Thursday, August 18, 2011

OTEC Firm Gets ‘First Approval in Principle’ for its Plant; Action Potentially Clears Way for Insurance & Financing, Improves Chances Oahu Will See Facility Built Here Soon

We don’t want to over-promote this, but three lines in the headline do seem appropriate in this case: The latest news about ocean thermal energy conversion (OTEC) seems to suggest a major milestone that could speed OTEC development here in the islands.

ABS (short for American Bureau of Shipping) has given “first approval in principle” to a floating OTEC production facility that’s proposed by OTEC International (OTI) of Baltimore, MD.

ABS describes itself as the world’s leading classification society in verifying “that marine vessels and offshore structures comply with Rules that the society has established for design, construction and periodic survey.”

The approval amounts to a “seal of approval” of OTI’s design and overall concept for a “moored spar” to generate electricity using temperature differences between the tropical ocean’s warm surface and deep, cool waters from 3,000 feet below.

There’s nothing new about the OTEC concept, which was first theorized in the 19th century and was first proven off the Big Island’s Kona coast in the 1970s. But this may be the first time an international rating agency has found favor with a specific design to commercialize it.

An industry insider we rely on for insights tells us that if any other OTEC proponent has achieved a similar endorsement, it hasn’t been announced.

Significantly, he says ABS’s action means the United States Coast Guard will allow the platform’s use, insurance companies will underwrite it and investors can jump in with a strong sense of assurance, although the latter may not be a concern for OSI, which already has foundation backing. It also means a shipyard can actually build one of OTI's designs; we're assured by a reliable source that if OSI builds in Hawaii, it will be a 100-MW commercial version.

“It is not a sexy milestone but a critical one nonetheless,” our friend says, “because without it, no offshore OTEC facility will get built.”

Ian Simpson, ABS Director of Offshore Technology and Business Development, Americas Division, was quoted in a company press release:

“This concept combines proven offshore principles with off-the-shelf power, technology and proprietary innovations, all assembled in a unique way. The design application illustrates how ABS is able to use its novel concept approach and guidance to provide review of a concept within the framework of established safety standards.”

The “moored spar” concept is being tested by StatoilHydro offshore of Norway in the North Sea to support a wind turbine. Like an iceberg with 90 percent of its mass below the sea’s surface, OTI’s spar concept puts the mechanical components – pumps, heat exchangers, generators, etc. – below the surface in a cylindrical spar and not on a ship or platform on the surface. The slide show at OTI's website makes this concept clearer than we can in this paragraph.

What this leads to depends on a laundry list of variables, but we hope more will be forthcoming soon from OTI about the company’s plans to build OTEC here in Hawaii. A power purchase agreement with Hawaiian Electric Company could be in the works.

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