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January 2013 Issue

More MHK Devices in the Water, but Funding, Legislative Challenges Remain

By Sen. Lisa Murkowski (R-Alaska)
Ranking Member, U.S. Senate Committee on Energy and Natural Resources

When writing about the status of the marine hydrokinetic energy (MHK) industry in 2013, it is hard not to think of Charles Dickens phrase: 'It was the best of times, it was the worst of times.'

While new marine energy devices were deployed and U.S. government agencies worked to streamline siting and permitting policies, the industry still faces setbacks in future federal funding and legislation.

Proving Ocean Energy Technologies
Right now should be the best of times for the ocean energy industry. Thanks to the continuing resolution that extended last year's spending levels into early spring, the Department of Energy's budget for water power is at a near record of $54 million, with $34 million allotted to MHK research. That's much higher than the $3.8 million budgeted as recently as 2007.

Last January, the Energy Department released two resource assessments that confirm that ocean, wave and tidal energy can contribute significantly to the nation's electricity production. The reports found that ocean energy could produce 15 percent of our nation's electricity by 2030 and provide a third of all power needs—1,420 terawatts.

Over the past year, more marine energy devices entered U.S. waters. Columbia Power Technologies (Corvallis, Oregon) tested its SeaRay buoy device off Discovery Park in Seattle, Washington, demonstrating its capability to convert wave energy into electricity. Additionally, Ocean Renewable Power Co. (Portland, Maine) continued testing its latest tidal current device in Maine. Verdant Power (New York, New York) also increased the number of its tidal turbines operating in the East River in New York City in a project that will generate up to 1 megawatt of electricity, beginning in 2013.

In August, the Federal Energy Regulatory Commission issued its first commercial license to a subsidiary of Ocean Renewable Power Co., allowing it to build and operate up to 10 1.5-megawatt wave generators in Oregon. The U.S. Navy also expanded its wave energy testing facility in Hawaii.

This past year, the U.S. Department of Energy again provided assistance for MHK technology test centers, while the Federal Energy Regulatory Commission and the Bureau of Ocean Energy Management worked to improve the framework for siting and permitting of hydrokinetic devices. NOAA, which is the permitting agency for ocean thermal energy conversion technology, has also improved its procedures for overseeing ocean energy development.

Ongoing Challenges
In terms of proving the efficiency and dependability of ocean energy devices, 2012 was a good year. But it also could be seen as the worst of times.

The president's proposed budget for fiscal year 2013 would cut federal water funding by 66 percent. Even more worrisome is that the federal budget crisis is likely to result in even less federal funding, with the budget for fiscal year 2014 likely being much smaller for all renewable energy technologies.

Another problem is that the United States is in danger of falling further behind Europe in promoting MHK. So far, Europe, led by the United Kingdom, has provided more than $500 million, while total U.S. aid is $177 million.

Another concern is that Congress, for the fourth year in a row, made little progress in advancing the research blueprint for the industry. In 2009, I introduced an MHK energy bill to follow up on the advances that Congress approved in 2007. It did not pass. In 2011, I reintroduced the bill, which would provide new federal aid to expand the industry, requiring the federal government to take over the cost of testing and verifying the performance of new devices. More importantly, it would also provide federal funds to help with the cost of environmental reviews.

The bill would also expand how federal funding could be used for system integration, engineering and design. While the bill made it out of the Senate Energy and Natural Resources Committee, it never saw the light of day on the Senate calendar. It will be back for consideration in the new Congress.

Where the Industry is Headed
While no one can guarantee level funding for MHK technology in the future, the progress that the industry has shown should encourage Congress to continue investing in the sector. The industry is also in a good place strategically. With the retirement of former New Mexico Democrat Sen. Jeff Bingaman, the Senate Energy and Natural Resources Committee will be led by two supporters of MHK, Democratic Sen. Ron Wyden of Oregon and myself.

The actions of private industry are encouraging. After years of effort, there are now a number of devices hitting the water. The key has always been to get devices into the water to show that ocean energy is for real and can be cost competitive.

While costs will be high for the early devices, the outlook for lower-cost MHK energy is improving. The industry has reached a level of stability that will enable it to move toward economic self-sufficiency, regardless of what the government does in the future.

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