Permitting Insanity

Why does it take more than 9 years and endless anguish to allow wind turbines in Nantucket Sound, but deepwater oil drilling routinely has environmental impact studies waived, supposedly because massive oil spills are unlikely? The oil industry has received approvals with potentially severe environmental impacts in as little as 10 minutes. Contrast the (over-)abundance of caution for wind and the cozy practice of superficial scrutiny for oil. Recent events make the dissonance especially jarring.

The Cape Wind offshore wind farm is closer than ever to the start of construction. Just more than a week after the explosion of BP's Deepwater Horizon platform, US Interior Secretary Ken Salazar gave formal approval, saying:

After careful consideration of all the concerns expressed during the lengthy review and consultation process and thorough analyses of the many factors involved, I find that the public benefits weigh in favor of approving the Cape Wind project at the Horseshoe Shoal location. With this decision we are beginning a new direction in our Nation’s energy future, ushering in America’s first offshore wind energy facility and opening a new chapter in the history of this region.

Laissez Failure

The slow-motion ecological catastrophe in the Gulf of Mexico is horrifying.

The oil slick is now the size of Ohio, and growing by the hour. Edges of it are now reaching land and all along the Gulf coast residents wait with deep foreboding and growing anger as the dimensions of the disaster become clear.

This is not an oil spill, but an oil spilling, as more ruptures from the sea floor, surfaces, and spreads its devastating reach towards shore. 40% of the coastal wetlands in the United States are under threat, as are the majority of the country's oyster and shrimp fisheries. Local fishermen have moved quickly through the 5 stages of grieving as they face the imminent destruction of their livelihood, economic security, their way of life, and their future.

Emergency response began quickly and broad efforts at mitigation are underway. The Obama Administration formed a National Response Team, Louisiana Governor Bobby Jindal is mobilizing the state's National Guard, and locals are taking to their boats to deploy booms to intercept the sprawling slick. Dealing with the immediate crisis is paramount now, yet soon hard questions must be asked, and honestly answered. The critical questions are:

Why did this happen? How do we prevent it happening again?

Technology Won't Save Us This Time

For a while many of us thought (hoped) that renewable energy would remain a bright spot of investment and innovation, even as other sectors of the economy stagnated, shriveled or sickened. However, the broader economic disease is spreading and renewable energy companies have caught the contagion.

Finavera has seemingly exited the wave energy business, a direct result of the lack of partners and especially funding for the AquaBuOY technology it acquired from Seattle-area AquaEnergy years ago.

After blowing hot and cold for the six months, the the wind industry has now joined the downturn.

Now Bluewater Wind is on the ropes following news that its parent company, Australian conglomerate Babcock and Brown is being forced into liquidation. After a lengthy and tempestuous courtship, Bluewatwer inked the first power purchase agreement (PPA) for offshore wind just this past summer with Delmarva, at a price of less than $0.11/kWh. While there is no word (yet) about the future of Bluewater, the Delmarva deal, or the PPA for the project, their collective future appears dim, another domino in the continuing unwinding. How the project could have ever been feasible at that astonishingly low rate will now likely never be known.

The lack of constancy on tax incentives (like the PTC) has been a drag on renewable energy investment for many years. Without the certainty of those incentives key financing strategies such as flip LLCs [pdf] become too risky, and the tax equity investors pull out. Without these investors renewable energy deals don't get done:

The pool of so-called "tax equity investors" has dwindled to around a half-dozen, from more than 20 in 2007. Key players such as Merrill Lynch and Lehman Brothers no longer exist. Others, including the likes of John Deere (DE) and Prudential (PRU), have backed out of the market, if only temporarily, according to research by Hudson Clean Energy, a private equity firm specializing in green energy. "This will be a constraining factor because the population of sophisticated buyers for these credits is too small," says Oerlikon's O'Brien.

The shortage of buyers couldn't have come at a worse time. To hit Obama's goals for new renewable energy, the industry will have to mobilize far more capital than it has had to before. This year, the tax equity market is expected to hit $11.1 billion and would have to rise to around $43 billion in 2012 to build all the capacity being called for. Yet in 2007, when the market had more than 20 buyers, investors bought up $5.4 billion in tax equity. Last year, just eight investors handled about $5.5 billion in 2008. "Between now and 2012, [tax equity] markets would have to grow four- or fivefold," says Arno Harris, CEO of Recurrent Energy, a renewables developer in San Francisco.

The ecosystem of creative fast-growing technology companies have pulled the economy out of the last several recessions:

In the 1970s microchips helped jump-start the economy. In the 1980s personal computers unleashed a wave of consumer and business spending. And in the 1990s the Internet gained steam just when the economy was at its bleakest, creating new companies, jobs, and investment opportunities. Even in 2001, when hundreds of dot-com companies went bust in the space of a year, a couple of guys were already working on a startup that would make money on web searches. (That would be Google.)

Technology won't save us this time, at least not all by itself, because of the tumorous growth of dysfunction in the core structures of the economy. Renewable energy could be the engine to lead the recovery, but first there must be capital investment. Attempts to "unfreeze" the credit markets have been a dismal failure, and further (but wiser) efforts in that direction, while worthy, will be insufficient. Tax cuts, refundable credits and such ilk are not the answer. A direct injection of capital to the renewable energy sector is essential for the inextricably linked needs of our future energy and economic health.

There is no time to waste; this is not a typical recession.

Grays Harbor Ocean Energy Company

The Grays Harbor Ocean Energy Company (GHOEC) has filed applications for preliminary Federal Energy Regulatory Commission (FERC) permits for hydrokinetic power at seven sites in six US states.

These filings are starting to get more visibility and comment and several people have asked us for more information on what we are doing, what our plans are, and why we are taking this approach. We have also upset a few people, primarily over two things: for not having engaged in more advance consultation, and for (some fear) having some kind of nefarious agenda.

In this post I will strive to provide some explanatory background along with more information about our plans and intentions. Your comments and constructive criticisms are welcome; please comment on this post or send email to info@graysharboroceanenergy.com.

Background

My business partner Burt Hamner and I founded GHOEC a year ago initially to pursue utility-scale ocean energy near Grays Harbor County in Washington State. Burt earlier had directed a feasibility study (12MB PDF) for Tacoma Power in Puget Sound's Tacoma Narrows to assess the viability and feasibility of tidal power. The study's conclusion is that tidal power in Tacoma Narrows would not be feasible for a decade or longer, and Tacoma Power sensibly declined to proceed further.

Although the study's result was disappointing--we had hoped to proceed with a demonstration project there--the need for renewable energy persists, so we looked at where to go next, and, as a result formed two companies, Hydrovolts and GHOEC. Hydrovolts seeks to take the concept of utility scale tidal turbines and build them much smaller--at kilowatt scale--for distributed and point-of-use generation. GHOEC sought to find solutions other than tidal power for large-scale renewable energy generation in Washington State.

During the assessment for Tacoma Power it became clear that the outer coast of Washington State has very strong wave and wind resources, and few were exploring them. Natural Currents LLC received a preliminary permit for tidal energy in Willapa Bay in March 2007 (P-12729) and Finavera Rewnewables continues to pursue wave energy in Makah Bay, having received the nation's first (and so far only) commercial operating license from FERC. (FERC permits and comments can be found here.) GHOEC filed an application for a preliminary FERC permit on 10/28/07 to assess the ocean energy potential near Grays Harbor; given the potential of the resource, we were surprised that no one else had previously done this.

Interestingly, AquaEnergy (later bought by Finavera) earlier looked at offshore energy in Grays Harbor, but discontinued their efforts because the ocean was too deep for their particular wave device. This may be the origin of the idea that the Washington coast is too deep for ocean energy devices in general; as we talked to various renewable energy people and companies we kept hearing that the ocean of Washington State was "too deep." However, the ocean current on the Pacific Coast moves south-to-north, and the Columbia River discharges at least a million tons of sediment into that current every year. So, while the outer continental shelf (OCS) is very narrow off California and much of Oregon, it gets quite large from near the mouth of the Columbia and to the north. 10 miles from shore the ocean is only about 150 feet deep, meaning that there is a very large area suitable for many kinds of marine renewable energy devices, and offshore wind turbines of the largest size could be placed far enough out to perhaps entirely mitigate concerns about views and noise.

The FERC Role

The FERC issued our preliminary permit P-13058 on 7/30/08. (Press Release.) This preliminary permit gives us the right to assess the potential for wave power at the two sites detailed in the application and described in detail on our web site. It does not permit the placement of anything in the water; that can only occur under a FERC pilot or operating license, and only after acquiring many other permits from the various local, state and federal authorities. What the FERC permit and FERC process do, however, is provide a detailed framework for proceeding. It removes ambiguity on what is required and ensures formal involvement of all stakeholders, including environmentalists, fishers and crabbers, local officials, tribes, property owners, and others. The FERC system also grants the first applicant for a hydropower site priority development rights. Says the FERC:

Section 4(f) of the Federal Power Act authorizes the Federal Energy Regulatory Commission to issue preliminary permits for the purpose of enabling prospective applicants for a hydropower license [covers wave power but not wind power] to secure the data and perform the acts required by FPA section 9.3 which in turn sets forth the material that must accompany an application for license. The purpose of a preliminary permit is to preserve the right of the permit holder to have the first priority in applying for a license for the project that is being studied. Because a permit is issued only to allow the permit holder to investigate the feasibility of a project while the permittee conducts investigations and secures necessary data to determine the feasibility of the proposed project and to prepare a license application, it grants no land-disturbing or other property rights.

We are very interested in offshore wind, and the wind off Washington State is amongst the best in the world for generating wind energy. Wind is not much mentioned in any of our FERC permit applications for a very simple reason: FERC has no jurisdiction over offshore wind on the OCS or anywhere else. In our application for the Grays Harbor demonstration project we had originally included information on our plans to test wind energy using a single turbine; the FERC sent the application back and requested we remove all references to this. The FERC didn't even want to hear about it. In our newest applications there is also only passing mention of wind energy, and this is based on our experience in filing applications with FERC according to their rules and requirements.

The Minerals Management Service Role

Historically, Minerals Management Service (MMS) of the Department of the Interior has overseen the leasing of federal lands (and waters) for resource extraction. It grants leases through a competitive auction for everything from oil and gas drilling to metals and mineral mining. The Energy Policy Act of 2005 (PDF) also gave the MMS jurisdiction over renewable energy projects on the OCS. The MMS and the FERC have been negotiating how to cooperate on offshore renewable energy projects ever since. They had publicly announced their intention to sign a MOU, but there is still no completed agreement. MMS completed the comment period on their proposed rules in September and has indicated that they will release final rules before the end of the year (now only weeks away.)

I posted earlier about FERC asserting jurisdiction over hydrokinetic projects on the OCS and the state of affairs between the two agencies. There are excellent summaries of the inter-agency squabble here and here. Final resolution by mutual agreement may yet happen, but intervention by Congress or adjudication by courts is looking more and more likely.

The GHOEC Approach

We believe our energy future requires offshore renewable generation from wind and wave. The best places to do these kinds of energy projects is farther out, beyond the limit of state waters--10-15 miles from shore.

The GHOEC technology solution for ocean renewable energy includes a mobile jackup platform that supports wave energy and wind turbines. The MMS does not yet have a process or rules to pursue energy projects on the OCS. When FERC asserted jurisdiction on hydropower projects on the OCS they provided a way to proceed. The Company therefore applied for FERC preliminary permits to assess wave energy from the sites identified. If the FERC issues preliminary permits the Company will proceed with site studies. The results of the studies, local consultations, partnering discussions and other factors will guide GHOEC in its decision of whether or not to proceed with the next phase of FERC permitting. We expect that resolution will be achieved on the issues between the FERC and the MMS and expect to pursue whatever applicable rules and procedures established by MMS, just as we will comply with those of all other authorities at every governmental level.

We are not hiding our interest in pursuing offshore wind or engaged in some kind of devious Trojan horse activity. Formal applications and responses to FERC are done according to their rules; we strive to present the full and accurate picture of what we are doing and planning on our web site. We also encourage interested or concerned parties to submit comments to FERC or directly to us. Commenting on the FERC applications is easy--when you have the docket number of the application go to FERC Online and follow the directions.

Finally, all of this is still at a very preliminary stage and many things could change as we go forward. We have not selected any particular wave or wind technology and recognize that considerable work lies ahead in figuring which, if any, would be suitable. Those alluded to in the applications or on our web site are provisional; any proposed solution will require careful and competent study in many areas, including suitability for any particular site.

We do like the three-legged jackup platform, adapted by Offshore Wind Power Systems of Texas from use in the Gulf of Mexico oil and gas industry. There are many advantages to this platform, including:

• There are no cables/wires underwater which threaten whales
• It has a smaller ocean floor footprint than cable systems
• It can be placed/removed in as little as a single day
• There is no driving of piles and thus none of the noise that pile-driving causes
• The structures are simple enough that they can be manufactured locally using facilities that exist in any marine industry in any reasonably-sized port.
• The core design withstands force 5 hurricanes and 60-foot swells

There are, of course, also many questions, which is why more studies need to happen before this or anything else is put in the water. Our approach is to proceed deliberately, following the rules, and doing the work of careful assessment and study using qualified experts and the insight and knowledge of local groups. If at any point it becomes clear that any project under consideration cannot be made viable, feasible, and environmentally compatible we will stop. Bookmark the page, print it out, memorialize this how you want. It is a commitment on our part.

Consultation

The first that many local authorities and stakeholders learned of our plans was by a notice from a federal agency or a piece in the news. That is not what we wanted, and we are sincerely sorry for the shock and for any offense.

Just as with our removal of most mentions of wind turbines in our applications to the FERC, so to with our consultations: we acted based on our experience with the application for the project in Grays Harbor. Burt wrote an open letter explaining how we were surprised by the pace of the process:

I wish to extend my apologies for surprising state and local officials and organizations in the states where we have proposed projects. The FERC acted on our applications faster than I think it has ever acted for any applicant before, and, frankly, it caught it us off guard. We have not had time to contact the political, energy and ocean leaders in our project areas.

We applied for the preliminary FERC permit for the Grays Harbor project on October 28, 2007. The FERC opened the application for public comment five months later, and issued the permit on July 30, 2007, nine months after we applied. The seven recent permit applications were applied for on October 21, 2008 and the FERC opened them for public comment on November 28, 2008, a mere five weeks later. We simply did not expect (and did not have advance notice) that seven applications would all be opened for comment so quickly. Naively, we assumed that we could begin that process in January rather than during the holiday season, and be fully engaged prior to the FERC's action. We were clearly wrong to assume this and regret the negative impression of our intentions it has created. Burt wrote:

We have been preparing to contact the officials in the states affected by our applications in January and February, after the holidays and the Presidential transition and the new Federal agency heads are in place. I personally called FERC and asked them to open the public comment period in January or February, because opening it in December is rather unfair to the public - the holiday season is a big distraction and I don't think the public and agencies really get a "normal" 60-day comment period if it opens on November 28. A proposal for offshore energy development of course greatly concerns state and local officials and the affected public and interest groups. We have great experience in stakeholder consultation and the permitting processes and we like the FERC system, unlike almost every other developer, because it requires and directs an extensive consultation process with every stakeholder. We will follow that process and contact state and local leadership in our site areas beginning in January 2008. We have already contacted a few key people in each state. We look forward to receiving "official" comments on our applications to FERC during the 60-day period, and of course we want any feedback at any time to help us understand local concerns and learn how we can advance this tremendous opportunity in open partnership and collaboration.

Again, we welcome your comments, either directly to us or to FERC (use the docket number of the application and go to FERC Online.)

Solving the Variability of Renewable Power

An oft-repeated problem with renewable sources such as wind, solar, wave, and tidal is that they are variable. When the wind is not blowing or the sun is not shining then they don't produce power; conversely, there are times where more power could be produced than could be used. This variability, often exacerbated by its unpredictability, has significant implications, especially for utility-scale generation that is connected to the electrical grid.

Current grid management is, in its simplest form, the matching of electrical generation and electrical use, the matching of supply and load. Electrical grid managers are able largely to rely on the load profile, the historical variation of the load over time. There are two basic techniques today to match generation and load: generate additional electricity from various sources when needed (the usual approach) or reduce demand (demand response, much less common.) A detailed explanation can be found here:

The power utilities are able to predict to a reasonable accuracy (generally to within one or two percent) the demand pattern throughout any particular day. This means that the free market in electricity is able to schedule just enough base load in advance. Any remaining imbalance would then be due either to inaccuracies in the prediction, or unscheduled changes in supply (such as a power station fault) and/or demand. Such imbalances are removed by requesting generators to operate in so called frequency response mode (also called frequency control mode), altering their output continuously to keep the frequency near the required value.

The grid frequency is a system-wide indicator of overall power imbalance. For example, it will drop if there is too much demand because generators will start to slow down slightly. A generator in frequency-response mode will, under nominal conditions, run at reduced output in order to maintain a buffer of spare capacity. It will then continually alter its output on a second-to-second basis according to the needs of the grid.

This spinning reserve is a significant expense to the power utilities as often fuel must be burned or potential power sales lost to maintain it. The kind of generation used for fast response is usually fossil fuel powered which produces emissions of between 0.48 and 1.3 tonnes of CO2 equivalent for every megawatt hour (MWh) generated. Thus a significant environmental burden, in the form of increased greenhouse gas emissions, is associated with this imbalance.

Most forms of generation are unsuitable as peaking power plants (peaker plants, spinning reserves) because they cannot be efficiently started/stopped or operated on an intermittent or sudden demand basis. As a practical matter, only natural gas turbine generation can serve as peaker plants. This is the core reason why T. Boone Pickens, Chesapeake Energy and others are so interested in wind power--it will increase demand for natural gas.

Thus the paradox: the desire to add renewable sources of electrical generation is motivated in part by the need to mitigate climate change; however, the addition of variable renewable sources increases the need for spinning reserves, which currently adds to the carbon problem.

What to do? What other than natural gas, with its carbon footprint problems, could serve as a spinning reserve or, more broadly, as a peaking power plant or some kind of load following capability from storage that would enable near-instantaneous supply increases to respond to changes in the electrical demand?

An alternative is grid energy storage. With the growing interest in and development of electric vehicles, especially plug-in hybrid electric vehicles (PHEVs) some have suggested that a growing array of distributed batteries in PHEVs could serve as a source of additional electricity in periods of high demand.

The concept, called vehicle to grid (V2G), is based on the fact that your car is typically not being used 90 percent of the time. "What if it could work for you while it sits there?" said Jeff Stein from the University of Michigan.

The National Science Foundation has granted a research team lead by Stein $2M to explore the possibility of V2G technology using PHEVs. There are many problems to be solved, however. The cars would need to be plugged into a socket not just when being charged, but also so electricity could be drawn back out. How would this be controlled? No PHEV owner will be happy to wake up in the morning and find the battery (half-)drained after being plugged in all night, presumably charging. There are (potentially significant) efficiency losses in charging/discharging batteries, and the life of the batteries would likely be shortened by an arbitrary cycle where complete charge or discharge may not occur. Lastly, there would need to be substantial elements of a future smart grid deployed to even allow this distributed storage to be harnessed in a centralized way. Interestingly, there is already a test of this concept underway at the University of Colorado (Boulder) by Xcel Energy. Other tests are also underway by Southern California Edison, Austin Energy, Duke Energy, Wisconsin Power, Excel Energy, and Pacific Gas & Electric, amongst others.

Hydro is another mostly green approach. Here in Washington state we get about 70% of our electricity from conventional (big dam) hydroelectric power, which has the ability to serve as a peaker plant by letting more or less water flow out of the reservoirs and through the turbines. There is competition for the water, however, especially from irrigation, but also from navigation and fisheries concerns, so the degree to which these dams can serve as peaker plants is somewhat limited.

Pumped storage hydroelectricity is another storage mechanism that might be explored, and may be very well-suited in coastal settings with large amounts of ocean energy generation (offshore wind, wave, etc.) Some of the drawbacks of this form of energy storage would be mitigated by a reservoir built for the purpose, rather than the use of a pre-existing (freshwater) lake.

Storage could also be achieved via flywheel arrays, hydrogen generation, compressed air, or other techniques.

Longer term, an updated, expanded, and smarter electrical grid is necessary. Wind generation is more variable the more local the scale and geographic reach of the turbine array. As more wind generation comes on line in greater density and over a more diverse, interconnected geographic area, local variations even out and become less significant. Offshore wind, despite its higher cost has several significant advantages over onshore wind; a large one is greater wind (power) on a steadier basis. Large coastal arrays (example) would take out some of the variability.

A Fresh Wind in the US

The post-election speculation is well underway, with predictable positions on one side arguing for a rapid implementation of the Obama energy plan, and on the other cautioning that not much can or should be done. FWIW, I've stated my opinion several times and, while no one can say with certainty what will happen, bets are already being made, and they suggest the start of a new boom.

BP is coming ashore in the US:

A spokesperson for BP told New Energy Finance: "We have decided to focus our investment on onshore wind assets in the US, where we have been extremely successful and have built up a portfolio that, if fully developed, could amount to as much as 15GW. We will not be pursuing opportunities in wind outside the US, and if we have ongoing ventures in other countries, we will review them." He stressed that the move did not represent a change in BP's level of investment in wind "at all".

Clearly not:

Clipper Windpower and BP are teaming up to build the 5,050-megawatt Titan wind farm, the world’s largest, in eastern South Dakota. Already under development, Titan will generate five times as much electricity as the state’s 780,000 residents currently use. This project includes building a transmission line along an abandoned rail line across Iowa, feeding electricity into Illinois and the country’s industrial heartland.

BP is not the only legacy energy company reallocating their wind energy attention. Shell pulled out of the London Array back in May, disappointing its partner E.ON. Said Paul Golby, UK CEO:

The current economics of the project are marginal at best - with rising steel prices, bottlenecks in turbine supply and competition from the rest of the world all moving against us.

At the time oil was at $120 a barrel and heading up. With oil now almost half that and trending down, all renewable energy projects, including wind, have come under pressure. Illiquid credit markets, a global recession and a lower cost of energy are combining to inhibit new energy project investment generally. Yet wind is clearly experiencing little more than a lull.

A BP spokesman, talking about the US said “It’s a big place and it’s got a lot of wind,” and BP found the existing regulatory frameworks in the U.S. "helpful" in boosting development through incentives. Shell does too:

Shell and BP are competing in the US to build the world’s largest wind farms. ‘Many are now recosting their plans and are attracted by other countries who are tempting them with tax breaks and a freedom to build what they want practically anywhere,’ said one analyst.

That seems a bit over the top given the growing opposition to wind farms in the US, but there's little doubt that public opinion is changing in ways that should make development of large scale wind projects easier to do. That the US environment is perceived as more favorable than the UK's is also odd considering that the Production Tax Credit (PTC) for wind received only a one year extension, while UK's Crown Estate has pledged to pay for half the pre-construction cost of offshore wind. One big reason for companies abandoning the UK market is grid connection:

Some companies in Scotland have been told to join a 13-year queue and are being asked for deposits of millions of pounds before the grid will agree to connect them. Currently, 115 Scottish renewable schemes, totalling 9GW of mostly wind power, are waiting to plug into the grid before they can supply electricity. Some already have planning permission but have to wait many years to connect.

Creating a smart grid with more capacity between windy plains and energy-hungry cities appears to be a high priority for the incoming Obama administration. Wind companies will also welcome a longer-term PTC which will make the financial planning more certain.

The prospects for wind now appear increasingly bright despite lingering concerns over the global economy, as turbine manufacturers, wind developers and the public at large perceive ever more clearly which way the wind is blowing:

The market for wind is very strong, with more than £40bn invested worldwide last year, demand for turbines going through the roof as countries rush to meet climate change targets, and the very few manufacturers producing turbines now looking only for large orders. Emerging Energy Research, a leading research and advisory firm analysing clean energy markets, expects the international wind power industry to increase 500 per cent over 12 years.

Vestas, the world’s biggest turbine maker, now has a £6bn order book and its turbine prices have risen 74 per cent in the past three years. China plans 100GW of wind power by 2020, a ten-fold increase from today. Texas alone plans more wind power than is expected to be installed in Britain in the next 20 years. The net result is that prices are escalating and orders for equipment taking longer and longer.

‘Everyone wants wind power. If you ordered today you could possibly get a turbine in 2011. But you would have to be a serious order,’ said an Enercon spokesman. ‘It is a very good time for wind.’

The boom has begun. Will it become a bubble? Do we care? Perhaps it's normal. At least we will be solving some real problems (energy security and climate change) in a sustainable way, even if some of the economic benefits prove eventually to be more transitory. Caveat investor, after all.

First Offshore Wind Turbine Operating in Germany

The first offshore wind turbine in Germany started producing power on Tuesday. Environment Minister Sigmar Gabriel turned on the first turbine at the future Hooksiel complex near the coastal city of Wilhemshaven. "Offshore wind power is of key importance for our future energy supply and a decisive factor in achieving our expansion goals for renewable energy," Gabriel said.

The 5MW pilot project located a mere 500m from the beach is a proof-of-prototype for an eventual 80 turbines to be placed 100km off the North Sea island of Borkum. Construction on that facility is planned to commence in 2009.

Germany joins Denmark, the United Kingdom, Sweden, Ireland and the Netherlands as the only countries generating offshore wind energy. Plans for offshore wind are underway in many places in Europe and in the United States. Offshore wind has been slower to catch on due to its higher costs, but this is changing due to continuing demand growth, the lack of additional land-based sites with good wind, and the development of new platform technologies.

Last year 14% of German electrical supply came from renewable sources, up from 11.5% in 2006. Germany has a 30% target by 2020--the most ambitious goal in the European Union.
By 2030 they aim to provide 15 percent of households with electricity produced at offshore wind farms, the equivalent of around 25,000 megawatts.

UK to Pay Half of Pre-Construction Costs of Offshore Wind

Wow.

Wind Power Flagging?

The United States added more wind capacity in 2007 than any other country in the world--over 5,000MW. This year, the new additions will break records again--more than 7,500MW. Can it continue? The Wall Street Journal, quoting the American Wind Energy Association, is doubtful:

Next year won’t be so sweet, the AWEA says, for two big reasons. First, the financial crisis is making it tough for lots of developers to get the cash to build new wind farms. And even though the industry’s prayers were answered with a last-minute, one-year extension of tax credits for wind energy, the tax breaks came late, in the last-gasp Congressional bailout package. That means construction on new wind farms will get a slow start next year.

There are other reasons for concern not cited by the Journal. One is growing opposition to wind projects from the local NIMBY factions and also from those who oppose wind farms on principal (for whom some have coined the terms BANANA--Build Absolutely Nothing Anywhere Near Anyone--and NOPE--Not On Planet Earth.) More on this in a later post.

Another reason is our increasingly creaky and ad hoc transmission and distribution electrical grid. With generation typically far from the load, the power must be moved. Here in Washington most wind generation is in the eastern half of the state and must use one of two corridors over the mountain passes. Both of these routes are at or very close to capacity today, so new wind farms cannot send power to a hungry Puget Sound area unless more wires are strung, a very expensive option.

These last two problems might be overcome by offshore wind. The larger problems of tight credit and, shall we say, gusty support for renewable wind energy will require stronger and better focused political leadership than we've seen the last few years. Dithering on making the smart and necessary energy choices would be an enormous missed opportunity for both our environment and our economy. The renewable energy industry in the United States demands bold leadership. Let's boldly demand it.

How big can wind turbines get?

Wind turbines keep getting bigger, and their larger sizes are increasingly targeted to offshore applications. How big can they get? How big is big enough?

Danish world-wide leader leader Vestas provides the industry workhorses, especially the V90 model rated at 2-3MW.

Industrial behemoth GE, the largest US manufacturer, has machines comparable those of Vestas; it's newest 3.6MW model is intended primarily for offshore use.

Enercon, third largest (depending on how one does the scoring) and #1 in Germany has a long line of devices from the 330kW model E-33 (330kW) to the "world's largest" E-126, a 6MW monster with an overall height of 198 m (650 ft) and a diameter of 126 m (413 ft).

The largest turbine from German Siemens Energy is the 3.6MW SWT-3.6-107.

Spanish Gamesa has three turbines rated at 2MW: the G-80, G-87, and G-90.

Fifth-largest manufacturer Suzlon, based in India but now with offices all over the world builds turbines from 350kW to 2.1MW. It is parent company to REpower, whose 5M turbine has an overall height of 183 m (600 ft) and a diameter of 126 m (413 ft). REpower is aiming offshore: two 5M turbines have already been installed at the Beatrice project in the UK.

Clipper Wind (#2 in US) has the 2.5MW Liberty turbine and lays claim to developing the largest wind turbine yet--the 7.5MW Brittania with a diameter of 175m (574 ft). Fortune reported in its September 29, 2008 edition that Her Majesty the Queen of England, through the Crown Estate, is buying the Brittania and that Clipper confirms recent reports suggesting that the size may be upped to an astonishing 10MW. Like the largest turbines from REpower, Siemens and Enercon, its target market is offshore.

Others coming to market with turbines of 1MW or greater include Vergnet, the only French manufacturer and Google-funded Makani Power.

Chinese industrial conglomerate KHCK is reputed to be building a 20MW (!) device which will undoubtedly push the limits of materials science, quite possibly, and literally, to the breaking point.

The economics of wind require larger turbines; hence the race to build them bigger and bigger. The cost of a wind turbine fully installed is now estimated at as much as $4 per watt. The cost goes to $5/W for offshore wind turbines. A big part of this cost, apart from the turbine itself, is the logistics of transportation and installation. As the parts of the turbine keep getting larger and heavier, bringing them from the factory to the installation site is becoming exorbitant.

The sites that have good wind are also frequently at higher elevation, e.g. on ridge lines, where road access and flat staging areas are rudimentary or non-existent. The cost of bringing turbine parts and the enormous cranes used to assemble them high in the air to such challenging sites add greatly to the overall cost. Nonetheless, there are some economies of scale that make it more economical to install larger devices. For example, a 500-ton crane can just as well install a 5MW nacelle as a 2.5MW one. Having undertaken the expense of building a road to the site just to accommodate the equipment one may as well bring in the biggest equipment possible.

So, how big can they get? On land, transportation limits will likely be reached soon, necessitating a cap on the maximum size or a more clever way of breaking the manufacturing into smaller pieces for transport, at the cost of more complicated, time-consuming and expensive assembly on-site. (UPDATE: recent travails of a traveling turbine.)

Offshore wind presents a different set of challenges and opportunities, and manufacturers are increasingly looking offshore for cost and many other reasons. These reasons are why I'm excited about the Grays Harbor Ocean Energy project. More on that in a later post.

UK-Pacific NW Marine Energy Mission

I spent all day on Monday at the Bell Harbor Conference Center with maybe 75 people involved in or interested in the renewable ocean energy industry. There were many excellent presentations and ample time to network and discuss areas of mutual interest. Sadly I couldn't talk to everyone and I missed bits of some presentations because I got engrossed in conversation... I forced myself to take some notes to try to capture some of the good bits.

This was the first stop on a week-long trade mission by a dozen or so entrepreneurs and other business people from England and Scotland. I'm a bit slow getting this post up; by now they've been and gone from Portland, OR (Wednesday) and are now down in Coos Bay for the Oregon Wave Energy Trust (OWET) Ocean Renewable Energy Conference. (Sorry I couldn't go to that one myself, but I have to do some "real work" at least part of the week ;-)

The event was organized by UK Trade and Investment and promoted by PNWER. Local organizing assistance came from the British American Business Council of the Pacific Northwest, Port of Seattle, WA Clean Tech Alliance, Washington Technology Center, Washington State CTED, OWET, and Oregon ECD. Sponsors included The North of England Inward Investment Agency, Ricardo, Scottish Development International (SDI) and Stoel Rives.

LA vice-consul Michael Rosenfeld of the UK consulate and Graham Evans of the WA Clean Tech Alliance traded off as masters of ceremonies; both did a splendid job keeping the sessions on track and on time, making introductions and injecting sufficient levity to keep all engaged.

Steve Klein, CEO of Snohomish PUD gave the morning keynote and talked quite a bit about SnoPUD's renewables plans. Of greatest interest to me was his flat assertion that "no fossil fuel generation will be added to our portfolio." Given their load growth of 10-12 thousand new connections and 15-20 aMW per year--amongst the fastest in the state--this is a remarkable statement. A lot of people are assuming Washington's future electricity demand will be met with liquid natural gas (LNG) thermal plants and/or Canadian imports (probably also LNG) but, as Steve stated, this is not a part of their Integrated Resource Plan (IRP). Instead, they intend to meet demand through conservation, wood waste/landfill/biomass, "cows" (is he serious?), and geothermal, taking advantage of their position on the Pacific "rim of fire". Interestingly, they plan on geothermal being the largest source of new energy (after conservation) with wind next. Small hydro and tidal are expected to be only small contributors at only 5 aMW each by 2020. They are also pursuing tidal energy in Puget Sound; he said that there "could be 100 aMW of tidal [energy] in Puget Sound ... [but] nobody really knows." I'll write more on this later.

Steve spent some time talking about wind energy; he has several "worries":

• they've added 10GW in the last 2 years, and problems are starting to show
• the wind doesn't blow much when it is very hot or very cold--when energy demand is greatest
• it is not predictable
• cost of wind is going up (not down)--as much as doubled
• the devices have mechanical issues (especially the gearboxes)
• SnoPUD isn't "putting all the eggs in the wind basket" (I think it's clear they're going to hard-boil them with geothermal!)

Scott Amsden of Tacoma Power talked about the results of their assessing tidal power in the Tacoma Narrows. This was a project done by my business partner Burt Hamner and Puget Sound Tidal Power. You can read all about it here.

Naval architect Charlie Nordstrom of the Glosten Associates gave a very interesting presentation on the growing interest in offshore wind and some details of the Trillium project that he and his firm are pursuing in Lake Ontario. Offshore wind has challenging logistics, foremost of which are the size and weight of the components and the enormous deamnds that these place on the equipment used to transport and install the turbines. For example, the 5MW turbines used in the Beatrice project in the UK require an approximately 800 ton "pick" or lift by a marine crane, and there are not very many such cranes. Also, since the weather conditions have to be right to do the picks, progress can be slow--Charlie noted that it took most of the summer to do just 2 installations. Not only are the demand on the equipment great, but there isn't very much of the right equipment available. On the west coast there are only a handful of cranes that can pick more than 500 tons. Glosten Associates are designing a 1000-ton crane for Manson Construction, which, when built, will be the largest crane available. At Trillium they are planning to use the Jumping Jack to do the installation. An additional constraint on offshore wind (or other energy projects) is the Jones Act, which basically prevents ships from other countries being used in US waters. (Of course, there aren't really any such ships available--in Europe they are all booked years out.)

Charlie identified the following best practices for offshore wind construction:

• minimize at-sea work
• design for installation
• keep expensive assets busy
• rely on operators' experience
• use existing equipment
• know your site conditions
• plan for equipment availability

Later in the afternoon Paul McKeever of NaREC added two more to this list:

• have equipment redundancy
• strategically purchase spare parts

After a break, we heard from the UK companies; I'll write about that in a later entry.

At lunch (great food!), Roget Garratt, Director of Resource Acquisition & Emerging Technology for Puget Sound Energy (PSE) gave the keynote, talking about PSE's customer base, growth, and generation plans. Afterwards he took some questions; the best was asked by Burt Hamner: in its IRP what does PSE anticipate will be the cost of energy in 2020? A quick glance around the room confirmed that this was The Question that many in the renewable energy industry really want to know. After all, if you are a project developer in renewable energy or part of the supply chain for the technology, you really need to know the price at which the customer will buy. Of course it gets a lot more complicated when once considers the (on-again/off-again) credits, potential penalties for not meeting the RPS, etc. but it all starts with the core COE. Although Roger answered the question he never gave a number. Does PSE consider this information proprietary, not wanting to let the other utility officials in the room know their planning numbers?

In the afternoon there were several panel discussions and they were pretty interesting--so much so I find that I neglected to take very many notes. Charlie Brandt of PNNL, Tim Stearns of CTED, Sheila Hosner of the Washington Department of Ecology and Mary Jane Parks of Principle Power discussed permitting and regulatory issues. Short story--there are a lot of agencies and permits needed to do any kind of offshore project, but the authorities are not awful to work with as long as you follow the process. Sheila recommended proactively keeping them informed, beginning long before you even file something. In that repsect it's rather like applying for an SBIR or other government grant--spending quality time with the program manager and building trust through constant communication really pays off. Sheila also represents the Governor's Office of Regulatory Assistance which has been established specifically to help companies wend permits through regulatory offices. Later, in wrapping up the day Graham Evans noted that many of the speakers (not just in this panel) agreed that "embracing" the regulatory process--not fearing, but cooperating--was the best practice for getting regulatory and permitting approval.

Burt Hamner gave a lucid overview of the Grays Harbor Ocean Energy project he and I are pursuing off the Washington Coast--the only proposed offshore wind project on the US west coast, and the only one with a FERC permit.

Brian Polagye of the University of Washington, Bob McClure of BioSonics and Paul McKeever of NaREC discussed R&D directions and emerging technologies in their panel. Bob's presentation was particulalry interesting, detailing his firm's state-of-the-art hydroacoustic technology to assess fish and aquamarine populations to astonishing levels of detail. Verdant Power and many others are clients using their equipment and know-how to assure that their marine energy equipment is compatible with the local species.

There was a lot more going on than I can write here, and lots of excellent information, ideas, and exchanges. Graham stated, to broad agreement, that this was just the beginning of such collaborative meetings, and that there is much more information, expertise, and lessons learned that are still to be shared. I know I speak for many participants in saying that I am keenly looking forward to the first quarter of 2009, when the reciprocal trip of NW ocean energy companies and people will journey to the UK to see what they have there and talk to those involved in more detail. Sign me up for that trip--it's going to be too cool!