Harnessing The Tides: Promising But Pricey
The falling cost of wind and solar power production is among the factors that have led to a revival of interest in wave and tidal power. Less unsightly than wind or solar facilities, harnessing the tides holds special fascination among environmentalists. Liberal website ThinkProgress argues that "blue is the new green." Meanwhile, approval has been granted for the first U.S. wave power plant to be built off the coast of Reedsport, Ore.
Wave and tidal power has many advantages over wind and solar. Waves are generally more reliable than clear, sunny skies or high winds. Powered by the moon's gravitational pull and earth's rotation, tidal flows are predictable.
Half of the U.S. population lives within 50 miles of the ocean, meaning that wave and tidal power generation puts energy sources in close proximity to end users. Currently, water is successfully used for energy production in other forms, almost all of it in hydroelectric dams. Hydropower accounted for 7 percent of U.S. energy production last year, 30 times the amount produced by solar.
Possible wave power technologies include using a 40-foot-tall buoy attached to the ocean floor or a snake-like link of attached floating tubes that "rides" waves. Both designs harness the rise and fall of waves to create power. Another technique involves absorbing the motion of waves from a structure on the bottom of the ocean outfitted with a series of compressible pumps.
While tidal power plants are rare, a few have been in operation over the past 50 years in France, Canada, and China. Harnessing energy from tides is simpler than doing so from waves. High and low tidal currents engage turbines, and changing tidal levels redirect water to create concentrated, stronger flows. Since seawater is nearly 1,000 times denser than air, tidal power has the potential to be more efficient than windmills at harnessing energy.
While wave and tidal energy appear to be attractive options, they also have significant drawbacks. Not all parts of the shoreline are conductive to power generation from waves and tides. Intense tidal currents and regular, heavy waves are necessary. Additionally, environmental, commercial, and recreational concerns regarding the ocean floor, marine life, and beaches are commonly expressed.
Currently, no commercial-scale wave power operations exist because, despite possible benefits, the costs of undertaking these projects on a large-scale are too steep, and projects remain uneconomical. This is the main reason why private companies, and even governments, have shown little interest. For example, this summer Ocean Power Technologies Inc. cancelled its plans to build a massive wave power plant off the southern coast of Australia because doing so was not "commercially viable."
Another wave power company, U.K.-based Pelamis Wave Power Ltd., entered administration (a last-ditch attempt to save failing companies) in late November after unsuccessful efforts to raise additional funding. The failure of Pelamis, a company once touted for its promising future, raises serious questions about the proper level of government support for wave and tidal power. When it comes to the future of this form of energy production, policymakers can learn from the experience of subsidizing wind and solar power production and development.
There is a reason why only 4 percent of U.S. energy comes from wind and solar -- they are expensive to tap. Data from the Energy Information Agency show that, for plants entering service in 2019, levelized wind power costs will be between $64 and $175 per megawatt. (Levelized costs are the lifetime costs of building, maintaining, and operating the plants divided by total amount of energy produced.)
Solar power will cost between $155 and $195 per megawatt. For comparison, conventional natural gas-fired plants produce energy at a levelized cost of $14 per megawatt. Prices paid by consumers for renewable energy are even higher when tax incentives are included.
Tax incentives are sold to the public as investments. But with government involvement comes, inevitably, government waste. Americans learned this lesson anew in the wake of Department of Energy's $16 billion Section 1705 Loan Guarantee Program, part of the 2009 American Recovery and Reinvestment Act. Out of the 26 projects, 22 were rated at or below "junk" investments and the remaining four projects were rated at BBB, the lowest investment grade level. Section 1705 was not an investment in any reasonable sense of the word.
If anything, the government's bet on solar -- epitomized by the crony-compromised federal loan guarantee to the Solyndra Corp., which wasted $535 million in taxpayers' money -- actually set back the cause of extracting energy from the sun. It was not until new technology altered the market dynamic that solar made some progress in terms of cost.
This experience is a cautionary tale for those who want the government to underwrite wave and tidal power, or force these sources of energy on consumers. Caution does not mean that government should stand in the way of future technological advances -- as it has to some extent with hydraulic fracturing (which fueled the surge in U.S. production of shale oil and natural gas). For example, even though U.S. oil and gas production has increased by about 25 percent since 2008, over that time federal acres leased for energy exploration have fallen 20 percent and the time taken to secure an energy exploration permit now stands at 194 days.
Another way the federal government could stand in the way of future wave and tidal energy innovation is through excessive regulation, which is a frequent complaint of those in the oil and gas industries. Restrictive terms in the Code of Federal Regulations (such as "must," "cannot," or "shall") regarding the oil and gas industry have increased 20 percent since 2006. This increase has been driven by the Environmental Protection Agency. In just two years, from 2010 to 2012, the EPA increased its oil and gas regulations by 45 percent and total EPA restrictions now stand at 136,000.
As attention and curiosity shift from wind and solar to wave and tidal power, it is important to avoid the energy policy mistakes of the past few decades.
This piece originally appeared in RealClearPolitics
This piece originally appeared in RealClearPolitics