OREG RD Proposal

8/3/2019 OREG RD Proposal

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A PROPOSAL FOR A COLLABORATIVE

RESEARCH & DEVELOPMENT PROGRAM

FOR ENABLING RENEWABLE OCEAN ENERGY

DELIVERY IN BRITISH COLUMBIA AND CANADA

September 2004

Prepared for:

The Canadian Federal Government

The B.C. Provincial Government

BC Hydro Corporate Strategic R&D

and

Other Canadian Electrical Utilities

Submitted by:

The Ocean Renewable Energy Group (OREG)

British Columbia


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Collaborative R&D Program for Enabling

Renewable Ocean Energy Delivery in British Columbia and Canada

EXECUTIVE SUMMARY

The recent Pacific Northwest Economic Region Summit adopted a strongly worded resolutionthat called on the U.S. and Canadian governments to implement strategies for developing oceanenergy technology and resources. The resolution calls for strategic initiatives similar to thecurrent focused research, development and demonstration of fuel cells and hydrogen power.

The Ocean Renewable Energy Group (OREG) is working toward 5 pre-commercialdemonstrations of ocean energy capacity in British Columbia by 2010. OREG proposes aCanadian target of 25 by 25 (at least 25,000 MW by 2025). OREG is also working to ensurethat the Canadian ocean energy development, supply and service sector employs at least 10,000by 2025, with worldwide sales of at least $2 billion.

OREG believes that this development is one of the most significant economic, business andsustainability initiatives in the launch of the 21

stCentury. That recognition is showing

internationally in many countries with access to significant wave and tidal resources. Portugalhas led with an enhanced power production incentive for ocean energy about to be copied byIreland. Focused R&D and infrastructure support is being directed at this opportunity in at leastsix other countries. The most recent was the UK commitment in August 2004 of $125 million which resulted in the formation of the UK Centre for Marine Renewable Energy.

Wind energy development, and indeed fuel cells and hydrogen initiatives, are emerging as partof the energy toolbox because of strategic policy and public financial investments made adecade ago. The 2001 initiative by BC Hydro to open a focus on wave energy was recognisedinternationally for its leadership. OREG is working to build a movement to capitalise on thatrecognition. In this proposal OREG has identified a significant financial commitment necessaryto start a focus on strategic research and create a mechanism to identify and pool the resources

that will be necessary to make Canadian business a part of a worldwide sustainable energyindustry. If this proposal succeeds in establishing an Ocean Energy Partnership, the challengewill then fall to this partnership to lever this initiative into a strategy to focus existing fundingprogrammes, or launch specific new programmes and initiatives, to:

Create market pull

Set a renewable portfolio standardCreate support for pre-commercial power purchase initiativesCreate a supportive climateFocus funding for ocean energy R, D&D and commercialisationCreate of a Centre of Excellence in ocean energyProvide strategic environmental assessments

Clear permitting and approvals mechanismsCreate a route to marketUnderwrite grid connection investmentEnsure that access and cost to connection do not discriminate against ocean energyCreate a favourable climate for investmentProvide tax/revenue incentives for power development and purchaseProvide incentives for investment in ocean energy

This document shall not be reproduced without the written approval of OREG

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OREG brings together industry, academia and government to advocate for the generation ofocean-based renewable energy, and to accelerate the research, development andcommercialization of associated new technologies. The group, which includes international andCanadian ocean energy companies and is based in British Columbia, is taking a leadership rolein ocean energy development in Canada.

There is a growing expectation that renewable energy can reduce greenhouse gas emissions andaddress shortages in hydrocarbon supplies. The Government of British Columbia is calling for50% of all new power generation to be "clean". Members of the public who have spoken atreview panel hearings on restarting offshore oil and gas exploration in the province present aconsistent message: alternative energy is a better option.

The Pacific and Atlantic coasts of Canada are blessed with abundant wave and tidal currentenergy. Many isolated communities on the British Columbia coast need to replace costly diesel- based generation. Distributed ocean energy generation may fulfill regional needs and sell anyexcess power to utilities through the North American electrical distribution grid. British

Columbia is uniquely positioned to move rapidly ahead. The coast offers a comparatively welldeveloped power grid system, land and water tenuring is less complex than in other countries,the expanse of tidal opportunities can offset issues related to intermittent production and asignificant population can be serviced in the Lower Mainland and Vancouver Island area.

The people who live in the coastal regions of Canada have valuable expertise in marineoperations, ocean technology, and marine fabrication, and world-class ocean engineeringexperimental and test facilities.

Unlike power generation using hydro-electricity, natural gas, or even wind, power generationusing waves and tidal currents is still in the early stages of development. A wide range of

technologies has been investigated, with only a few reaching the stage of pilot power production.In the field of ocean energy development there are no dominant techniques, companies orcountries, providing a great opportunity for Canada to excel. To take advantage of this rareopportunity, Canada must make strategic commitments similar to those made by countries likeIreland, the United Kingdom, and Portugal, and by the European Union as a whole. Theseregions are targeting research, development and demonstration resources, providing capitalsupport, subsidizing the purchase of ocean power, and encouraging investment. Their objectiveis to produce reliable supplies of ocean power based on solid technology and supported by astrong service and operating industry.

OREG is working to ensure that similar strategies will be followed in Canada. In this proposal,

OREG proposes a five-year strategic research program that will push forward the developmentand adaptation of ocean power technologies, mobilizing a collaborative and focused researchcommunity. The program will ensure that Canada is part of the international collaborative effortunderway to make ocean renewable energy a resource on the scale of hydro-electricity by 2025.Forecasts will be projected for the development of Canadian ocean power supplies, to assist withthe planning of future electricity generation requirements.


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The OREG is proposing a five-year R&D program that consists of ten themes:

Theme 1the accurate assessment of resources in BC and on the East Coast of Canada

Theme 2the advancement of new technologiesTheme 3the establishment and operation of pioneer test sites for ocean energy in BC, one for

wave power and one for tidal current powerTheme 4power quality and improvement through hybrid processes, including secondarystorageTheme 5grid interconnection issuesTheme 6engineering reliabilityTheme 7virtual modeling of the process for converting wave/tidal current to electricity, usingpromising technologiesTheme 8the integration of ocean energy technologies with other renewable technologies, suchas, offshore windTheme 9the feasibility of using ocean energy to produce compressed hydrogenTheme 10networking among R&D centres, coordinating activities through IEA and organizing

technical conferences

OREG will also be involved in the study of integrated energy options for remote communities.

Underlying all of this effort is a commitment by OREG to minimize the risk that development

and demonstration projects will be delayed or cancelled by ensuring that there is a community oftechnical, policy and financial support. Canada has policy objectives for renewable energy thatinclude ocean energy, but the existing support mechanisms do not ensure that it becomes arealistic and reliable option. British Columbia has set a target for renewable energy, but has nomechanism to ensure that ocean power builds the technology and infrastructure to contribute tothe overall commercial power supply.

Leadership in this collaborative initiative is expected to come from the Government of Canada,the Province of British Columbia, and BC Hydro. Other provinces and utilities will join in partsof the research program that involve common interests.

BC Hydro considers ocean energy to be a potential solution for power supply to communitiesthat are not connected to the grid, and a potential contributor to distributed generation andsustainability goals. However, they also recognize the technical, financial, and policy challengesto commercialization. To avoid the risk of emerging renewable energy technologies being"marginalized", OREG proposes collaborative financing, direction and evaluation of a focusedResearch, Development and Demonstration program for 2005-2009.

OREG proposes that an Ocean Energy Partnership (OEP) Group be formed to provide overalldirection and to provide security for the interests of the funding agencies. The group is expectedto be made up of BC Hydro (and possibly other partnering utilities), Natural Resources Canada,the Western Economic Diversification, Environment Canada and Industry Canada, the B.C.Ministry of Mines and Energy (and eventually the resources departments of other provinces),and representatives of OREG. The OEP Group will be responsible for setting priorities among


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the themes identified in the proposal, and any others that it may identify. A detailed descriptionof scope, tasks, deliverables, schedules, and the associated cost for each theme will be developedduring the Scoping Stage for final approval by the OEP.

The total budget for this initial programme is expected to be approximately $3 million per year

for five years.

In order for the program to be successful, it is critical that the full budget and the proposedmanagement approach are accepted.

OREG believes this programme to be a first focused step. It should lead to additional initiativesand support efforts and direct assistance to ensure that technology and project developers accesspublic and private funds to develop & demonstrate their technologies, and implement projects.End users such as BC Hydro will need to develop specific mechanisms for electricity purchasefrom near-commercial conversion technologies such as tidal current and ocean waves. Theseinitiatives and activities can be expected as part of a strategy that can be built beyond this

proposed collaborative R&D Program.


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TABLE OF CONTENTS

PageEXECUTIVE SUMMARY ......................................................................................................... ii1.0 BACKGROUND ........................................................................................................1

1.1 Ocean Energy Development in Canada and the World ..............................................11.2 The B.C. Energy Plan and the Hydro Integrated Energy Plan (IEP).........................21.3 The Emerging Focus ...................................................................................................31.3.1 PNWER Resolution 2004-8........................................................................................3

2.0 OCEAN ENERGY RESEARCH WORLDWIDE......................................................12.1 The Strategic Choices .................................................................................................5

3.0 OCEAN ENERGY POTENTIAL THE VALUE PROPOSITION .........................73.1 Resource Estimates .....................................................................................................73.1.1 World ..........................................................................................................................73.1.2 British Columbia.........................................................................................................83.1.3 Power Generation by 2025 .......................................................................................10

3.2 The Development Curve ...........................................................................................103.2.1 Technology ...............................................................................................................103.2.2 Price of power ...........................................................................................................113.3 Meeting Sustainability Agendas ...............................................................................123.3.1 Renewable.................................................................................................................123.3.2 Footprint....................................................................................................................133.3.3 Impact .......................................................................................................................133.4 Meeting Economic Development Agendas ..............................................................133.5 Meeting Multiple Needs ...........................................................................................143.5.1 Generating Electricity...............................................................................................143.5.2 Applying Ocean Energy to the Needs of Remote Communities ..............................14

3.5.3 Integrating Ocean Energy with Other Renewable Energy Sources..........................153.5.4 Applying Ocean Energy to Generate Hydrogen .......................................................163.5.5 Other Market Opportunities......................................................................................17

4.0 BARRIERS AND CHALLENGES ..........................................................................194.1 Technical...................................................................................................................194.1.1 Cost ...........................................................................................................................194.1.2 ReliabilityWithstanding a Hostile Environment...................................................204.1.3 Intermittent Production and Power Quality ..............................................................204.1.4 Interconnection Issues for Distributed Generation ...................................................204.2 Policy ........................................................................................................................214.2.1 "Marginalized" Energy .............................................................................................21

4.2.2 Energy Policies .........................................................................................................214.2.3 Lack of a Planning and Permitting Process ..............................................................224.2.4 Removal of Institutional Barriers .............................................................................224.3 Financial....................................................................................................................234.4 Technology Implementation and Commercialization...............................................234.5 Scaling Up.................................................................................................................24


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5.0 COLLABORATIVE R&D TO MEET CHALLENGES AND OVERCOMEBARRIERS.................................................................................................................................25

5.1 Initiatives and Priorities............................................................................................255.2 Fit With National and B.C. Priorities .......................................................................285.3 Collaborative R&D Projects Proposed by OREG ....................................................29

6.0 PROPOSED PROGRAM .........................................................................................316.1 Theme 1: Assessment and Monitoring of Ocean Energy Resources........................316.1.1 Resource Assessment................................................................................................316.1.2 Wave and Tidal Current Monitoring ........................................................................316.1.3 Production Estimation...............................................................................................326.2 Theme 2: Advancing New Technologies.................................................................326.3 Theme 3: Establish Test Sites for Ocean Energy ....................................................326.3.1 Site Availability ........................................................................................................326.3.2 Facilitating Research, Development And Demonstration Projects ..........................346.4 Theme 4: Investigating Power Quality; Improvement Through Hybrid PowerGeneration, or Secondary Storage ..........................................................................................34

6.5 Theme 5: Grid Interconnection.................................................................................356.6 Theme 6: Reliability Engineering.............................................................................356.6.1 Structural...................................................................................................................356.6.2 Mechanical Systems .................................................................................................376.6.3 Mooring ....................................................................................................................386.6.4 Electrical Connection................................................................................................386.7 Theme 7: Virtual Modeling of the Wave/Tidal Current to Electricity Conversion(VMWTEC) Process of Relevant Technologies.....................................................................386.8 Theme 8: Demonstration and Integration with Other Renewable Technologies.....386.9 Theme 9: Feasibility of Utilization of Ocean Energy for Hydrogen Production......396.10 Theme 10: Networking with IEA, EU, and Other R&D Centres; Organizing Relevant

Technical Conferences............................................................................................................396.11 Approach to Intellectual Property.............................................................................406.12 Provisional Milestones and Budget ..........................................................................406.13 Program and Funding Partners .................................................................................456.13.1 Government of Canada Involvement ........................................................................456.13.2 Government of British Columbia Involvement ........................................................466.13.3 BC Hydro Involvement.............................................................................................476.13.4 Funding Sources .......................................................................................................486.13.5 Tentative Task Partners for the Collaborative R&D ................................................49

6.14 Program Direction and Management ........................................................................516.14.1 Ocean Energy Partnership (OEP) Group ..................................................................51

6.14.2 Program Management Process..................................................................................516.14.3 Placement of Operation.............................................................................................52

7.0 REFERENCED DOCUMENT SOURCES ..............................................................53APPENDIX The Ocean Renewable Energy Group (OREG) .....................................................55


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LIST OF FIGURES

Figure 1: Range of Unit Energy Costs (2003 Status) [Ref. 3]................................................... 2Figure 2: Forms of Ocean Energy and Estimated Global Power [ Ref. 12] ............................... 7Figure 3: Global Wave Power Distribution (kW/m of crest length) [Ref. 8] ............................. 8

Figure 4: Available Wave Power for the B.C. Coast (in kW/m), Based on 1991 Data [Ref. 9] 8Figure 5: Potential Tidal Energy Sites in British Columbia [Ref. 11]........................................ 9Figure 6: Implementation Curves of Wind and Wave Energy [Ref. 13] .................................. 10Figure 7: Learning Curves for Power Generation Technologies to 2030 [Ref. 14] ................. 11Figure 8: Predicted Reduction of Electricity Costs for Wave Energy Technologies [Ref. 15] 12Figure 9: A Range of Uses for Ocean Energy [Ref. 36]........................................................... 14Figure 10: Funding Gap [Ref. 22]............................................................................................. 23


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1.0 BACKGROUND

1.1 Ocean Energy Development in Canada and the World

The Conference Board of Canada [1] recently reported that renewable energy remains a growthmarket, with installed capacity expected to double over the next decade in the United States and

Canada. Most renewable options are expected to be competitive with grid power in Canada by2013, especially if supported with effective incentives. The report also concludes that remoteareas of Canada that do not have a connection to the electrical grid are ideal for first applicationsof proven but not yet commercial renewable technologies. However, the Conference Board ofCanada anticipates that the costs of renewable resources such as photovoltaics, tidal, wave, andfuel cells must be reduced and the technologies improved before they will be adopted forwidespread use. Their overall conclusion is that there are opportunities and challenges inmoving forward and defining a Canadian strategy for renewables. Comprehensive strategies are

needed, developed through an increase in inter-governmental co-ordination and co-operation.Incentives and partnerships that can bring renewable energy technologies to self-sufficiency andcommercialization must be supported, and mechanisms must be established to recognize the

environmental, economical and efficiency attributes of renewable energy.

While the comments of the Conference Board of Canada apply to all emerging energy supplies,they are particularly relevant to ocean energy.

The worldwide pursuit of ocean energy has developed more slowly than many of thealternatives. However, in the last few years several European countries and the European Unionhave begun to focus their development efforts in the field of ocean energy. For example, it hasbecome a theme of the International Energy Agency. In order to ensure that Canada shares inthe progress gained, and in the absence of a national or regional ocean energy organization inCanada, Powertech Labs has represented Canada at the Executive Committee of the International

Energy Agency Implementing Agreement on Ocean Energy Systems IEA-IA-OES.

Other international initiatives to develop ocean energy are underway. Canadian ocean energytechnology companies are pursuing demonstration opportunities in Europe. Companies fromAustralia and the United States are working in British Columbia, having been attracted by BCHydro renewable energy programs and recognizing the wave energy potential and the strongelectricity markets of the region.

Driven by commitments to environmental responsibility and climate change mitigation, theGovernment of British Columbia is currently creating a new Alternate Energy Strategy that willfocus on all forms of alternate energy, identifying their technical and market barriers. The

province aims to be a leader in energy efficiency and promoting opportunities for alternateenergy. The development of ocean energy resources could play a large role in achieving thosegoals.

There are no clearly dominant technologies in the ocean power arena. Despite significantassistance for programs in the United Kingdom and other countries, Canada still has anopportunity to be a significant player. The marine current and wave climates on the east and west


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coasts of Canada are a strategic advantage. Existing strengths in ocean science and technology,world-class testing facilities and well-established ocean engineering, design, fabrication andmarine operations capabilities will prove critical. A coordinated effort can ensure that Canadahas access to renewable ocean energy and is a leader in the world market for ocean energyequipment, services and operations. Leadership of that coordinated effort is emerging in British

Columbia.

1.2 The B.C. Energy Plan and the Hydro Integrated Energy Plan (IEP)

British Columbia's Energy Plan [2] sets a voluntary goal of 50% of supplies of new energy from"Clean Electricity" sources, although the definition of clean electricity is broad and does notmention ocean energy. The clean electricity objective is constrained by the expectation thatadditional costs to produce it will increase electricity rates by less than 0.2% per year. BCHydro responded to the BC Energy Plan policy with an Integrated Energy Plan (IEP) [3], whichevaluated sources of alternate energy using a framework of performance criteria and costestimates based on currently available approaches. The performance criteria were:

Capacity (nameplate or gross capacity)

Dependable capacity (reliable for three hours in the peak load period, weekdays during twocontinuous weeks of cold weather)

Annual average energy (expected production over the period of a year)

Firm energy (production that could be relied upon during a given year)

Figure 1: Range of Unit Energy Costs (2003 Status) [Ref. 3]




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The BC Hydro IEP used a dependable capacity rating of only 5% in estimating cost of energy production from ocean energy resources, such as, tidal current and wave. The results of theirassessment of the relative costs (2003 status) of producing energy, including wave and tidalpower, are shown in Figure 1.

As part of a four-year action plan, the 2004 IEP identifies initiatives to be taken in the short term.Two of these initiatives are particularly relevant to ocean energy technology:

To provide the planning justification for private sector calls for electricity, and otherresource acquisitions, and

To demonstrate how environmental, social and economic considerations are included inBC Hydros electricity planning.

Research into ocean energy technologies and their commercialization contributes to bothinitiatives. It provides an opportunity for entrepreneurs and technology developers to contributeto the energy resource portfolio. Ocean energy is considered to be environmentally benign, and

research into its potential provides an opportunity for the utility company to demonstrateplanning for various social and economic conditions.

1.3 The Emerging Focus

Powertech Labs initiated a dialogue among representatives of the Canadian Federal Government,the B.C. Provincial Government and BC Hydro about coordinated activities and strategies forenabling ocean energy development in the province. As part of this effort, in 2003 PowertechLabs made a series of presentations at national and regional forums and held various meetings

with individual technology/project developer in BC and other local organizations.

In the winter of 2004, these stakeholders were brought together with interested federal andprovincial agencies, researchers and R&D support organizationsa "cluster" of key players whocould push ahead with ocean energy opportunities. A not-for-profit organization was formed,called the Ocean Renewable Energy Group (OREG). Its mandate is to move the ocean energyagenda forward. The vision, mission and structure of OREG are summarized in the Appendix.

At the recent Pacific North West Economic Regional (PNWER) Summit, a special session onOcean Power was held as part of the Energy II - Emerging Technology track [4]. OREG, alongwith the other organizations from BC, Washington, and Alaska, presented an assessment ofocean energy potential and the steps needed to realize it. Legislators who attended the sessionwere impressed, and adopted the following resolution:

1.3.1 PNWER Resolution 2004-8

Just as the Pacific NW plays a leadership role in the hydrogen and fuel cell technology

development, the region has the potential to lead in the technology development and

production of renewable energy from the ocean. Resource assessments show that Ocean

Energy has a potential to play a major role in achieving a goal of 20% of electricity

generation from renewable energy sources by 2020 for PNWER members.




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1.3.1.1 Action Items:

1. PNWER urges Federal governments of Canada and the United States to implement a

national Ocean Energy Strategy.

2. PNWER recommends to both federal governments to promote the development and

use of Ocean Energy technologies.

Specific provisions of this recommendation should include:

- Federal recognition of Ocean Energy as a renewable resource;

- Creation of an Ocean Energy program within the relevant Energy and Economic

development departments;

- Streamlining of regulatory process for approval of Ocean Energy projects;

- Market incentives to spur investments in Ocean Energy technologies and projects,

like investment credits, production tax credits, renewable energy credits, and alike;

- Federal funding sources for R&D and demonstration projects;

- Ask federal governments to establish pilot test areas for ocean energy development.

This resolution and the work that is underway to implement a B.C. Strategy for Alternate Energyare raising awareness of the opportunity that ocean energy presents.




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2.0 OCEAN ENERGY RESEARCH WORLDWIDE

The International Energy Agency (IEA) published a summary of the state-of-the-art in waveenergy research in their 2003 annual report [5]. Their review looked at the progress in researchby country and by technology. The essential points are abstracted below.

It can be said that research in wave energy conversion based on adequate scientific backgroundstarted in the 1970s when the oil crises provoked the exploitation of a range of renewable energysources, including waves. Based on various energy-extracting methods, a wide variety of waveenergy systems has been proposed but only a few full-sized prototypes have been built anddeployed in open coastal waters. Most of these are or were located on the shoreline or nearshore, and are sometimes named first generation devices. In general these devices stand on thesea bottom or are fixed to a rocky cliff. Shoreline devices have the advantage of easiermaintenance and installation and do not require deep-water moorings and long underwaterelectrical cables. The less energetic wave climate at the shoreline can be partly compensated bynatural wave energy concentration due to refraction and/or diffraction (if the device is suitablylocated for that purpose). The typical first generation device is the oscillating water column(OWC).

Offshore devices (sometimes classified as third generation devices) are basically oscillatingbodies, either floating or (more rarely) fully submerged. They exploit the more powerful waveregimes available in deep water (typically more than 40m water depth). Offshore wave energyconverters are in general more complex compared with first generation systems. This, togetherwith additional problems associated with mooring, access for maintenance and the need of longunderwater electrical cables, has hindered their development, and only recently some systemshave reached, or come close to, the full-scale demonstration stage.

The oscillating water column (OWC) device comprises a partly submerged concrete or steelstructure, open below the water surface, inside which air is trapped above the water free surface.The oscillating motion of the internal free surface produced by the incident waves makes the airto flow through a turbine that drives an electrical generator.

Full sized OWC prototypes were built and tested under real sea conditions in Norway (inToftestallen, near Bergen, 1985), Japan (Sakata, 1990), India (Vizhinjam, near Trivandrum,Kerala state, 1990), Portugal (Pico, Azores, 1999), UK (the LIMPET plant in Islay island,Scotland, 2000). In all these cases, the concrete structure is fixed (bottom-standing or built onrocky sloping wall). The installed power capacity of these prototype OWCs is (or was) in therange 60-500 kW. Smaller shoreline OWC prototypes were built in Islay, UK (about 1990), and

recently in China. The so-called Mighty Whale, built in Japan a few years ago, is in fact afloating version of the OWC.

In an OWC plant, the energy conversion chain consists of the following elements: wave to air (inwhich the structure containing the oscillating water column plays a major role); air turbine;electrical generator (and complementary electrical equipment). The integration of the plantstructure into a breakwater has several advantages: the constructional costs are shared, and theaccess for construction, operation and maintenance of the wave energy plant become much




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easier. This has been done successfully for the first time in the harbour of Sakata, Japan (in1990). The option of the 'breakwater OWC' is presently being considered for several situations inEurope. Several types of air turbines have been proposed for (and in some cases used in) OWCs.The axial-flow Wells turbine, invented in the late 1970s, has the advantage of not requiringrectifying valves. It has been used in almost all prototypes. The most popular alternative to the

Wells turbine seems to be the self-rectifying impulse turbine; its rotor is basically identical to therotor of a conventional single-stage steam turbine of axial-flow impulse type (the classical deLaval turbine).

An Australian company (Energetech) proposes a technology using a parabolic-shaped collector(about 40-metre wide) to concentrate the wave energy upon the OWC structure. The system usesa self-rectifying air turbine that is different from the Wells turbine and the impulse turbine butshares some features of both. The Energetech OWC system was conceived originally as abottom-standing structure, but a floating version is presently being built at Port Kembla, near toSydney, Australia.

The Pendulor was originally developed in Japan as a shoreline device. Its main element is ahinged rectangular plate facing the waves, whose pendulum-like oscillations drive a highpressure hydraulic power-take-off system. A floating version of the Pendulor is presently beingdeveloped in Japan.

There is a substantial variety of typically offshore wave-energy devices, some of which reached,or are close to, the prototype stage. In most cases, there is a mechanism that extracts energy fromthe relative oscillating motion between two bodies. This is the case of the Pelamis, developed inUK, a snake-like slack-moored articulated structure composed of four cylindrical sections linkedby hinged joints, and aligned with the wave direction. The wave-induced motion of these jointsis resisted by hydraulic rams, which pump high-pressure oil through hydraulic motors driving

three electrical generators. Sea trials of a full-sized prototype (120 m long, 3.5 m diameter,750 kW rated power) started in the North Sea in March 2004. The McCabe Wave Pump,developed in Ireland, has conceptual similarities to the Pelamis: it consists of there rectangularsteel pontoons hinged together, with hydraulic rams converting their relative motions into usefulenergy.

The Archimedes Wave Swing (AWS), basically developed in Holland, is a fully-submergeddevice consisting of an oscillating upper part (the floater) and a bottom-fixed lower part (thebasement). The floater is pushed down under a wave crest and moves up under a wave trough.

This motion is resisted by a linear electrical motor, with the interior air pressure acting as aspring. A prototype of AWS was built, rated 2 MW (maximum instantaneous power). The

device has been sunk to position off the north coast of Portugal recently.

The AquaBuOY combines two concepts developed in Sweden in the 1980s: the IPS buoy and thehose pump. The Aquabuoy consists of a slack-moored vertical-axis buoy, about 7 m diameter,whose heave oscillations produce high-pressure water flow by means of a pair of hose pumps.This is converted into electrical energy by a conventional water turbine driving an electrical




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generator. Plans to build a prototype have been announced. Another system based on a heavingbuoy is the Wavebob, a basically Irish concept that is being developed in Europe.

The Wave Dragon, an offshore floating system mostly developed in Denmark, is based on theovertopping concept rather than on the oscillating body concept. The system consists of a

floating slack-moored platform with two long arms acting as wave reflectors to focus the wavestowards a ramp. Behind the ramp there is a reservoir where the overtopping water is collectedand temporarily stored. The power take-off equipment consists of a series of conventional low-head propeller-type water turbines each one driving an electrical generator. A 1:4.5-scale model,57 m-wide, equipped with 7 turbines, was constructed. The model tests, that included powergeneration to the grid, started in 2003 off the Danish coast in the North Sea.

Like the Mighty Whale referred to above, the Backward Bent Duct Buoy (BBDB) is a floatingversion of the OWC that has been object of considerable interest and development, first in Japan,and more recently also in Europe (namely in Ireland). Unlike in the case of wind energy, thepresent situation shows a wide variety of wave energy systems, at several stages of development,

competing against each other, without it being clear which types will be the final winners.

In the last ten years or so, most of the R&D activity in wave energy has been taking place inEurope, largely due to the financial support and coordination provided by the EuropeanCommission and to the positive attitude adopted by some European national governments. Ingeneral, the development, from concept to commercial stage, has been found to be a difficult,slow and expensive process. The final stage is testing under real sea conditions. In almost everysystem, optimal wave energy absorption involves some kind of resonance, which implies that thegeometry and size of the structure are linked to wavelength. For these reasons, if pilot plants areto be tested in the open sea, they must be full-sized structures. For the same reasons, it isdifficult, in the wave energy technology, to follow what was done in the wind turbine industry

(namely in Denmark): relatively small machines where developed first, and were subsequentlyscaled up to larger sizes and powers as the market developed. The high costs of constructing,deploying, maintaining and testing large prototypes under sometimes very harsh environmentalconditions, has hindered the development of wave energy systems; in most cases such operationswere possible only with substantial financial support from governments.

There are two generic ways of extracting energy from tidal flows: by placing a barrage across anestuary with a large tidal range to create static head and operate a low head water turbine or byextracting kinetic energy of tidal (marine) current to mechanical energy using different types of

turbine without interrupting the natural tidal flow. Tidal currents are caused by the movement ofoceans, driven by the gravitational fields of the earth, sun, and moon. Large tidal currents do not

necessarily require a large tidal range. The factors that have a greater influence on the magnitudeof tidal currents are the phasing of the tides (location and timing of high and low tides) and theconstriction of the water through narrow passages (concentration of tidal flow). Since BritishColumbia has a wide range of tidal phases and numerous narrow passages, tidal currents are ofgreat interest as an energy source.




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There are several large tidal barrage plants, including one in Nova Scotia, in operation in theworld. Even though the conversion technology is mature, any new project based on this schemeis less likely to happen in Canada because of environmental concern and disruption to navigationassociated with this type of plant. Technologies for generating electricity from tidal current areunder active development and some new approaches are being proposed. Most of the current

conversion devices can be classified into three categories: (a) axial flow turbines, (b) cross flowturbines, and (c) ducted turbine. This type of conversion process has a turbine installed in thetidal stream. Kinetic energy is transferred to the turbine, which drives a generator that convertsthe kinetic energy into electricity.

The axial flow tidal current turbines are similar to wind turbines, with fixed blades that rotate inthe current. This type of tidal current conversion process has been or being demonstrated upto acapacity level of 300kW. Recently built projects using this type of conversion process are theSeaflow project at the Severn Estuary off Devon, UK, by the Marine Current Turbines and theHammerfest Strom project in Norway.

Cross flow current turbines are placed in a tidal stream in such a way that direction of current isacross the axis of rotation of turbine. In Canada, this type of tidal current conversion technologyhas been demonstrated in early 80s through prototype testing. Recently, a project (calledEnermar) involving this type of conversion process (called kobold turbine) is being demonstratedin Italy in the Strait of Messina. The turbine, which has three blades and is rated at 130 kW, issuspended from a float. In US, cross flow turbine with helical blades has been developed byProf. Gorlov. Prof. Salter in UK has proposed a cross flow tidal current turbine also.

The conversion process using a ducted turbine involves placing a turbine in a duct to augmentthe power extracted from a given sized turbine. This concept was first proposed by Darrieus. InBritish Columbia, Blue Energy Canada has proposed a variant of this type of conversion process

for a cross-flow turbine.

Other types of tidal current conversion process have been proposed or are being demonstrated.One approach uses the pressure differential in a Venturi flume to drive a fluid (air or water)through a conventional pipeline turbine that can be located on the shore. Another approach togenerating electricity from tidal current is by utilizing lift force induced by hydrofoil. Thisdevice, called Stingray, is being demonstrated in UK. New turbine conversion technologies arebeing developed by Clean Current Power Systems in Canada and Florida Hydro Power in US.

The United Kingdom is at the forefront of the development of the tidal current energy conversionprocess, and predicts that they will have full-scale demonstration plants by the end of 2004. Two

of the most advanced prototypes, currently supported under the DTI Renewable Energy Researchand Development Program, are the "Stingray" and the "Seaflow" projects. As mentioned in the previous paragraph, tidal current demonstration projects have been built in UK, Norway, andItaly.

Companies in British Columbia are also making significant contributions with their designs. Forexample, Blue Energy is planning on building a 500kW demonstration project using their ducted




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cross-flow turbine technology. Similarly, Clean Current Power Systems is planning on ademonstration project using their turbine technology.

2.1 The Strategic Choices

The Irish government, in a public consultation document [6], has suggested that a country isfaced with three choices:

Option 1focus on the development and deployment of indigenous ocean energy technologieswith a view to stimulating the development of a world leading ocean energy manufacturingindustry.

Option 2accept that the risk involved in attempting to develop indigenous technologyleadership and an export industry in wave and tidal energy may be too great to justify the level ofsupport needed. A commitment to develop ocean energy without a specific focus on developingan indigenous solution provides a means to adapt technology to use local resources, and mayresult in the development of research excellence supporting an exportable technology industry

Option 3simply maintain a watching brief in the field of wave and tidal energy and adopt anyemerging technology.

European countries that have access to significant ocean energy resources are clearly pursuingthe first of these options. In August 2004, the United Kingdom committed an additional $125million to lever ocean energy forward [7].




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3.0 OCEAN ENERGY POTENTIAL THE VALUE PROPOSITION

3.1 Resource Estimates

3.1.1 World

The oceans are an enormous energy resource, with excellent market potential for clean,renewable and sustainable energy. The possible sources of ocean energy are shown inFigure 2. Two of the most promising sources are marine currents, which are caused bytidal effects and thermal and salinity differences, and ocean waves, which are generated

by the action of wind blowing over the ocean surface. The total power of marine currentsis estimated to be 5 TW, which is of the same order as global electricity consumption. Animportant positive factor for the commercialization of tidal currents is their predictability.Ocean waves also show promise, with the global wave power potential estimated to be 1to 10 TW.

TIDES(0.03 TW)

MARINECURRENTS

(5.0 TW)

THERMALGRADIENT

(2.0 TW)

SALINITYGRADIENT

(2.6 TW)

WAVES(1 to 10 T W)

OCEAN

ENERGY

Figure 2: Forms of Ocean Energy and Estimated Global Power [ Ref. 12]

Canada's east and west coasts are areas of strategic opportunity due to the availability ofhigh wave energy potential, as shown in Figure 3.




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Figure 3: Global Wave Power Distribution (kW/m of crest length) [Ref. 8]

3.1.2 British Columbia

The coasts of mainland British Columbia and Vancouver Island have the potential tosupply a major portion of the ocean energy resource. A preliminary assessment of waveenergy on the west coast of Vancouver Island (as shown in Figure 4) indicates anaverage near-shore power level of 33 kW/metre of wave front, and a total incident wavepower of ~8.25 GW.

Figure 4: Available Wave Power for the B.C. Coast (in kW/m), Based on 1991 Data

[Ref. 9]




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An inventory of tidal current resources prepared for BC Hydro has identified 55 siteswith currents exceeding 2m/s (most of them on the mainland coast, as shown in Figure5), with a total power availability of more than 2,000 MW [10].

Figure 5: Potential Tidal Energy Sites in British Columbia

[Ref. 11]

In British Columbia, some of the highest-velocity tidal current flows occur through thepassages between the Strait of Georgia and Johnstone Strait. The tidal range is moderate(five metres), but the tides from the Pacific through Johnstone Strait are roughly 180degrees out of phase with the tides entering the Strait of Georgia from the southern end ofVancouver Island. This phase difference may mean that tidal currents in B.C. couldprovide a more consistent source of electricity than typically provided by single-phasetidal projects [3].




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3.1.3 Power Generation by 2025

In Europe, it has been forecast that wave energy alone might equal the world contributionfrom large-scale hydro by 2025. A recent strategy document by the Canadian FederalGovernment [34] estimates that power production in Canada from ocean waves could be2,000 MW by 2025. The National Energy Board of Canada [35] forecasts that tidal

developments in British Columbia, Nova Scotia and New Brunswick could produce21,000 MW by 2025. It is difficult to forecast accurately, however, since the efficiency ofenergy capture remains to be proven and large-scale ocean energy plants with distributionnetworks have yet to be developed.

The rationale for pursuing tidal currents and ocean waves as energy sources is driven bythe size of the resource, its renewability and its reliability. It will add valuablediversification, increasing the security of the overall power supply. Ocean energy islargely independent of fuel supply cost risks, and may in fact be critical in the emergenceof supplies of hydrogen as fuel.

3.2 The Development Curve

3.2.1 Technology

Forecasting of technology development is a highly speculative activity, especially for along-term time horizon. However, considerable efforts are being made to improve themodeling of technology development within energy models [14].

Wind power is the world's fastest growing energy source (see Figure 6). It has increasedin excess of 30% annually for the past five years. At the beginning of 2004, worldwidewind-generated capacity exceeded 39,000 MW. It is expected to be 95,000 MW by 2008

and 194,000 MW by 2013. In February 2004, Canada's installed wind energy capacitywas only 327 MW, but if Canada eventually fulfills 20% of its electricity needs fromwind energy as other countries have been able to do, its wind energy capacity will reach50,000 MW.

Figure 6: Implementation Curves of Wind and Wave Energy [Ref. 13]




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The chart on the right in Figure 6 shows the short-term ocean wave power generationforecast by the European countries. Canada projects 23,000 MW of wave and tidalenergy generation by 2025. Clearly, it will take a decade or more of development beforeocean energy can approach this target, even when commercial scale technologies becomeavailable. The challenge will be to accelerate the development and implementation

curves through a coordinated effort in research, development and demonstration.

3.2.2 Price of power

The costs of energy generated from the ocean (wave and tidal current), as shown inFigure 1, are constrained by the pre-commercial status of the conversion technologies. Insome cases, these costs are significantly higher than current conventional energy sources.Yet technological breakthroughs may occur for emerging energy technologies.

Models have been developed to estimate the amount of additional R&D necessary tobring about accelerated technological progress for a technological cluster. Such progresswould have an influence on conversion efficiency and total investment cost, and thus on

the cost of energy over the long term. The positive effect of learning by doing, alongwith the impact of R&D on technology development, yields projections of steadilyreducing costs for various power generation technologies. These projections areconsistent with historical trends, as shown in Figure 7.

Figure 7: Learning Curves for Power Generation Technologies to 2030 [Ref. 14]

Wind power production costs have been decreasing at 4% per year through the lastdecade. The initial capital cost per kW in 1980 was about $2,800/kW, and it decreased toabout $1,000/kW in 1995. In the United States, the average wind energy cost of




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electricity (in 2000 dollars) fell from 47 cents/kWh in 1981 to 5.1 cents/kWh in 1995.This trend has been similar for most emerging energy technologies [16].

The European Wave Energy Thematic Network believes that wave energy developmentis beginning to show a similar curve, as shown in Figure 8 [17]. However, ocean energy

prices are difficult to forecast in the absence of a greater body of research, developmentand demonstration. With adequate investment in R&D and with more installations of pre-commercial renewable technologies such as wave or tidal current power generators, theenergy price will progressively drop, i.e., the 2003 estimates of energy price ranges (asshown in Figure 1) for generating electricity from tidal current and wave resources willshift left in the figure. Whereas, within the same time frame, the estimated energy priceranges for generating electricity from coal and natural gas are likely to increase and willshift towards right in the figure. Adequate R&D investment will enable reducing thetime required to make the pre-commercial technologies to be competitive.

Figure 8: Predicted Reduction of Electricity Costs for Wave Energy Technologies [Ref. 15]

3.3 Meeting Sustainability Agendas

3.3.1 RenewableWave and ocean current energy is infinitely renewable. Many ocean currents arecontinuous, only subject to weather-induced seasonal and annual variations in strength.Tidal currents vary in strength and direction every day, every month and every year, butthe variations are almost totally predictable. With wave energy, the wave heights,wavelength and direction change with the seasons and with the prevailing weather, buthindcasts and forecasts mean that some level of predictability will be possible.




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It is likely that ocean power plants will be able to operate without regular use of fossilfuels and with minimal use of consumables that depend on fossil fuels.

Fossil fuels and other non-renewable resources will be used in the manufacture offacilities, but will be typical of other industrial facilities and will be a one-time

occurrence.

3.3.2 Footprint

The energy footprint factor has yet to be established. It may vary between areas andamong technical approaches. The area needed for an ocean power plant is expected to besmaller than a wind or photovoltaic plant of similar capacity due to the higher energydensity of wave and tidal current resources. Ocean energy plants are usually floatingmoored structures with low visible impact and limited exclusion areas, or are structuresbuilt on the ocean floor in relatively shallow water (


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3.5 Meeting Multiple Needs

Ocean energy will be a boon to the coastal regions of Canada. It will supply distributed power tothe grid, ease transmission constraints, and meet local energy requirements, as shown in Figure9. It will also provide an economic boost through job creation.

Ocean Renewable

Energy

Ocean Renewable

Energy

Grid ConnectedDistributed

Gene ration of

ElectricityRem ote Electr ification,Prod ucti on of P otable

Water thro ugh

desalination

HydrogenProduction

Inte grating with OtherRene wab le, such as,

Offshore Wind for C ostoptimization

For Potential Offs hore

Oi l & Gas Industry:Powering the Sa tellite

Wells Using the

Electricity from theOffshore Wave Plant

P roduction of

Compressed Air forAquacul ture

Grid ConnectedDistributed

Gene ration of

ElectricityRem ote Electr ification,Prod ucti on of P otable

Water thro ugh

desalination

HydrogenProduction

Inte grating with OtherRene wab le, such as,

Offshore Wind for C ostoptimization

For Potential Offs hore

Oi l & Gas Industry:Powering the Sa tellite

Wells Using the

Electricity from theOffshore Wave Plant

P roduction of

Compressed Air forAquacul ture

Figure 9: A Range of Uses for Ocean Energy [Ref. 36]

3.5.1 Generating Electricity

Ocean energy resources off the outer coasts of Canada and within the inner coastalregions could be harnessed to generate electricity. The generation could be grid-

integrated distributed generation or non-integrated for remote locations and offshore oiland gas platforms.

3.5.2 Applying Ocean Energy to the Needs of Remote Communities

Ocean energy has the potential to be a very significant energy resource for remotecommunities in Canada, as well as in developing nations worldwide.

Canada has more than 300 communities that are not connected to an electrical grid or tonatural gas networks. Many of these remote communities depend on oil or diesel fuel forelectrical generation. Due to the high cost of transporting these fuels, energy costs can beup to 10 times greater than those in urban centres. Since 1998, NRC Canada and

Renewable Energy for Remote Communities has been addressing this problem throughtheir Renewable Energy Strategy. The Canadian federal government is working in partnership with the utility industry, the renewable energy industry and northernCanadians, including Aboriginal communities, to develop project implementation toolsand to support information transfer of renewable energy technologies that will facilitatethe selection and implementation of renewable energy projects.




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Another market opportunity for ocean energy is desalination plants, which generatepotable water for remote communities and developing nations. Fresh water is producedthrough an osmotic process, using a technology such as the McCabe Wave Pump. Thiswave pump, which is being demonstrated in Ireland, is designed to operate either as agenerator for electricity or to desalinate seawater. Another application for wave energy is

compression of gases such as air or oxygen for use in aquaculture, as is done in Japan.

Ocean energy plants may also supply power to remote cottages, agricultural properties,aquaculture operations, tourist lodges, telecommunications sites, and so on, as well as providing cathodic protection for oil and gas operations. Ocean power could reducedependence on diesel generators, which are expensive to run and have a considerableimpact on the environment. Diesel-generated electricity in remote areas of Canadaproduces about 200,000 tonnes of GHG emissions every year. A significant proportion ofthese emissions could be reduced by switching to cost-effective, clean and renewablesources of electricity, such as micro-hydro, small wind, and solar photovoltaics, and inthe case of coastlinesocean energy.

Most ocean energy systems will be designed to run with a diesel generator back-up, butthe goal is to reduce reliance on expensive and polluting petroleum fuels, to addressenvironmental and economical concerns in rapidly growing northern communities, and toprovide affordable power as an economic stimulus.

3.5.3 Integrating Ocean Energy with Other Renewable Energy Sources

A renewable energy source combined with a fossil fuel energy source is one kind ofhybrid energy supply, but there are other possibilities. Developers have demonstratedhybrids that use ocean energy with other renewables such as wind and solar. Hybridshave the potential to improve the use of sub-sea power connections and to raise the ratio

of output to construction cost.

For example, Ecofys in the Netherlands has proposed a combination of wind and wavesources, and the Osprey wave power plant in the United Kingdom (which was destroyedin a storm) was designed to also be a mounting platform for offshore wind turbines. Itclaimed to be the first hybrid wind-wave device. A wind and wave hybrid in Nantucket is

in the planning stages, but has been stalled by the public approval process.

The Canadian coast provides an excellent opportunity to explore the feasibility offacilities that combine offshore wind with offshore waves to generate electrical power,and to address issues such as potential storm damage and public perception. A large

offshore wind project has been proposed in BC [37]. Feasibility of harnessing oceanenergy along with the offshore wind through the development of hybrid structure couldbe examined as part of this proposed project.




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3.5.4 Applying Ocean Energy to Generate Hydrogen

Renewable sources of energy like solar, wind, tidal and waves cannot be controlled toprovide direct, continuous base-load power or even peak-load power when it is needed.In practical terms they are limited to ~20% of the capacity of an electricity grid. The sunaffects all ocean activity, the tides are driven by the gravitational pull of the moon, and

the waves are driven by the winds. The availability of ocean energy therefore depends onthe weather, local climate and time of day. As a result, ocean power plants may beintermittent sources of energy.

If there were some way that large amounts of electricity from intermittent producers suchas solar, wind, tides and waves could be stored efficiently, the contribution of thesetechnologies would instantly become viable. In the case of ocean energy, this drawbackis offset by the secondary storage systems inherent to many ocean energy conversion processes. Nevertheless, it makes sense to combine ocean energy generation with anenergy carrier (fuel) such as hydrogen.

Many are hoping that hydrogen will one day replace oil, not only for environmentalreasons, but also for political and national security reasons. But where will all thehydrogen come from? Currently, there are petroleum-based ways of generating it, butultimately these defeat the long-term goals of avoiding climate change, protecting theenvironment, and having a national source of energy that we can depend on. Electrolysisin a fuel cell is a clean way of generating hydrogen, but it is currently more economicalto sell our excess electricity than use it to make hydrogen. That may change if the newlyemerging hydrogen economy flourishes. The hydrogen economy is expected to provide asignificant business opportunity for all forms of renewable energy, and will demand theoptimal use of all power generated from each system. Renewable energy sources such assolar, wind, and ocean are ideal for producing hydrogen by electrolysis, because we can

utilize the hydrogen as an energy carrier to transform and store the converted energy.

The advantage of marrying ocean energy and hydrogen generation is that while oceanenergy is stochastic in nature and electrical energy cannot be stored, hydrogen energycan, like a battery, store converted electrical energy until it is needed. When oceanenergy is abundant or at its peak, it can be used to generate hydrogen, which is thenstored for use when the ocean energy is at a low point.

Other opportunities provided by combining ocean energy with hydrogen productioninclude:

Problems in connecting with an electricity grid can be avoided, along with the cost ofinstalling a sub-sea cable, by using retired offshore platforms to convert ocean energyto electricity and hydrogen.

The hydrogen produced using ocean energy can be stored and shipped via pipeline,tanker or cryogenic bulk carrier anywhere in the country, or the world.

Not only can ocean energy be used to generate hydrogen; it can pressurize it as well.In order to be an efficient fuel, hydrogen must be compressed to very high pressures.




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Ocean energy can be used to pressurize the gas up to 15 bars, which increases theefficiency of the compression process.

A fuel cell hybrid can be a self-sufficient power system, integrating hydrogen fuelcell technology with ocean energy technology. Unused power from a tidal energygenerator can produce hydrogen through electrolysis, which a fuel cell will convert

into electricity as needed. Such a system uses no fuel and creates no pollution, andwould be of interest to ecologically minded communities and resorts. It would also benefit rural communities that do not have electricity, both in Canada and indeveloping nations.

As well as powering a fuel cell, hydrogen produced by this fuel cell hybrid can beused for transportation, providing economic benefits and increased self-sufficiencyfor communities.

3.5.5 Other Market Opportunities

Developers of ocean energy technology will transfer technology and know-how from theexisting offshore oil and gas industry to the new marine renewable energy industry.

Many companies in the offshore oil and gas industry see that their future lies in theirability to diversify skills and services into renewable energy sources. This synergy isbecoming a key driver in the development of marine renewables.

The offshore industry is also highly skilled in working in the unforgiving marineenvironment, and has developed equipment with levels of survivability and reliabilitythat the ocean energy community will need.

In the future, the offshore oil and gas industry will need the power from ocean energy, particularly from deep water waves, as it moves to remotely produced and sub-seaproduction operations.




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4.0 BARRIERS AND CHALLENGES

Technical, political and institutional barriers and challenges lie in the path of ocean energydevelopment. Some obstacles are specific to ocean energy but many also affect other renewablesectors. To overcome them, research and development efforts will need to be well coordinated.

4.1 Technical

In order to develop competitive high performance ocean energy systems for global energymarkets, the following issues will have to be addressed:

Cost

Reliability (withstanding a hostile environment)

Intermittent production and power quality issues

Interconnection issues for distributed generation

4.1.1 Cost

The apparent costs of ocean power plant design concepts are high when compared withconventional electricity generation. The experience so far with prototypes has shown thatinstallation difficulties are due more to logistics and civil engineering challenges than tothe concept itself. Most existing technologies are still at the prototype testing stage andtheir availability, reliability and pre-commercial demonstration costs have not yet beenvalidated.

The costs of components and infrastructure are the two major factors influencing oceanenergy system economics. Sites that offer the best energy potential because of strongwaves and currents are also difficult and dangerous to access, so there is a need forreliable components that are easy to maintain.

The long gap in time between testing the concept model in a wave tank and testing theprototype in a marine environment incurs high technical and financial risks. There is aneed for improved modeling, marine simulations and testing procedures to shorten thetime it takes to produce an operational system. This will require development of acomplex marine model, which could also be used in power generation capacityprediction, resource assessment and as a control strategy for autonomous operation

Costs can be reduced through improving the components, extending their lifetime, and

improving the design and efficiency of the complete system. Research should be aimedat optimizing both component and system design. While there is already a range oftechnologies being deployed as prototypes, new power off-take systems must be designedand tested for each new ocean energy conversion concept, adding to the developmenttime and cost. With experience, more standardization and cost reduction can beexpected.




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Deployment is another area of concern. Installation represents the highest cost and risk.Designs must be developed that are easy to deploy, along with procedures that are cheapand safe.

4.1.2 ReliabilityWithstanding a Hostile Environment

Most ocean energy systems are built with established construction methods and relativelysimple technology. For example, Blue Energy's system has fixed rotor blades mounted indurable marine concrete caissons, which is structurally and mechanically straightforward.The transmission and electrical systems are similar to thousands of existing hydroelectricinstallations, except they now operate in seawater. Others may use structures similar tothe bottom-founded or floating structures used by the oil industry. In all cases, it is to beexpected that reliability will increase and lifecycle costs will decrease with experienceand integrated design approaches.

4.1.3 Intermittent Production and Power Quality

Ocean wave energy is an inherently stochastic resource with significant daily and

seasonal variation. Intermittent generation sources, such as ocean wave, wind, and solar,can create technical issues for grid system operation at penetration levels beyond 5-10%of system capacity. These issues include concerns about fault ride-through and frequencycontrol, voltage and power factor control, and increased levels of operating reserves [19].

Extensive research is underway to address the issues caused by the intermittence of windenergy, such as forecasting methods, energy storage, voltage and frequency control,system reserves, correlation with other intermittent resources, and power quality issues.The progress that is achieved in this area can be incorporated into the design of oceanwave energy devices. Wind energy research will identify mitigating measures and willhighlight priorities for those who are researching and developing ocean wave energy

technologies.

Tidal current energy is less affected by intermittence, since it can be predicted due to thecyclic flows of the ocean's tides. There should be sufficient flexibility built into the gridto optimize load capacity by using pumped storage, so that energy can be stored when notneeded and then used to cover peak loads or periods when there is less production.Moreover, potential sites in BC having tidal current at different phases will reduce theimpact of intermittence.

4.1.4 Interconnection Issues for Distributed Generation

Distributed Generation (DG) is a large part of the solution for secure, sustainable energyresources[20]. The ultimate goal is for most distributed resource technologies, such asfuel cells, photovoltaics, and microturbines, to rely on power electronic inverters forconnection to the power system. In the near term, most of the distributed energyresources being built and planned are for conventional, synchronous machine-basedgeneration. Either way, ocean energy can contribute to the supply.




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There are concerns around DG in general, and cyclical energy sources in particular. Howcan the dynamics of a local subsystem or distribution feeder be altered by DG? Whathappens where there is significant penetration of DG relative to the total power load onthat feeder? When the energy source is cyclical, or less than predictable, it is easy to seewhy there may be resistance to incorporating that resource into the grid. Do planning or

engineering approaches address these issues?

4.2 Policy

Developers of ocean energy technology and other stakeholders have identified the followingmajor non-technical constraints:

Energy market liberalizationthe focus on least cost and the lack of energy sector

confidence in emerging (= alternate = marginal = marginalized) energy

Lack of support in energy policyocean energy is not directly supported, even by thosepolicies that target alternate energy

Lack of regulations that encourage, and reward, the use of ocean energy Lack of market incentive programs, tax-credit programs for companies and individuals

who use ocean energy sources, or investment

Lack of financial assistance for R&D, public awareness campaigns, and organizationaland lobbying activities

Issues related to planning and permitting of projects

Institutional barriers and lack of support infrastructure

4.2.1 "Marginalized" Energy

New approaches to financial and economic analysis may be needed if the standardtechnologies that produce cheap power, which are vulnerable to fuel prices, are to be

compared to initially expensive and risky technologies that gain access to free energy.

4.2.2 Energy Policies

Public awareness of the availability, potential and benefits of renewable energies is low.This leads to a lack of demand for both the energy itself and the policies that will enableits supply. The market barriers that have been identified are:

Industry visibility and credibility, including standards

Understanding of ocean resources, and the areas where various technologies may beeconomical

Understanding of the true cost of renewable energy sources versus conventionalenergy sources

Environmental and aesthetic concerns about the project sites

Public opinion

The Intergovernmental Panel on Climate Change estimates that $10 billion in R&D and$7 - 12 billion in worldwide deployment incentives are needed, spread over a couple ofdecades, to support commercialization of renewable energy technologies. Other policies




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that would encourage greenhouse-friendly technologies include tradable emissions permits and/or fees that would internalize some of the social and environmental costsassociated with conventional energy technologies, and regulations to open access to theutility grid to small, independent renewable electricity producers.

The costs of environmental impacts associated with energy conversion from conventionalsources are not yet incorporated into energy prices, which makes the clear environmentaland other benefits of renewables less apparent in the marketplace. Once policy isdeveloped and implemented that expresses the external environmental costs of theconventional energy supply (through fiscal mechanisms such as green credits, carbontaxes, etc.), renewable technologies could suddenly have a significant competitiveadvantage.

Portugal has recently published a law that fixes new prices for the purchase of electricitygenerated by renewable sources. It takes into account:

Amount of power generated

Costs of operating and maintaining the conventional power plant that is no longerrequired

An environmental value that corresponds to the amount of carbon dioxide per kWhsaved by the renewable energy plant

A prerequisite for further growth of the renewable energy industry is fiscal measuressuch as subsidies or "eco-tax" exemptions for investors and operating companies thatsupport the emergence of renewable energy and allow the technologies to compete in the

marketplace.

The general public will need to be educated about the added value of ocean energy, interms of power quality, reliability, and service delivery. This marketing effort couldcreate an image of ocean energy systems as highly technical but green, readily available,and adaptable for new applications.

4.2.3 Lack of a Planning and Permitting Process

Planning guidelines and administrative or permitting procedures need to be put in placeto handle proposed ocean renewable energy projects. Currently, the relatively minor localnegative impacts of renewable developments are sometimes perceived by planningauthorities and the general public as outweighing the national or regional environmentalbenefits and the long-term energy sustainability from such projects.

4.2.4 Removal of Institutional Barriers

Policy and decision-makers lack knowledge and experience about renewables, as doesthe energy distribution industry. Conventional energy sources have benefited from avariety of subsidies, policies and other forms of support on a sustained andglobal/multinational basis, allowing for competitive delivery of these energy sources by amature industry. The rules now governing deregulated energy markets make it difficult




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for energy companies to justify investments in new initially non-competitive and riskytechnologies, even if they are sustainable and ultimately their energy is free.

Integrated resource planning has become the "just in time" approach in the energy sector.It includes objectives to diversify supply sources and to optimize sustainability, but

reliability becomes critical when capacity reserves are optimized. Some of theseobjectives make it difficult to focus on longer-term sustainability by assisting some of thelonger-term solutions through their development curve.

4.3 Financial

The experience gained in developing wind energy provides some guidance on the roles thatgovernments, utilities and the private sector must play. The May 2004 report [21] by ClimateChange Capital places ocean energy development a full step behind offshore wind developmentand two steps behind onshore wind development. The report calls for government support forcontinuing R&D and enhanced valuation mechanisms for any ocean renewable energy credits,

Figure 10: Funding Gap [Ref. 22]

and ensuring that ocean energy producing projects should be relieved of the infrastructure costsof grid hook up or enhancement. Climate Change Capital, which is a merchant bank thatspecializes in financial development of renewables, sees the government role as critical toensuring that there will be supplies of ocean energy, and critical to development of an effectiveinvestment climate.

4.4 Technology Implementation and Commercialization

The funding for ocean energy technologies lies in the left half of Figure 10, with most still in theR&D stage. Devices that have been tested must be scaled up or developed in clusters to operate

as power plants, and experience is needed with extended operation and maintenance. Nosupplier has yet come through with a proven "standard" product. All suppliers are facing the pre-commercial funding gapa development phase where technology and financial risks areparticularly high.

There are three choices:




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1. Sit back and wait for others to be ready to sell commercial systems2. Rely on existing R&D and commercialization efforts, if any by Federal departments of

Canada, to help some initiatives survive this "valley of death"3. Take a proactive role in trying to collaborate and solve the problems inherent in this

phase of any technology development, by recognizing the particular challenges of the

marine environment and the strategic importance of accessing ocean energy as soon aspractical.

4.5 Scaling Up

One of the strategic advantages that ocean energy offers over other renewables is energy density,due to the accumulated energy and the density and viscosity of the water. This means thatscaling up to significant power production could occur on a much smaller footprint than forphotovoltaics and offshore wind. In many instances it will be possible to scale production simplyby incorporating more unit devices into a production system.




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Renewable Ocean Energy Delivery in B

OREG RD Proposal

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