New Business Cycle Expected for Ocean Energy

After securing helpful policy items in the recently passed House-Senate energy bill, proponents of ocean energy are looking forward to an accelerated business cycle for the nascent renewable energy technology. The energy bill’s ocean provisions are the most recognition the federal government has given to the potential of ocean power in over 20 years.

U.S. Rep. Jay Inslee (WA) and the recently formed Ocean Renewable Energy Coalition called the energy bill provisions monumental and expect them to spur the industry. While Inslee ultimately voted against the overall energy legislation due to its significant subsidies for the oil, gas and coal industries, he was able to improve parts of the bill such as including ocean energy as one of the government’s priorities. The President is expected to soon sign the energy bill into law. “With over seventy percent of the Earth’s surface covered by oceans, we need to explore their clean energy potential as one solution to break us from our addiction to fossil fuels,” Inslee said. “In the process of developing ocean energy, we might be able to minimize the harmful effects of greenhouse gas-induced global warming on ocean life and our planet.” Given the considerable potential for ocean energy projects in Washington State, Inslee hopes the ocean incentives in the bill will encourage companies to expand exploration of ocean power projects in the region. Mercer Island-based AquaEnergy is currently in the process of developing ocean wave energy projects in Makah Bay in a partnership with the Makah Indian Nation and the Clallam County PUD. Among other companies that could explore ocean energy in Washington State are Ocean Power Technologies and British Columbia-based Blue Energy. Washington State has 157 miles of coastline and over 3,000 miles of interior shoreline, including Puget Sound and the Strait of Juan de Fuca. “America should be the world leader in developing and deploying ocean energy technology,” Inslee said. “Puget Sound’s human and natural resources make our area an obvious candidate to benefit from an investment in ocean energy.” One such example of how ocean energy could work in Washington State is that of Verdant Power. Verdant has deployed, on an experimental basis, six 36 kW tidal power turbine units that will temporarily supply power to two customers on New York City’s Roosevelt Island, at no cost. Puget Sound would be an attractive location for companies to deploy clean ocean energy projects. Clean energy groups have suggested that the Tacoma Narrows might have considerable potential as a tidal energy resource if the energy can be harnessed in a way that is not disruptive to the environment or marine animals. One of Inslee’s ocean power amendments will extend the renewable energy production tax credit to include ocean power produced from tidal, wave, current and thermal sources. Another Inslee amendment will expand the federal purchase requirement to ocean power produced from the sources mentioned above. A summary of the provisions in the energy bill that promote ocean energy: – A provision including ocean energy among the eligible sources in a section requiring that 60 percent of the funds in the Renewable Energy Production Incentive (REPI) program be used to pay utilities for renewable projects. This means that electric utilities can apply to the Department of Energy (DOE) for direct payments for electricity using ocean energy devices. – A section that makes ocean energy projects eligible to receive tax credits under renewable energy projects that employ new or significantly improved technologies as compared to commercial technologies in service at the time. The Energy Secretary may consult with the Treasury Secretary to offer loan guarantees for up to 80 percent of facility project costs. The bill authorizes the appropriation of funds necessary to provide loan guarantees for innovative technologies. – Research and development programs under the Secretary of Energy that will be based on increasing the conversion efficiency of all forms of renewable energy, decreasing the cost of renewable energy generation, promoting the diversity of the energy supply, decreasing the dependence of the United States on foreign energy supplies, improving energy security and decreasing the environmental impact of energy-related activities. Ocean energy is listed under potential projects. – A section mandating that the federal government receives 7.5 percent of total power consumption from renewable energy, which includes ocean energy, by 2013. – A section authorizing local governments to apply for grants to use renewable energy sources, including wave power but not other ocean energy sources, to increase energy efficiency. * A section that requires the Secretary of the Interior to enter into a contract with the National Academy of Sciences under which the National Academy will study the potential of developing wind, solar and ocean energy resources on available federal land. – A section directing the Secretary of Energy to annually review the available assessments of renewable energy resources within the United States, including solar, wind, biomass, ocean (tidal, wave, current, an thermal), geothermal and hydroelectric energy resources. – A section under which the Secretary of Energy will identify and evaluate strategies or projects with the greatest potential for reducing the dependence on imported fossil fuels, including the increased use of renewable energy sources such as wave energy, but not other ocean energy sources. Separately, Congressman Inslee is promoting clean energy legislation for the 21st Century called the New Apollo Energy Act. Among other items, New Apollo provides $49 billion in government loan guarantees for the construction of clean-energy generation facilities that will produce power from ocean, wind, solar, geothermal, biomass, coal with carbon-sequestration technology, and other sources. Inslee’s legislation will use new tax incentives and market-based assistance, along with energy performance standards to address three challenges to America: creating clean energy manufacturing jobs, decreasing dependence on foreign oil, and reducing greenhouse gas emissions. For more information on Rep. Inslee’s New Apollo Energy Act, see the following link.
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