OES Annual Report 2012 - Ocean Energy Systems

OES Annual Report 2012 - Ocean Energy Systems OES Annual Report 2012 - Ocean Energy Systems

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51 04 / COUNTRY REPORTS UNITED STATES OF AMERICA Michael Reed U.S. Department of Energy (DOE) INTRODUCTION In 2012 the U.S. ocean energy industry accomplished several significant achievements, including: multiple open water deployments, advancements in infrastructure development, initial grid connectivity, landmark power purchase agreements (PPA), and milestones in permitting and licensing. The open water deployments have provided valuable baseline performance data and in-water test experience to inform future design improvements. Furthermore, this was the first year developers (Verdant Power, Ocean Renewable Power Company, and Ocean Power Technologies) received hydrokinetic licenses issued by the Federal Energy Regulatory Commission (FERC), which resulted in the development of 5.55 MW of demonstration projects. Overall, there were approximately 85 active FERC-issued hydrokinetic preliminary permits in 2012, totalling roughly 14.8 GW. Throughout 2012 technology development progressed with the addition of an ocean energy technical data exchange forum (Annex V) to the International Energy Agency’s Ocean Energy Systems – Implementing Agreement. Additionally, the device cost reference model efforts continued and a new collaborative initiative to develop an open source numerical modeling package (WECSim) began. The WECSim initiative will simulate power production for multiple wave energy converter architectures and is a collaborative effort among the National Renewable Energy Laboratory, Sandia National Laboratories, and other code developers. Additionally, resource assessments for ocean current, river current, and ocean thermal progressed and will be complete during late 2012 and early 2013. Environmental research and information sharing continued with the launch of the Department of Energy’s (DOE) Tethys database and the extension of Annex IV activities, with the final report and data to be publicly released in 2013. The outlook for 2013 is optimistic, with further testing of a number of devices planned and some projects expanding to arrays and commercial-scale devices. OCEAN ENERGY POLICY Strategy and National Targets This mission of the DOE Water Power Program is to research, test, evaluate, develop and demonstrate innovative technologies capable of generating renewable, environmentally responsible and cost-effective electricity from water resources. Pursuant to that mission, the Program is currently undertaking the necessary analysis to assess the opportunities associated with tapping ocean energy resources. The completion of significant advanced assessments of U.S. wave and tidal energy resources has resulted in a programmatic decision to focus technology development efforts largely on the abundant national wave energy resource. Based on these analyses, the Program has established a national marine and hydrokinetic (MHK) deployment goal of 23 GW by 2030. The strategy of the Water Power Program is broken down into four major thrust areas: 1. Technology Advancement 2. Testing Infrastructure and Instrumentation Development 3. Resource Characterization 4. Market Barrier Identification and Removal The 2012 DOE MHK portfolio consisted of 115 projects and represented a total Program investment of $34 million. Most of the MHK funding (80%) was directed toward major thrust areas 1 and 2.

52 Support Initiatives and Market Stimulation Incentives During this past year a variety of market stimulation activities were introduced that will continue to be pursued in 2013. First, the re-authorization of the Marine Renewable Energy Promotion Act proposes: higher funding levels to DOE, the creation of a new adaptive management program, and the prioritization of a device verification program that would accelerate commercialization. Additionally, the Act includes companion tax legislation that provides a five-year tax depreciation schedule to MHK – an incentive currently available to other renewable energy technologies. Furthermore, Department of Defense appropriators and members of the Armed Services committees are collaborating to develop language that would help the U.S. Navy to formalize its MHK R&D efforts, and provide additional funding for these activities under the Navy energy program office. In addition, a number of states have authorized clean energy incentives that further support water power development. To compile these efforts, DOE maintains a Database of State Incentives for Renewables and Efficiency (DSIRE) which can be found at http://www.dsireusa.org Main Public Funding Mechanisms The primary means by which the U.S. federal government supports ocean energy is by providing grants to competitively-selected companies and institutions active in ocean energy R&D in the United States – much of which is funded through the DOE Wind & Water Power Program. Throughout 2012 DOE continued to support industry demonstration projects through its Technology Readiness Level Advancement Initiative as well as Advanced Water Power grants. This past year DOE issued a Funding Opportunity Announcement (FOA) for ocean energy technology, titled “In-Water Wave Energy Conversion (WEC) Device Testing Support.” This FOA is particularly significant for the wave energy industry because it offers $500,000 to one project to deploy and test a buoy (point-absorber) WEC for one year at the Navy’s Wave Energy Test Site (WETS) off of Marine Corps Base Hawaii in Kaneohe Bay, Oahu. On September 25, 2012 Northwest Energy Innovations was selected to receive the award for their Wave Energy Technology – New Zealand (WET-NZ) device. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are U.S. Government programs in which federal agencies set aside a small fraction of their funding for competitions only open to small businesses. These programs help emerging MHK technologies advance along the DOE Technology Readiness Level (TRL) chain. Small businesses that win awards in these programs keep the rights to any technology developed and are encouraged to commercialize the technology. In April 2012 DOE announced that $9 million would be available to fund approximately 50 small businesses developing a variety of renewable energy technologies. Each selected project would receive a Phase I award of up to $150,000. Awardees with successful projects would also have the opportunity to compete for follow-on Phase II funding for as much as $1 million per project. Two notable projects that received 2012 SBIR/STTR funding are FloDesign and Oscilla Power. Relevant Legislation and Regulation In 2010 President Obama signed an Executive Order establishing a new National Ocean Council and adopting a new national ocean policy to enhance stewardship of U.S. ocean waters and the Great Lakes. In 2012 the National Ocean Council released a Draft Implementation Plan for the policy and began regional marine planning efforts in many parts of the country, which will facilitate efforts to plan for energy generation from U.S. ocean resources. The Department of Interior’s Bureau of Ocean Energy Management (BOEM) has established additional State Task Forces in Oregon and Hawaii to help identify lease blocks best suited for wave energy development and is continuing to establish similar Task Forces in other states. In addition, BOEM and FERC announced revised guidelines for MHK developers pursuing permitting and licensing on the U.S. Outer Continental Shelf. The revisions further clarify the regulatory process and help streamline the procedure for authorizing research and testing of MHK devices. ANNUAL REPORT 2012

51<br />

04 / COUNTRY REPORTS<br />

UNITED STATES OF AMERICA<br />

Michael Reed<br />

U.S. Department of <strong>Energy</strong> (DOE)<br />

INTRODUCTION<br />

In <strong>2012</strong> the U.S. ocean energy industry accomplished several significant achievements, including: multiple<br />

open water deployments, advancements in infrastructure development, initial grid connectivity, landmark<br />

power purchase agreements (PPA), and milestones in permitting and licensing. The open water deployments<br />

have provided valuable baseline performance data and in-water test experience to inform future design<br />

improvements. Furthermore, this was the first year developers (Verdant Power, <strong>Ocean</strong> Renewable Power<br />

Company, and <strong>Ocean</strong> Power Technologies) received hydrokinetic licenses issued by the Federal <strong>Energy</strong><br />

Regulatory Commission (FERC), which resulted in the development of 5.55 MW of demonstration projects.<br />

Overall, there were approximately 85 active FERC-issued hydrokinetic preliminary permits in <strong>2012</strong>, totalling<br />

roughly 14.8 GW. Throughout <strong>2012</strong> technology development progressed with the addition of an ocean<br />

energy technical data exchange forum (Annex V) to the International <strong>Energy</strong> Agency’s <strong>Ocean</strong> <strong>Energy</strong><br />

<strong>Systems</strong> – Implementing Agreement. Additionally, the device cost reference model efforts continued and<br />

a new collaborative initiative to develop an open source numerical modeling package (WECSim) began.<br />

The WECSim initiative will simulate power production for multiple wave energy converter architectures and<br />

is a collaborative effort among the National Renewable <strong>Energy</strong> Laboratory, Sandia National Laboratories,<br />

and other code developers. Additionally, resource assessments for ocean current, river current, and ocean<br />

thermal progressed and will be complete during late <strong>2012</strong> and early 2013. Environmental research and<br />

information sharing continued with the launch of the Department of <strong>Energy</strong>’s (DOE) Tethys database and<br />

the extension of Annex IV activities, with the final report and data to be publicly released in 2013. The<br />

outlook for 2013 is optimistic, with further testing of a number of devices planned and some projects<br />

expanding to arrays and commercial-scale devices.<br />

OCEAN ENERGY POLICY<br />

Strategy and National Targets<br />

This mission of the DOE Water Power Program is to research, test, evaluate, develop and demonstrate<br />

innovative technologies capable of generating renewable, environmentally responsible and cost-effective<br />

electricity from water resources. Pursuant to that mission, the Program is currently undertaking the<br />

necessary analysis to assess the opportunities associated with tapping ocean energy resources. The<br />

completion of significant advanced assessments of U.S. wave and tidal energy resources has resulted in<br />

a programmatic decision to focus technology development efforts largely on the abundant national wave<br />

energy resource. Based on these analyses, the Program has established a national marine and hydrokinetic<br />

(MHK) deployment goal of 23 GW by 2030.<br />

The strategy of the Water Power Program is broken down into four major thrust areas:<br />

1. Technology Advancement<br />

2. Testing Infrastructure and Instrumentation Development<br />

3. Resource Characterization<br />

4. Market Barrier Identification and Removal<br />

The <strong>2012</strong> DOE MHK portfolio consisted of 115 projects and represented a total Program investment of $34<br />

million. Most of the MHK funding (80%) was directed toward major thrust areas 1 and 2.

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