Sauer observes that “we’re at something like $13,000 per installed [tidal-energy] kilowatt, now, and we think that, by 2020, that figure will be below $4,000 per installed kilowatt.”
Sauer, a structural engineer who previously designed, developed, and managed major power projects, particularly co-generation plants, pointed out that a portion of the 21.5-cent price reflects the state’s Ocean Energy Act mandate for tidal-energy demonstration projects (and other marine-energy initiatives) to invest in the state’s economy.
As the PUC’s “term sheet” says, ORPC is required to, among other things, “create and/or retain at least 80 full-time equivalent jobs in Maine during the development, construction and installation of the [p]roject.” A failure to deliver on those, and other, commitments will result in “financial payments … not to exceed 7% of total revenue in any given year.”
The mandates were originally recommended by the Ocean Energy Task Force empanelled by then-Gov. John Baldacci in 2008. Sauer, who co-founded ORPC in Florida while working as an energy consultant, said “Maine’s support for tidal energy development was a critical factor in our selection of Maine for our [Portland] headquarters. And, obtaining the terms of these power purchase agreements would not have been possible without the enactment of the state’s marine energy policies – which passed the House and Senate unanimously.”
Maine’s Ocean Energy Act, Sauer added, “has set a precedent for the entire country.”
Carolyn Elefant, co-founder and Legislative and Regulatory Counsel to the Ocean Renewable Energy Coaltion in Washington, D.C., told AOL Energy that the energy from “waves, tidal power, and other hydrokinetic resources could supply up to 6 percent of the nation’s electric power. But it’s very difficult to pin down the potential for any specific hydrokinetic resource because there’s so much variability from site to site, and you have to remember that the technology is so new that there’s a possibility of capturing more of the potential from [hydrokinetic] resources than there currently is.”
Funding this technology is also an issue. Besides the 30-percent investment tax credit offered by the Treasury Department, ORPC obtained a $10 million, Department of Energy matching grant for the project. But President Obama’s fiscal year 2013 request for DOE’s Water Power Program was only $20 million – a decline of 66 percent from the previous fiscal year.
But Elefant notes that, thanks to “heroic lobbying efforts,” the House and Senate appropriations panels have more than doubled the funding proposal (which is now in conference committee). The Senate’s $59 million proposal, Elefant said, includes $44 million for marine and hydrokinetic research and development; the House proposal allocates $25 million for this research.
Meanwhile, ORPC is preparing to launch a 600-kilowatt demonstration project in Alaska’s Cook Inlet. The project is expected to launch in 2014, after which it will be expanded to 5 megawatts. In a Canadian project, ORPC is planning to install 1.05 megawatts of capacity in the Bay of Fundy.
While “a lot of energy technology companies are thinking in terms of utility-scale projects,” Elefant says, “there’s an increasing recognition that technologies like tidal energy, along with the export potential of that technology, are appealing even if the projects aren’t necessarily built to utility scale.”