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HomeNewsLocal newsOcean Thermal Energy Company Study Finds: OTEC Feasible

Ocean Thermal Energy Company Study Finds: OTEC Feasible

Ocean Thermal Energy Corporation, a company trying to persuade the territory to contract it to build a commercial-scale ocean thermal electricity production plant, told the V.I. Legislature it had finished its own feasibility study on their own plan – and concluded it was feasible.

The concept, which has been brought up before the Legislature and the V.I. Water and Power Authority on several occasions over the past decade, involves using the difference in temperature between deep ocean waters and surface waters in deep ocean tropical locations to generate electricity.

The V.I. Legislature authorized the feasibility study, at OTEC’s expense, in 2014 (See Related Links below)

Electricity from ocean thermal energy could provide the territory a stable, inexhaustible, emissions-free power supply with no fuel costs, according to OTEC officials. OTEC executives Ted Johnson, Jeremy Eakin and Heru Ofori-Atta were bullish on the potential for cheap, clean electricity, testifying to the Senate Energy and Environmental Protection Committee on Wednesday.

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"The potential of OTEC is great," testified Johnson, OTEC senior vice president and head of ocean thermal energy conversion programs, summarizing the conclusions of the feasibility study his company produced on their own product.

Because it requires both warm surface waters and easily accessible deep water that is at least 20 degrees Celsius colder than the surface, year-round, few places on the planet are well situated to take advantage of this potential power source. But the U.S. Virgin Islands is one of those places, they said.

Company members spoke about a small project in Hawaii and plans for two 10-megawatt, commercial scale plants in the Bahamas, and emphasized that OTEC, by its nature, was a good source of base-load power. Other alternative energy sources, like wind and solar, are not ideal for base-load power because they come and go rapidly, with the wind and sun, they said.

The sea temperature differential, in contrast, does not vary much, OTEC officials said.

Costs are coming down with technological advances and reduced costs for heat exchangers and pipes, and the technology is getting more affordable every day, Johnson and others said.

Eakin, OTEC’s chief executive officer, said the cost of electricity would depend on the details of a power purchase agreement and the type and scale of plant that was ultimately constructed. But he said the Hawaii plant was producing electricity in the 19 cents per kilowatt hour range, and the USVI could probably see something in a similar range.

Sen. Tregenza Roach asked, "The cost per kilowatt hour depends on your cost of financing, correct? So what is the likely range?"

Johnson said, "The mid range is like 26 cents. It could be a bit less or more, depending on whether the plant produces drinking water, how big it is and the cost of financing, he added.

WAPA is currently charging residential customers about 29 cents per kilowatt hour, subject to fluctuations in the price of fuel. It is in the process of switching to lower cost propane fuel and the current rates are based on the prices of that fuel.

Asked about how financing would work, Eakin said the company partnered with Raymond James Financial to borrow $100 million from Deutsche Bank for the planned project in the Bahamas.

OTEC plants can be on land or at sea, in principle. Being on land reduces costs dramatically, if it can be done, and makes seawater air conditioning much easier, officials said.

St. Croix has several locations where conditions may be good for a land-based plant and the company has given a preliminary look at Salt River, Butler Bay and Rost Op Twist. Their study concluded an off-shore, floating plant would probably be the most feasible option for St. Thomas.

Sen. Almando "Rocky" Liburd asked, "Where in the world today is there an OTEC plant functioning like we are talking about here?"

Johnson said, "The OTEC plants today are small plants.” There is one in Hawaii, that just came on line, he said. "But what we are talking about here is commercial capacity," he said.

To date, there has never been a commercial-scale OTEC power plant, according to a number of news outlets, energy industry statements and articles in Scientific American and other locations. (See Related Links below.

Asked about drawbacks to the system, Johnson said the engineering of the plant was critical and, "if you don’t do the design well, you are going to have problems." But he emphasized that the fuel was free and the concept had good potential. He did not emphasize that no one had made a commercial-scale version yet.

When he was still head of WAPA, testifying before the Senate and at WAPA board meetings in years past, former WAPA Executive Director Hugo Hodge Jr. said the utility would have trouble getting approval and federal financial help with OTEC because it had no commercial-scale track record and was considered an experimental technology.

Sen. Sammuel Sanes, the committee chairman, said the territory would continue to look into the potential for OTEC.

"It is a proven technology. It is not a concept. It is proven on a smaller scale and I think we need to move forward with this conversation," Sanes said.

No votes were taken at the information-gathering hearing.

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