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Building a Marine Renewables Industry in the United States:  The Need for A "Third Wave" Regulatory Process
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Building a Marine Renewables Industry in the United States: The Need for A "Third Wave" Regulatory Process


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Emergence of a robust marine renewables energy industry has been stymied in part by a regulatory process better suited for large, well funded entities. This paper presents my first phase of work on a …

Emergence of a robust marine renewables energy industry has been stymied in part by a regulatory process better suited for large, well funded entities. This paper presents my first phase of work on a Third Wave model of regulation for marine renewables, as well as other future renewable technologies that may be developed

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  • 1. Carolyn Elefant Law Offices of Carolyn Elefant Washington D.C. TJOGL Symposium, Austin TX February 15, 2007 Building a Marine Renewable Industry in the United States Need for a 3rd Wave Approach to Regulation
  • 2. Marine Renewables
    • What are marine renewables?
    • Where are marine renewables located?
    • Why develop marine renewables?
    • How do we build a marine renewable industry?
  • 3. What Are Marine Renewables?
    • Marine renewable energy is an umbrella term that encompasses energy from:
    • natural movement of waves, tides and currents in oceans, tidal areas and other bodies of water
    • Temperature differentials in ocean (ocean thermal energy conversion)
    • offshore wind
  • 4. Types of Wave Energy Technology Point absorbing device (buoy) Aqua Energy Wave power absorbed at point Power take off Floating or bottom mounted Point absorber Ocean Power Technologies Multi-point absorber Wave Star
  • 5. More Wave Energy Technology
    • Floating Attenuator
    • Long floating device oriented parallel to waves
    • Motion pumps fluid to hydraulic motors that drive generator
    • Pelamis, Ocean Power Delivery (OPD)
  • 6. More Wave Energy Technology Energetech Port Kembla Project Limpet in Scotland (shorebased) Operating since 2000, 500 kw plant (powers 500 homes) Oscillating Water Column Waves enter channel Change in air pressure drives bi-directional turbine (e.g., Wells Turbine)
  • 7. More Wave Energy
        • Ramp over which waves topple
        • Reservoir
        • Conventional hydro turbines at the bottom of the reservoir
        • Wave Dragon, Denmark,
  • 8. Types of Tidal Power Technology
    • Uses tides or currents to generate power
    • Based on similar principles as wind, but with water as denser medium
    • In-stream potential
    Marine Current Technologies (dual turbines) Verdant Power Turbines (East River) Gorlov Turbine
  • 9. Ocean Thermal Energy Conversion
    • Generates power through changes in temperature between cold sub-surface water and warm surface water
    • Best suited to tropical climates
    • Was lead technology of 1970s, never fulfilled promise
    • Projects operating in Hawaii and planned
  • 10. Offshore Wind
    • Operating for over ten years in Europe, 529 MW installed as of 2003
    • Projects planned for Nantucket, Long Island, Gulf of Mexico off Texas
    • US potential estimated as at least 907 GW by NREL
  • 11. Where are marine renewables globally?
    • 2.75 MW Pelamis project under construction in Portugal
    • Iberdrola/OPT planning 2 MW pilot project for Spain
    • 500 kw Limpet and 400 kw Pico Island
    • Marine Current Turbines – tested 30 kw turbine, recently obtained siting approval for 1 MW turbine
    • Wave Dragon overtopping connected to grid, tested in Denmark and UK, scheduled for deployment in 2007
    • 400 kw Fort Kembla, Australia Project
    • European Marine Energy Center (EMEC) test site with grid connection for wave and tidal projects
  • 12. Where are marine renewables globally?
  • 13. Where are marine renewables in the United States?
    • Verdant Power/Roosevelt Island Tidal Project: deployed two 30 kw turbines in December, generated 10 MWh for grocery store (4 year permit process)
    • AquaEnergy/Makah Pilot (1 MW) – filed license application after 4 year process
    • OPT – brief operation of project on naval base in HI
  • 14. Where are marine renewables in the United States?
    • Gold Rush: following EPRI Report, May 2006 identifying optimal tidal sites in US, over 30 preliminary permits to study sites have been filed with Federal Energy Regulatory Commission
    • Permits for wave projects filed by AquaEnergy and OPT off coasts of Oregon and Washington State
  • 15. Where are marine renewables in the United States?
    • Interested states:
    • Oregon (OSU wants to have test site)
    • Florida Atlantic University ($5 million in funds to serve as Center of Excellence for ocean energy
    • Alaska held conference on tidal energy in Jan. 2007
    • San Francisco eyeing project for SF Bay/Golden Gate Bridge
    • Hawaii/Navy – retain interest in OTEC
    • NY/Long Island – Verdant Project and Long Island sound projects under exploration
  • 16. Follow the money….
    • Large companies invest in marine renewables in 2006:
    • GE buys a stake in Ocean Power Delivery
    • Voith Siemens invests in Wavegen/Limpet
    • Finavera Renewables acquires AquaEnergy
  • 17. Why pursue marine renewables?
    • Close to load
    • Huge, untapped renewable potential (preliminary studies show 2100 TW hours of wave energy), not even fully assessed
    • Less intermittent than wind, intermittency is more predictable
    • Can be deployed modularly, or for DG purposes
    • Minimal environmental impacts expected
    • Projects can revitalize coastal communities
    • Opportunities for export of technology to Europe, Asia and Third World countries (e.g., OPD sites project in Portugal, OPT in deal in Spain)
  • 18. How do we build a marine renewables industry in the United States?
    • Present impediments
    • Need for a Third Wave
  • 19. Present System: Regulatory Purgatory
  • 20. Current Regulatory Scheme
    • Characterized by:
      • Regulatory Overkill
      • High Regulatory Cost
      • No exemptions for demo or pilot projects (to date)
      • Efforts at site banking
      • Lack of government support or programs
      • Overlapping Jurisdiction
  • 21. Current Regulatory Scheme
    • Overlapping Jurisdiction:
        • MMS vs. FERC
        • FERC vs. states
  • 22. MMS v. FERC
    • MMS Jurisdiction
    • 2005 Energy Policy Act gives MMS jurisdiction to issue leases for renewable energy projects on Outer Continental Shelf (3 miles offshore generally, 10 miles off coast of Texas and Florida
    • FERC Jurisdiction
    • Section 23(b) of Federal Power Act requires license for projects on navigable waters or federal lands that produce power from water. FERC says navigable waters are up to 12 miles offshore.
    • Traditionally, FERC licenses dams. Says that non-impounded wave and tidal are hydro because a buoy is a powerhouse.
  • 23. MMS v. FERC
    • Who has jurisdiction on OCS?
      • MMS says it has exclusive jurisdiction (files protest at FERC in January 2007 challenging FERC’s effort to license projects on OCS.
      • FERC says that MMS issues lease, but FERC still issues a license
      • Problem with FERC approach: dual regulation for wave/tidal on OCS, but not for other OCS renewables
  • 24. FERC v. State
    • FERC issues preliminary permits to applicants to study sites, and licenses to construct
    • States have coastal zone programs in place; FERC authority can usurp state siting powers
    • Some states upset that developers obtained permits to study tidal sites from FERC rather than giving local community a voice
  • 25. Regulatory Overkill: What’s wrong with this picture?
  • 26. Regulatory Overkill/Cost
    • Projects subject to same regulation as mammoth, fossil fuel plants
    • Multiple state and federal laws apply (see attached handout)
    • Cost of environmental compliance is around 40 percent of project cost – a turn off for investors!
  • 27. Lack of Exemptions or Streamlining
    • Developers need to get demos into the water to test in real world condition; no streamlining or exemptions for small projects
    • Catch 22: Agencies reluctant to license demos without data on impacts, yet developers can’t gather data without operational testing
  • 28. Site Banking Issues
    • In aftermath of EPRI report on tidal power, speculator companies staked claims to sites round the country
    • FERC has not decided on claims, lead to delay at sites in Maine, Oregon and San Francisco where local communities were committed to progress
    • Decision/rulemaking on FERC agenda today (Feb. 15, 2007).
  • 29. Lack of government support
    • DOE has not had designated marine renewables staff since 1995.
    • Some $s for projects through earmarks and SBIR grants, but none for industry research, which continues for wind
    • Lack of tax benefits like Production Tax Credit, Investment Tax Credit gives private investors that marine renewables are not on par with other renewables
  • 30. Time for a Third Wave….
    • What is the “third wave?”
    • Alvin Toffler’s theory of social transition:
      • First Wave: Agrarian Society
      • Second Wave: Industrial Society
      • Third Wave: Information Age, the “You” Generation (personalization)
  • 31. How is the Third Wave Relevant to Regulation?
    • Second Wave
    • Developers pay all regulatory costs as “cost of doing business”
    • Money thrown at regulatory process, passed on to ratepayers
    • Big plants are better
    • Lack of agency cooperation
    • Third Wave
    • Should emerging technologies bear the cost of gathering information that builds a socially valuable industry?
    • Are there inherent benefits to smaller projects?
    • Will regulation stifle smaller, nimbler companies?
    • Technology enables coordination/information sharing
  • 32. Some Third Wave Ideas
    • Information gathering through programmatic assessments
    • Public funding for adaptive management to allow studies of impacts post-deployment and gather data for public benefit (helps tailor process)
    • Promote government efficiency through MOUs and joint renewable offices, share data and interact through collaborative tools like wikis and web based meetings
  • 33. Information Gathering
      • Now, information gathered by developers for their exclusive use and benefit
      • Fund public agencies like MMS, FERC or DOE to gather information for industry benefit. Agencies can conduct programmatic environmental impact statements to rule out environmentally sensitive regions and identify optimal resources.
  • 34. Tailored Processes
    • Rather than one size fits all permitting (with same standards for fossil fuel and small marine projects), recognize proportionality, impacts of marine renewables less severe
    • Public funding for adaptive management to address uncertainties – some studies, but then site project, with ongoing study, mitigation and even removal for adverse impacts. Use information gained to further the industry.
  • 35. Use of Technology to Combat Bureaucracy
    • Use technology to force agency coordination:
    • --MOUs and Joint Permitting task forces
    • reinforce information sharing and collaboration through wikis and web conferencing
    • --With widespread information, agencies should be able to coordinate and share responsibility instead of duplicate
    • Use technology to educate communities on benefits of renewables and drive support
  • 36. A New Perspective for Energy Development
    • What’s the value of building a new industry?
    • What’s the value of a new source of renewable energy that diversifies supply?
    • What’s the value to encouraging success of small innovative companies?
  • 37. Final Thoughts
    • Will we catch the third wave and work to build a marine renewables industry? Or will we be left standing onshore. The choice is ours.