Green Wombat

PG&E signs nation's first wave-energy deal

An offshore wave farm will supply Californians with clean green electricity generated by the ocean under a first-of-its-kind power purchase agreement that utility PG&E will announce Tuesday morning.

The giant San Francisco-based utility has signed a long-term contract to buy 2-megawatts of electricity from Finavera Renewables' wave-energy power plant to be built off the Northern California coast. The Vancouver company intends to eventually expand the Humboldt County project into a 100-megawatt "wave park." It is likely to be the first of a score of floating power stations dotting California's 1,100-mile coastline in the coming years, judging by the stack of applications for such wave farms on file at the Federal Energy Regulatory Commission.

"This power purchase agreement is extremely significant and reflects the massive potential for wave power as a renewable source of energy in the future," says PG&E spokesman Keely Wachs. Like the Golden State's other big investor-owned utilities -- Southern California Edison (EIX) and San Diego Gas & Electric (SRE) -- PG&E (PCG) must obtain 20 percent of its electricity from renewable sources by 2010 and 33 percent by 2020.

"The California market is huge for wave energy," Finavera CEO Jason Bak told Fortune's Green Wombat. "This is the first power purchase agreement with a large utility, and we see this as being one of the key components to commercializing wave energy technology."

The ocean as potential source of greenhouse gas-free power is tremendous: the energy locked up in the surf rolling toward the California coast is equivalent to some 37 gigawatts -- enough to light nearly 30 million homes -- according to PG&E. And unlike the sun and wind, waves can generate electricity 24/7. But the technology to tap all that water-borne power and deliver it at competitive prices remains in the startup phase.

PG&E and Finavera would not disclose the terms of the power purchase agreement. But Bak acknowledged that the key challenge he and other wave-energy companies face is "advancing the technology to the stage where we have a near-commercial technology."

Finavera plans to deploy strings of connected wave-energy converters that it calls AquaBuoys. As waves roll past an array of AquaBuoys connected to an onshore station by an undersea cable, two-stroke hose pumps convert their energy into pressurized seawater that drives electricity-generating turbines. According to filings Finavera has made with the Federal Energy Regulatory Commission, a fully built-out 100 megawatt Humboldt wave farm would consist of 200 to 300 AquaBuoys floating on a two-square-mile site about two to three miles off the town of Trinidad. The initial phase of the project is expected to go online in 2012 and will use eight AquaBuoys.

While PG&E is merely dipping its corporate toe in the wave-energy waters with a relatively small 2-megawatt power purchase agreement, the deal with Finavera is likely to intensify efforts to stake claims on the best stretches of coast.

PG&E itself earlier this year unveiled its WaveConnect project to build two 40-megawatt wave farms, one off Humboldt and the other off the Mendocino County coast. Chevron (CVX) dived in last July with a plan for a Humboldt wave farm to be built by Scotland's Ocean Power Delivery -- now called Pelamis Wave Power -- before abruptly pulling its application a month later.

Over the past two months there's been a new flurry of applications. New Jersey's Ocean Power Technologies (OPTT) in November filed for a FERC permit for a 20-megawatt "wave energy park" to be located off the Humboldt coast. And a newcomer to the wave energy business called GreenWave Energy Solutions has filed permit applications for wave farms off Mendocino and the Central Coast town of Moro Bay in San Luis Obispo County. (The Thousand Oaks, Calif., company lists a San Francisco attorney as its president and it was registered by a Southern California developer.)

Before Finavera can begin construction of the Humboldt wave farm it must first spend two to three years completing environmental impact studies and negotiating with local, state and federal regulators. While obtaining financing for wave-energy projects using untried technology is difficult, Finavera will have one advantage over its competitors: a long-term power purchase agreement with one of the United States 'largest utilities.

"This PPA is a vote of confidence from PG&E that we can do get the project done," says Bak.

PG&E, San Francisco Battle Over Wave Energy

photo: Jakanori 
The first wave energy power plant has yet to be built off the California coast but a skirmish over who will control the seas has already broken out in Washington between utility PG&E and the city of San Francisco. Last February, PG&E (PCG) filed an application with the Federal Energy Regulatory Commission, or FERC, for preliminary permits to develop two 40-megawatt wave farms off the Northern California coast. Now the city of San Francisco - PG&E's hometown - has asked FERC to deny the utility the wave energy permits. "While specifically not referring to this application, San Francisco believes the risk of sparking a 'gold rush' by ill  prepared applicants with ill-conceived projects is too high and the drain on Commission  resources in reviewing such applications would be too great," wrote San Francisco Deputy City Attorney Stephen A. S. Morrison in June 15 letter. Preliminary permits such as those PG&E are seeking give the holder three years to conduct a feasiblity study for a wave farm and then first dibs on obtaining a license for any resulting project. San Francisco, which Morrison stressed "is keenly interested in supporting the development of local, clean, renewable energy, such as that anticipated in the PG&E projects," fears that companies will "site bank," or lock up choice wave energy spots.

FERC is currently considering whether to change its wave energy permitting process. San Francisco supports scuttling the preliminary permit process and allowing all applicants to apply once they have a project ready for licensing. PG&E, on the other hand, believes the way to discourage site banking is to apply "strict scrutiny" to preliminary permit applications to ensure only legitimate projects proceed. "PG&E does not think FERC should prematurely reject pending new technology preliminary permit applications," wrote PG&E attorney Annette Faraglia. 

So far San Francisco has not made any moves to oppose a proposed Chevron (CVX) wave farm that would be located adjacent to PG&E's project off Fort Bragg in Mendocino County. The city and PG&E have long had a contentious relationship. Even as the two are currently cooperating on exploring the possibility of developing tidal power in San Francisco Bay, the city is considering dumping PG&E as its power provider in favor of securing its electricity elsewhere.

Some more details of the PG&E wave farms have emerged from federal filings. The utility is considering a number of wave energy technologies but currently anticipates that there will be between eight and 200 wave generators at each wave farm. PG&E plans to deploy and test several different types of wave generators at each site. But there will be numerous environmental hurdles to overcome before such projects can be built. In a letter to FERC, an Interior Department official said that PG&E's Humboldt County project could affect at least three protected ocean-going bird species: the California brown pelican, the marbled murrelet and short-tailed albatross.

Chevron Joins California Wave Energy Gold Rush

There's gold in them there waves. Five months after California utility giant PG&E filed plans to develop two 40-megawatt wave farms off the Northern California coast, oil behemoth Chevron is hitting the water with its own wave energy project in the same patch of ocean, according to an application filed with the Federal Energy Regulatory Commission. (Thanks to environmental reporter Frank Hartzell of the Mendocino Beacon for the tip.) Chevron (CVX) intends to initially deploy Scottish firm Ocean Power Delivery's Pelamis wave generators off the small Mendocino County town of Fort Bragg. The wave farm will produce between two and 60 megawatts of green energy that Chevron plans to sell to PG&E (PCG) or other electricity providers. "The proposed project will be a new source of clean, renewable ocean energy to generate power for commercial and industrial purposes that currently consume natural gas or other combustible fuels," states the application filed by Chevron Renewable Energy, which is based in Houston of all places. "The proposed project is designed to displace electricity generated from a typical coal-fired generation resource, thereby avoiding the [greenhouse gas] emissions that would otherwise be released into the atmosphere."

Chevron estimates its project would eliminate 308,000 metric tons of carbon dioxide that would otherwise be produced by coal-fired power plants. California, of course, has virtually no such plants but it does import about 20 percent of its electricity from out-of-state coal-fired power stations. Under California's global warming law, regulators have banned utilities from signing long-term contracts for such dirty electricity and that's creating opportunities for renewable energy producers to fill the void.

Chevron's move is a boon to Ocean Power Delivery, which has become one of the leading wave energy producers with projects in Portugal and the U.K. (Green Wombat happened to just finish editing a story on the company that will appear in the August issue of Business 2.0.) OPD's Pelamis "sea snakes" float semi-submerged on the ocean. As waves move the long articulated cylinders, oil is pumped through motors that drive generators that produce electricity. Chevron expects each 600-foot, 13-foot diameter sea snake to generate about 1.4 megawatts of electricity. The company will also consider other wave energy technologies. It will spend up to $2 million over the next two years conducting field studies and an environmental impact assessment of the project, according to the application.

Fast Track for California Wave Farms

originally uploaded by kayjay88

California utility PG&E (PCG) wants to have two 40-megawatt wave farms up and running off the state's north coasts within a few years, according to documents it has filed with the Federal Energy Regulatory Commission, or FERC. "It is PG&E's intention to take advantage of economies of scale and scope across the projects, with the intent to maximize the projects' potential generation output in the shortest time possible," an utility executive wrote in a letter to FERC. The utility hopes to have the WaveConnect projects ready for full licensing within two to three years. Other details on WaveConnect: The Mendocino County wave farm will be located off Fort Bragg in open ocean a half mile to 4.5 miles offshore. A 68-square-mile area will be assessed. PG&E essentially will turn the zone into a wave-energy testing ground, spending up to $3 million to try out various technologies from up to four manufacturers. "A number of different device concepts are being pursued by independent device manufacturers, and there is no industry consensus at this time on the optimal energy conversion technology," PG&E execs wrote in an application for a preliminary permit for the project. "The initial ... devices to be used will be selected from device manufacturers who have sufficiently mature technologies available for deployment." PG&E is in preliminary discussions with Ocean Power Technologies of New Jersey, the U.K's Ocean Power Delivery and Ireland's Finavera Renewables. While wave energy technologies vary, they essentially involve a device that floats on the ocean's surface and that harnesses the power produced by the surf to drive a turbine that generates greenhouse gas-free electricity. PG&E will deploy multiple wave-energy devices in an array moored to the ocean's floor and connected to the shore by a transmission cable.  The Humboldt WaveConnect project will be located between two and 10 miles off the coastal town of Eureka. The test area will be 136 square miles. Both locales have good surf. Average monthly wave height between 6 and 10 feet.

PG&E to Develop Wave Energy Off the California Coast

photo originally uploaded by friskyreddog

Dude, waves aren't just for riding anymore. In a national first, utility PG&E (PCG) took the first step today toward developing two 40-megawatt "wave farms" off California's north coast. If the project goes forward, PG&E would likely become the world's largest producer of wave-generated electricity. The utility has asked the Federal Energy Regulatory Commission for permission to test multiple wave energy technologies in two projects off the coast of Mendocino and Humboldt counties, inviting wave-energy companies to submit project proposals for the utility's WaveConnect initiative. "The waters off the coast of Humboldt and Mendocino counties have excellent wave power potential," said PG&E energy procurement executive Fong Wan in a statement. While wave energy technologies vary, they essentially involve a device that floats on the ocean's surface and that harnesses the power produced by the surf to drive a turbine that generates greenhouse gas-free electricity. For instance, Sydney startup Energetech has developed an offshore power plant that uses a parabolic wall to magnify the energy of incoming waves, which force air into a hollow chamber. The air activates a turbine that powers a generator. The company's prototype (photo at right) is operating off the New South Wales coast in Australia.

PG&E is in early discussions with wave energy companies Ocean Power Technologies of New Jersey, the U.K's Ocean Power Delivery and Ireland's Finavera Renewables, utility spokesman Keely Wachs told Green Wombat. Ocean Power Technologies is developing what it calls a PowerBuoy. The device floats on the ocean's surface and as the buoy bobs around on waves, the motion is converted to mechanical energy that drives a generator. Ocean Power Delivery's wave energy generator consists of snake-like, hinged cylindrical sections called a Pelamis. As the Pelamis moves on the waves, the motion powers hydraulic motors connected to a generator. Finavera is making what it calls an AquaBuoy that "converts the kinetic energy of the vertical motion of oncoming waves into clean electricity. The respective technologies are shown below.

Mendocino and Humboldt counties are environmental strongholds, and despite WaveConnect's potential to fight global warming, PG&E's sure to encounter local resistance, or at least questions, about the project's impact on the ocean and marine life.