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Report on US-Ireland Marine Energy Program Study Visit to USA

Participants of Study Tour

Last month, I wrote about the fact that I was setting off to the USA as part of a US-Ireland Marine Energy programme organised by the Irish Institute and funded by the US department of State. The trip was a great success. Our hosts set up an impressive schedule over ten days, covering a myriad of regulatory, technical and commercial issues relating to Marine Energy or “Marine HydroKinetic Energy” (MHK) as the conversion of wave or tidal stream energy is known in the US. 

An introduction to the US energy landscape by Prof. David Deese of Boston College set the theme for the week.  The US is coming from a starting point of having no offshore renewable energy projects (including wind) in the water to date.  It seems that progress has been frustrated by what Prof. Deese highlighted as the thorny issue of state policy and regulation verses US Federal regulation whereby authorities at State and Federal level must both be satisfied to consent projects such as offshore wind or marine renewables in US waters. 

For Ocean Energy developments within the 3 mile limit, the state has responsibility for marine spatial planning and licencing of real estate.  However, beyond 3 miles the responsibility falls to the Federal Department of the Interior, or more specifically the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) that was recently created after the Deepwater Horizon disaster.  Irrespective of the location of the project, the Federal Energy Regulatory Commission (FERC) will still have jurisdiction to give Marine Hydrokinetic projects a permit to generate. 

The result seems to be a regulatory minefield that is only recently being untangled by federal authorities in response to a more enthusiastic political climate for the development of innovative energy projects in the marine environment.  Discussions with each of these regulatory bodies and agencies certainly gave considerable food for thought on how to best implement licensing procedures in the two jurisdictions of Ireland. 

In many ways it should be simpler in Ireland as European regulation is enforced by ensuring that state legislation in Ireland and the UK comply with EU directives, while EU bodies play no direct role in the consenting process.  As such, there is really only one relevant jurisdiction to be consulted by any given project developers in Ireland, unless the project has the misfortune of straddling the border!

At State level, the delegation met with Secretary Richard K. Sullivan Jr. and his team, who oversees the Commonwealth of Massachusetts’ six environmental, natural resource and energy regulatory agencies.  Secretary Sullivan’s team were clearly motivated by the potential benefits of bringing a renewable energy industry to the region.  I couldn’t help feeling that the pooling of the often conflicting ambitions of the energy and environmental policy into a single unit of government was a distinct advantage in achieving a policy consensus to drive forward pragmatic and environmentally sound energy policy. 

The focus there is on the offshore wind opportunity for the State of Massachusetts, where the transmission costs of importing wind from the US mid-west can be used to justify the additional cost of exploiting offshore wind more locally to the US East coast load centres.  The locally infamous “Cape Wind” project has been in the consenting process for close to 10 years and is the embodiment of the regulatory problems in the US.  However, it is also the vehicle that is driving through the necessary policy reform in the US and the market is likely to open up on the back of its persistence.  In this way there are many parallels with what ESBI’s WestWave project is attempting to achieve in an Irish context, though we hope not to replicate their time frames!

Regulatory issues aside, Massachusetts is aiming to be a centre of renewable energy with advanced plans for the world’s largest test centre for wind turbine blades at Charlestown, near Boston.  Also, a new multi-purpose “marine commerce terminal” is being mooted at the old Whaling port of New Bedford, where the Irish delegation was hosted by the New England Marine Renewable Energy Centre.  One can easily see the parallels with Ireland, where Belfast is set to become an energy logistics hub to serve offshore wind energy projects in the Irish sea.  Ports at Killybegs, Foynes and Cork would also stand to benefit from any wave energy developments on the Western seaboard.

Despite the clear environmental benefits and unfolding policy reforms, there still remains the critical question of whether the emerging marine energy conversion technologies can achieve technical and economic viability, producing electricity at an acceptable cost to the consumer.  The delegation met with US-based developers Ocean Renewable Power Company, who have deployed a small scale tidal turbine in the sea off the coast of Maine.  Ocean Energy Systems Limited has ambitions to develop wave energy technology based on the Irish McCabe Wave Pump technology for use both in sea water desalination and electricity production. 

The delegation also met with Wavebob LLC, part of the Irish company Wavebob which was set up to take advantage of the naval engineering environment in the US.  As if to prove the point, the delegation was treated to a tour by Professor Michael McCormick of the US Naval Academy at Annapolis, Maryland.  The facilities and know-how in the region are second to none and I can’t help but feel that US partnership in this area could bring great benefit to the industry as a whole.  Some of these companies were also able to avail of the financial support from the US Department of Energy’s Water Power Program, with whom the Irish delegation also had the opportunity to exchange ideas on how best to support emerging technologies in the area.

Despite the impressive research and engineering capabilities, naval research facilities and grant support programmes on offer, I felt there was one major constraint to development in the US.  The delegation had the opportunity to discuss the sector with a number of US venture capital fund managers who were able to lay down a number of considerable challenges to investment in the sector in the US.  Risks associated with the regulatory regime, the marine environment, transmission access to market and the cost of technology development were sobering realities for investors. 

For now, Ireland may well be more attractive to investors in many of these categories.  Levelised Cost of Energy is a key issue in the US, where tariff support or tradable Renewable Obligation Certificates (ROCs) are not on the policy table as yet.  We stand a much better chance in Ireland of attracting private finance to technology companies or to develop pre-commercial demonstration projects such as ESBI’s WestWave, where feed-in tariffs can help to bridge the gap between technology development and demonstration and commercial, type-certified energy conversion systems that can be scaled up to achieve a more competitive cost of energy. 

Later in the year, we will have an opportunity to invite some of the people we visited to participate in a series of meetings in Ireland with the aim fostering more permanent ongoing co-operation.  It will be interesting to see how ocean energy developments on the island of Ireland will be viewed through the eyes of our US visitors.

 John Fitzgerald is technology manager with ESBI’s Ocean Energy group.

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