[From Renewable Energy Access:]
Verdant Power LLC, builder of the first tidal-power project in the U.S., says a competitor is blocking access to prime sites by applying for permits with no intention of developing them. Oceana Energy Co. denies it is blocking development at any of the 12 sites where it has asked for permission to place tidal-power projects. Tidal energy uses the movement of waters in ocean channels to run turbines.
Verdant, based in Arlington, Virginia, describes its turbines as "underwater windmills.'' Sean O'Neill, president of the Ocean Renewable Energy Coalition, a trade group in Potomac, Maryland, said it is difficult to sort people who are tying up sites speculatively from those legitimately seeking locations that would be best suited for their technology. He declined to characterize Oceana's activities.
"Speculation, and the fact it could hold up a site for anywhere from three to six years, that certainly is not good for the industry,'' O'Neill said in an interview. "Any company that is banking sites should be tarred and feathered.''
In a July 3 filing with the Federal Energy Regulatory Commission (FERC), closely held Verdant compared Oceana's moves to the dot-com tactic of registering Internet domain names and holding them "for ransom." The company said it believes Oceana "intends to bank the sites and auction them off for its own private gain when tidal technology matures."
A preliminary FERC permit gives developers three years exclusive access to a site.
Oceana will harm development of tidal energy "at a time when large institutional companies are beginning to invest in wave and tidal companies," Verdant said. "These investors most likely will pull their money, with a possible death-spiral effect on this fledgling industry."
Washington-based Oceana filed applications with the commission seeking permits for sites in Alaska, Washington, Massachusetts, Maine, New York and New Hampshire. The company already has a permit for a site in San Francisco Bay.
"We don't know at this point if we would go forward with developing one site or all of them," said Mike Hoover, general counsel for Oceana Energy. "The sites are worth nothing at this point to anyone.''
Most of the permits Oceana seeks are for sites identified as ideal for tidal power in reports funded by the utility industry's research organization, EPRI.
The commission has approved 11 preliminary permits for tidal energy since 2004, according to spokeswoman Celeste Miller. Another 22 permits are pending, she said.
Roger Bedard, ocean energy leader for EPRI and author of the EPRI reports, said the number of tidal project proposals has boomed since the reports were issued late last year and early this year.
"I think our feasibility study has something to do with it,'' he said.
Verdant said in its filing that Oceana is targeting sites identified in the EPRI report and has failed to propose any specific projects or technologies.
The company lacks "any reputation in the still relatively close-knit ocean energy community,'' Verdant said.
Verdant is preparing to install next month the first tidal energy facility in the U.S. in New York City's East River [previous post]. The test facility will provide 200 kilowatts of power. It could be expanded to 300 turbines capable of generating a total of 10 megawatts, enough power for about 8,000 average U.S. homes.
Oceana's founders include William Nitze, former assistant administrator in the Environmental Protection Agency and a former general counsel for Mobil Oil Corp. The former chairman of the White House Counsel on Environmental Quality, George Frampton Jr., told regulators in a July 18 filing that he is conducting due diligence on Oceana on behalf of "a major private equity fund interested in being the lead investor in Oceana.''
This site banking issue was a frequent topic of discussion at the recent Ocean Renewable Energy Conference in Newport Oregon I attended [see previous post]. Another company (I'm not sure the name) has aparently been trying to file for prime wave energy sites off the coast of Oregon also identified in an EPRI report.
This site banking issue could be a real setback for the fledgling ocean energy industry, and is a major concern for legitimate ocean energy developers. One suggestion at the Conference was that the Oregon Department of Energy (ODOE) file preliminary permits for the prime wave sites located off the coast of Oregon in order to prevent speculators from banking the sites. ODOE would then cede the development rights to legitimate developers. I'm not sure if that strategy will be employed to protect wave energy sites from the kind of site banking that has apparently already locked down a dozen prime tidal energy sites.
And what's this crap from Oceana about "The sites [being] worth nothing at this point to anyone"? They clearly are worth something to legitimate developers like Verdant who want prime tidal energy locations to develop and turn a profit, while driving the nascent ocean energy industry forward. The fact they Oceana seems to think they aren't worth anything at this point indicates to me that they are in fact not interested in developing these sites, at least not anytime soon. If they were planning to develop them, I'd think they would consider the sites a bit more valuable...
I hope, for the sake of the industry, that Oceana is a legitimate developer with real plans to develop most of these sites in the next 3-5 years. If it turns out that they are simply speculators site banking prime sites, then, as OREC's Sean O'Neill aptly said, they should be tarred and feathered.
Wednesday, August 09, 2006
[From Renewable Energy Access:]