Join us at we demonstrate our breakthrough wave energy technology at Duke University's Energy Week.
President Obama will host the White House Frontiers Conference, a national convening co-hosted with the University of Pittsburgh and Carnegie Mellon University to explore the future of innovation here and around the world. The convening will include topics inspired by the November issue of WIRED, which will be guest-edited by the President on the theme of "Frontiers." The conference will focus on building U.S. capacity in science, technology, and innovation, and the new technologies, challenges, and goals that will continue to shape the 21st century and beyond. Harvest Wave Energy is honored to have been invited to exhibit our groundbreaking wave energy technology at this prestigous conference.
One area of focus of the Wave Energy Prize has been on numerical modeling of your wave energy converter. And rightfully so, the experimental modeling component has provided an excellent opportunity for developers to validate their existing computational models which are the backbone of design decision making. We'd like to take this opportunity to give thanks to our corporate partner, Resolved Analytics, which has provided us excellent support in numerical modeling and computational fluid dynamics (CFD) consulting.
Over the past year our team has been hard at work on our entry into the US Department of Energy's Wave Energy Prize competition. The prize was intended to be challenging and to push us to the limits of our capabilities. Our team, along with 8 others, has passed through a series of stage gate reviews including an original technical design package which has followed us through the competition and continues to evolve, a series of numerical model simulations and 1:50th scale modeling verification of those results, and recent preparation for 1:20th scale model testing to be completed at the Naval Surface Warfare Center's MASK wave basin.
Teams have worked closely with the DOE's Wind and Water Power Technologies office and their subcontractors. This collaborative work has provided guidance to teams regarding concept feasibility, numerical modeling procedures, performance verification procedures, scale model best practices, and scale model test coordination. I would guess that between the bi-weekly conference calls, group presentations, and other communications we've had over 200 hours of direct collaboration thus far.
Sounds time consuming, right? The long hours aren't so much of a bear if you can step back and see a big, shiny pot-of-gold at the end of tunnel. For us, that pot-of-gold is the $2.25M in prize money and the opportunity to get in on the ground floor of a nascent industry with immense potential. That's a pretty cool motivator.
But, my last week spent with the folks at the NSWC's Carderock naval facility has me thinking about the hard work of those behind the scenes that have made the Wave Energy Prize a reality. Though optimizing a novel wave energy device in order to have a valid entry into the competition was a lot of work, planning, funding and launching a competition intended to provide breakthroughs in wave energy must have required 10X that effort. And while our initial technical design package pushed us to the limit, the review and judging of those document was also no easy task. And there were 63 teams which submitted packages! And though performing numerical model simulations and taking part in 1:50th scale modeling was challenging, exponentially more so was the development of a set of computation tools that enabled teams to do just that, and the preparation and coordination of 5 wave tank facilities across the nation that hosted teams in Stage 2 of the competition. And for all the work coordinating the 1:20th scale modeling, we should keep in mind that the WEPrize team has done all the same amount of collaboration with each of the other 8 teams. You are starting to get the picture I'm sure.
Most impressively, these folks are doing so without the pot-of-gold at the end of tunnel. Largely behind the scenes, they aren't hoping for wealth or fame as a result of their support of this competition and industry in general. They are, instead, motivated by professional devotion. Maybe they have a passion for what they do. Or maybe it is a personal commitment to their country or the social cause of renewable energy. Whatever it is, I'm all for it and have to take my hat off. If any of the developers participating in this challenge are able to achieve their aspirations it is only because of the hard work of the many selfless, talented individuals who have contributed behind the scenes. So, I just want to call attention to the work of a few here.
Among many others; Jesse Roberts, Diana Bull, Kelly Ruehl, Vince Neary, Carlos Michelin, et al.. Their motto is accurate: "Enabling a successful water power industry". They have produced a prolific number of publications in both technical and commercial topics related to wave energy over the past 5 years.
Michael Lawson, Yi-Hsiang Yu, Nathan Tom, Jochem Weber, Al Levecchi, Daniel Laird, et al.. Same as the folks from Sandia; a tremendous amount of background work in market analysis, risk mitigation, research and development, and modeling tools. Most notably, the work performed in collaboration with Sandia on the WEC-SIM suite of computational modeling tools.
Jose Zayas, Allison LaBonte, Darshawn Karwat, et al.. The champions of the water power industry in the US. They are responsible for implementation of the DOE's commitment to developing and deploying a portfolio of innovative technologies for clean, domestic power generation from resources such as hydropower, waves, and tides.
Wes Scharmen, Julie Zona, Phil Michael, et al.. The prime contractor to the DOE. Ricardo folks continue to do a spectacular job administering, guiding and judging the competition.
David Newborn, Miguel Quintaro, et al.. Right not this team is in the middle of eight straight weeks of twelve hour days in which they are certifying team's 1:20th scale models and managing the wave tank testing of those models. They have done a top notch job making sure that all of the teams are prepared for final testing and have reliable methods of measuring power absorbed.
Here we continue our assessment of the commercial viability of ocean based electricity generation. As we have outlined in a previous post, the first step in such an assessment is establishing the market requirements for the eventual widespread adoption of the technology. In another post we defined the primary market need as that for renewable energy generation driven by Renewable Portfolio Standards, estimating a US Pacific coast only market demand for $230B of new generation assets by 2030. We’ve also briefly explored some limitations of existing technologies that will eventually be painful to utilities which are required to provide customers with renewably sourced electricity. Here we complete our assessment of future market requirements for wave energy systems by looking at the economics of wind and solar electricity systems to better understand wave energy's path to cost parity.
Electric utilities are some of the most conservative businesses in the world. They are not typically the first in the pool with regards to new and untried technologies. That is why, over the past ten years or so, Independent Power Producers (IPPs) and project development groups have taken the reins in leading wind and solar into the mainstream. Utilities have been more than happy to step back and allow these entities to take on the high risks associated with early adoption of renewable technologies. In exchange, they have provided the long-term financial assurance needed for developers to obtain project financing by guaranteeing the price paid for the electricity from such developments for periods up to 20 years through Power Purchase Agreements (PPAs). They have been willing to do so, even though they could produce equivalent electricity from existing fossil fueled assets for lower costs, for a number of reasons. First, most utilities recognize the public and private market drivers that make increased renewables an inevitability and such arrangements have allowed them an opportunity to learn about these new technologies and how the electricity produced can be integrated into existing portfolios. Second, utilities appreciate the fact that renewables reduce long term risks associated with the volatile cost of fossil fuels needed to produce traditional electricity. These partnerships have led to the relative boom in wind and solar installations reflected in the chart below showing the historical progression of electricity generation by the two technologies (Source: US Energy and Information Administration).
This experimental-learning stage is coming to a close as electricity produced by wind and solar accounted for 4.6% and 0.6% of total generation in the United States in 2015, respectively. Going forward utilities will be forced by state and federal energy policies to greatly accelerate the adoption of renewable generation in order to meet future targets. Fortunately, these partnerships, fostered under an umbrella of supportive public policy, have driven technology costs down, as is evidenced by the following graph showing the evolution of PPA prices over the past 10 years. PPAs reflect the total cost of ownership and operation of the development at hand, plus a small profit margin for the developer (Sources: Lawrence Berkeley Lab Ref. 1 and 2).
Reductions in the price paid for solar electricity have been due to learning curve reductions in manufacturing and installation costs. Recent reductions in prices paid for wind electricity are the result of higher capacity factors driven primarily by a focus on installation sites in geographic regions with the highest wind energy resources and by technology advancements including taller towers that subject turbines to more consistent and energetic winds. It is important to note that the PPA prices shown inherently include the effects of federal and state financial subsidies that can offset as much as 50% of capital costs for either technology.
It is also informative to note the capital costs that are reflected in these PPA agreements, as shown in the chart below (Source: Lazard). The reader should note that despite level capital costs for wind and solar, PPA prices for wind remain significantly lower than those for solar reflecting the approximate capacity factors for the two technologies of 30% and 20%, respectively.
And so we arrive at the point of this survey; a target for the cost of electricity produced by wave energy technologies in order for systems to be cost competitive with solar and wind within a reasonable time frame. Ideally the time frame would also match the time frame associated with the market realization of the limitations of existing renewable technologies as their levels of penetration increase. As shown by the example of wind’s advantage over solar at equal capital costs, capacity factor is of utmost importance. Wave energy is blessed with a more consistent and predictable resource and so we are able to target a capacity factor of between 35% and 45%. It is reasonable to assume that such a positive differential in capacity factor will be equally offset by higher maintenance costs due to ocean based deployment. It is also reasonable to assume that future cost improvements in wind and solar will be equally offset by expiring public subsidies and solar energy value deflation. With these assumptions in hand, and following learning rates similar to what other technologies have experienced, the following chart demonstrates a feasible path to competitive wave energy by 2021.
So how close are we to this target in 2016? One source of verified data will be the detailed techno-economic performance assessments that are on-going as part of the Department of Energy’s Wave Energy Prize. These results are expected in November. One other data point available is a recent project funding award announcement for Finland’s AW-Energy. AW-Energy is in the planning stage for a Portuguese project intended to provide a rated capacity of 5.6 MW at a project cost of $27M, equating to a capital cost of $4,800 / MW, in good agreement with the projected path above. Time will tell if AW is able to meet that projected budget. The project is exemplary for two reasons. First, all other announced projects display much less favorable economics. Second, AW is utilizing an oscillating wave surge converter (OWSC) technology similar to that being developed by Harvest. We strongly believe that the industry will soon coalesce around the fact that wave surge collector technologies are the most cost effective of the myriad of wave energy technologies available.
In our next post we will examine how the DOE is using the Wave Energy Prize results to assess techno-economic performance of next generation technologies and provide a detailed breakdown of structural wave energy costs of our current generation device.
US President Barack Obama, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto completed a one-day summit in Ottawa Wednesday where they unveiled a commitment to see half of the continent’s electricity generated by non-fossil fuel sources by 2025. I hesitate to label the commitment as one to "clean power" as the White House press release has because the plan includes nuclear power whose credentials as a "clean" technology are debatable. But never-the-less, given the unlikely prospect of additional nuclear capacity additions within the subject time frame the proposal would result in massive additions of renewable energy. Here we ask whether or not such a goal is obtainable withing the context of historical trends, technological limitations and economic scenarios.
Before getting into the discussions we should note that there is a massive amount of misinformation available in the public domain pertaining to energy supply and demand. These are loaded topics so be careful to do your due diligence on any supposed "facts" you might read, including those you find here. The most trusted source for historical data and predictions regarding electricity supply and demand are those of the US Energy Information Administration (EIA) and which we have used as the basis for our discussion below.
US electricity generation is one of the least volatile energy statistics, growing at a fairly even rate of ~1% since 1950. This historical growth is shown in the figure to the right. There are some fundamental changes occurring within the electricity sector that make future predictions less certain, but indications are that electricity generation will continue to rise, albeit more slowly, over the subject time period.
The chart to the right compares the historical growth in solar and wind electrical generating capacity with the future growth projections of the EIA and with the growth needed to reach 50% non-fossil fuel sourced electricity by 2025. To be conservative we have assumed a combined capacity factor of 32% that is well above current technical capabilities. The growth implied, a tripling of renewable energy in 9 years, requires a leap of faith regarding industry's ability to support it.
Beyond industry's capability, we also needs to consider other limiting factors such as geography and economics. Below is a map of planned capacity additions for 2016. What you will notice is that both wind and solar additions are localized with the majority of solar installations occurring in the far west and southeast and wind installations occurring in the midwest and Texas.
To understand the causes of this localization please consider the maps below. The first set of maps demonstrate the geographic distribution of solar and wind resources of the United States.
But it is not only the resource availability that is setting new capacity geographies; retail electricity prices and local incentives are also making an impact. The following set of maps demonstrate the areas in which solar and wind installations will produce electricity that is more or less expensive than the retail price of electricity, inclusive of current federal and state incentives for renewables reaching as high as a 50% reduction in capital costs in some cases. Dots of a significant size are indicative of locations that will result in electricity costing less than the local retail rate.
Together, these factors present a major problem. First, regions rich in solar and wind resources, where economics are favorable, are already reaching grid capacity limitations due to their intermittency of those resources, as evidenced by increasing periods where retail electricity rates actually become negative. Without implementing counter-measures, further capacity additions in those areas will require turning off renewable generators, termed "curtailment", for increasing amounts of time which will in-turn drive the lifetime cost of electricity produced by those units higher. Solutions to this problem commonly proposed include demand side management, geographic grid interconnections and grid-scale energy storage. These solutions, though technically possible, will also entail costs that can generally be assumed to be as great or greater than the costs of curtailment. Second, wind and solar outside of those regions rich in resources are, generally speaking, not yet economical compared to retail rates.
In conclusion, although the plan outlined by North American leaders has obvious societal benefits including the creation of jobs and the reduction in negative health impacts due to fossil-fueled power generation, reaching those targets will stretch the capacity of industry and be costly to achieve. It will be the end users of electricity footing the bill, either in the form of increased utility rates or increased federal and state taxes as needed to support stronger subsidies, and their willingness to support such payments will ultimately determine whether our nations follow through on such commitments. For now, we'll conclude that its possible but unlikely.
We are working as quickly as possible on a revolutionary renewable energy technology that has the potential to ease the burden of achieving these societal goals, stay tuned for more information.
Renewable Portfolio Standards are driving the adoption of renewable energy in California. Grid operators are beginning to see conditions resulting in negative wholesale electricity prices. We investigate the root causes and the lasting effects on consumer electricity prices of these massive changes.
The wave energy industry has been the focus of some recent news articles  . The US DOE's Wave Energy Prize, in which Harvest Wave Energy is a finalist, has been the catalyst for this renewed public interest. The WEPrize is just one of the DOE's programs intended to refocus technology developers on achieving high techno-economic performance in early-stage R&D. The DOE's structured innovation project is another. We think these initiatives are exactly what is needed to drive wave energy technology towards cost parity with other forms of renewables. Further, we are also glad to see that the DOE has planned for follow on funding intended to support further engineering and commercialization of the most promising early-phase concepts identified in these projects. Kudos DOE, keep up the good work.