September 3rd, 2013By Elizabeth Case
Last September, with great fanfare, Ocean Power Technologies began construction on America’s first wave-powered utility. Holding the first – and only – wave energy permit from the Federal Energy Regulatory Commission, OPT had planned to deploy a test buoy off the coast of Reedsport by spring.
Ocean Power Technologies PB150 PowerBuoy®
But a year after the permit, regulatory and technical difficulties have all but halted the project. Federal regulators notified the company earlier this year it had violated the license after failing to file a variety of plans and assessments.
All that remains in the water are pieces of a single anchoring system on the ocean floor. State officials have told the New Jersey company to remove them by month’s end.
Leading a new industry has been rough sailing for OPT, as state and federal agencies scramble to write policies for marine energy, and coastal communities worry about fishing grounds and environmental protection. Powerful enough wave technology that can elbow a niche in the energy industry remains a work in progress.
And now, after missing multiple, self-imposed deadlines since it went public in 2007, OPT now makes vague promises to test their first buoy in Oregon waters no later than 2016.
“It’s tough fighting with a new technology,” said Kevin Watkins, the company’s Oregon representative.
Three years may still be an ambitious goal. Belinda Batten, director of the Northwest National Marine Renewable Energy Center in Corvallis, estimates wave energy could be commercially viable on the West Coast by 2020 — at the earliest.
Oregon is particularly situated for wave energy: Its established grid infrastructure, the powerful west-to-east waves that hit along the shore and coastal population provide an easy market, says Jason Busch, director of Ocean Wave Energy Trust. The state raced to become a leader in wave energy technology, with proponents claiming it could inject $1 billion plus a year someday into the state economy. However, a 2008 moratorium on federal wave energy utility permits for Oregon stalled the industry in-state.
“Nobody in their right mind would try to set up shop here without the opportunity to develop,” says Busch, whose nonprofit focuses on the wave energy development in Oregon.
Since OPT started its permitting process in 2007, it beat the moratorium, leapfrogging its competition. The project eventually aims to power 375 homes with 10 wave-harnessing buoys with tentative plans for a much larger installment.
It’s an advantage with an expiration date. Now that the state Land Conservation and Development Commission has adopted the hotly debated Territorial Sea Plan, the moratorium could lift in the next couple of years. The plan sets aside about 22 square miles for marine energy development.
Another sign of a faster track for wave projects: On Aug. 1, Senators Ron Wyden, D-Ore., and Lisa Murkowski, R-Alaska., introduced legislation to streamline regulatory processes for ocean, lake and river energy proposals.
But the Reedsport wave project has been slowed by more than regulations.
In 2007, OPT projected it would deploy its first wave buoy by mid-2009. The launch was quickly pushed back as the company worked to secure state and federal permits, and successfully tested two buoys, in Hawaii and Scotland, the latter a prototype of those planned for Reedsport.
Last fall, OPT began to install the anchors for its first buoy. Wave power seemed within reach.
But almost immediately, foul weather and technical difficulties delayed construction. Then in February, OPT temporarily lost track of one of the three anchors. The scare sparked a state law to require ocean renewable energy companies to set aside funds for equipment recovery.
Their troubles came to a head in June when FER ordered OPT to stop the installation until it files the proper paperwork. At the same time, the Department of State Lands told OPT to sweep up the remains of the anchor system and restart when the technology is ready and the legalities resolved, says Chris Castelli, an analyst for the department.
Meanwhile, the 140-foot long buoy sits ready and waiting at Oregon Iron Works’ Vancouver site.
While the federal government has long-established regulations and relations for traditional power providers, FERC is still figuring out how to handle marine energy, said Carolyn Elefant, counsel to the Ocean Renewable Energy Coalition, a national trade association for marine energy. The resulting slow process can sink companies pushing new technology who might not have pockets deep enough to fund years of permit approvals while sustaining research and development, she explained.
John Hull, the executive director of the Business Innovation Institute at the University of Oregon, attributes some of OPT’s troubles to jumpstarting any new industry.
“Disruptive innovations within established industries always face a bit of an uphill climb,” he says. “But it’s always disrupters that end up changing the industry.”
Setbacks this year have likely increased financial pressure on the Reedsport project, which has received at least $4.6 million in grants from the U.S. Department of Energy and $500,000 from PNGC Power, a group of local utility co-ops. Ocean Power Technology’s annual reports show about a $10 million per year losses since it went public in 2007. The 2012 report also said: “If we are unable to raise additional funds when needed, our ability to operate and grow our business could be impaired.”
How, when and who will tap the state’s wave energy first has become a lot murkier. Still, despite the difficulties of being the first out of the gate, Hull thinks OPT gained a significant competitive advantage by staking the first claim in Oregon’s energy-rich waves.
“There’s an awful lot of water on earth, but there’s only so much right water,” Hull said.