Oregon wave project permit surrendered

The developer of a proposed large wave energy project off the Oregon coast has surrendered a key federal permit for the project.

Waves lap islands off the Maine coast near Casco Bay, a more sheltered site than that proposed off Oregon.

Ocean Power Technologies subsidiary Reedsport OPT Wave Park, LLC had proposed a 50 megawatt project in the Pacific Ocean off the central Oregon coast.  This larger project was intended to follow on the heels of OPT's "Phase I" development, a 1.5 megawatt non-grid connected pilot project which in 2012 became the first U.S. wave project to win a license from the Federal Energy Regulatory Commission.

OPT also won preliminary permits from the FERC to study the feasibility of larger projects off Reedsport, including a 15 megawatt "Phase II" and the 50 megawatt "Phase III" project.  OPT's Phase III preliminary permit gave it three years to study the feasibility of the "Reedsport Expanded Project", after which OPT could seek a license to develop and operate the larger scale phases.

That permit was set to expire on February 28, 2014.  Given the technological, permitting, and community engagement challenges raised by developing any advanced energy project, many permittees find that they need more than 3 years to study a site.  The FERC allows such developers to seek successive preliminary permits, effectively extending the due diligence period for qualified developers able to show real progress.

But based on a February 28, 2014, FERC filing, OPT announced that it would not seek a successive preliminary permit at this time, and would instead surrender the Phase III preliminary permit.  In its filing, OPT acknowledged the significant efforts made by the state of Oregon to facilitate wave energy projects, but noted the challenges interposed by a cascading series of unforeseen delays:delays in the Phase I study and development processes, resulting delays in the Phase II consultation, licensing, study, and monitoring processes, and "increased project-related costs."  Ultimately, OPT noted that while it continues to evaluate its Phase I and Phase II implementation options, "OPT's plans for an expanded Phase III Project are sufficiently uncertain at this time that the company cannot justify requesting an additional three-year preliminary permit extension."

Meanwhile, last month another OPT affiliate announced an agreement with Lockheed Martin to develop a 62.5 megawatt wave energy project off the coast of Australia.  While it is tempting to read between the lines and surmise that the Australian permitting process, culture, or site conditions are more favorable than those in Oregon, OPT has given no concrete indication that this is the case.  Estimates of U.S. wave energy potential remain large -- with at least one report identifying a total available wave energy resource of 2,650 terawatt-hours per year.  Whether or not the expanded Oregon project returns to active development, the size of the resource points to continued interest in developing the U.S.'s marine renewable energy resources.

Wave energy project in Australia advances

What may become the world's largest electricity generation project to rely on the power of ocean waves is moving forward in Australia, as Lockheed Martin has announced that it has signed a contract with Victorian Wave Partners Ltd. to develop a 62.5-megawatt project off the coast of Victoria, Australia.

Waves off the coast of Maine.

The world's oceans contain significant amounts of energy, embodied in waves, tides, and currents.  Winds blowing over the seas also contain substantial energy.  Given the immense size of these marine renewable energy resources, extracting useful power from the oceans offers significant potential to serve society's needs without relying on fossil fuels.  Early projects, like the 2008 Aguçadoura Wave Farm off Portugal, sought to demonstrate the feasibility of wave energy conversion, but the rigors of the marine environment, need for advanced technologies, and costs of developing a wave energy project have limited development of wave and other hydrokinetic energy resources.

Today's announcement by Lockheed Martin of a project development agreement with Victorian Wave Partners Ltd. envisions a much larger project than has previously been developed anywhere in the world.  Victorian Wave Partners is an Australian special purpose company owned by Ocean Power Technologies Australasia Pty Ltd., an affiliate of U.S. company Ocean Power Technologies or OPT.   OPT's PowerBuoy wave generation technology uses a buoy that moves up and down in ocean waves to capture mechanical energy.  This mechanical energy is used to power an electrical generator, whose electricity is transmitted to shore via an underwater cable.  OPT has proposed projects relying on its PowerBuoy technology off the coast of Oregon in the U.S., and has tested its technology off Hawaii, New Jersey, and Scotland.

The Victoria project is scheduled to be developed in three stages.  The first stage is expected to produce approximately 2.5 megawatts of peak power by 2014 or 2015, with subsequent stages designed to build up to 60 additional megawatts of peak capacity by 2018 or 2019.  The project relies in part on funding from the Australian Renewable Energy Agency or ARENA.  Australia has established a goal of relying on renewable energy for 20 percent of its needs by 2020.  ARENA offers funding to qualified renewable energy projects capable of helping the island nation meet this goal.

While the Victoria project may become the world's largest wave energy project to date, other projects in Australia, Scotland, and the United States are moving forward.  Will waves soon contribute meaningfully to the world's portfolio of energy resources?