Tidal power past, present, and future at Tide Mill Institute 2013

The Tide Mill Institute held its ninth annual conference this past Friday and Saturday.  About 60 people interested in the past, present, and future of tidal energy gathered at the Topsfield Historical Society's Gould Barn in Massachusetts.  The audience included developers of recreated historic tide mills and modern tidal power projects, inventors of tidal turbine technology, academics, state legislators, historians, architects, and other enthusiasts of tidal power.

Tide Mill Institute's John Goff speaks about historic tide mills in Salem, Massachusetts.

Ocean Renewable Power Company's president and CEO, Chris Sauer, gave the keynote presentation on ORPC's efforts and success in developing modern hydrokinetic tidal power plants in the Gulf of Maine and elsewhere.  Chris described the research and development process that led to ORPC's Turbine Generator Unit or TGU.  He also described the engineering, regulatory, and commercial challenges of developing tidal power plants today, as well as ORPC's approach to overcoming these challenges.

Other presentations included: Professor Kerr Canning's exposition of a tide mill site he discovered on the Apple River in Nova Scotia; Professor Robert Gordon's look at tide mill mechanics at sites in York, Maine; a review of tide mill history on the Gowanus Canal in Brooklyn, New York, by Angela Kramer of the Brooklyn Historical Society and Proteus Gowanus; and a survey by representatives of local historical societies of tide mills on the North Shore of Massachusetts.

Tide Mill Institute members and attendees also enjoyed displays on historic and modern tide power projects, and informal discussions of archaeological discoveries and modern developments. 

The Tide Mill Institute will hold its 10th annual conference in 2014.

Japan's floating offshore wind turbines

A recently-installed floating wind turbine off the Japanese coast marks the second operating floating project in Asia.  Located about 12 miles off the coast of the site of the 2011 Fukushima nuclear power disaster, the government-funded project is being developed by a consortium led by Marubeni Corp.  So far, it consists of a single 2-megawatt Hitachi turbine coupled with a floating substation, with near-term plans to add two 7-megawatt Mitsubishi Heavy Industries Ltd. turbines, and a longer-term vision of installing 1,000 megawatts of capacity.

The Fukushima project follows a 2-megawatt floating offshore wind project installed off Nagasaki.  The Nagasaki project is located about 1 kilometer off the island of Kabashima, a 9-sq.-km island with some 110 households, and followed a 100-kilowatt test project deployed in 2012.

Japan's push for offshore wind development is motivated in large part by the Fukushima nuclear disaster.  Before 2011, nuclear power provided about 30% of Japan's electricity, but all 54 of Japan's nuclear reactors were shut down or inoperable after the disaster.

As an island nation with extensive coastal resources and little if any native fossil fuels, offshore wind may be a natural fit for Japan.  Relatively deep waters surrounding Japan make seabed-mounted towers impractical, so floating platforms may enable greater use of renewable wind energy.  The floating pilot projects off Nagasaki and Fukushima are designed in part to test different technologies, and may help reduce the costs of future projects.

Under the Japanese approach, each of these projects is funded by a separate ministry: the Fukushima project is supported by the Ministry of Economy, Trade and Industry, while the Nagasaki project is funded chiefly by the Environment Ministry.

Will Japan continue to develop its deepwater offshore wind resources?  Will floating platforms and turbines play a significant role in powering Japanese society?  Will the pilot projects lead to engineering and manufacturing knowledge that could place Japan at the forefront of the growing deepwater offshore wind industry?

Massachusetts to develop wind energy siting guidance

As interest continues to grow in the generation electricity from wind energy, the siting of wind projects is an important issue.  While producing power from wind energy avoids the use of fossil fuel along with the emission of carbon dioxide and other pollutants, society has an interest in ensuring that wind projects are developed responsibly and in appropriate locations.  Regulation of sites for wind energy development generally occurs at the state and local levels, and some observers - both wind developers and opponents of specific wind projects - have complained of bad results from a patchwork of regulations, some of which are not based on good science.

Wind turbines in Ipswich, MA, visible across Plum Island Sound from the Parker River National Wildlife Refuge.

In Massachusetts, the state Department of Public Utilities has launched an initiative to remedy this defect.  On October 31, 2013, the Department opened an investgation into best practices for the siting of land-based wind energy facilities.  According to the Department's notice:

The investigation will result in the development of wind energy facility siting guidance based on sound scientific, technical, and policy information. Specifically, the Department will examine the following topics related to land-based wind energy facilities: design, environmental and human health, safety, construction impacts, socio-economic impacts, decommissioning, and the review process for wind projects.

The Department has docketed this case as D.P.U. 13-165, Investigation into Best Practices for Siting of Land-Based Wind Energy Facilities, and has solicited public comment by December 6. Following receipt and review of the comments, the Department anticipates holding public hearings beginning in January.

The guidelines developed through this process will shape the siting and development of land-based wind projects in Massachusetts.  Massachusetts has a strong commitment to renewable energy, as evidenced in the Green Commnities Act, its renewable portfolio standard, and in public sentiment.  That said, to date most wind power consumed in Massachusetts comes in the form of renewable energy certificates representing power generated from wind facilities in Maine and other states, largely due to the relative difficulty of siting a wind energy project in Massachusetts.  Will this process lead to more wind energy development in Massachusetts?

 

Yellowstone park proposes utility upgrades

The U.S. National Park Service manages over 84 million acres of land for both conservation and visitor use.  For wilderness parks, these joint objectives lead to the challenge of providing park facilities with electricity despite their remote location.  The Park Service has launched energy efficiency and sustainability programs, but many visitor and administrative facilities still need electricity for safety and comfort.  How should the Park Service balance conservation and development?

Old Faithful geyser erupts in Yellowstone National Park.

Yellowstone National Park, the nation's first park, highlights the difficulty.  Most facilities in the park receive electricity from transmission and distribution lines owned by utility NorthWestern Energy, but the park's rugged environment, challenging climate, and relatively old electrical infrastrucutre lead to frequent power outages - over 250 in 2012.  Unlike much of the electric grid outside the park, facilities in Yellowstone lack modern communication infrastructure - a Supervisory Control and Data Acquisition or SCADA system - that would let the utility diagnose and correct the cause of power outages from the utility's central offices in Montana.

As a result, Yellowstone and NorthWestern Energy have proposed to update the park's electrical distribution system.  Proposed upgrades include an automated, remote monitoring and control system, the installation of equipment buildings, back-up power generators and propane fuel tanks.  The proposed communication system would require the construction of seven towers for radio equipment within the park, generally located at existing electrical substation sites.

Under the National Environmental Policy Act, the Park Service cannot approve the plan without conducting an environmental assessment of the impacts of the proposed development.  The Park Service has released its Environmental Assessment (10.5 megabyte PDF), which is open for public comment until December 6.

The use of national park lands for energy infrastructure can be controversial due to differing philosophies on the level of development desirable in parks.  At the same time, the Park Service notes that the Yellowstone outages have had negative effects on park operations and visitor experience, creating health and safety concerns and lost revenue for concessioners.  How will this balance play out in Yellowstone?

Tide Mill Institute to hold conference November 8-9, 2013

The Tide Mill Institute will hold its 9th annual conference this week in Topsfield, Massachusetts.  The event, to be held at the Topsfield Historical Society's Gould Barn on November 8 and 9, brings together people interested in the past, present, and future of tidal energy.

Tidal energy has been used to produce useful power since at least 619, based on archaeological finds at the site of Nendrum Monastery on an island off Northern Ireland.  Tide mills came to the New World along with early European settlers, who captured the energy embodied in the rise and fall of tides and put it to use powering grist mills, lumber mills, and other industries.  According to a 1979 paper, "Early Tide Mills: Some Problems", at one point over 300 tide mills operated in North America.  As their functionality was supplanted by steam engines, electricity, and internal combustion energy, much of society's historic use of tidal energy has been forgotten.

Meanwhile, people still look to the tides to provide useful power.  The Canadian province of Nova Scotia has been home to a 20 megawatt tidal power plant since 1984, and is promoting even more innovative uses of tidal energy resources through incentive programs and policies.  In the United States, the Ocean Renewable Power Company (ORPC) has developed the nation's first major grid-tied tidal electric generator, and has ambitious plans to bring more tidal and hydrokinetic projects online around the country.

This week's Tide Mill Institute event brings these themes together into a continuous narrative, from past through the present to the future.  The Tide Mill Institute's mission is:

• to advance appreciation of the American and international heritage of tide mill technology;
• to encourage research into the location and history of tide mill sites;
• to serve as a repository for tide mill data for students, scholars, engineers and the general public and to support and expand the community of these tide mill stakeholders; and 
• to promote appropriate re-uses of old tide-mill sites and the development of the use of tides as an energy source. 

The 2013 conference kicks off Friday night with an informal reception, followed by a symposium and dialogues Saturday from 8 AM through 3:30 PM.

For more information about the Tide Mill Institute, please contact:

• Bud Warren - budw@myfairpoint.net 207-373-1209
• Earl Taylor - ERMMWWT@aol.com 617-293-3052
• Todd Griset - tgriset@preti.com 207-791-3000

Wind to power Microsoft's Texas data center

Microsoft has agreed to purchase energy produced by a Texas wind farm to power its data center in San Antonio.  The announcement, posted on the official blog of Microsoft's Sustainability Development Team, describes a 20-year power purchase agreement with RES Americas under which Microsoft will purchase all of the output of the 110 megawatt Keechi Wind project located about 280 miles north.

The power purchase agreement fits with Microsoft's stated commitment to carbon neutrality.  Since 2012, Microsoft has imposed an internal fee on the use of carbon-based forms of energy; Microsoft uses that fee to make investments in alternative or carbon-neutral energy, such as this power purchase agreement.

The Keechi project will be owned and operated by RES Americas, a subsidiary of British company RES Ltd.  RES Americas currently operates over 600 MW of renewable energy projects, and has a renewable energy construction portfolio that exceeds 6,500 MW and 64 projects, as well as 534 miles of transmission lines.  Its Keechi project is expected to cost $200 million, and will feature 55 turbines expected to produce 430,000 megawatt hours of energy per year.  (To put this figure in context, it could power up to 45,000 homes, or cover between 5 and 10 percent of Microsoft's total electricity consumption.)  Construction is expected to begin in 2014, with the project going operational by June 2015.

Microsoft is not alone in promoting its use of renewable or alternative energy to power its data centers.  In 2012 Google entered into an agreement to purchase the output of a wind farm in Oklahoma to power its Pryor data center.  Apple's new data center in Maiden, North Carolina is powered in part by a solar photovoltaic array and a biogas-fed fuel cell.  eBay has proposed siting a 6 megawatt natural gas-fired fuel cell at its Utah data center.  Whether the data center is powered by on-site distributed generation or buys power from a designated off-site renewable resource, the trend is toward promoting cleaner, greener computing through these arrangements.  These choices may help the companies with cost control and power reliability as well as public relations.

Will large consumers of electricity continue to invest in alternative or renewable electric generation?  If so, will they favor arms-length power purchase agreements with developers of remote projects, or will they rely more heavily on on-campus development of distributed generation?  Will this trend spread beyond the big names so far - Microsoft, Apple, Google, and eBay - to the point where smaller or less tech-oriented companies develop or do similar projects and deals?

  Googa 20-year power purchase agreement (PPA) for wind energy in Texas that will be funded in part by proceeds from Microsoft’s carbon fee - See more at: http://blogs.msdn.com/b/microsoft-green/archive/2013/11/04/microsoft-signing-long-term-deal-to-buy-wind-energy-in-texas.aspx#sthash.4l62oNbo.dpuf

a 20-year power purchase agreement (PPA) for wind energy in Texas that will be funded in part by proceeds from Microsoft’s carbon fee - See more at: http://blogs.msdn.com/b/microsoft-green/archive/2013/11/04/microsoft-signing-long-term-deal-to-buy-wind-energy-in-texas.aspx#sthash.4l62oNbo.dpuf

a 20-year power purchase agreement (PPA) for wind energy in Texas that will be funded in part by proceeds from Microsoft’s carbon fee - See more at: http://blogs.msdn.com/b/microsoft-green/archive/2013/11/04/microsoft-signing-long-term-deal-to-buy-wind-energy-in-texas.aspx#sthash.4l62oNbo.dpuf

Will YieldCo structure change energy investments?

A relatively new way some utility companies are structuring their assets is drawing increased investment.  Dubbed the "YieldCo" model, the basic idea is that an established energy and utility companies will create a YieldCo subsidiary as a vehicle for holding investments in assets that produce sustained or increasing cash flow.  The YieldCo then pays out a relatively high percentage of its earnings to its shareholders as dividend yield.  Utility giant NRG Energy Inc. launched NRG Yield, Inc. this July, and other companies and market watchers have hinted that more YieldCo spinoffs may come in the near future.  Will the YieldCo model catch on?  How will it change the flow of money to and from energy projects?

The YieldCo model offers several kinds of benefits.  One is an answer to the question of renewable energy projects can compete during long-term periods of low power prices and reduced demand for electricity?  YieldCos are hoped to offer lower cost of capital for these projects.  Most often, they are conceived of as as holding electric generation projects whose output is fully contracted for, and older renewable and other assets that no longer qualify for special tax benefits.  The structure lets owners monetize assets without giving up control.  Meanwhile, the expected high and consistent yields can also attract capital and new investors, much as real estate investment trusts (REITs) or master limited partnership (MLPs) have done for other sectors. 

In the case of NRG Yield, its initial asset base featured a mix of conventional and distributed elcetric generation projects.  This mix included eleven utility-scale power plants and renewable projects, plus and two portfolios of distributed solar projects.  NRG Yield appears to have been a success, attracting $430 million in its initial public offering, with shares subsequently rising over 50% more in value. 

But despite NRG Yield's success since July, the structure is relatively novel as applied to electric generating infrastructure.  Downsides to the YieldCo structure include less favorable tax treatment than is available to REITs or MLPs (basically, a higher level of taxation), the cost of establishing a spinoff YieldCo, and increased exposure to interest rate risk.

If the YieldCo structure catches on, it could attract new investment capital to the renewable and conventional electric generation sector.  Will other companies follow NRG Yield's example?  NextEra Energy Inc. (owner of Florida Power & Light) is said to be exploring the concept, and is reportedly considering a portfolio of 1,500 to 2,000 MW of operating assets and another 1,200 MW in the development pipeline for contribution to a YieldCo in the next 4 years.  How big a shift we see to YieldCos remains to be seen, but for now excitement about the possibilities remains high.