Less than two years ago, Ocean Power Technologies appeared on the brink of launching the first U.S. wave-energy power project, in Oregon. Now the whole thing seems to be falling apart.
While still leaving open the chance it will install an initial single, non-grid connected, power-producing test buoy, as well as a possible expansion to 10 grid-connected, 150-kilowatt buoys, OPT last week informed the Federal Energy Regulatory Commission that it was surrendering its preliminary license to pursue the third and ultimate phase of the project, a 100-buoy, 50-megawatt, utility-scale wave power station on the ocean [PDF].
The plan fell victim to a cascading series of problems the company has experienced in fulfilling its timetable on the first two phases of the project, according to the OPT’s Feb. 28 FERC filing.
“Due to unforeseen delays in Phase I Project implementation and associated studies, as well as increased project-related costs … the Phase II consultation and licensing processes have been severely impacted,” the company said. “(B)ecause the Phase I and Phase II studies and monitoring prescribed in the Reedsport Settlement Agreement were intended to inform consultation and licensing of a final, expanded Phase III Project, that final stage has also been severely impacted.”
Phase I, the initial 150-kilowatt test buoy, was supposed to go in the water two and a half miles off the coast near the town of Reedsport in late-summer or early-fall 2012. The impending launch generated considerable excitement and hope in Oregon, where the state had invested several million dollars in seeding the ocean-energy industry. At the time, Jason Busch, executive director of the Oregon Wave Energy Trust, which had provided some $436,330 [PDF] in funding to OPT – told the New York Times, “All eyes are on the O.P.T. buoy.”
But the OPT PowerBuoy, more than 100-feet long, never made it out of the Portland-area where it had been built. First came reported weather delays, then setbacks with the mooring system. By June the following year, the state of Oregon had requested that OPT remove the parts of the buoy system that had gone in the water in September 2012, telling FERC, “it appears that OPT is a little over 3 years away from deploying a buoy.”
The Oregon project definitely appears to be far from top of mind for New Jersey-based OPT. In its most recent quarterly reporting, the project barely got a mention, with OPT saying simply that the Reedsport project “has been suspended pending resolution of regulatory, financial and other matters.” The company has been talking much more of late about a planned Australian project.
While it’s easy to mock OPT for its failure to make good on its promised Oregon project – especially given that the company, by its own admission, “has incurred net losses and negative operating cash flows since inception” in 1994, and as of April 30, 2013, had accumulated a deficit of $140.7 million – it’s important to remember that building any power plant in this day and age can be difficult. Throw in a new, untested technology like wave energy, then add in the further complicating factor of making it all happen in an area of the ocean prized by both environmentalists and marine industries, and you can see the scope of the challenge.
Even though OPT had worked extensively with stakeholders and regulatory agencies on its permitting, and had big support from the state, a representative of the Oregon Dungeness Crab Commission told the news service EarthFix that the surrender of the Phase III permit by OPT was “a victory for the crabbing and fishing communities.” Under the Territorial Sea Plan adopted by Oregon last year, which includes designated zones for the development of renewable energy on the ocean, the portion of ocean OPT had planned to use for its 50-buoy array will become a Resources and Uses Conservation Area.