managers should recognize the possibility that they can get money for preserving their trees, rather than cutting them for lumber.

“This could be a real breakthrough for forest management,” he said. “It’s a nice marriage of being a tree farmer and a carbon farmer at the same time.”

In Santa Cruz County, ClimateSmart will fund maintenance of the Lompico Headwaters Forest, owned by the Sempervirens Fund.

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PG&E Q4 Earnings Up; Costs Up Too

East Bay Business Times, February 22, 2008

PG&E saw its fourth-quarter earnings rise sharply as it reaped gains from capital investments.

The company reported net income of $203 million, or 56 cents a share, compared with $152 million, or 43 cents a share, in the same quarter in 2006. The 2006 quarter included $18 million, or 5 cents a share, in severance costs from job cuts, the company said.

Net income for the full year year was $1 billion, or $2.78 per share, compared with $991 million, or $2.76 per share, in 2006. Total operating revenue for the year stood at $13 billion, up from $12.5 billion in 2006.

The company affirmed previous guidance that it will see 2008 earnings from operations in the $2.90 to $3.00 per share range and reaffirmed guidance for 2009 earnings from operations in the $3.15 to $3.25 per-share range.

Whether or not the company achieves that guidance and its target growth rate depends on its success in efforts to become more efficient and drive costs down, said Christopher Johns, senior vice president, chief financial officer and treasurer, on a conference call with analysts and investors. The company has just rolled out a major initiative to automate the scheduling and execution of field work. “Realizing the expected benefits from that release and other operational improvements is vital to reaching our 2008 forecast and 8 percent growth rate,” he said.

Even as the company tries to wring cost savings out of operations, it is facing the challenge of costs for materials, permitting and labor rising at a faster pace than the scenario it included in its general rate case before the California Public Utilities Commission, he added. “These rising costs and demands on our business increase the pressure on our initiatives to achieve greater operational efficiency.”

The company is looking to identify broader operations savings, and is conducting a full review of plans, operations and spending levels for 2008 through 2010.

Johns also noted that PG&E filed a petition with the CPUC on Feb. 21 that seeks to modify a September CPUC decision on a broad energy efficiency program that incentivizes utilities and their customers to become more energy efficient. PG&E wants assurance it will be able to recognize of portion of earnings from the incentives on an annual basis, rather than at the end of the three-year energy efficiency program cycle. A decision on the petition to modify could take several months.

On a conference call with analysts and investors, Peter Darbee, chairman, president and CEO, said the utility is determined to continue to move forward with a key goal of becoming an environmental leader.

So far this year, the company has signed contracts for 800 megawatts of new renewable energy resources, including the recently signed contracts with Calpine Corp. for 175 megawatts of geothermal energy, and its contract with EnXco for 150-megawatts of wind energy.

It has signed several big solar contracts, including an agreement to purchase over 500 megawatts of clean energy from a new solar power plant that will be built by Solel Solar Systems in the Mojave Desert. Over the next five years, PG&E expects to have a solar thermal portfolio of about 2,000 megawatts, which is the equivalent of the four new gas-fired plant the company is completing at its Gateway Station plant in Eastern Contra Costa County.

The company also raised its quarterly common stock dividend to $0.39 per share from $0.36 per share, beginning with the first quarter.

Shares of PG&E closed at $39.30, up 13 cents, or 0.33 percent.

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Finavera Granted FERC Prelim Permit for Humboldt Wave Energy

Finavera Renewables, Vancouver, Canada, February 15, 2008

Finavera Renewables is pleased to announce it has been issued a Preliminary Permit for its proposed 100MW Humboldt County, California wave energy project. The permit approval was granted by the United States Federal Energy Regulatory Commission (“FERC”).

The preliminary permit is valid for a period of three years, and allows Finavera Renewables to conduct various studies, including analyses of oceanographic conditions, commercial and recreational activities, and other impacts potentially associated with the planned project. The company will rely on the studies and stakeholder consultations in framing its application to FERC for a project operating license.

Finavera CEO Jason Bak said, “We believe the Humboldt County project could become the United States’ first commercial wave energy installation. This Preliminary Permit from FERC is a significant milestone that allows us to move forward on advanced planning for the project, and we look forward to working closely with the local community to ensure a successful project. We believe this project will illustrate how our innovative technology can contribute to the new energy economy through the creation of renewable electricity, jobs and ultimately, shareholder value. We are excited to be leaders in responding to the world’s need for clean energy.”

This permit continues the progress the Company has made over the last several months on its ocean energy activities. The Company signed a long term power purchase agreement with Pacific Gas & Electric for a 2 MW project in California. As well, FERC issued the first ever operating license for a wave energy project in the United States to Finavera Renewables for the Makah Bay Wave Pilot Project in Washington State.

The proposed Humboldt County project would use interconnected clusters of the company’s AquaBuOY wave energy devices. The project would have a generating capacity of 100MW, and total annual generation from the project is estimated to be approximately 175 gigawatt-hours per year. This is the company’s second Preliminary Permit on the west coast of the United States. The Coos County wave project in Oregon was granted a permit from FERC in 2007. Also, the Company holds an Investigative Use Permit for a wave energy project in Ucluelet, British Columbia.

To view the approved preliminary permit, please visit: HERE

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Geothermal to Help PG&E Meet Renewable Goal

DAVID R. BAKER, The San Francisco Chronicle, February 15, 2008

Pacific Gas and Electric Company will turn to Earth’s own energy to meet a looming state deadline for using more renewable power.

The utility is expected to announce today that it has signed an agreement with Calpine Corp. to buy more electricity from The Geysers geothermal field north of Calistoga, where steam heated deep underground powers electric generators on the surface.

San Francisco’s PG&E already buys power from The Geysers, and the amount added under the new contract isn’t much – roughly enough for 42,750 homes. But with it, 20 percent of PG&E’s contracts for future energy supplies will come from renewable resources.

And for California utilities, 20% is the magic number.

The state has ordered its investor-owned utilities to ensure that 20% of the power they sell comes from sources such as the sun, the wind, the earth or the ocean. PG&E, Southern California Edison and San Diego Gas & Electric all have until the end of 2010 to meet that requirement.

Getting there hasn’t been easy, and PG&E appears to be the first to do it.<

Southern California Edison has enough contracts to reach 16 or 17%, one of the utility’s spokesmen said Thursday. San Diego Gas & Electric did not respond to a request for information Thursday, but company officials warned last year that they would probably miss the state deadline.

“We’re proud to have reached this milestone, and we’re going to continue to add renewable energy to our power mix,” PG&E spokesman Keely Wachs said.

Even PG&E’s achievement comes with a caveat. The company now has enough power contracts to hit 20%, but some of those contracts won’t kick in until after the state deadline passes, delivering power to PG&E customers in 2011. That isn’t a legal problem. If a utility falls just short of 20% by the end of 2010, it can still comply with the law by overshooting the 20% goal the following year.

But that caveat underscores the difficulty utilities have had in meeting California’s ambitious renewable-energy goals. Simply put, the state does not have enough geothermal generators, wind farms and solar power plants to produce as much clean energy as California’s politicians and citizens want. More renewable-power projects have been proposed, but it’s an open question how many will get built.

“The state still faces some very real obstacles to bringing more renewable energy online,” Wachs said.

Many of the companies proposing large solar arrays or innovative ways to tap the power of ocean waves are relatively young, don’t have long track records of success and run into trouble finding financing for their projects.

It doesn’t help that government rules and incentives keep changing. For example, Congress still hasn’t decided whether to extend a tax credit that renewable-energy developers consider crucial. The credit expires at the end of this year.

“There has been a boom-and-bust cycle in renewable energy, in part created by Congress,” said Craig Kline, a partner at the Troutman Sanders law firm who specializes in alternative-energy financing. “If you want to do a project that won’t enter service until January ’09, right now you do it at your own risk.”

Even when a project has financing, the utilities can’t count it as a sure thing until it starts delivering power. A Canadian company last week backed out of a contract to sell PG&E electricity from a power plant under development in another corner of The Geysers geothermal field. Energy analysts speculate that Western GeoPower wants more money for the electricity than it would have received under the PG&E contract. The company’s president could not be reached for comment Thursday.

Calpine’s operations at The Geysers, in contrast, are a much safer bet.

Calpine, based in San Jose, owns 19 power plants at the geothermal field, which straddles the border of Lake and Sonoma counties. The field has generated electricity without interruption since 1960. PG&E used to own power plants there and stills buys power from the field, which is dotted with wells that bring subterranean steam to the surface.

Calpine recently started a $200 million effort to squeeze more energy from the field by upgrading old equipment and reboring some of the wells. The company also wants to tap areas of The Geysers that haven’t yet been drilled.

Calpine has endured its own financial problems, emerging from bankruptcy late last month. But the facilities that will supply PG&E with extra power already exist. Calpine also sells some of its power from The Geysers to Southern California Edison and the Sacramento Municipal Utility District.

“We certainly look at it as a very valuable resource,” Calpine spokesman Mel Scott said.

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PG&E Receives Approval for 585.5 MW of Projects

San Francisco, California, RenewableEnergyAccess.com, December 28, 2007

Pacific Gas and Electric Company (PG&E) announced that the California Public Utilities Commission (CPUC) has approved its four new renewable energy power purchase agreements (PPA). The four projects — three utility-scale solar and one geothermal — will generate approximately 585 megawatts (MW) of electricity for PG&E’s customers in northern and central California.

“We’re thrilled the CPUC has approved these renewable contracts and look forward to partnering with them as we continue to deliver more clean energy to our customers.” — Fong Wan, V.P. of Energy Procurement, PG&E

The first of PG&E’s four contracts is with Solel for a 553-MW solar thermal project to be located in California’s Mojave Desert. PG&E also announced two utility-scale photovoltaic solar power projects with Cleantech America, Inc. and GreenVolts, Inc. respectively. These two projects combined will deliver up to 7 MW of energy and will be completed in 2009. The fourth approved contract is with Western GeoPower Corp. for approximately 25 MW of geothermal energy from The Geysers Geothermal Field.

“As we look toward a carbon constrained future, we recognize the need to utilize a variety of renewable energy sources to meet our climate goals,” said Fong Wan, vice president of energy procurement at PG&E. “We’re thrilled the CPUC has approved these renewable contracts and look forward to partnering with them as we continue to deliver more clean energy to our customers.”

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