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Innovators Develop Second Wave of Ocean-Based Energy

Trevor Curwin,|Special to CNBC.com
Sunday, 18 Apr 2010 | 12:05 PM ET

Like a deep-sea fisherman of the past, UK-based Aquamarine Power believes it has conquered the cruel environment of the world’s oceans to bring almost limitless clean energy ashore.

AquaMarine's Oyster technology.
Source: Aquamarine Power
AquaMarine's Oyster technology.

“Two concepts make it stand out—designed simplicity, and inherent survivability,” says Aquamarine CEO Martin McAdam about the Oyster, its new wave-powered generating technology.

In a tough operating environment that has crushed or drowned many competitors, the Oyster is currently generating energy off the Orkney Islands in northern Scotland by taking the radical approach of leaving the electricity-producing components of its power plant on land.

“This is one of the main challenges facing all ocean energy technologies—how to ensure devices will survive,” he says.

The Oyster’s core is a buoyant, hinged flap that sways backwards and forwards in the waves near shore. This motion drives two hydraulic pistons which push high pressure water onshore to drive a conventional hydroelectric turbine.

That keeps the production end of the equipment—the generator, converters, transformers and circuit breakers – high and dry onshore for easy maintenance and operation.

“In essence, the Oyster is simply a large pump which provides the power for a conventional hydroelectric plant,” says McAdam. “There are only seven moving parts offshore—a hinge, two hydraulic pumps that pump the high pressure water to the shoreline and four valves.”

Despite McAdam’s cutting edge technology, the promise of harvesting ocean energy from waves, tides and currents is not new.

For several decades, many test projects have been tried but few achieved scalability, with most concepts succumbing to the operating environment and to high costs of production.

Peter Asmus, an analyst with cleantech research firm Pike Research, says the industry is only now getting starting to build a new generation of technologies, like the Oyster,

“[One] 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,” he says.

The resource is clearly abundant. The Electric Power Research Institute, an independent energy research organization, estimates that the U.S. could produce 10 gigawatts of wave power and 3 gigawatts of tidal power within 10 years.

That would be enough to produce six percent of U.S. electrical demand—similar to the amount provided by hydroelectricity today. Tidal power could replace another three percent of that demand.

Europe Leads Race

Currently, most ocean energy development takes place in Europe, spurred by cap-and-trade policies that make renewable energy price-competitive and by governments racing to subsidize the nascent sector.

“While wave and tidal developers are offered lavish subsidies amounting to about 30 cents per kilowatt hour in Europe, the U.S. currently offers a measly one cent per kilowatt hour on top of wholesale rates,” says Pike’s Asmus, pointing out that it is about half of the subsidy offered to onshore wind power projects, “a fully commercialized technology,” he says.

McAdam is happy to take advantage. He calculates the Oyster could generate in excess of 50 gigawatts of power worldwide, “giving us an estimated accessible global market of $190 billion for our technology alone.”

But even if the technology proves itself, large-scale ocean energy projects face the same hurdles that such projects face on land—a spotty transmission grid and a financing crunch still thwarting many big infrastructure projects.

One savior may be a competing renewable energy technology: offshore wind power

Offshore wind projects mount proven and scalable wind turbine technology on platforms at sea. These could work in conjunction with ocean energy systems like Aquamarine’s Oyster, providing crucial infrastructure to make wave and tidal power more viable.

“It could be offshore wind projects finance the transmission lines and [ocean energy] piggybacks on that,” says Asmus.

The mix of the two renewable power sources makes them more reliable to electricity consumers, says Aquamarine’s McAdam.

Advantages To Rivals

“One of the advantages of wave energy is that it is complementary to wind,” he says. “Waves are created by weather systems far out at sea, and very often when the wind drops, waves increase.”

He says waves are more predictable than wind, adding that “the more sources of green energy you have in the energy mix, the less intermittent it becomes.”

Michael Kanellos, researcher and editor-in-chief with research firm Greentech Media/GTM Research, says that even with those benefits it will still be tough to attract investment for ocean power.

“You’re trying to build something in the world’s worst environment,” he says. “If you’re going to build offshore, you could build offshore wind [more easily]. It’s going to be tough going up against offshore wind.”

He adds this will likely be a niche technology for years to come, with projects deployed in very specific locales to generate power to sell into the wider power grid, or to provide local energy for more remote communities less connected to the grid.

“Some of the best tides in the world are unfortunately on the most unpopulated coastlines,” Kanellos says.

While he’s all for synergy between offshore wind and wave power, McAdam isn’t asking for any favors.

“Our goal is to produce wave energy that is cost-competitive with offshore wind,” he says. “We are a few years off that yet, but we estimate that by 2017, our technology costs will have reduced sufficiently to meet that goal.”

And it may have been a long time coming, but says the opportunity is much closer today than it has been.

“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,” he says. “We need wind, we need solar, but we should also be smart and be in a good position to tap the immense power of our oceans.”