[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
         MARINE AND HYDROKINETIC ENERGY TECHNOLOGY: FINDING THE
                       PATH TO COMMERCIALIZATION

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                              ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 3, 2009

                               __________

                           Serial No. 111-67

                               __________

     Printed for the use of the Committee on Science and Technology


     Available via the World Wide Web: http://www.science.house.gov

                                 ______




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                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                   HON. BART GORDON, Tennessee, Chair
JERRY F. COSTELLO, Illinois          RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas         F. JAMES SENSENBRENNER JR., 
LYNN C. WOOLSEY, California              Wisconsin
DAVID WU, Oregon                     LAMAR S. SMITH, Texas
BRIAN BAIRD, Washington              DANA ROHRABACHER, California
BRAD MILLER, North Carolina          ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois            VERNON J. EHLERS, Michigan
GABRIELLE GIFFORDS, Arizona          FRANK D. LUCAS, Oklahoma
DONNA F. EDWARDS, Maryland           JUDY BIGGERT, Illinois
MARCIA L. FUDGE, Ohio                W. TODD AKIN, Missouri
BEN R. LUJAN, New Mexico             RANDY NEUGEBAUER, Texas
PAUL D. TONKO, New York              BOB INGLIS, South Carolina
PARKER GRIFFITH, Alabama             MICHAEL T. MCCAUL, Texas
JOHN GARAMENDI, California           MARIO DIAZ-BALART, Florida
STEVEN R. ROTHMAN, New Jersey        BRIAN P. BILBRAY, California
JIM MATHESON, Utah                   ADRIAN SMITH, Nebraska
LINCOLN DAVIS, Tennessee             PAUL C. BROUN, Georgia
BEN CHANDLER, Kentucky               PETE OLSON, Texas
RUSS CARNAHAN, Missouri
BARON P. HILL, Indiana
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
KATHLEEN DAHLKEMPER, Pennsylvania
ALAN GRAYSON, Florida
SUZANNE M. KOSMAS, Florida
GARY C. PETERS, Michigan
VACANCY
                                 ------                                

                 Subcommittee on Energy and Environment

                  HON. BRIAN BAIRD, Washington, Chair
JERRY F. COSTELLO, Illinois          BOB INGLIS, South Carolina
EDDIE BERNICE JOHNSON, Texas         ROSCOE G. BARTLETT, Maryland
LYNN C. WOOLSEY, California          VERNON J. EHLERS, Michigan
DANIEL LIPINSKI, Illinois            JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
DONNA F. EDWARDS, Maryland           RANDY NEUGEBAUER, Texas
BEN R. LUJAN, New Mexico             MARIO DIAZ-BALART, Florida
PAUL D. TONKO, New York                  
JIM MATHESON, Utah                       
LINCOLN DAVIS, Tennessee                 
BEN CHANDLER, Kentucky                   
JOHN GARAMENDI, California           RALPH M. HALL, Texas
BART GORDON, Tennessee
                  CHRIS KING Democratic Staff Director
         SHIMERE WILLIAMS Democratic Professional Staff Member
          ADAM ROSENBERG Democratic Professional Staff Member
            JETTA WONG Democratic Professional Staff Member
             DAN BYERSRepublican Professional Staff Member
          TARA ROTHSCHILD Republican Professional Staff Member
                      JANE WISE Research Assistant
                    ALEX MATTHEWS Research Assistant


                            C O N T E N T S

                            December 3, 2009

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Brian Baird, Chairman, Subcommittee 
  on Energy and Environment, Committee on Science and Technology, 
  U.S. House of Representatives..................................     8
    Written Statement............................................     9

Statement by Representative Bob Inglis, Ranking Minority Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................     9
    Written Statement............................................    10
Prepared Statement by Representative Jerry F. Costello, 
  Subcommittee on Energy and Environment, Committee on Science 
  and technology, U.S. House of Representatives..................    11
Prepared Statement by Representative Eddie Bernice Johnson, 
  Subcommittee on Energy and Environment, Committee on Science 
  and technology, U.S. House of Representatives..................    11


                               Witnesses:

Jacques Beaudry-Losique, Deputy Assistant Secretary for Renewable 
  Energy, Office of Energy Efficiency and Renewable Energy, U.S. 
  Department of Energy
    Oral Statement...............................................    12
    Written Statement............................................    14
    Biography....................................................    21

Roger Bedard, Ocean Energy Leader, Electric Power Research 
  Institute (EPRI)
    Oral Statement...............................................    22
    Written Statement............................................    24
    Biography....................................................    35

James G.P. Dehlsen, Founder and Chairman, Ecomerit Technologies, 
  LLC
    Oral Statement...............................................    36
    Written Statement............................................    37
    Biography....................................................    43

Craig W. Collar, P.E., Senior Manager for Energy Resource 
  Development at Snohomish Public Utility District
    Oral Statement...............................................    44
    Written Statement............................................    45
    Biography....................................................    56
Gia D. Schneider, Co-Founder and CEO, Natel Energy, Inc.
    Oral Statement...............................................    57
    Written Statement............................................    59
    Biography....................................................    67

Discussion
  The Problem of Outsourced Manufacturing and Test Beds..........    67
  Pace of Test Bed Development...................................    68
  Keys to Expediting Projects....................................    68
  Species Safety.................................................    68
  Turbine Design.................................................    69
  Combining Wave and Wind Technologies...........................    70
  Comparing Economic Costs and Benefits of Energy................    71
  Hydrokinetic Potential in the Great Lakes......................    72
  Low Head Hydropower............................................    73
  Other Promising Technologies...................................    73
  Lessons from Verdant Power in New York State...................    74
  Cost Competitiveness of MHK Technologies.......................    75
  Impacts on Scenic Views........................................    75
  Progress to Date and the Power Density of MHK..................    76
  2009 Stimulus Funding for MHK..................................    77
  The Importance of Consistent Federal Support...................    77
  Permitting and Regulatory Structure............................    78
  Energy Production From the Gulf Stream.........................    81
  Thermal Energy Potential in the Oceans.........................    82
  Closing........................................................    83


         MARINE AND HYDROKINETIC ENERGY TECHNOLOGY: FINDING THE
                       PATH TO COMMERCIALIZATION

                              ----------                              


                       THURSDAY, DECEMBER 3, 2009

                  House of Representatives,
                     Subcommittee on Energy and Environment
                        Committee on Science and Technology
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Brian 
Baird [Chairman of the Subcommittee] presiding.


                            hearing charter

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                     U.S. HOUSE OF REPRESENTATIVES

      Marine and Hydrokinetic Energy Technology: Finding the Path

                          to Commercialization

                       thursday, december 3, 2009
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

PURPOSE

    On Thursday, December 3, the Subcommittee on Energy and Environment 
will hold a hearing entitled, ``Marine and Hydrokinetic Energy 
Technology: Finding the Path to Commercialization.'' The purpose of the 
hearing is to explore the role of the Federal government and industry 
in developing technologies related to marine and hydrokinetic energy 
generation.
    Similar to wind technologies of a few decades ago, interest in 
marine and hydrokinetic (MHK) technologies is increasing around the 
world. Also, as with the emergence of wind technologies of the 1970s, 
MHK technologies of today need a considerable amount of RD&D before 
commercialization. These technologies include wave, current (tidal, 
ocean and river), ocean thermal energy generation devices and related 
environmental monitoring technologies. There are a variety of energy 
conversion technologies and companies active in this field, and some 
MHK devices being demonstrated, primarily outside of the United States.

WITNESSES

          Mr. Jacques Beaudry-Losique, Deputy Assistant 
        Secretary for Renewable Energy, U.S. Department of Energy

          Mr. Roger Bedard, Ocean Energy Leader, Electric Power 
        Research Institute

          Mr. Jim Dehlsen, Founder & Chairman, Ecomerit 
        Technologies, LLC

          Mr. Craig W. Collar, P.E., Senior Manager for Energy 
        Resource Development at Snohomish County Public Utility 
        District

          Ms. Gia Schneider, Chief Executive Officer of Natel 
        Energy, Inc.

BACKGROUND

    The marine and hydrokinetic (MHK) renewable energy industry is 
relatively new, yet some of its technologies have roots from the 
growing wind industry. Experts in the industry expect that MHK 
technologies will follow a similar path as wind turbines. Significant 
achievement in efficiency enhancements and cost reductions during the 
past 30 years in the wind industry are transferable to MHK 
technologies. Similarly, the Electric Power Research Institute (EPRI) 
predicts that cost reduction forecasts for the MHK industry will follow 
a similar path as wind technologies, but not without overcoming some 
significant hurdles.
    Studies have estimated that approximately 10 percent of U.S. 
national electricity demand may be met through river in-stream sites, 
tidal in-stream sites, and wave generation. This estimate includes 
approximately 140 TWh/yr from tidal and in-stream river technologies 
and 260 TWh/yr from wave generated electricity.\1\ This does not 
include ocean thermal energy, ocean currents or other distributed 
generation in man-made water systems.
---------------------------------------------------------------------------
    \1\ Electric Power Research Institute, ``North American Ocean 
Energy Status.'' March, 2007.
---------------------------------------------------------------------------
    MHK generation could be important as it would meet the demand for 
coastal regions of the U.S. Coastal regions are home to 53 percent of 
the population of the U.S. despite comprising only 17 percent of the 
land in the country. 23 of the 25 most populous counties are located in 
coastal regions and the 10 fastest growing counties are in coastal 
states--California, Florida, and Texas.\2\
---------------------------------------------------------------------------
    \2\ National Ocean and Atmospheric Administration, ``Population 
Trends Along the Coastal United States''. September 2004.
---------------------------------------------------------------------------
Technologies and Industry Activity
    Various MHK technologies can be used to harness energy from three 
major sources: currents (tidal, ocean and river), waves, and stored 
ocean thermal energy.

Current (tidal, ocean and river) Energy Technologies

    There are several different energy technologies being used to 
harness the energy found in currents. Ocean currents of the world are 
untapped reservoirs of energy linked to winds and surface heating 
processes. The Gulf Stream is an example of an ocean current. Tides, 
another form of currents, are controlled primarily by the moon. As the 
tides rise and fall twice each day, they create strong tidal currents 
in coastal locations with fairly narrow passages. Examples include San 
Francisco's Golden Gate, the Tacoma Narrows in Washington's Puget 
Sound, and coastal areas of Alaska and Maine. Tidal in-stream energy 
conversion (TISEC) devices harness the kinetic energy of moving water 
and do not require a dam or impoundment of any type. Additionally, in-
stream river technologies can be used in any kind of free flowing 
water, such as rivers or man-made canals.
    Conversion devices used to harness energy from tidal currents are 
similar to those used for river currents, the major differences being 
that river currents are unidirectional and contain fresh water. 
Different kinds of currents turn turbines- either horizontal (axis of 
rotation is horizontal with respect to the ground, and parallel to the 
flow of water) or vertical (axis of rotation is perpendicular to the 
flow of water). The kinetic motion of the water turns the blades of the 
rotor, which then drives a mechanical generator. The systems used to 
harness energy from tidal and river currents are similar to those used 
in wind energy applications. These similarities lead many experts to 
believe that the development time for TISEC and in-stream river current 
conversion technologies may be less than other MHK technologies, such 
as wave energy conversion or ocean thermal energy conversion (OTEC) 
technologies.
    Electricity generated from tidal currents has an estimated cost for 
a utility and municipal generator ranging from 4 cents/kWh to 12 cents/
kWh, depending on power density.\3\ Additional cost reductions will be 
achieved through economies of scale and improved engineering.\4\ 
Despite the similarities between in-stream river devices and in-stream 
tidal devices, the former has no reliable studies regarding the cost of 
electricity. Research regarding the cost of electricity for river 
devices would help to expand the industry.
---------------------------------------------------------------------------
    \3\ This is the relationship between the density of the seawater 
(in kilograms per cubic meter) and the instantaneous speed or velocity 
of the stream (in meters per second).
    \4\ Electric Power Research Institute. ``North America Tidal In-
Stream Energy Conversion Technology Feasibility Study''. June 11, 2006.
---------------------------------------------------------------------------
    Companies across the country are developing devices to harness 
energy from currents. Verdant Power, established in 2000 and based in 
New York, has three different projects. Its longest running project is 
the Roosevelt Island Tidal Energy (RITE) Project operated in New York 
City's East River. In 2005, the Federal Energy Regulatory Commission 
(FERC) issued a special Declaratory Order allowing Verdant Power to 
produce and deliver electricity to end users during the testing phase 
of the RITE Project. The first federally licensed, in-stream 
hydrokinetic power plant, developed by Hydro Green Energy, was deployed 
on the Mississippi River in Hastings, Minnesota and began operating 
commercially on August 20, 2009. This project was approved in December 
2008 by FERC. Pre-installation environmental testing has occurred since 
February 2009. The turbine has a nameplate capacity of 100 kW and its 
expected output is 35 kW. A second more efficient turbine is scheduled 
to come online in spring 2010.

Wave Energy Technologies

    Wave energy conversion technologies use the motion of waves to 
generate mechanical energy that can be converted to electricity. There 
are many different devices in the testing, development, pre-commercial 
and commercial stages. While all systems operate under the same general 
concept of generating electricity through wave energy, they differ in 
design and method of electricity conversion components. Some of the 
most common technologies include: attenuators or linear absorbers, 
pitching/surging/heaving/sway (PSHS) devices, oscillating water 
columns, overtopping terminators, point absorbers, and submerged 
pressure differentials.
    The Electric Power Research Institute (EPRI) states that the cost 
of electricity for electricity generated through wave energy conversion 
devices can range from 11.1 cents/kWh in parts of California to 39.1 
cents/kWh in Maine. Wave technology is at approximately the same stage 
of development as wind technology 20 years ago, just starting its 
emergence as a commercial technology. At the beginning of wind power 
commercialization, the cost of electricity was over 20 cents/kWh. For 
each doubling of cumulative installed capacity, the cost of electricity 
from wind energy decreased by roughly18 percent. The cost of 
electricity is now around 6 cents/kWh (in 2006$). EPRI predicts that 
many MHK technologies will follow this same path.\5\
---------------------------------------------------------------------------
    \5\ Electric Power Research Institute. ``North American Ocean 
Energy Status''. March 2007.
---------------------------------------------------------------------------
    Despite the cost of wave energy generation several companies are 
pursing demonstration projects. Ocean Power Technologies (OPT) founded 
in 1994 and headquartered in Pennington, NJ has tested and is now 
deploying its PowerBuoy worldwide. In 2007, PNGC Power signed a funding 
agreement for OPT to develop a 150 kW PowerBuoy off the coast of 
Reedsport, Oregon. This project received $2 million in support from DOE 
in 2008. The first PowerBuoy is expected to be deployed in 2010. 
Pacific Gas & Electric Company (PG&E) is also looking at wave energy 
devices. They will be developing a testing center similar to the Wave 
Hub (discussed below) and has been awarded a cost sharing grant of 1.2 
million by DOE for this project. The California Public Utility 
Commission is also contributing 4.8 million. The proposed WaveConnect 
project, to be located in Humboldt County, will be able to test up to 
four wave technologies at one time. PG&E was granted its FERC 
preliminary permit in March of 2008 and is planning to apply for its 
pilot plant license with the FERC in spring 2010.\6\
---------------------------------------------------------------------------
    \6\ Electric Power Research Institute. ``Offshore Ocean Wave 
Energy: A Summer 2009 Technology and Market Assessment Update,'' July 
21, 2009.
---------------------------------------------------------------------------

Ocean Thermal Energy Conversion Technologies

    Ocean thermal energy conversion (OTEC) is an energy technology that 
converts solar radiation in the ocean to electric power. OTEC systems 
use the ocean's natural thermal gradient--the ocean's layers of water 
have different temperatures--to drive a powerproducing cycle. More than 
70 percent of the Earth's surface is covered with oceans. This makes 
them the world's largest solar energy collector and energy storage 
system. On an average day, 60 million square kilometers (23 million 
square miles) of tropical seas absorb an amount of solar radiation 
equal in heat content to about 250 billion barrels of oil. A fraction 
of this stored energy can be converted to electricity with OTEC 
technologies.
    The three types of systems used for OTEC are closed-cycle, open-
cycle, and hybrid, which employ features from both closed and open-
cycle systems. Closed-cycle utilizes a fluid with a low boiling point 
that is vaporized by warm surface seawater in a heat exchanger. The 
vapor turns a turbo-generator, and is then run though a second heat 
exchanger containing cold deep-seawater. This condenses the vapor back 
to the liquid form and it is then recycled through the system. Open-
cycle technologies use warm seawater that boils when placed in a low-
pressure container. The steam from the boiling water drives a low-
pressure turbine that is attached to a generator. It is then condensed 
back to a liquid. Hybrid systems involve warm seawater which enters a 
vacuum chamber where it is flash-evaporated into steam, similar to the 
open-cycle evaporation process. The steam vaporizes a low-boiling-point 
fluid (in a closed-cycle loop) that drives a turbine to produce 
electricity.
    Even though OTEC systems have no fuel costs, the high initial cost 
of building a facility makes OTEC generated electricity more expensive 
than conventional alternatives. Existing OTEC systems have a low 
overall efficiency, but there is reason to believe that subsequent 
technology advances and an expanded body of research based on off-shore 
oil and gas industry can make OTEC technologies cost-effective. 
Lockheed Martin Corporation reports that one of the key challenges 
facing OTEC is creating an economically viable plant. This situation is 
due to the non-linear scale-up of major OTEC subsystems--increasing the 
output power by a factor of ten increases the plant capital costs by 
factor three. The resulting cost of electricity from the first 100 MW 
commercial facility is calculated to be approximately 21 to 25 cents/
kWh. These rates are competitive today in such locations as Hawaii and 
Guam. However, this number does not take into account several factors 
such as production and investment credits and decreased costs of future 
plants which further lower the cost.
    OTEC systems currently are restricted to experimental and 
demonstration units. Island communities which currently rely on 
expensive, imported fossil fuels for electrical generation are the most 
promising market for OTEC. DOE originally funded research in OTEC in 
1980 and has recently awarded two grants to Lockheed Martin Corporation 
totaling $1,000,000. The funding will help develop and describe 
designs, performance, and life-cycle costs for both the near shore and 
offshore OTEC baseline cost figures. Additionally, funding will go 
towards the development of a GIS-based dataset and software tool to 
assess the maximum extractable energy potential globally using OTEC 
technologies. The U.S. Navy has expressed considerable interest in 
OTEC. In September of this year the U.S. Naval Facilities Engineering 
Command (NAVFAC) recently awarded Lockheed Martin an $8.12 million 
contract to further the OTEC technology development.
International Activities
    Many countries are developing MHK energy technologies. Brazil, 
Canada, the Netherlands, Italy, China, Sweden, Mexico, Germany, 
Australia, Portugal, India, Ireland, Japan, Denmark, Greece, New 
Zealand and many others are all operating MHK energy devices at the 
various scales of testing and commercialization. For example, South 
Korea deployed their first commercial tidal power plant in May of this 
year. It is estimated that this device will power approximately 430 
households annually, and by 2013 it will have up to 90,000 kW of 
capacity and supply electricity to 46,000 houses. South Korea is also 
developing an additional 254 kW tidal power plant in Sihwa, which is 
scheduled to be completed by the end of next year.
    The United Kingdom (UK) has made efforts to develop MHK energy 
technology. It has established specific funding streams and centers for 
development and testing of MHK technologies. The UK's marine energy 
goal is to have 2 GW of installed capacity by 2020. The Government is 
also developing a Marine Action Plan that is expected to be published 
by spring 2010. The Marine Renewables Proving Fund was established by 
the UK Government to provide up to $32.8 million in grants for the 
testing and demonstration of pre-commercial wave and tidal stream 
technologies. They also have established the Marine Renewables 
Deployment Fund, which will support technologies as they move from 
development to deployment. Additionally, three device testing centers 
have been established with a combined funding of up to $56.6 million 
from the UK Government. They are:

          New and Renewable Energy Centre (NaREC): The UK 
        Government appropriated $14.5 million to build on and utilize 
        existing infrastructure to provide an open access facility for 
        marine developers to test and prove designs/components onshore. 
        This facility includes complete in-house prototype development 
        facilities for wave technology, including a wave tank, 
        mechanical and electrical design engineering and procurement, 
        electrical engineering consultancy and support for power 
        conversion and drive train development, complete system testing 
        from marine environment to grid connection, resource and 
        feasibility assessment and consultancy, market analysis and 
        research, and project management, funding, and investment 
        coordination.

          European Marine Energy Centre (EMEC): EMEC was 
        established following a recommendation by the House of Commons 
        Committee on Science and Technology in 2002. The UK will 
        provide $11.9 million as part of a renewable energy strategy 
        for their in-sea stage testing facilities--the only multi-
        berth, purpose-built, open-sea testing facilities in the world. 
        The Edinburgh-based Pelamis Wave Power technology has generated 
        electricity to the national grid from its deep water floating 
        device at EMEC's wave test site. After being tested, the 
        Pelamis was deployed and connected to the Portuguese grid in 
        the fall of 2008, but is currently not in operation. Verdant 
        Power, Ocean Power Technologies and Columbia Power 
        Technologies, as well as other MHK energy developers based in 
        the United States have tested their technologies or interacted 
        with EMEC's testing facilities and staff. EMEC is linked with a 
        range of different developers and devices, as well as academic 
        institutions and regulatory bodies. EMEC aims to ensure that 
        different devices are monitored in a consistent way, using the 
        best available methods. Furthermore, the dissemination of 
        monitoring information can be carried out throughout the 
        industry, regulatory bodies and their advisors, as appropriate.

          The Wave Hub: Due to be built in 2010, the Wave Hub 
        is a $62 million project in which a collection of wave energy 
        conversion devices will be connected to the national grid 
        through high voltage sub-sea cables. It will be the UK's first 
        offshore facility for the demonstration of wave energy 
        generation devices.

Barriers to Generation in the United States
    Despite the fact that the U.S. has significant MHK resources and 
several companies interested in the technology, more investment and 
greater attention has been paid to these technologies in Europe. The 
U.S. MHK industry is behind Europe and this could be because of a 
variety of interconnected financial, regulatory, and environmental 
barriers.
    While cost remains one of the largest barriers, it is estimated 
that with appropriate pilot and commercial scale demonstration of MHK 
technologies, the cost of MHK generated electricity will quickly 
decrease over time. Getting from pilot to commercial scale requires 
investment in small-scale systems which are not yet proven 
technologies. It is already difficult to finance new renewable projects 
with the existing state and federal incentives. MHK projects have an 
additional set of unique environmental and regulatory barriers which 
add to the cost of installation and project uncertainty which investors 
find risky. As a result, developers are put in the position of needing 
to push for large commercial technologies to drive costs down, but will 
not do so until a technology is demonstrated and proven commercially 
viable.
    Project finances are heavily dependent upon the pace of the 
regulatory permitting process. This regulatory permitting process can 
be costly, lengthy, and complex, and is a very significant barrier to 
MHK development in the United States (not the focus of this hearing). 
This process includes activities such as lease and revenue 
negotiations, submittal of plans and operations concerning the 
demonstration site assessment, construction and operations 
requirements, environmental and safety monitoring and inspections. 
Generally, many of these qualifications have not changed for over a 
half century and were developed for traditional hydropower plants or 
for oil and gas projects, not for demonstration MHK activities. 
Although earlier this year the FERC and Mineral Management Service 
(MMS) established a less complex permitting, licensing, leasing 
framework, and pilot project approval process, there are still upwards 
of 20 other federal, state, and local regulatory agencies which oversee 
MHK projects.
    Part of the complex net of regulatory barriers for MHK devices are 
the environmental impact requirements needed for permits and licenses. 
Baseline data collections and significant monitoring of individual 
sites are needed to fully understand the impacts of MHK devices on the 
environment. Although environmental issues are expected to be minor for 
small numbers of units, one factor to be considered is whether large 
numbers of units will have more significant impacts on the environment. 
Techniques or models are needed to predict the cumulative effects of 
multiple units in order to guide deployment and monitoring.\7\ A system 
of management practices, known as ``adaptive management,'' is being 
used to identify potential environmental impacts, monitor these 
impacts, and compare them against quantified environmental performance 
goals. Adaptive management is particularly valuable in the early stages 
of technology development. In addition to site-specific research, 
collaborative research that is shared across industry groups and 
federal agencies is being discussed as a way to meet environmental 
requirements. Participants in a workshop convened by the DOE agreed 
that a facility, like the UK's EMEC, would be useful in carrying out 
environmental studies and making results publicly available.
---------------------------------------------------------------------------
    \7\ Fisheries. Volume 32 Number 4. ``Potential Impacts of 
Hydrokinetic and Wave Energy Conversion Technologies on Aquatic 
Environments''. April 2007.
---------------------------------------------------------------------------
Department of Energy Marine and Hydrokinetic Activities
    The U.S. became involved in marine renewable energy research in 
1974 when the Hawaii State Legislature established the Natural Energy 
Laboratory of Hawaii Authority. The Laboratory became one of the 
world's leading test facilities for OTEC technologies, but work there 
was discontinued in 2000. In 1980, two laws were enacted to promote the 
commercial development of OTEC technology: the Ocean Thermal Energy 
Conversion Act, (P.L. 96-320), later modified by P.L. 98-623, and the 
Ocean Thermal Energy Conversion Research, Development, and 
Demonstration Act, P.L. 96-310.
    The Congress did not act on MHK technology 2005 (P.L. 109-58). 
Included in section 931(a)(2)(E) was a broad authorization for 
research, development, demonstration, and commercial application 
programs for ocean energy, including wave energy. That authorization 
contained no further instructions on how to structure a MHK program and 
expires after FY 2010. Then as part of the Energy Independence and 
Security Act of 2007 (EISA, P.L. 110-140) the Marine Renewable Energy 
Research and Development Act of 2007 was authorized. This directed the 
DOE to support RD&D and commercial application programs for MHK 
renewable energy technologies, including tidal flow and ocean thermal 
energy conversion technologies, and authorized DOE to provide grants to 
higher education institutions for establishment of national centers for 
marine renewable energy research, development, and demonstration. This 
research received an authorization of appropriations for $50,000,000 
annually from 2008 to 2012. Additionally, DOE is required to submit a 
report in June of 2009 to Congress that addresses the potential 
environmental impacts of MHK technologies--the report has not been 
submitted as of yet.
    Since the 2007 EISA authorization DOE has established a portfolio 
of RD&D activities within the Wind and Hydropower program in the Office 
of Energy Efficiency and Renewable Energy. The DOE has received $10, 
$40 and $50 million over the last three years for all of the programs 
water activities, this includes traditional hydropower. The MHK 
activities have received a small amount of funding and the program has 
issued a variety of small awards to fulfill its statutory obligations. 
The two national centers were awarded $1.25 million each for up to 5 
years: Northwest National Marine Renewable Energy Center, a partnership 
between Oregon State University and the University of Washington; and 
the National Marine Renewable Energy Center of Hawaii. DOE's program 
priorities for their solicitations include systems deployment, testing 
and validation; cost reduction and system performance/reliability; 
understanding environmental effects; resource modeling; and development 
evaluation and performance standards.
    Although DOE has made significant efforts to conduct MHK RD&D, it 
is not clear if DOE is able to meet the needs of the industry under the 
current structure of the program. This hearing seeks to address the 
following questions: (1) Should MHK activities be removed from the 
larger Wind and Hydropower program and become its own technology 
program? (2) How could test facilities or specific grants help deploy 
more MHK devices into the actual demonstrate sites? and (3) How can the 
DOE, working with other federal agencies, help overcome environmental 
and regulatory barriers through better practices and improved 
technologies?

    Chairman Baird. Good morning, everyone, and welcome to our 
hearing on Marine and Hydrokinetic Energy Technology: Finding a 
Path to Commercialization.
    In today's hearing we will explore the role of the Federal 
Government and industry in developing technologies related to 
marine and hydrokinetic energy generation. These technologies 
include devices which harness energy from waves, tidal, ocean 
and river currents, and ocean thermal gradients. Development of 
related environmental monitoring technologies is critical for 
appropriate implementation of these emerging technologies.
    Studies have estimated that approximately 10 percent of 
U.S. national electric demand may be met through energy 
generation from river in-stream sites, tidal in-stream sites 
and wave generation. This projection does not include ocean 
thermal energy, ocean currents or other distributed energy 
generation from manmade water systems. While there is a huge 
potential for energy from these technologies in the United 
States, the U.K. has been referred to as the world leader in 
ocean energy development by the International Energy Agency 
(IEA) and the Electric Power Research Institute (EPRI). The 
world-renowned testing facilities of the European Marine Energy 
Centre are at the forefront of technology development, and are 
the premier test bed and information center for policymakers, 
academia and U.S. companies with new technologies.
    The United States became involved in marine renewable 
energy research in 1974 and enacted two laws on ocean thermal 
energy in 1980. The Congress did not authorize significant 
research on these technologies until the Energy Independence 
and Security Act (EISA) of 2007. Since then DOE has built up a 
modest portfolio of marine energy R&D activities within the 
Wind and Hydropower program of the Office of Energy Efficiency 
and Renewable Energy. This program has received a small amount 
of funding and issued a variety of small awards to fulfill its 
statutory obligations.
    In my own home state of Washington, DOE has funded 
OpenHydro, a tidal technology developer based in Ireland and 
selected by the Snohomish County Public Utility District to 
design and install a tidal energy pilot plant in Admiralty 
Inlet. I am glad we have a representative of Snohomish here 
with us today so we can hear about this project, which is 
expected to begin operation as early as 2011 and produce up to 
one megawatt of energy--enough to power roughly 700 homes.
    With few exceptions, marine and hydrokinetic technologies 
will need to be competitive in the marketplace if they are to 
be widely deployed. Therefore, I am especially interested to 
hear from our witnesses about the current and projected costs 
of electricity generated from marine and hydrokinetic 
technologies and how a more robust federal program might help 
in bringing these costs down.
    With that, I would like to thank our excellent panel of 
witnesses, who we will hear from a moment.
    [The prepared statement of Chairman Baird follows:]

               Prepared Statement of Chairman Brian Baird

    In today's hearing we will explore the role of the Federal 
government and industry in developing technologies related to marine 
and hydrokinetic energy generation.
    These technologies include devices which harness energy from waves, 
tidal, ocean and river currents, and ocean thermal gradients. 
Development of related environmental monitoring technologies is 
critical for appropriate implementation of these emerging technologies.
    Studies have estimated that approximately 10 percent of U.S. 
national electricity demand may be met through energy generation from 
river in-stream sites, tidal in-stream sites, and wave generation. This 
projection does not include ocean thermal energy, ocean currents or 
other distributed energy generation from man-made water systems.
    While there is huge potential for energy from these technologies in 
the U.S., the U.K. has been referred to as the world leader in ocean 
energy development by the International Energy Agency and the Electric 
Power Research Institute.
    The world renowned testing facilities of the European Marine Energy 
Centre are at the forefront of technology development, and are the 
premier test bed and information center for policymakers, academia, and 
U.S. companies with new technologies.
    The U.S. became involved in marine renewable energy research in 
1974 and enacted two laws on ocean thermal energy in 1980. The Congress 
did not authorize significant research on these technologies until the 
Energy Independence and Security Act of 2007. Since then DOE has built-
up a modest portfolio of marine energy RD&D activities within the Wind 
and Hydropower program in the Office of Energy Efficiency and Renewable 
Energy. This program has received a small amount of funding and issued 
a variety of small awards to fulfill its statutory obligations.
    In my home state of Washington, DOE has funded OpenHydro, a tidal 
technology developer based in Ireland and selected by the Snohomish 
County Public Utility District to design and install a tidal energy 
pilot plant in Admiralty Inlet. I am glad we have a representative of 
Snohomish here with us today so we can hear about this project which is 
expected to begin operation as early as 2011, and will produce up to 1 
MW of energy - enough to power roughly 700 homes.
    With few exceptions marine and hydrokinetic technologies will need 
to be competitive in the marketplace if they are to be widely deployed. 
Therefore, I am especially interested to hear from our witnesses about 
the current and projected costs of electricity generated from marine 
and hydrokinetic technologies, and how a more robust federal program 
might help in bringing those costs down.
    With that, I'd like to thank this excellent panel of witnesses for 
appearing before the Subcommittee this morning, and I yield to our 
distinguished Ranking Member, Mr. Inglis, for his opening remarks.

    Chairman Baird. At this point I recognize the distinguished 
Ranking Member, Mr. Inglis, for his opening remarks.
    Mr. Inglis. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    This is a timely hearing. This year we have held hearings 
on solar, wind and biomass energy sources. Hydropower 
contributes more renewable energy to the U.S. electrical grid 
than all these other renewable sources combined. Depending on 
rainfall and water storage, conventional hydropower accounts 
for 6 to 9 percent, that is 6 to 9 percent of the total U.S. 
electrical supply.
    Today we have the opportunity to explore ways to increase 
the contribution from hydropower through unconventional water 
sources. Marine-based hydropower represents a significant 
source of unused energy. South Carolina has a coastline of 
nearly 200 miles and considerable tidal resources around the 
Sea Islands. Technologies that can take advantage of the waves, 
currents, temperature differences and tides can turn our 
abundant coastal and tidal zones into energy generators.
    As we will hear from our witnesses, these technologies will 
face a number of challenges related to environmental conditions 
and competition with recreational and commercial activities. I 
am confident, though, that we can manage all these challenges 
to utilize this large potential energy source. Microhydro 
represents a great opportunity for distributed electricity 
generation in streams and rivers, irrigation canals and other 
bodies of water previously not considered powerful enough for 
power generation. Hydropower installations of 1 megawatt or 
less can be deployed across the country, easing the burden on 
our electrical grid and increasing the security of electricity 
users around the country.
    I am looking forward to hearing from our witnesses today on 
the current state of these technologies, what we need to move 
forward and what role the government should play in removing 
barriers to development and installation.
    Thank you again, Mr. Chairman, and I yield back.
    [The prepared statement of Mr. Inglis follows:]

            Prepared Statement of Representative Bob Inglis

    Good morning and thank you for holding this hearing, Mr. Chairman.
    This is a timely hearing, Mr. Chairman. This year, we have held 
hearings on solar, wind, and biomass energy sources. Hydropower 
contributes more renewable energy to the U.S. electrical grid than all 
of these other renewable sources, combined. Depending on rainfall and 
water storage, conventional hydropower accounts for 6-9% of the total 
U.S. electricity supply. Today we have the opportunity to explore ways 
to increase the contribution from hydropwer through unconventional 
water sources.
    Marine based hydropower represents a significant source of unused 
energy. South Carolina alone has a coastline of nearly 200 miles and 
considerable tidal resources around the Sea Islands. Technologies that 
can take advantage of the waves, currents, temperature differences, and 
tides can turn our abundant coastal and tidal zones into energy 
generators. As we'll hear from our witnesses, these technologies will 
face a number of challenges related to environmental conditions and 
competition with recreational and commercial activities. I am confident 
that we can manage all of these challenges to utilize this large 
potential energy source.
    Microhydro represents a great opportunity for distributed 
electricity generation in streams and rivers, irrigation canals, and 
other bodies of water previously not considered powerful enough for 
power generation. Hydropower installations of I megawatt or less can be 
deployed across the country easing the burden on our electrical grid 
and increasing the security of electricity users across the country.
    I am looking forward to hearing from our witnesses today on the 
current state of these technologies, what we need to move forward, and 
what role the government should play in removing barriers to 
development and installation. Thank you again, Mr. Chairman, and I 
yield back.

    [The prepared statement of Mr. Costello follows:]

         Prepared Statement of Representative Jerry F. Costello

    Good Morning. Thank you, Mr. Chairman, for holding today's hearing 
to examine the future of marine and hydrokinetic energy technology 
(MHT) research and development (R&D) efforts.
    MHT may become an efficient source of renewable energy in the 
future, and many U.S. companies have expressed interest in researching 
and developing technologies to harness energy from major sources of 
water. However, MHT remains years away from being a commercial source 
of energy because of several barriers, such as regulations and high 
costs.
    I am interested in hearing from our witnesses what steps they 
believe are necessary to move these projects to the demonstration phase 
and if there is a greater burden from the current regulatory system or 
if the financial barriers to developing large-scale markets is overly 
restrictive. I would like to know how this Subcommittee can help 
overcome these burdens to move this research forward.
    Finally, several of our international partners, in particular South 
Korea and the United Kingdom, have made substantial investments and 
developed large-scale demonstration projects in MHT. I am interested in 
hearing how U.S. research efforts can work with their international 
partners to learn from these demonstration projects.
    I welcome our panel of witnesses, and I look forward to their 
testimony. Thank you again, Mr. Chairman.

    [The prepared statement of Ms. Johnson follows:]

       Prepared Statement of Representative Eddie Bernice Johnson

    Good morning, Mr. Chairman and Ranking Member.
    Thank you for holding today's hearing on marine and hydrokinetic 
technologies and finding a pathway for their commercialization.
    Today we have an opportunity to discuss what could potentially be 
one of our greatest untapped renewable energy resources, water. Where 
there is moving water, there is an enormous potential for power.
    The possibility of utilizing the hydrokinetic energy our Nation's 
vast coastlines possess is more than promising. Estimates suggest that 
the amount of energy that could feasibly be captured from U.S. waves, 
tides and river currents is enough to power over 67 million homes. As 
we search to find viable and sustainable renewable energy technology, 
we must consider the great potential hydrokinetic technologies promise 
to yield.
    My state of Texas has a solid industrial base for design, 
fabrication and installation of marine structures. Texas also has a 
trained workforce of divers and undersea technicians that would be 
easily employable in a marine power industry for installation and 
maintenance of these power facilities. The Gulf Coast including the 
complete Texas coastline has a strong potential for development. My 
district, which encompasses Dallas, Texas certainly has industry that 
could help marine and hydrokinetic power move forward.
    Although we can not, at the present, move completely away from 
finite resources for fuel, we should begin to research and employ 
renewable technology. Additionally, we must make a thoughtful 
transition to clean renewable energy in a manner that would sustain the 
competitiveness of crucial energy intensive industries that not only 
provide our Country with jobs but also provide the world with products. 
As we choose which energy resources to develop we must carefully weigh 
all of their impacts.
    Today's witnesses are of some of the top experts in the fields of 
Marine and Hydrokinetic Energy. They have provided much thought to this 
topic. I am keenly interested to hearing your opinions on how we can 
provide a cost-effective environmentally safe method to deploy these 
technologies.
    Mr. Chairman, I want to welcome today's witnesses. Thank you, and I 
yield back the balance of my time.

    Chairman Baird. I thank you, Mr. Inglis. We have been 
joined by Dr. Ehlers and also by Mr. Smith from Nebraska. I am 
always glad to see someone from Nebraska here at a tidal energy 
thing. It shows that the concerns about global warming must be 
real if we are planning on tidal energy in Nebraska. We have 
got problems on our hands. But good to see you, Mr. Smith. 
Thank you. He is an excellent Member of this committee. I am 
glad to have him here.
    With this, we will hear from our witnesses. Mr. Jacques 
Beaudry-Losique is the Deputy Assistant Secretary for Renewable 
Energy at the Office of Energy Efficiency and Renewable Energy 
for the U.S. Department of Energy. Mr. Roger Bedard is the 
Ocean Energy Leader for the Electric Power Research Institute. 
Mr. James Dehlsen is the Founder and Chairman of Ecomerit 
Technologies LLC. Ms. Gia Schneider is the Chief Executive 
Officer of Natel Energy. Did I skip somebody? Oh, okay. I am 
sorry. And we are hoping Mr. Inslee will be here to introduce 
Mr. Collar but I get the pleasant duty of doing that. From my 
home state, Mr. Craig Collar is the Senior Manager of Energy 
Resource Development for Snohomish County PUD, or Snopud, as 
they sometimes call it, but I think Snohomish PUD is a better 
deal. A beautiful county and great tidal resources there if we 
can figure out how to harness them. So we have an outstanding 
panel of witnesses, and as our witnesses know, you will have 
five minutes for your spoken testimony. Your written testimony 
will be included in the record for the hearing. When you have 
completed your spoken testimony, we will begin with questions. 
Each member of our panel will have five minutes to question 
witnesses. With that, we look forward to your testimony. Thank 
you again for being here.
    Mr. Beaudry-Losique.

    STATEMENTS OF JACQUES BEAUDRY-LOSIQUE, DEPUTY ASSISTANT 
SECRETARY FOR RENEWABLE ENERGY, OFFICE OF ENERGY EFFICIENCY AND 
          RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Beaudry-Losique. Chairman Baird, Ranking Member Inglis 
and Subcommittee Members, it is a pleasure to testify this 
morning. Thank you for your leadership in bringing these 
important marine and hydrokinetic energy technologies to the 
attention of the American public. The Department of Energy 
shares your belief that these technologies have significant 
potential to contribute to the Nation's future supply of clean, 
cost-effective renewable energy.
    Studies conducted by the University of Washington, Virginia 
Tech and the Electric Power Research Institute estimate 
approximately 400 terawatt-hours per year can be extracted from 
marine and hydrokinetic technologies in this country, excluding 
ocean thermal systems. This is enough electricity to power 
cleanly approximately 36 million average American homes.
    The Department of Energy's Office of Energy Efficiency and 
Renewable Energy allocated a substantial portion of its 
Congressional appropriations for water power toward the support 
of marine and hydrokinetics projects. In fiscal year 2008, $9.1 
million supported 14 marine and hydrokinetic projects. In 
fiscal year 2009, funding more than tripled to $31.3 million, 
which supported a total of 41 separate projects. And in fiscal 
year 2010 we expect approximately $35 million to support marine 
and hydrokinetics projects.
    The Department provides needed research and development 
funding for the industry, which is still at a relatively early 
stage of development and includes many small firms. Only one 
commercial project is currently operating in the United States, 
a 100-kilowatt in-river turbine on the Mississippi River in 
Hastings, Minnesota. Therefore, much of the work the Department 
funds focuses on two major priorities: one, assessing the 
Nation's resources, and two, determining baseline potential 
future costs of energy through analysis and testing of device 
performance and reliability, and the extent to which there are 
environmental impacts associated with these technologies.
    In order to monitor this developing industry, the 
Department recently created an online database for devices 
under development. This database provides detailed information 
about the testing and deployment of these technologies around 
the world, even though the majority of development is occurring 
in Europe, North America, Japan and South Korea. The database 
currently tracks 149 companies working on 123 devices, which 
demonstrates that no firm industry consensus exists as to which 
technology will perform most efficiently. In fact, technology 
selection is highly dependent upon regional factors.
    We segment the marine and hydrokinetic industry into three 
major categories: one, wave energy, two, currents such as 
ocean, tidal and river; and three, ocean thermal energy 
conversion, or OTEC. In the first case, the United States has 
experienced significant growth in the wave energy industry in 
the last decade and there are currently more than a dozen 
domestic companies and developers in existence. The size of the 
domestic resources encourage the development of this 
technology, particularly in the Pacific Northwest.
    Second, the Department is committed to working with 
industry to develop ocean, tidal and river current 
technologies. For example, the Department recently made awards 
to develop the first drive train uniquely designed for large 
ocean current design devices and for a pylon-based mooring 
system to increase efficiency of in-river turbines. The 
Department also funds a number of projects in one of the most 
promising areas in the country for development of tidal energy: 
the Puget Sound in Washington the State. For the past year, DOE 
and the Snohomish County Public Utility District have jointly 
funded an initial survey siting and permitting work necessary 
for the construction and installation of up to three turbines 
at a tidal energy pilot in the Admiralty Inlet west of Whidbey 
Island.
    Third, ocean thermal energy conversion systems use the 
ocean's natural temperature to generate power. OTEC could 
produce significant amounts of alternative energy for tropical 
island communities that rely heavily on imported fuels. The 
Department is currently assessing OTEC lifecycle costs, testing 
and manufacturing methods for coldwater pipes, developing a 
national resource assessment, and evaluating specific 
environmental impacts associated with large water intake 
systems.
    Furthermore, to help achieve program objectives, the 
Department created and currently utilizes National Marine 
Renewable Energy Centers. The centers are public private 
partnerships with the goals of promoting research, development 
and deployment of marine energy technologies. In 2009, two 
centers were formally established, one at the University of 
Hawaii and the other as a partnership between the University of 
Washington and Oregon State University. The Department is 
pleased with the progress that has taken place at the centers 
since their recent inception. As an aside, next week I will 
visit the Pacific Northwest National Laboratory's Sequim Marine 
Research Facilities, which work in partnership with the 
centers.
    Finally, to enable market development, the Department 
collaborates with the International Electrotechnical Commission 
to develop codes and standards for all three groups of emerging 
technologies, as well as with the International Energy Agency 
to create a worldwide database of environmental research and 
best monitoring practices for these technologies.
    Looking to the future, the Department is currently 
developing an industry roadmap. This effort will identify the 
various barriers that limit progress and highlight the 
technology developments, policies and other activities 
necessary to overcome these barriers. The first step is 
essential to ensure that marine and hydrokinetic power can 
become another significant resource to the Nation's clean 
energy portfolio in the long term.
    So thank you again for the opportunity to appear before you 
today to discuss these important issues, and I am looking 
forward to answering any questions.
    [The prepared statement of Mr. Beaudry-Losique follows:]

                 Prepared Statement of Beaudry-Losique

    Chairman Baird, Ranking Member Inglis, Members of the Committee, 
thank you for the opportunity to appear before you today to discuss the 
U.S. Department of Energy's Water Power Program and its activities 
related to marine and hydrokinetic energy generation technologies.
    The global marine and hydrokinetic industry consists of energy 
extraction technologies that utilize the motion of waves, the currents 
of tides, oceans, and rivers, and the thermal gradients present in 
equatorial oceans. The Department of Energy (DOE) believes that marine 
and hydrokinetic energy technologies have significant potential to 
contribute to the nation's future supply of clean, cost-effective, 
renewable energy. In its March 2007 Assessment of Waterpower Potential 
and Development Needs, the Electric Power Research Institute (EPRI) 
conservatively indicated that marine and hydrokinetic power (exclusive 
of ocean thermal energy resources) could provide an additional 23,000 
megawatts (MW) of capacity by 2025 and nearly 100,000 MW by 2050. In a 
more recent 2009 study appearing in HydroReview, collaborating authors 
from the University of Washington, the Virginia Tech Advanced Research 
Institute, and EPRI refined earlier estimates to conclude that 
resources could conservatively yield a total of 51,000 MW of 
extractable energy.\1\ This estimate is the equivalent of 34 
conventional coal-fired power plants.\2\ The Department is currently 
developing predictive cost and performance models to assess the near- 
and mid-term economic potential for developing these resources.
---------------------------------------------------------------------------
    \1\ Bedard, Roger. George Hagerman. Brian Polagye. Mirko Previsic. 
``Ocean Wave and In-Stream ``Hydrokinetic'' Energy Resources of the 
United States.'' Forthcoming publication in HydroReview. 2009.
    \2\ Figures are based on the assumptions of an average coal plant 
with 500 MW of capacity, operating with a 90% capacity factor, and the 
average marine and hydrokinetic plant operating with a 30% capacity 
factor.
---------------------------------------------------------------------------
    According to recent industry studies,\3\ potential ocean thermal 
energy conversion (OTEC) resources may be even larger.\4\ However, it 
is necessary to note that preliminary estimates of extractable U.S. 
resources are just estimates of technical potential that do not equate 
to economically recoverable energy. There still remains an industry 
need for detailed, comprehensive resource assessments and validation of 
the costs for recovering this energy, which the Department is currently 
supporting through its programs.
---------------------------------------------------------------------------
    \3\ Nihous, Gerard. ``An Order-of-Magnitude Estimate of Ocean 
Thermal Energy Conversion Resources.'' Journal of Energy Resources 
Technology. December 2005. Vol. 127. p 328; Nihous, Gerard. ``A 
Preliminary Assessment of Ocean Thermal Energy Conversion Resources.'' 
Journal of Energy Resources Technology. March 2007. Vol. 129. p. 17.
    \4\ Estimates are between 3,000,000-5,000,000 MW for global 
installed capacity.
---------------------------------------------------------------------------
    The marine and hydrokinetic energy industry is still at a 
relatively early stage of development with less than a half dozen small 
commercial projects installed worldwide and only one operating in the 
U.S., a river hydrokinetic project in Hastings, Minnesota. Much of the 
work being funded through the Department is, therefore, focused on 
evaluating the size, location and specific characteristics of the 
Nation's off-shore ocean and river energy resources, establishing 
baseline cost, performance and reliability data for a variety of 
devices, and assessing the environmental impacts associated with 
various technologies.
    As part of our comprehensive effort to evaluate marine and 
hydrokinetic energy, the Department also funds targeted, innovative 
research and development projects with industry partners and the 
National Laboratories to address the near-term technical challenges to 
device development and deployment, helping to generate reliable, 
validated performance data and identify key cost drivers and reduction 
opportunities. The Department leverages its extensive expertise in 
technology development to identify and fund research in areas where 
industry currently lacks either the capabilities or financial 
resources.

Technology Overview

    In order to monitor this developing industry, the Department has 
recently created an online database for marine and hydrokinetic devices 
that provides detailed information about the different technologies and 
deployment activities occurring around the world. There are currently 
dozens of unique device designs, and no firm industry consensus as to 
which technologies will perform the most efficiently and effectively. 
The database can present a snapshot of projects in a given region, 
assess the progress of a certain technology type, or provide a 
comprehensive view of the entire marine and hydrokinetic energy 
industry.\5\ Based on information collected for this database, the 
following is an overview of the different types of marine and 
hydrokinetic technologies being developed around the world.
---------------------------------------------------------------------------
    \5\ The database can be accessed at http://
windandhydro.energy.gov/.
---------------------------------------------------------------------------
Wave Energy Technologies
    Wave energy can be harvested from offshore, near shore, and shore-
based environments through a number of engineering approaches. While 
there is currently no international consensus on nomenclature for wave 
energy devices, the Department is working with the Intergovernmental 
Panel on Climate Change and the International Electrotechnical 
Commission on standards to better define terminology. Major technology 
types are listed below.

          Attenuators: linear, jointed structures aligned 
        parallel to the direction of the oncoming wave. Attenuators 
        capture wave energy from the relative motion of their jointed 
        parts as the wave passes along them.

          Point absorbers: floating structures that captures 
        energy through mechanical motion as they rise and fall with the 
        waves at or near the water surface.

          Oscillating wave surge converters: near shore designs 
        that derive power from the back and forth movement of wave 
        surge. These devices often function as pumps, using pistons to 
        drive water through submerged or land based turbines.

          Oscillating water columns: channel waves into a 
        partially submerged hollow chamber. The rise and fall of water 
        within the structure pressurizes the chamber's air column and 
        forces air through a turbine at high velocities.

          Overtopping devices: a category of floating or shore-
        based structures that are partially submerged, and funnel waves 
        over the top of the structure into an elevated reservoir. Water 
        then runs out of the reservoir through a turbine.

          A variety of fully submerged devices are under 
        development that capture energy from the pressure differential 
        induced within a device from passing waves. Such pressure 
        difference can be used to drive a fluid pump to create 
        mechanical energy.

    Wave energy currently represents the largest sector of the marine 
and hydrokinetic industry both nationally and globally. The U.S. has 
experienced significant growth in the number of wave technology 
developers in the last decade, and there are now more than a dozen 
operating throughout the country, with the majority developing point 
absorber technologies.\6\ However, the United Kingdom still leads 
countries in the total number of wave technology developers, as well as 
the number of technologies in the latter stages of development. To 
date, the U.K. is the only country in which a company's commercialized 
wave technology has been sold to a publicly traded utility.
---------------------------------------------------------------------------
    \6\ ``Marine and Hydrokinetic Technology Database.'' Wind & 
Hydropower Technologies Program. (Online, 6/19/2009, http://
www1.eere.energy.gov/windandhydro/hydrokinetic/default.aspx).

Current-Based Energy Technologies
    Technologies designed to capture the energy from moving ocean, 
tidal, or river currents represent a smaller sector of the marine and 
hydrokinetic industry, but can be considered more mature relative to 
wave technologies due to the mechanical similarities hydrokinetic 
turbines share with wind turbines. One of the main technological 
differences between tidal current devices and those designed to capture 
energy from ocean or river currents is the need for tidal devices to be 
either bi-directional or change their orientation with the ebb and flow 
of the tides. Generally, current-based technologies can be divided into 
three categories: axial flow turbines, cross flow turbines, and 
reciprocating devices.

          Axial or horizontal axis turbines: typically consist 
        of three or more blades mounted on a horizontal shaft to form a 
        rotor that is oriented toward the direction of the flow. The 
        kinetic motion of the water current creates lift on the blades 
        causing the rotor to turn driving a mechanical generator. Axial 
        flow turbines can also utilize a shroud to protect and 
        accelerate water past the blades.

          Cross flow turbines: typically have two or three 
        blades mounted along a vertical shaft to form a rotor. These 
        devices can extract multi-directional flows without the need to 
        orient to the direction of the flow. The kinetic motion of the 
        water current creates lift on the blades causing the rotor to 
        turn driving a mechanical generator.
          Reciprocating devices: generate electricity through 
        an oscillating motion caused by the lift and drag forces of the 
        water stream (similar to the tail motion of a fish or marine 
        mammal like a whale or dolphin). Mechanical energy from this 
        oscillation feeds into a power conversion system.

    Although the roots of the modern current technology sector can be 
found in the U.S., developers of current-based technologies in the U.K. 
were quick to develop and deploy axial flow turbines during the late 
1990s and early 2000s to take advantage of the strong tidal flows 
located in U.K. waters. The first grid-connected axial flow turbine, 
known as ``Seaflow,'' was installed in May of 2003 on the North Devon 
Coast in the U.K. Most of the technology development in this sector is 
focused on axial flow turbines and is occurring in the U.K., U.S., 
Ireland, Canada, Norway, Australia and New Zealand. With the exception 
of two companies that are currently developing cross flow turbines, all 
development of current-based technology in the U.S. has focused on 
axial flow turbines.
Ocean Thermal Energy Technologies
    Ocean thermal energy conversion (OTEC) systems use the ocean's 
natural thermal gradient to drive a power-producing cycle. Temperature 
differences between warm surface waters and colder deep waters need to 
differ by about 20 C (36 F) for OTEC devices to produce significant 
amounts of power.
    The technology's lack of widespread development is due in part to 
high upfront capital costs, which has delayed the financing of a 
permanent, continuously operating OTEC plant. However, OTEC 
technologies could potentially produce significant amounts of 
alternative energy for tropical island communities that rely heavily on 
imported fuels. Most research and development to date has taken place 
in the U.S., Japan, Taiwan, and India.

Tidal Energy Case Study: Puget Sound
    As one of the most promising areas in the country for the 
development of tidal energy, the Puget Sound in Washington State is 
currently home to a number of projects being funded by the Department. 
For the past year, the Department and the Snohomish County Public 
Utility District (SnoPUD) have jointly funded the initial survey, 
siting and permitting work necessary for the construction and 
installation of up to three turbines at a tidal energy pilot plant in 
the Admiralty Inlet, west of Whidbey Island. It was recently announced 
that the turbines will be designed and constructed by OpenHydro, a 
company specializing in shrouded, horizontal-axis turbines. SnoPUD will 
also be working with the Department and the Pacific Northwest National 
Laboratory over the coming year to determine the types of aquatic 
species present in the Admiralty Inlet, and will further determine both 
baseline levels of background noise as well as the acoustic impacts 
that hydrokinetic turbines could have on these species. Finally, as 
part of an ongoing project between the Department and the Northwest 
National Marine Renewable Energy Center to develop integrated 
instrumentation packages to collect environmental data, researchers at 
the University of Washington have deployed state-of-the-art equipment 
at the potential SnoPUD site to evaluate water quality, flow 
characteristics, substrate composition and sedimentation rates.

Overview of the Water Power Program

    The primary objective of the Department's marine and hydrokinetic 
energy activities is to evaluate the potential contribution that each 
of the aforementioned technologies can make to the nation's energy 
supply, through the development of accurate resource assessments, 
performance profiles, and lifecycle costs. Once the potential of the 
various technologies is better understood, the Department can make more 
targeted strategic decisions about which portfolio of research and 
development projects to support, based on the most promising marine and 
hydrokinetic technologies.

Resource Assessments
    The Department is currently funding five separate resource 
assessments to quantify potential technically extractable marine and 
hydrokinetic energy by resource type and location. These include 
assessments for wave, tidal, ocean current, river current, and ocean 
thermal energy potential. The data generated by these projects will 
help stakeholders assess the potential contribution to the U.S. 
renewable energy portfolio and prioritize the level of investment for 
each resource type. Two assessments (wave and tidal) are scheduled to 
be completed by the end of fiscal year 2010. The other three 
assessments were only recently awarded in September through the 
Department's competitive solicitation process and are thus still in the 
process of negotiating contracts for the data collection. The 
Department aims to have each of those three assessments completed 
within one calendar year of project initiation.

Siting Issues and Environmental Impacts
    The Department is also working to understand the environmental and 
navigational impacts of marine and hydrokinetic energy technologies and 
to find ways to mitigate any adverse impacts. DOE is using this 
information to identify best siting practices for marine and 
hydrokinetic technologies and to create mitigation strategies to 
address these impacts. DOE is also working with other government 
organizations to develop best practices for ensuring the process of 
siting and permitting is effective and efficient.
    Under a cost-share contract with the Department's Bonneville Power 
Administration (BPA) and funds from certain BPA customer utilities and 
Washington State organizations, Golder Associates has been developing 
the ``Integrated Decision Support System (IDSS)'' for location, 
assessment, and optimization of in-stream tidal power development in 
Washington State. The IDSS is a computing platform to identify and 
analyze potential environmental, navigation, and fisheries issues and 
conflicts related to siting. The platform will be a multi-user, web-
based geographic information system and tidal simulation model 
database, including power estimation tools. The IDSS is intended to 
provide siting decision-makers the information they need to make sound 
siting decisions.
    In addition, the Department conducts targeted research into the 
impacts of marine and hydrokinetic technologies on ocean habitats and 
individual wildlife populations, including fish and marine mammals. 
This research includes studies how different types of hydrokinetic 
turbines can harm or change the behavior of fish, investigates the 
impacts of extracting energy from an ocean system on sedimentation 
rates, and tests a limited range marine mammal acoustic-deterrent 
system at an open water location.

Technology Performance and Cost Modeling
    To determine the economic feasibility of harnessing the Nation's 
marine and hydrokinetic energy resources, the Department is supporting 
the development of numerical predictive cost and performance models as 
well as technology development projects in each area to generate real-
life data to support and validate the models.
    Although certain marine and hydrokinetic energy devices have been 
developed and deployed as pilot-scale demonstration projects, very few 
have operated continually for significant periods of time. As a result, 
the efficiency, reliability, survivability, and cost of the various 
devices types are not well quantified.
    To validate, refine, and improve these models, the Department is 
also partnering with industry to develop and deploy individual marine 
and hydrokinetic devices that will generate the real-world data 
necessary to inform accurate analyses of device cost, performance, and 
environmental impacts. Partnering with industry will directly reduce 
the time required to develop projects, and will provide critical data 
on device performance and reliability. The Department's efforts include 
support for in-water testing and development projects, as well as work 
to design devices, sub-systems, and components.
    Specific industry-led technology design and development projects 
include:

          Siting studies and the design of a grid-connected 
        test berth being developed by Pacific Gas & Electric Company 
        for multiple wave energy devices;

          Construction and demonstration of an oscillating 
        water column device (called the Ocean Wave Energy Converter) by 
        Concepts ETI, Inc.;

          Development and installation of a tidal energy device 
        in the Puget Sound by Snohomish County Public Utility District;

          Demonstration of advanced composite cold water pipes 
        for ocean thermal energy conversion devices by Lockheed Martin;

          Design and testing of a 2.5 MW Aquantis Current Plane 
        ocean current turbine, intended for eventual deployment off the 
        coast of southeastern Florida, by Dehlsen Associates, LLC;

          Optimization, demonstration, and validation of an 
        intermediate-scale wave buoy from Columbia Power Technologies, 
        Inc. in preparation for a full-scale ocean deployment;

          Scale-up of a previously tested power-buoy from Ocean 
        Power Technologies, which will increase the power extraction 
        rate, increase survivability, and reduce operation and 
        maintenance costs;

          A Cooperative Research and Development Agreement with 
        Verdant Power to improve and refine the company's tidal turbine 
        rotor;

          Design and validation of an innovative floating 
        support structure from Principal Power Inc. that combines wave 
        and wind energy power take-off mechanisms to defray the mooring 
        and installation costs associated with higher power output;

          Design and testing of an easily replicable, 
        modifiable mooring system for fast-water tidal energy devices 
        by Ocean Renewable Power Company, LLC; and

          Design, testing, and deployment in the Mississippi 
        River of a pylon-based mooring structure for in-river turbine 
        current technology from Free Flow Power Corporation.

    In addition to the above projects that are focused on developing 
specific devices and technologies, the Department also funds the 
development of models, tools, and materials that can be widely used by 
the entire industry to optimize performance, predict loads, minimize 
failures, and reduce costs. The Department also maintains a database of 
all U.S. facilities capable of conducting hydrodynamic testing of 
marine and hydrokinetic devices, and is developing a program to aid 
developers in testing and validating initial sub-scale device designs.

Budget and Funding for Specific Technologies
    The Department of Energy's Office of Energy Efficiency and 
Renewable Energy (EERE) has allocated a substantial portion of its 
Congressional appropriation for Water Power toward the support of 
marine and hydrokinetic projects. In fiscal year 2008, $9.05 million 
supported marine and hydrokinetic projects, while $31.3 million in 
fiscal year 2009 funding supported these projects. Some projects 
utilizing these funds are technology-specific while others are cross-
cutting in nature. The Department plans to continue to provide 
financial support for marine and hydrokinetic projects as appropriate 
and according to Congressional appropriations and guidance.
    In fiscal years 2008 and 2009, the Department awarded approximately 
$5.8 million to five separate projects focused specifically on wave 
energy development. These projects included a resource assessment, the 
design and siting of a grid-connected open-water device testing berth, 
engineering and testing an intermediate scale oscillating water column 
device, and two projects to build and test next generation point 
absorbing buoys.
    During the past two years, the Water Power Program awarded 
approximately $4.5 million to six tidal energy-specific projects. These 
include a U.S. tidal energy resources assessment, the testing of new 
environmental monitoring equipment for tidal projects, surveys of 
aquatic species in the Admiralty Inlet, engineering design and 
construction approvals for a pilot tidal plant, and projects to design 
more efficient tidal turbine rotors and more reliable mooring systems.
    In the area of ocean-current energy, the Program awarded $1.9 
million across three ocean-current-specific projects, including the 
development of the first drive-train uniquely designed for large ocean 
current devices, a U.S. resource assessment, and the development of 
environmental survey methodologies for potential projects located off 
the southeast coast of Florida.
    For river-current technologies, the Program awarded approximately 
$1.3 million to two river-current-specific projects, including the 
development of a pylon-based mooring system designed to reduce device 
installation and maintenance times and increase efficiency, and a 
nationwide assessment of in-stream hydrokinetic resources.
    The Department awarded approximately $2.6 million in fiscal year 
2008 and fiscal year 2009 to four projects focused on OTEC. These 
projects include a specific evaluation of the environmental impacts 
associated with the water intake systems, the validation and testing of 
a new manufacturing method for OTEC cold-water pipes, a resource 
assessment, and an assessment of the lifecycle costs of OTEC devices. 
In August 2009, the Navy also announced that it would award over $8 
million to Lockheed Martin for OTEC component and subsystem design and 
testing. That project will be able to build upon the research currently 
being conducted by DOE, and collaboration between our two agencies will 
continue to ensure that there are no duplicated efforts.
    The Department is developing lifecycle cost and performance 
profiles for different marine and hydrokinetic energy device classes, 
including wave, tidal, ocean current, in-stream hydrokinetic, and ocean 
thermal energy conversion. These profiles are informed by baseline 
representative commercial project development data from specific sites. 
The baseline cost of energy data will allow the Department to 
characterize and evaluate competing device classes and to identify the 
key drivers affecting the cost of marine and hydrokinetic energy. 
Verification of these data will also help the Department prioritize 
research and development efforts in a manner that assists and 
complements the industry's efforts.

National Marine Renewable Energy Centers

    One of the mechanisms for achieving Departmental objectives has 
been to create and utilize National Marine Renewable Energy Centers 
(NMRECs), where a wide variety of work can be conducted. In 2009, two 
NMRECs were formally established--one at the University of Hawaii, and 
another as a partnership between the University of Washington and 
Oregon State University (known as the Northwest NMREC). The Centers are 
public-private partnerships between the universities, private 
companies, non-profits and governmental organizations, all with the 
goals of promoting research, development and deployment of marine 
energy technologies.
    The work at the Northwest NMREC is primarily focused on wave and 
tidal research, with Oregon State focusing on wave technology 
applications and the University of Washington concentrating on tidal 
technology. Projects currently underway include:

          development of advanced wave forecasting 
        technologies;

          creation of models used to optimize the placement and 
        spacing of wave devices;

          site selection and design for an open water test 
        berth for wave energy devices; and

          development of integrated instrumentation packages to 
        collect environmental data.

    Projects at the NMREC in Hawaii are focused on both wave and ocean 
thermal energy conversion technologies, and include:

          validation of wave forecasting models using real-time 
        data;

          upgrades to wave tank facilities to accommodate 
        device testing by developers;

          identification and testing of environmentally 
        friendly material coatings; and

          modification of a submersible transport and recovery 
        vessel able to deploy large instrumentation packages.

    The Department is pleased with the progress that has taken place at 
the Centers over the short one year period since inception. During the 
past month, the programs at both Centers were critiqued by a panel of 
independent experts as part of an EERE-mandated peer review for all 
marine and hydrokinetic projects. Peer Reviews are rigorous, formal, 
and documented evaluation processes that use objective criteria and 
qualified, independent reviewers to evaluate the technical, scientific 
or business merit, and the productivity and management effectiveness of 
programs and projects. The results of the peer review for the 
Department's marine and hydrokinetic technology program will be made 
publicly available within the next three months.
    Because of the significant research and development work occurring 
outside the U.S., establishing and maintaining collaborative efforts 
with the international community has also been extremely important. 
Currently, representatives for the Department are leading work on Annex 
IV of the International Energy Agency's Implementing Agreement on Ocean 
Energy Systems. The goal of this international collaboration is to 
assess worldwide research on the environmental effects and monitoring 
efforts for ocean wave, tidal, and current energy systems and will 
result in a global, publicly-available database of information, studies 
and best monitoring practices.
    The need for international metrics to determine technology 
readiness levels and performance is also paramount, and so the 
Department is engaged with the International Electrotechnical 
Commission (IEC) to facilitate the development of relevant industry 
standards, provide consistency and predictability to their development, 
and to better represent U.S. interests. The IEC is based out of Geneva, 
Switzerland and is actively supported by 76 member countries in its 
efforts to prepare and publish international standards for all 
electrical, electronic and related technologies. Because of their 
technical expertise, the National Renewable Energy Laboratory (NREL) 
and Science Applications International Corporation (SAIC) were jointly 
selected to represent the Department on the U.S. Technical Advisory 
Group to the committee and to support the participation of key U.S. 
industry technical experts in the four relevant standards development 
working groups of the IEC.

Strategic Program Planning

    Looking to the future, the Department is supporting the marine and 
hydrokinetic energy sector in developing a unified industry vision and 
roadmap. This effort will detail the various technical, non-technical 
and market barriers that limit progress and highlight the technology 
developments, policies, and other activities necessary to overcome such 
barriers. Based on industry consensus, NREL was selected to lead the 
project to develop this roadmap on behalf of the Department, with work 
scheduled for completion by the end of fiscal year 2010.
    The Department has also convened several workshops with members of 
the marine and hydrokinetic industry in order to better align the 
Department's efforts with the needs of industry stakeholders before a 
formal roadmap is completed. The first of these meetings, hosted by the 
Department and EPRI, was held in October 2008, and the resulting report 
is publicly available at http://oceanenergy.epri.com/
oceanenergy.html#briefings.\7\
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    \7\ Prioritized Research, Development, Deployment and Demonstration 
(RDD&D) Needs: Marine and Other Hydrokinetic Renewable Energy. EPRI, 
Palo Alto, CA 2008. www.epri.com/oceamemergy/
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    The development of a marine and hydrokinetic industry roadmap 
directly supports DOE's ongoing internal efforts to develop a detailed 
Multi-Year Program Plan for the Water Power Program. All of the 
resource and technology characterization work currently underway is a 
crucial part in developing such a plan. As an industry roadmap is 
developed and ocean energy resources are accurately characterized, the 
program will be able to more efficiently prioritize future efforts, and 
tackle the barriers to technology development and deployment that it is 
best suited to address. The Multi-Year Program Plan for the Water Power 
Program is scheduled to be completed and made publicly available by May 
2010.
    The Department currently coordinates and leads an ad hoc advisory 
committee to the Interagency Working Group on Ocean Partnerships (the 
Joint Subcommittee on Ocean Science and Technology) focused on marine 
and hydrokinetic issues, which includes the Federal Energy Regulatory 
Commission, Minerals Management Service (MMS), National Oceanic and 
Atmospheric Administration (NOAA), U.S. Navy, U.S. Coast Guard, Fish 
and Wildlife Service, National Park Service, Environmental Protection 
Agency, and the U.S. Army Corps of Engineers.
    DOE is providing support to the National Park Service in their 
development of a report titled, ``Marine and Hydrokinetic Energy 
Technologies and Recreation: A Guide to Concepts and Methods,'' which 
will focus on potential impacts to recreation from marine and 
hydrokinetic technologies, and suggest ways in which those impacts can 
be studied and mitigated.
    The Department is collaborating closely with NOAA to develop an 
integrated permitting process for OTEC demonstration projects, which 
DOE has authority over, and OTEC pilot projects, which are to be 
regulated by NOAA. The Navy is also very involved in this process, 
based on their high levels of technical knowledge and experience with 
OTEC research.
    The Department also participates in the West Coast Governors 
Association's Ocean Energy Action team and worked with MMS to organize 
its 2008 Alternative Energy Workshop. Finally, the Program helps to 
shape the Department's position on national marine spatial planning 
efforts currently underway at the Federal level, and continually works 
to ensure that there is due consideration of marine and hydrokinetic 
energy technologies in all discussions and decisions.
    As stated previously, the marine and hydrokinetic industry is at a 
relatively early stage of development and maturity when compared to 
other renewable energy technologies, but the Department believes this 
industry can play a substantial role in the portfolio of clean, cost-
effective, domestic energy that our Nation is dedicated to developing. 
To this end, DOE is committed to evaluating the realistic potential of 
the various resources and energy generation technologies and focusing 
Departmental efforts in the most efficient and effective areas. DOE has 
made key investments in this nascent industry and will continue to do 
so. Furthermore, DOE is uniquely positioned to aid in the development 
of marine and hydrokinetic technologies through continued support and 
collaboration with industry stakeholders, international partners and 
other non-governmental organizations. Most importantly, DOE's continued 
involvement will help speed the deployment of these technologies, just 
as the Department's commitment to wind energy has helped that industry 
to rapidly develop in recent years.
    Thank you again for the opportunity to appear before you today to 
discuss these important issues. I am happy to answer any questions.

                 Biography for Jacques Beaudry-Losique

    Jacques Beaudry-Losique was appointed in December 2008 as the 
Deputy Assistant Secretary for Renewable Energy of the U.S. Department 
of Energy's (DOE) Office of Energy Efficiency and Renewable Energy 
(EERE). EERE works to strengthen the United States' energy security, 
environmental quality, and economic vitality in public-private 
partnerships. In this role, he oversees a portfolio of more than $750 
million of Renewable and Clean Energy programs, including wind, water 
power, solar, biomass, geothermal and fuel cell technologies.
    Previously, Mr. Beaudry-Losique served as the Program Manager of 
DOE's Office of Biomass Program. Over two years, Mr. Beaudry-Losique 
built what is now recognized as the largest and most advanced biofuels 
deployment program in the world. He was instrumental in accelerating 
the Office of Biomass deployment activities to support Presidential and 
Congressional goals. Among numerous milestones, his office initiated 
major programs to launch a cellulosic biofuels industry, including an 
investment of up to $272 million in four major cellulosic ethanol 
projects in 2007 and another investment of up to $240 million in nine 
10% cellulosic biofuels demonstration projects in 2008. Jacques' office 
also played a leadership role in helping industry address environmental 
sustainability issues and supply chain bottlenecks such as the 
``ethanol blend wall.''
    Mr. Beaudry-Losique initially joined the Department as the Program 
Manager of the Industrial Technologies Program in June 2005, serving in 
that capacity until reappointed to the Office of Biomass Program in 
December 2006. He brought to the Office extensive experience in 
executive management, business development and commercial negotiations.
    Prior to joining DOE, he worked in numerous senior management roles 
in the private sector. As the business development leader of General 
Electric Power Systems investment activities, he was responsible for 
the placement of equity investments into strategic energy technology 
companies. Prior to that, he held senior management roles with Aspen 
Technologies, a leading engineering and supply chain software company 
with strong ties to MIT. Mr. Beaudry-Losique also has many years of 
experience as a management consultant with McKinsey and Company.
    Mr. Beaudry-Losique holds a Bachelor of Science degree in chemical 
engineering from the University of Montreal and a Master of Science 
degree in Industrial Engineering and Engineering Management from 
Stanford University. As a recipient of a Canadian Science Foundation 
Fellowship, he attended the MIT Sloan School of Management, where he 
received a master's degree in management in 1992.



    Chairman Baird. Thank you very much.
    Before we proceed to Mr. Bedard, I want to briefly note 
that our colleague, Representative Inslee from my home State of 
Washington, has joined us. Mr. Inslee has introduced 
legislation pertinent to this topic, and without objection, I 
would like to ask my colleagues that Mr. Inslee be allowed to 
join us on the dais. Hearing no objection, thank you for 
joining us, Mr. Inslee.
    With that, we will proceed to Mr. Bedard.

STATEMENT OF ROGER BEDARD, OCEAN ENERGY LEADER, ELECTRIC POWER 
                   RESEARCH INSTITUTE (EPRI)

    Mr. Bedard. Thank you, Chairman Baird, Ranking Member 
Inglis and Members of the Committee, again, my name is Roger 
Bedard. I am the Ocean Energy Leader at the Electric Power 
Research Institute, a collaborative, nonprofit R&D 
organization. I appreciate the opportunity to provide testimony 
to this Committee on marine and hydrokinetic, or MHK, 
technology, and the pathway to commercialization.
    In 2004, we initiated wave energy technical and economic 
feasibility studies. In 2006, we followed that up with tidal 
hydrokinetic feasibility studies, and in 2008 with river 
hydrokinetic studies in the State of Alaska. Our studies have 
resulted in a substantial momentum, nationwide momentum towards 
adding MHK technologies to our national portfolio of energy 
supply alternatives. One measure of this momentum is the number 
of preliminary permits filed to the Federal Energy Regulatory 
Commission (FERC) by private investors that reference the EPRI 
studies.
    I will focus my comments today on four key points. First, 
the wave and tidal hydrokinetic energy resource available to 
generate electricity in the United States is significant. 
Second, the technology to convert these resources to 
electricity is emerging and ready for testing in the ocean. 
Third, wave and tidal hydrokinetic energy can be cost 
competitive with other renewable technologies in the future. 
And fourth, significant challenges remain to finding the 
pathway to commercialization of MHK technologies.
    Our studies indicate the total recoverable ocean wave and 
tidal energy resource could enable electricity generation on 
the order of about 10 percent of the present electricity 
consumption, and that turns out to be about 400 kilowatt-hours 
per year. The most significant of these resources is wave 
energy and the locations with the most economically viable wave 
energy resources are Hawaii and the Pacific Northwest. It is 
important to understand, though, that many factors may limit 
the use of this technology, including electrical transmission 
capabilities, environmental concerns and societal 
considerations.
    There are many technology companies at various stages of 
development. The development cycle for these technologies is 
typically five to ten years. While there are now many companies 
ready for prototype testing in the ocean, only a few have 
reached that stage of development.
    As wind technology was beginning to emerge into the 
commercial marketplace, the wholesale cost of electricity was 
in excess of 30 cents per kilowatt-hour. That is in 2009 
dollars with no government financial incentives. Technology 
improvements and learning through production has cut that cost 
to about seven cents per kilowatt-hour today. Our studies 
indicate that MHK technology will enter the marketplace at a 
lower entry cost than wind energy did and will progress down a 
similar learning curve. The key reason for that is the high 
power density of the MHK resource compared to, say, the wind or 
solar resources.
    On the other side of that coin is a challenge. The 
challenge for the industry is to develop cost-effective 
deployment and operational maintenance technology given the 
remoteness, and at times, hostility, of the operating 
environment.
    We believe that a robust electrical system in the future 
will have a diversified portfolio of energy supply 
alternatives. Our Nation has investigated all known electricity 
supply alternatives except for one: the ocean. Our oceans are a 
public resource accommodating multiple uses including marine 
life, fishing, shipping and recreation. Ocean energy could work 
in harmony with those other users and provide renewable energy 
for the overall good of our society.
    It will take a sustained evolutionary effort over the next 
20 years to perfect MHK energy technology. We need to build the 
capability in this country to design, analyze, fabricate, test 
and deploy these emerging technologies.
    In the area of testing and test facilities, currently the 
U.S. marine energy industry is challenged by the lack of proper 
and standardized infrastructure to deploy devices in the ocean. 
We are starting to make progress. The Northwest National Marine 
Research Center, led by Oregon State University and University 
of Washington, will provide ocean energy conversion system test 
berths for developers to perform ocean testing. The Pacific Gas 
and Electric Company (PG&E) is developing a pre-commercial 
demonstration test facility known as WaveConnect for full 
system testing of arrays or farms of these devices.
    Long-term and consistent government funding support through 
this high-risk research, development and demonstration period 
is essential for building a globally competitive commercial 
U.S. industry. The idea of harnessing the vast power of the 
earth's oceans has fascinated and tantalized humans for 
centuries. Today we may be on the cusp of realizing these 
potential MHK technology options that we expect will prove 
tremendously valuable to our Nation in a carbon-constrained 
future. Thank you.
    [The statement of Bedard follows:]

                   Prepared Statement of Roger Bedard

    Thank you, Chairman Baird, Ranking Member Mr. Inglis and Members of 
the Committee
    I am Roger Bedard, Ocean Energy Leader for the Electric Power 
Research Institute (EPRI), a non-profit, collaborative R&D 
organization. EPRI has principal locations in Palo Alto, California, 
Charlotte, North Carolina, and Knoxville, Tennessee. EPRI appreciates 
the opportunity to provide testimony to the Energy and Environment 
Subcommittee on the topic of ``Marine and Hydrokinetic (MHK) 
Technologies; Finding the Pathway to Commercialization.''
    In 2004, EPRI initiated technical and economic feasibility studies 
of ocean wave energy. We followed these studies with tidal hydrokinetic 
studies in 2006 and river hydrokinetic studies in Alaska in 2008. These 
studies have resulted in a substantial nationwide momentum towards 
adding MHK technologies to our national portfolio of energy supply 
alternatives. One measure of this momentum is the large number of 
preliminary permit applications filed by industry with the Federal 
Energy Regulatory Commission for the development of MHK power 
generation projects which reference the EPRI studies.
    I will focus my comments today on four key points:

          First, the wave and tidal hydrokinetic energy 
        resource available to the U.S. which can be converted to 
        electricity is significant;

          Second, the technology to convert those resources to 
        electricity is emerging and is ready for testing in the ocean;

          Third, wave and tidal hydrokinetic energy can be cost 
        competitive with other renewable technologies in the future; 
        and

          Fourth, significant challenges remain to finding the 
        pathway to commercialization of MHK energy technologies.

    The key message that I hope you will take away from my testimony is 
that MHK energy is a renewable resource that we as a nation should 
seriously consider as an addition to our national portfolio of energy 
supply alternatives and that this consideration requires Government 
support and incentives as it has with other energy technologies in the 
past.

Background

    The idea of harnessing the vast power of Earth's oceans has 
fascinated and tantalized humans for centuries. Today, we may be on the 
cusp of realizing this potential and enabling that to happen in the 
U.S. is within your jurisdiction.
    Marine and hydrokinetic (MHK) technologies is a term used by the 
U.S. Congress to describe the conversion of ocean wave potential and 
kinetic energy, in-stream tidal, open-ocean and river current kinetic 
energy, and ocean thermal energy conversion It excludes offshore marine 
wind kinetic energy, does not mention ocean salinity gradient energy 
and should not be confused with conventional hydropower using a dam, 
impoundment or diversionary structure.
    EPRI believes that a robust electricity system of the future will 
be a balanced and diversified portfolio of energy supply alternatives. 
Our nation has investigated many if not all known electricity supply 
alternatives (including space-based power; i.e., photovoltaic panels in 
orbit beaming power to large antennas on Earth) except for one; our 
oceans (with two exceptions, a large ocean thermal energy conversion 
program in the 1980s and a more modest open-ocean current program in 
the 1970s). Our oceans are a public resource held in trust and 
accommodating multiple users; fisherman make their living from the 
ocean, commercial shipping navigates the oceans to deliver goods, 
recreational boaters, surfers and those who just walk on the beach 
enjoy the ocean and whales and other living creatures make the ocean 
their home. Ocean energy could be one of those users working in harmony 
with other users and providing renewable energy for the overall good of 
our society.



Some of the Benefits of Marine and Hydrokinetic Energy
    The advantages of ocean energy are numerous. First and foremost is 
a potential for costs that are competitive or lower than that of other 
renewable technologies. EPRI studies indicate that the high power 
density (kW/m2 for currents and kW/m of wave crest length for wave) of 
the MHK resource results in smaller and stronger energy conversion 
machines lower in capital cost than for other renewable technologies. 
The remoteness and at times, hostility of the ocean environment, 
however, results in higher deployment, operation and maintenance cost, 
but on balance, the cost of electricity can be comparable or lower than 
that with other renewable technologies. Other benefits include: (1) 
providing a new, environmentally friendly, renewable energy source for 
meeting load growth and legislated Renewable Portfolio Standard 
requirements; (2) easily assimilated into the grid (because of the 
predictability of the resource), (3) easing transmission constraints 
(since a large percentage of our population lives near the coast) with 
minimal, if any, aesthetic concerns; (4) reducing dependence on 
imported energy supplies and increasing national energy security; (5) 
reducing the risk of future fossil fuel price volatility; (6) reducing 
emissions of greenhouse gases as compared to fossil fuel-based 
generation; and (7) stimulating local job creation and economic 
development by using an indigenous resource.
    Existing industries in the U.S. such as ship building are looking 
for opportunities to diversify, grow, and compete. These industries 
provide a trained workforce and institutional knowledge that will 
benefit ocean renewable energy technologies while helping to re-
vitalize their own sectors.
    The economic opportunities are significant. A relatively minor 
investment today could stimulate a worldwide industry generating 
billions of dollars of economic output and employing thousands of 
people while using an abundant and clean natural resource.

EPRI's Experience
    EPRI's ocean energy experience is with wave and in-stream tidal and 
river hydrokinetic energy. In 2004, we initiated system definition 
technical and economic feasibility studies of ocean wave energy. At 
that time, the DOE was only able to provide in-kind services support to 
the EPRI efforts from the wind technology program at the National 
Renewable Energy Laboratory (NREL), which had an off shore component 
addressing related technical, environmental and regulatory issues. 
Under the leadership of Dr. Robert Thresher, Director of the National 
Wind Technology Center, NREL has provided valuable in-kind services and 
we continue working together today. EPRI followed the 2004-2005 wave 
energy studies in 2006-2007 with tidal in-stream studies and in 2008-
2009 with river in-stream studies in Alaska (over 50 reports are 
available on our public website www.epri.com/oceanenergy/). The EPRI 
studies have resulted in a substantial nationwide momentum. One measure 
of this momentum is the large number of preliminary permit applications 
filed with the Federal Energy Regulatory Commission by industry for the 
development of MHK power generation projects in the U.S.

The Ocean Wave and In-Stream Tidal Currents, Open Ocean Currents and 
                    River Currents Hydrokinetic Energy Resource

Available Ocean Wave Energy Resource
    EPRI has estimated the U.S. wave energy resource using decades of 
measurements by NOAA and Scripps data buoys. We estimate the available 
wave energy resource to be about 2,100 TWh/yr (for all state coastlines 
with an average annual wave power flux > 10 kW/m). This energy is 
divided regionally as follows:



    The amount of that available wave energy that can be converted into 
electrical energy is not known given the uncertainties of societal, 
device spacing, conflicts of sea space and environmental limits.
    A preliminary estimate can be made by assuming absorption of 15% of 
the total available wave energy resource, a power train conversion 
efficiency of 90% and a plant availability of 90%. The electricity 
produced using this assumption is about 255 TWh/yr or equal to an 
average annual power of about 30 GW. The rated power is about 90 GW 
given a typical capacity factor of 33%. This amount of energy is 
comparable to the total energy generation from all conventional hydro 
power, or about 6.5% of current U.S. electricity consumption. This is 
significant.
    Early wave plants must be built-out in phases with environmental 
monitoring and an adaptively managed process to larger size plants so 
that the cumulative effects of these larger plants stay within societal 
limits of acceptability
    EPRI, teamed with NREL and Virginia Tech, has received grant 
funding from the DOE to perform a rigorous evaluation of the nation's 
available ocean wave energy resource and practical electrical energy 
generation potential. This work is scheduled for completion in 2010.
Available In-Stream Tidal Currents Hydrokinetic Energy Resource
    Tidal in-stream hydrokinetic energy resources are not as well 
understood as wave energy resources. Economically viable hydrokinetic 
tidal energy sites typically occur in narrow passageways between oceans 
and large estuaries or bays. EPRI has studied many but not all 
potential U.S. tidal energy sites. The tidal energy resource at a 
single transect for those sites evaluated by EPRI to date is estimated 
at 115 TWh/yr with 6 TWh/yr at sites in the continental U.S. and the 
remaining 109 TWh/yr in Alaska. Tidal hydrokinetic energy resources may 
be locally important resources for the following regions in the lower 
48 states; Maine, New York, San Francisco and Washington's Puget Sound.



    The 115 TWh/yr estimate excludes sites with annual average power 
densities less than 1 kW/m2. If in-stream energy conversion device 
technology is economical at power densities less than 1 kW/m2, then the 
available resource in the lower 48 states could be much larger. These 
estimates should be considered as the lower bound of the tidal 
hydrokinetic resource because not all the U.S. tidal sites with 
potential have been evaluated.
    The amount of the available tidal hydrokinetic energy resource that 
can be converted to electrical energy is not known given the 
uncertainties in societal, physical, ecological and environmental 
limits. We understand how to estimate the kinetic energy resource 
across a particular transect at a particular site, however, we have 
learned that this estimate is a poor predictor of both the maximum 
possible level of extraction for that site as well as the environmental 
impacts of extracting kinetic energy from that site. From a purely 
physical standpoint, depending on the limitations of seabed space 
within the high-velocity transects and the requirement to maintain 
adequate navigation clearance, the number of turbines that could be 
sited within a constrained channel is known given a maximum packing 
fraction for turbines. However, this could be limited to even lower 
levels of extraction by the ecological implications of changing the 
tidal regime by extracting kinetic energy from the flow. There is a 
self-limiting point at which it will not be economic to add additional 
turbines to an array since extraction reduces the available kinetic 
energy. It is unclear whether the available space, social and 
environmental pressures, or economics will pose the most stringent 
limits on resource extraction.
    Furthermore, our current understanding of how extracting 
hydrokinetic energy at one site would affect the availability of 
hydrokinetic energy at another site within the same estuary or bay is 
insufficient to perform a resource estimate for an entire bay system.
    A conservative assessment of the deployment potential can be made 
by assuming absorption of 15% of the total available tidal hydrokinetic 
resource at a single transect of a tidal passageway (serving as a 
conservative proxy for the limiting factors discussed above), a power 
train efficiency of 90%, and a plant availability of 90%. The 
electricity produced using this assumption for the sites studied by 
EPRI is about 14 TWh/yr. This corresponds to an average annual power of 
1,600 MW and a rated power of about 4,800 MW given a typical capacity 
factor of 33%. These estimates should be considered as the lower bound 
of the tidal hydrokinetic resource because not all the U.S. tidal sites 
with potential have been evaluated.
    Georgia Tech has received grant funding from the DOE to perform an 
assessment of the energy production potential from tidal streams in the 
U.S. This work is scheduled for completion in 2010.

Available In-Stream River Current Hydrokinetic Energy Resource and 
        Practical In-Stream River Current Hydrokinetic Electrical 
        Energy Potential
    A study carried out by New York University (NYU) graduate students 
in 1986, using a set of assumptions which were stated to be 
conservative, reported that about 110 TWh/year (average power of 12,500 
MW) could be extracted from rivers using in-stream hydrokinetic energy 
conversion and that the majority of the nation's river hydrokinetic 
energy resource is in the Pacific Northwest and Alaska. Significant 
rivers in the continental U.S. are illustrated below
    System definition and feasibility studies performed by EPRI in 
2008-2009 showed that river in-stream hydrokinetic energy may be a 
feasible resource option for remote village electrification. EPRI 
surveyed six sites shown in the figure below and performed system 
definition and techno-economic feasibility studies for the three sites 
shown in yellow. Two pilot projects (Yukon River at Eagle and Kvichak 
River at Iguigig) are now underway at remote villages in Alaska, one 
funded by the Denali Commission and the other funded by the State of 
Alaska Renewable Energy Fund.






    EPRI, teamed with NREL and the Universities of Alaska at Anchorage 
and Fairbanks, was recently selected by the FY2009 DOE Waterpower 
program for negotiation leading to award to assess the nation's river 
in-stream hydrokinetic resources and was also recently selected to 
perform desktop and laboratory flume studies that will produce 
information needed to determine the potential for injury and mortality 
of fish that encounter hydrokinetic turbines of various designs. 
Behavioral patterns will also be investigated to assess the potential 
for disruptions in the upstream and downstream movements of fish.

Available Open Ocean Current Resource and Practical Ocean Current 
        Electrical Energy Potential
    The primary open-ocean current resource available to the U.S. is 
located about 30 km off the shores of Southern Florida. The total 
available resource is not known, however, both Aeroviroment in the 
1970s and recently Florida Atlantic University have estimated a 
practically recoverable electrical energy of 50 TWh/yr and an average 
annual power of about 10 GW (a capacity factor of 57%). Other ocean 
currents are typically located too far from shore or are too slow in 
current speed to provide for practical or economical transmission of 
power to load centers.



    Georgia Tech was recently selected by the FY2009 DOE Waterpower 
program for negotiation leading to award to assess the nation's open-
ocean hydrokinetic resources.

Resource Summary
    Research by EPRI suggests that ocean wave and in-stream tidal 
hydrokinetic energy resource is location specific and that the total 
electrical energy production potential is equal to about 10% of the 
present U.S. electricity consumption (or about 400 Twh/yr). The most 
significant of these resources is wave energy and the locations in the 
U.S. with the most economically viable wave energy resource are Hawaii, 
Alaska and the Pacific Northwest (as far south as Point Conception 
which is just north of Santa Barbara, California).
    While this preliminary assessment provides a good first order 
indication of the resource potential, it is important to understand 
that many factors, such as electrical transmission capabilities, 
economic viability, environmental concerns and socio-economic 
considerations may impose additional limits onto these resources that 
may substantially alter full development potential. Given the present 
technical, environmental and economic uncertainties, it is important to 
pursue all MHK resources in a sensible and strategic manner.

Status of Ocean Wave and In-Stream Tidal, Open Ocean and River Current 
                    Energy Conversion Technology

Ocean Wave Energy Conversion Technologies
    Today's wave energy conversion technologies are the result of many 
years of testing, modeling and development by many developer 
organizations. Total capacity deployed to date is about 4 MW worldwide, 
and most of the devices are engineering prototypes. The first shore-
based grid-connected wave power unit was a system built into the 
coastline of the Island of Islay in Scotland in 2000. In 2003, 
WaveDragon of Denmark was the first offshore grid-connected wave power 
unit and was deployed in a protected bay due to its subscale design. 
The following year (2004), Pelamis of the U.K. was the first full-
scale, offshore, grid-connected wave power unit deployed in open seas 
at the European Marine Energy Center (EMEC) in the U.K. Based on 
successful testing at EMEC, the first commercial sale of an offshore 
wave power plant was announced by Pelamis Wavepower in May 2005 and the 
first 2.25 MW of that plant was deployed off the coast of Portugal in 
2008. Unfortunately, the primary project investor, Brown and Babcock, 
recently declared bankruptcy and the project is now on hold pending 
further investment capital.
    A number of demonstration projects are ongoing and planned in the 
U.K, Ireland, Spain, Portugal, China, Japan, Australia, Canada, and the 
United States. If these early demonstration projects prove successful, 
medium-size wave farms up to 30-50 MW in capacity could be deployed 
within the next five to eight years.




    (a) PowerBuoy, courtesy of Ocean Power Technology, (b) OWC, 
courtesy of OceanLinx (c) Pelamis, courtesy of Pelamis Wave Power, and 
(d) WaveDragon, courtesy of WaveDragon,

Tidal In-Stream Energy Conversion Technologies
    Today's tidal in-stream energy conversion technologies, much like 
wave energy technologies, are the result of many years of testing, 
modeling and development by many developer organizations. Total 
capacity deployed to date is about 3 MW worldwide, and most of the 
devices are engineering prototypes. The first grid-connected power 
units were built and installed in the U.K. and Norway.
    A number of demonstration projects are ongoing and planned in the 
U.K, Norway, Sweden, France, Italy Korea, New Zealand, Canada, and the 
United States. The first commercial in-stream tidal power plant has yet 
to be realized.



    (a) East River Roosevelt Island Tidal Project Axial Turbine 
courtesy Verdant Power, (b) Gorlov Vertical Turbine courtesy Lucid 
Energy and (c) Cross Flow Turbine courtesy Ocean Renewable Power Corp
River In-Stream Energy Conversion Technologies
    Today's river in-stream energy conversion technologies are scaled 
down versions of larger tidal water turbines. Unlike wind turbines 
where the cost has come down as the sizes get larger, river in-stream 
developers hope to achieve cost reductions through high volume 
production of small machines, typically constrained in size due to 
river depth limitations and navigation requirements.
    Two river in-stream turbines have been deployed in the U.S.; a 5 kW 
hydrokinetic turbine in the Yukon River in Alaska and a 40 kW 
hydrokinetic turbine deployed downstream of the hydro potential 
turbines at a conventional hydroelectric dam in Hastings, Minnesota.

Open Ocean Current Energy Conversion Technologies
    Today's open-ocean current energy conversion technologies are 
similar to tidal and river in-stream technologies but with the 
potential of being very large in size due to the depths of the ocean. 
The 1970s Coriolis water turbine design diameter was 170 meters.
    The first commercial in-stream open-ocean power plant has yet to be 
realized.

Energy Conversion Summary
    There are many technology developers with different conceptual MHK 
energy conversion devices and those devices are at various stages of 
development. The time period for a MHK technology to progress from a 
conceptual level to deployment of a long-term full-scale prototype 
tested in the ocean is typically on the order of 5 to 10 years. The 
technology is still in its emerging stage; like where wind technology 
was approximately 15 to 20 years ago. It is too early to know which 
technology will turn out to be the most cost-effective, reliable, and 
environmentally sound, but it is likely that many different MHK 
technologies will play a role in our energy future.
    Of the many technology developers (greater than 50 each for wave 
and marine water turbine hydrokinetic machines), only a few dozen have 
progressed to rigorous subscale laboratory tow or wave-tank model 
testing. Only two dozen have advanced to short-term (days to months) 
subscale tests in the ocean. Even fewer have progressed to long-term 
(>1 year) testing of a full-scale prototype systems in the ocean. Pre 
commercial ``pilot demonstration power plants'' are needed to address 
critical concerns about reliability, maintainability, environmental 
issues and costs.

Status of MHK Power Projects and their Economic Competitiveness

    Today, a large number of small companies, backed by government 
organizations, private industry, utilities, and venture capital, are 
leading the commercialization of technologies to generate electricity 
from ocean wave and tidal, river and open-ocean current resources. A 
small number of companies are leading the commercialization of ocean 
thermal gradient (and salinity gradient) energy technologies.
    Over two decades ago, wind technology was beginning its emergence 
into the commercial marketplace at a busbar cost of electricity (CoE) 
in excess of 20 cents/kWhr (in 2004$ with production credits and 5-year 
accelerated depreciation). The historical wind technology CoE as a 
function of cumulative production thru 40,000 MW of cumulative 
production capacity deployed through 2004 is shown in the figure below. 
Wind technology experienced an 82% learning curve (i.e., the cost has 
reduced by 18% for each doubling of cumulative installed capacity). 
Over 1,500 MW of wind has now been installed worldwide. EPRI studies 
performed in 2004/2005 project indicate that wave energy will enter the 
market place at a lower entry cost than wind energy did and will 
progress down a learning curve that is similar to that of wind energy. 
The wave energy industry has the advantage of higher power densities 
compared to wind energy and therefore should have lower capital cost. 
The challenge to the wave energy industry will be to develop cost 
effective deployment and high reliability operation and maintenance 
technologies with low costs. Otherwise, the cost of deploying and 
operating these machines in a remote, and sometimes, hostile 
environment will outweigh the initial capital cost advantages and the 
CoE may not be competitive with other options.
    The CoE is now approximately 7 cents/kWhr (in 2009$ with no 
incentives) for an average 30% capacity factor wind plant. Today, MHK 
technology status can be compared to wind 15 to 20 years ago; close to 
starting its emergence as a commercial technology.




Government Support of Marine and Hydrokinetic Research, Development and 
                    Demonstration (RD&D) and Commercialization

    The European Union (UK, Ireland, Denmark, Norway, Sweden, France, 
Spain, and Portugal) is leading the development and commercialization 
of emerging marine and hydrokinetic energy technologies. Their support 
to accelerate this development includes:

          Supporting the technology developers with funding

          Funding subscale and full scale test facilities

          Establishing goals for commercialization

          Developing roadmaps that point out the pathways to 
        meet these goals

          Providing financial incentives necessary to meet 
        those goals

    The Europeans have a 10 year head start on us in developing MHK 
technology.
    Other nations are also starting to engage in MHK energy. In Canada 
for example, EPRI performed in-stream tidal system definition and 
feasibility studies in the Bay of Fundy (Nova Scotia and New 
Brunswick). Our 2006 studies resulted in an immediate announcement by 
Nova Scotia Power for a multi million dollar tidal pilot demonstration 
project in the Minas Passage. This project is now funded at $70 million 
and the first of three large scale (1 MW class) machines has been 
deployed. Two other tidal machines as well as the submerged 
transmission cable will be deployed in 2010.
    In the U.S., DOE manages a Waterpower RD&D program which began in 
FY2008 at $10 million, increased to $40 million in FY2009 and to $50 
million in FY2010. This DOE program is funding many projects, including 
some of the EPRI work already discussed, but I will limit my testimony 
to one managed by universities and two managed by utilities which 
address a critical need; the need to test this new technology. 
Currently, the U.S. marine energy industry is challenged by the lack of 
proper and standardized infrastructure to deploy and test wave energy 
conversion devices in the ocean. Testing of these new devices needs to 
be done at scales that vary from small scale devices in subscale test 
facilities, to full scale ocean testing of prototype machines and to 
demonstration testing of pilot power plants. We are starting to make 
progress and sustaining this progress with long-term and consistent 
support is essential for building a globally competitive U.S. industry.
    (1). The Northwest National Marine Renewable Energy Center (NNMREC) 
is a DOE-funded partnership between Oregon State University (OSU) the 
University of Washington (UW) and the National Renewable Energy Lab 
(NREL). The University partition of responsibilities is as follows:

          OSU is responsible for wave energy research and 
        development.

          UW is responsible for in-stream tidal energy research 
        and development.

          Both universities collaborate on research, education, 
        outreach, and engagement.

    The NNMREC at OSU will provide wave energy conversion system 
developers with test berths to perform ocean testing, demonstration and 
advancement of sub-scale and full-scale devices. The first phase ocean 
test berths will be ``mobile'', with future plans to include both 
mobile and grid connected capabilities. The mobile ocean test berths 
(MOTBs) will consist of a power analysis and data acquisition (PADA) 
device and an adjustable load bank to simulate the utility grid as 
illustrated below




    (2) Pacific Gas and Electric (PG&E) WaveConnect--PG&E is the 
largest investor owned utility in the country and its service territory 
includes about 600 miles of high wave energy coastline. PG&E seeks to 
complete final design, stakeholder outreach and permitting of two 5 MW 
pilot ocean wave demonstration plants in this current phase of the 
project. The next phase of the project will include building an 
undersea electrical grid connection several miles offshore. This 
``offshore electrical cable and socket'' will connect wave energy 
converters from multiple vendors to the PG&E electrical grid (similar 
to the U.K. Wave Hub funded by the UK government) and provide for 
testing and evaluation of the devices for commercial deployment. The 
current final design and permitting phase of the project is supported 
through PG&E ratepayer funding (80%) and by the DOE (20%). A greater 
level of Federal Government support may be needed once the project 
enters into the construction phase.




    (3) Snohomish County Public Utility District No 1 (SnoPUD) 
Admiralty Inlet Tidal Power Demonstration Project--SnoPUD is located 
near Seattle, Washington, and is the second largest publicly-owned 
utility in the Pacific Northwest, and the twelfth largest in the United 
States in terms of customers served. The PUD has a rapidly growing 
service load and is required by the Washington State Renewable 
Portfolio Standard (RPS) to supply 15% of its load from new, renewable 
energy resources by 2020. As a result of these factors, approximately 
140 MW of renewable energy resources needs to be added each year, on 
average, for the next twelve years. The PUD believes that tidal 
hydrokinetic energy from the Puget Sound estuary has the potential to 
contribute significantly toward meeting this challenge, but also 
believes in-water testing is required to address uncertainties in 
performance, cost and environmental effects.
    The PUD is partnering with OpenHydro of Ireland to conduct the 
deployment, demonstration and testing of tidal in-stream energy 
conversion technology in the Admiralty Inlet region of the Puget Sound. 
The PUD currently envisions a ?1 MW pilot plant consisting of two to 
three OpenHydro turbines. The PUD envisions plant construction 
beginning in 2011. This project is currently supported at less than 50% 
by the DOE and may need greater Federal funding in the construction 
phase.




Conclusions

    EPRI estimates the recoverable potential to provide electricity 
from ocean wave and in-stream tidal hydrokinetic resources to be about 
10% of today's electric consumption in the U.S. The technology to 
convert those resources to electricity, albeit in its infancy, is 
available today for prototype and pilot demonstration testing and 
evaluation. Initial studies suggest that given sufficient deployment 
scale, these technologies will be commercially competitive with other 
forms of renewable power generation. However, significant technical, 
economic, operational, environmental and regulatory barriers remain to 
be addressed in order to progress this emerging industry to commercial 
development.
    It is critical for the success of this industry to gain a full 
understanding of all life cycle-related issues over the coming years to 
pave the way for larger scale commercial deployments. Such 
understanding can only be gained in a practical way from the deployment 
of prototype and pilot demonstration systems in the ocean. Currently, 
the U.S. marine energy industry is challenged by the lack of proper and 
standardized infrastructure to deploy and test wave energy conversion 
devices in the ocean. We are starting to make progress and sustaining 
this progress with long-term and consistent support is essential for 
building a globally competitive U.S. industry.
    Successful deployment of prototype and pilot demonstration systems 
will not only address technology and economic related issues, but will 
also provide confidence to regulators, the general public and 
investors. Both market push (RD&D) and market pull mechanisms (economic 
incentives to encourage deployment) will be required to successfully 
move this technology sector forward and develop the capacity to harness 
energy from the ocean.
    It is very unlikely that any of this early stage development will 
be funded by the private sector because the risk of failure is too 
high. When an ocean energy development company can test a prototype 
scale machine that shows promising performance, reliability and cost, 
then the private sector investors may be interested. Even at that 
point, the private sector will not want to assume all of the financial 
risk and exposure to fully fund the first demonstration projects, or 
the first commercial projects, so some sort of support for these early 
commercial projects will be essential to get the industry started.
    In retrospect, it is interesting to note that there are currently 
only two major U.S. companies selling large utility scale wind turbines 
in the United States, out of about a dozen that attempted to develop 
wind systems over the past 30 years. On the other hand, there are six 
major global companies now selling wind turbines in the United States, 
and several smaller foreign companies. Long term and consistent support 
through the high risk research and development period and though 
demonstration is essential for building a globally competitive U.S. MHK 
industry and commercializing it. It should also be noted that the 
Europeans already have a 10 year head start on developing MHK 
technology.
    The eventual level of MHK power capacity in the U.S. will be 
strongly dependent on enabling actions and policies that support the 
development of the industry.
    The establishment of national MHK deployment and timeline goals and 
the research, development and demonstration pathways or roadmap to 
success will assist in fully developing this potential. The funding 
needed to implement the roadmap and achieve the goals will be a 
significant higher than current levels, but within historical 
percentages for government agencies and private industry. Given the 
long technology development and deployment lead times inherent in 
capital intensive industries like energy, investment and policy 
decisions cannot be delayed without risk of losing opportunities for 
technology options that we expect will prove tremendously valuable to 
our nation in a carbon-constrained future.

Thank You

Roger Bedard

EPRI Ocean Energy Leader

November 29, 2009

                       Biography for Roger Bedard



    Chairman Baird. Thank you.
    Mr. Dehlsen.

STATEMENT OF JAMES G.P. DEHLSEN, FOUNDER AND CHAIRMAN, ECOMERIT 
                       TECHNOLOGIES, LLC

    Mr. Dehlsen. Thank you, Chairman Baird, Ranking Member Mr. 
Inglis and Members of the Subcommittee, my name is Jim Dehlsen.
    My work has been in renewable energy technology since 1980, 
mainly focused on wind turbine design, manufacturing and 
helping to build the industry. The companies I formed and led 
are today America's two wind turbine manufacturers of utility-
scale power generation: the wind division of General Electric 
with roots going back to Zond Systems, which I established in 
1980, and the second formed in 2001, Clipper Windpower. I can 
state from this experience that both of these turbine 
manufacturers would not exist today had it not been for the 
enlightened U.S. energy policy stemming back to the oil embargo 
in the 1970s. Since 1999 I have also been engaged in marine 
renewable energy and recently formed Ecomerit Technologies with 
my son Brent to advance electric power systems based on wave 
and ocean currents. My wife tells me I flunked retirement.
    I have been asked to address three items: advancing marine 
renewable energy as a separate program from hydropower, the 
expected time for marine energy to reach commercial readiness 
and large-scale deployment, and the DOE industry partnership in 
wind technology and implications for marine renewable energy.
    First, hydropower and hydrokinetic have little in common. 
The basis for establishing a marine hydrokinetic program 
separate from hydropower is based not only on major differences 
in requirements for offshore marine versus land-based system 
deployment and operation, but also on very different technical, 
financial and technology maturity characteristics. These two 
hydros have little in common. Advances in the new marine 
technology will be far more robust and will occur more quickly 
and with marine hydrokinetic programs apart from, and not 
under, the federal hydropower program.
    Second, the cost of energy and deployment. For a decade I 
have engaged in an effort to advance utility-scale power 
generation technology for both wave energy and ocean currents. 
Based on our engineering, we are targeting a cost of energy for 
both technologies in the range of 10 to 12 cents per kilowatt-
hour by 2015, a level that should enable early 
commercialization, provided the U.S. government implements an 
effective program of incentives that supports marine renewables 
more tangibly and consistently than the federal support for 
wind energy. We are suspecting early systems to be megawatt 
sized. Therefore, meaningful rates of deployment, several 
thousand megawatts per year, should come in the 2015 to 2020 
time frame in line with a forecast potential of 23 gigawatts by 
2025, which was a recent estimate by the CORE. While this 
appears quite accelerated when compared to the history of wind, 
solar and other renewable energy technologies, it must also be 
viewed in light of the advanced know-how which is brought 
forward from marine engineering and shipbuilding, offshore oil, 
submersible vehicles, knowledge we now have on structural loads 
and control systems of wind turbines, the advanced numerical 
model design tools and fabrication know-how of large composite 
structures. This substantially reduces development costs and 
timelines.
    Furthermore, the urgency that is now upon us from climate 
change and energy security is driving development of marine 
renewable energy not just in America but Europe as well, now 
with several years' lead, so we can expect a fast and 
competitive pace of technology advancement.
    Learning from wind power: The U.S. renewable energy 
experience shows that in a government-industry partnership, the 
fundamental factor for success is a sustained federal 
commitment in the face of change, such as global price 
fluctuations or shifting national priorities that come with 
each Administration or political appointee. Perhaps the hardest 
public policy lesson that has come out of the American wind 
effort has been the repeated crippling effect on the industry 
from discontinuity in government support. The United States was 
in a clear leading position in wind power in the early 1980s 
due to early support which gave birth to the industry. 
Government support ended later that decade in the United States 
and the wind industry virtually collapsed. A series of on-
again, off-again programs followed. While the U.S. wind 
industry continued in a struggle for survival, strong European 
Union support stimulated rapid growth throughout the continent. 
Today the European companies enjoy the lion's share of the 
industry, creating several hundred thousand jobs, generating 
upwards of $40 billion a year and growing at 20 percent plus 
annually. Now we are seeing massive support for wind energy in 
China, which has initiated 10 separate 10,000-megawatt regions 
representing $200 billion in industrial activity fully 
supported by the central government.
    While America had the foresight and made the investment to 
launch the wind industry, discontinuity in support has allowed 
other nations to capture a major share of the long-term 
industry and industry benefits. We must not let this happen 
with marine renewables. Government support should be 
implemented quickly and sufficiently to sustain this emerging 
industry until it reaches industrial scale. Thank you.
    [The statement of Mr. Dehlsen follows:]

               Prepared Statement of James G.P. Dehlseon

    Mr. Chairman and members of the Subcommittee, it is my pleasure to 
appear before you today to discuss the role that the government can 
play in advancing marine-based renewable energy technologies to meet a 
significant part of the nation's future electricity supply.
    I am Founder and Chairman of Ecomerit Technologies, which has a 
focus on developing reliable, competitively priced, utility-scale ocean 
current and wave-powered electricity generating systems. We are also 
actively developing and investing in other sustainability-related 
technologies. We are located in Carpinteria, California.
    Ecomerit Technologies represents my third entry in developing 
industrial-scale renewable energy technology. In 1980, I established 
Zond Systems, Inc., which pioneered wind power technologies leading to 
three generations of advanced wind turbines, and grew to become one of 
the largest global companies in wind turbine manufacturing, project 
development and plant operation. Acquisition of this technology and 
manufacturing formed the basis for GE's entry into the wind energy 
industry in 2002. As of last year, GE had produced over 10,000 turbines 
with worldwide deployment.
    I also founded Clipper Windpower in 2001 with my son, Brent, and 
serve as Chairman of the Board. Clipper manufactures a new generation 
wind turbine, the 2.5 MW Liberty -the largest turbine produced in the 
U.S. -which received the Department of Energy's 2007 Outstanding 
Research and Development Partnership Award for its contribution toward 
industry advancements. Clipper is now in development on a 10 MW 
offshore turbine -the world's largest -planned for introduction in 
2012/2013. In its lifetime, one of these 10 MW turbines will have the 
equivalent electricity generation of about 2 million barrels of oil.
    It is important to note that the breakthrough wind energy 
technologies developed by Zond and Clipper were made possible by DOE/
NREL grant funding and technical support, and this support also 
accounts for a substantial part of the technological innovation that 
has led to the success of the present $40 billion per year global wind 
industry.

Key Elements for Success in Marine Hydrokinetic Technology (MHK)

    Drawing on my three decades in developing and commercializing 
renewable energy technologies, it is clear to me that marine 
hydrokinetic power can now play a significant role in adding to our 
national energy security, our economic development, and meeting our 
environmental goals. However, as with wind and solar energy, it will 
take a serious, robust and sustained partnership between the federal 
government and technology developers in a number of areas, including:

          Technology advancement, verification and acceptance 
        through support for research, development and deployment;

          Clear, timely, predictable, and workable regulatory 
        framework for siting and permitting of marine renewable 
        projects;

          Clear, timely, and predictable incentive regime 
        structure that facilitates rapid advancement of technology 
        deployment;

          Close federal agency coordination and benefiting from 
        lessons learned here and abroad in both wind and hydrokinetic 
        power technology development and deployment; and

          The development of standards and certifications to 
        provide confidence to customers and the financial markets.

Marine Renewables Overview

    Today's emerging marine renewables industry includes technologies 
with the potential to convert the power of wave, tidal and constant 
ocean currents into utility-scale electricity supply.
    The U.S. is blessed with abundant marine renewable resources on our 
extensive coastlines. According to the Electric Power Research 
Institute, the commercially available U.S. wave energy potential, 
alone, is roughly equal to 6.5% of the nation's entire generating 
portfolio. That is approximately the amount of electricity being 
produced by all traditional hydroelectric dams in the U.S. Another 
example is the Gulf Stream, just 15 miles off the coast of Florida, 
which has a constant flow equal to 50 times all the rivers of the 
planet and presents an opportunity to adapt much of the mature 
technology developed for wind power to provide thousands of megawatts 
of clean baseload power to the eastern seaboard states. Clearly, marine 
renewable energy can play a significant role in expanding our homeland 
energy supply and the power needs of our marine-related military 
facilities around the world.
    Federal commitment to creating a robust U.S. marine renewables 
energy industry will advance our national economic goals by creating 
high-quality employment in coastal communities, long-term production in 
shipyards, development of fleets of vessels for deployment and 
servicing, and strengthening the thousands of businesses that make up 
the U.S. industrial supply chain. The establishment and nurturing of a 
U.S.-based marine renewable industry would secure our nation's place in 
developing offshore renewable energy technologies thereby ensuring that 
the United States is an exporter, not an importer, of these 
technologies.

Federal Support and Industry Partnership

    The formation and growth of a U.S.-based marine renewables industry 
is not a given. It is essential to understand that marine renewables 
face significant challenges before they can become a meaningful part of 
the nation's power supply. These challenges include the current limited 
federal support, lack of adequate regulatory framework, and the need 
for closer government agency cooperation.
    At the same time, there is the opportunity for accelerated growth 
of a U.S. marine renewables industry by adopting the ``lessons 
learned'' and building on the successes of wind and solar development 
programs both in the U.S. and Europe.
    I strongly support the current action in Congress that would 
address these issues head-on and with a strong sense of urgency. 
Specifically, I support the pending marine and hydrokinetic program 
reauthorization which would establish the following program parameters:

    $250 million/five-year authorization of:

          Research, Development, Demonstration & Deployment 
        (RDD&D)/separate program line for water power

          Device verification

          Five-year accelerated depreciation

    I believe that this program could have a comparable success and 
payback to the nation as experienced with U.S. programs in support of 
wind power and solar energy technologies.
    One of the key issues I would like to stress today is the need for 
a serious, sustained federal effort to develop, demonstrate, and deploy 
marine hydrokinetic technologies to economically help meet its needs 
for energy security and CO2 reduction and for gaining a 
global leadership position in the marine renewable energy sector and 
benefit from the major industrial opportunity that it presents.
    The federal technology programs, particularly those at DOE, have 
over their 30-year history directly enabled the development and 
commercialization of new energy technologies such as geothermal, solar, 
biomass and wind. The Department's management -political and career -
and the technical experts at headquarters and the national 
laboratories, can take much of the credit for helping to create today's 
global renewable industries. They closely collaborated with the 
emerging industry players to understand, and then mitigate risk; they 
requested the funds necessary to research, develop and demonstrate new 
technologies; they shared the pride when technology achieved commercial 
success and gritted through the setbacks along the way; and they 
promoted the new technologies, within the government, as well as with 
the nation's utilities, and their consumers. They helped launch major 
industrial activity and large-scale renewable power generation.
    The U.S. renewable energy experiences shows that in a government/
industry partnership, the most fundamental factor in success is a 
sustained federal commitment in the face of changing or uncontrollable 
events, such as global oil price fluctuations or shifting national 
priorities that come with each new administration or political 
appointee.

    I share two examples:

    In the 1990's, the DOE/NREL support for wind energy technology 
development and verification was highly effective and led to much 
larger and more efficient turbines. During that time, my company, Zond, 
developed three generations of turbines, greatly aided by technical and 
grant support from DOE/NREL. This enabled Zond's growth to a leading 
position in the industry, and eventually GE acquired the technology and 
manufacturing for its entry into wind energy. By 2008, GE had produced 
over 10,000 turbines, placing it among the top global wind turbine 
companies. The $32 million in DOE/NREL grant support has leveraged well 
in excess of $15 billion in direct economic activity.
    In 2001, we launched Clipper Windpower to produce a new generation 
turbine based on advanced powertrain architecture and controls. In the 
same year, DOE/NREL solicited wind turbine technology proposals, and 
with good fortune, Clipper was selected for a $9 million matching 
grant. This was followed by over $150 million in private equity funding 
for the 2.5 MW Liberty turbine, which we started manufacturing in 2006. 
Clipper now has 800 employees, and there are 375 turbines deployed in 
17 projects across the U.S., totaling 938 MW of generating capacity. 
This success would not have been possible without the DOE/NREL's 
assistance, from design to development, from demonstration to 
deployment, and yielding the ``most advanced and efficient wind turbine 
in the industry'' (DOE 2006 Report). Our DOE/NREL partnership again 
resulted in significant new manufacturing activity, created jobs, added 
to the Federal and State tax base, and helped grow the U.S. renewable 
power industry.
    But there is the other side of the coin. Clipper Wind was also 
seeking to partner with DOE/NREL to develop offshore wind technology 
when the offshore wind program was suddenly terminated in 2006, 
significantly shifting the early offshore wind technology lead to 
Europe. With this, Clipper had to revert to overseas for support, where 
government incentive structures for technology development were robust 
and consistent. Today, we are engineering the 10 MW Offshore Wind 
Turbine in Blythe, England, where production is planned to start in 
2013.
    The UK now leads the world in offshore operating wind turbine 
capacity, and the European Union has accelerated their offshore wind 
program, expected to exceed $150 billion by 2020. They have set goals 
of 20% from renewable energy deployment in 2020, which now includes 
offshore wind, wave, and tidal currents. This is supported by robust 
technology development grants and energy pricing mechanisms. UK 
offshore renewable energy produces roughly double the revenue compared 
to U.S. energy pricing.
    China has installed its first offshore turbines, and its land-based 
turbine deployment is expected to be the highest for any nation by 2010 
and beyond.

Hydropower and Hydrokinetic Have Little in Common

    The basis for establishing a marine hydrokinetic program, separate 
from hydropower, is based not only on major differences in requirements 
for offshore/marine vs. land-based system deployment and operation, but 
also very different technical, financial, and technology maturity 
characteristics. Traditional hydropower technology has remained 
relatively static for decades. These two hydros have little in common. 
Advances in the new marine technology will be far more robust, and 
progress will occur more quickly with the marine hydrokinetic program 
apart from, and not subsumed under, the federal hydropower program.

Technology Verification Program
    I firmly support the Congressional language that would establish a 
technology verification effort to increase marine-based power 
experience and to build and operate enough candidate devices to obtain 
statistically significant operating and maintenance data. The 
technology verification program for wave, tidal, and current energy 
systems is the bridge to commercial deployment of marine renewable 
energy devices. This program is modeled on DOE's successful wind 
turbine verification program of the 1990's, which lead to invaluable 
experience on siting, permitting and operations. In particular, the 
program significantly increased data collection to address the 
uncertainty regarding impacts of the then-emerging wind industry. A 
similar effort directed towards marine-based renewable energy 
technologies would also enhance DOE's ability to effectively manage an 
increased level of funding in a timely manner and with clear results.

Government Coordination
    DOE should also work closely with other federal agencies that have 
an interest in marine renewables, particularly with the Department of 
Defense, the Department of Commerce (NOAA), and those agencies that 
have regulatory authority and can provide incentives.
    Since 2002, DOD has provided funding for the development of marine 
renewable technologies. DOD facilities also offer a market for marine 
renewable products and services, particularly to reduce dependence on 
imported fossil fuels, which can be extraordinarily costly when 
supplied to DOD and remote bases.
    The lack of a clear, timely, and predictable regulatory regime 
deters not only private investors in the technology, but also testing 
and near-term deployment funding. Federal agencies with regulatory 
authority or concerns related to marine renewables should work together 
to streamline deployment of MHK projects. The recent announcement by 
the Federal Energy Regulatory Commission that it has signed a 
Memorandum of Understanding (MOU) with nine federal agencies to 
streamline the siting of transmission lines provides an excellent model 
that should be applied to the marine renewable energy sector. Federal 
agencies should also coordinate with states that are either investing 
in this technology or will play a role in permitting and siting 
projects, including Maine, New York, Florida, California, Oregon, 
Washington, and Hawaii.

Cost of Energy and Deployment

    Since 1998, I have engaged in an effort to advance utility-scale 
power generation technology for both wave energy and ocean currents. 
Based on this engineering, we are targeting a cost of energy for both 
technologies in the range of $0.10 to $0.12/kWh by 2015, a level that 
should enable commercialization, provided the U.S. government 
implements an effective program of incentives for research, 
development, and deployment, that supports marine renewables more 
tangibly and consistently than the federal support for wind energy. 
Meaningful rates of deployment (several gigawatts/year) should come in 
the 2015 2020 timeframe in line with the forecast potential of 23 GW by 
2025.\1\
---------------------------------------------------------------------------
    \1\ American Council on Renewable Energy (ACORE), ``The Outlook on 
Renewable Energy in America, Volume II: Joint Summary Report'', March 
2007; ACORE: Hydropower Industry Outlook, presentation to ``Renewable 
Energy in America: Phase II Market Forecasts and Policy Requirements,'' 
November 29-30, 2006.
---------------------------------------------------------------------------
    While this appears quite accelerated when compared to the history 
of wind, solar, and other renewable energy technologies, it must also 
be viewed in light of the advanced know-how, which is brought forward 
from marine engineering in shipbuilding, offshore oil, submersible 
vehicles, knowledge we now have of structural loads and control systems 
of wind turbines, the advanced numerical model design tools, and 
fabrication of large composite structures. This substantially reduces 
development costs and timeline. Furthermore, the urgency that is now 
upon us from climate change and energy security is driving development 
of marine renewable energy not just in America, but Europe as well. So 
we can expect a fast and competitive pace in technology advancement.

Learning from Wind Power Policy

    The U.S. renewable energy experiences shows that in a government/
industry partnership, the fundamental success factor is a sustained 
federal commitment in the face of changing or uncontrollable events, 
such as global oil price fluctuations or shifting national priorities 
that come with each new administration or political appointee.
    Perhaps the hardest public policy lesson that has come out of the 
American wind effort has been the repeated crippling effect, on the 
industry, from discontinuity in government support. The U.S. was in a 
clear leading position in wind power in the early 1980's due to the 
U.S. government's investment in renewable energy technologies, which 
started during the oil embargo in the 1970's. By the mid-1980's, 
government support ended and the U.S. wind industry virtually 
collapsed. A series of on again, off again programs followed. While the 
U.S. wind sector continued in its struggle for survival, strong 
European Union support stimulated rapid growth throughout the 
continent. Today, European companies enjoy the lion's share of the 
industry and have created several hundred thousand jobs, with a global 
wind industry generating upwards of $40 billion per year and growing at 
20% annually. We are now seeing massive support for wind energy in 
China, which has initiated ten 10,000 megawatt regions representing$200 
billion in industrial activity fully supported by the Central 
Government.
    While America had the foresight and made the investment to launch 
the wind industry, discontinuity in federal support has allowed other 
nations to capture a major share of the long-term industry/energy 
benefits. We must not let this happen with marine renewables; 
government policy should be implemented quickly and sufficiently to 
sustain this emerging industry until it reaches industrial scale.

Summary

    In summary, marine renewables offer enormous potential to stimulate 
our economy, address our environmental issues, and to provide an 
indigenous source of clean, renewable energy. I urge the Subcommittee 
to support a serious and sustainable federal investment to stimulate 
the continued development and ultimate deployment of U.S.-based marine 
renewables at home and around the world.
    Thank you again for the opportunity to appear before you today and 
I am happy to take your questions.






                    Biography for James G.P. Dehlsen

    James G.P. Dehlsen James G.P. Dehlsen, recognized as a pioneer and 
world leader in wind power and renewable energy, co-founded Clipper 
Windpower, Inc., in 2001 where he serves as Chairman of the Board of 
Directors. Clipper developed the breakthrough 2.5 MW Liberty wind 
turbine. Manufacturing started in 2007 and in 2008, 289 turbines were 
produced, representing 722 MW and 8% of the U.S. market. Clipper is in 
development on a 10 MW offshore turbine planned for testing in 2011.
    Mr. Dehlsen founded Zond Corporation in 1980 and served as its CEO 
and Chairman of the Board. Zond pioneered wind power technology, 
growing rapidly to become one of the largest global companies in wind 
turbine manufacturing, wind power project development and plant 
operation. With its acquisition by Enron Corporation in 2000, Mr. 
Dehlsen ended his Zond tenure. In 2002, General Electric purchased the 
wind business and technology for its entry into wind energy and is now 
a global leader in the industry.
    Recognition for his work in the wind industry includes the Lifetime 
Achievement Award by the American Wind Energy Association, and the 
Danish Medal of Honor conferred by His Royal Highness, Prince Henrik of 
Denmark. He was inducted into the Environmental Hall of Fame as a 
leading environmentalist and ``Father of American Wind Energy.'' Mr. 
Dehlsen has served as an advisor to the Department of Energy's Wind 
Program, testified at the first U.S. Senate hearings on global warming, 
and has served as a delegate to the Conference on Climate Change in 
Kyoto, Japan. Mr. Dehlsen has eight patents and seven patents pending.

    Chairman Baird. Mr. Collar.

 STATEMENT OF CRAIG W. COLLAR, P.E., SENIOR MANAGER FOR ENERGY 
   RESOURCE DEVELOPMENT AT SNOHOMISH PUBLIC UTILITY DISTRICT

    Mr. Collar. Good morning. Thank you, Mr. Chairman, Ranking 
Member Inglis and Members of the Committee. Again, I am Craig 
Collar from Snohomish County Public Utility District. Snohomish 
PUD is of course located in Washington State just north of 
Seattle. We are the 12th largest public utility in the country 
and we certainly appreciate the opportunity to provide 
testimony on this important topic today.
    As you are all aware, the marine energy industry really 
today is in its infancy, and as a result there is very little 
data available relative to the viability of marine energy 
moving forward. In our view, the best way to close that data 
gap is by the responsible deployment and close monitoring of 
commercial-scale turbines at appropriately selected sites. In 
fact, that is the very purpose and objective of our project in 
the Puget Sound. Our project is already recognized as one of 
the leading efforts in the country. We have an extremely strong 
project team. It includes the University of Washington, the 
Northwest National Marine Renewable Energy Center, EPRI, two 
national labs, and of course, the Department of Energy. In 
working with our partners, we have selected Admiralty Inlet as 
the most appropriate site for our project, and as you can see 
from the chart, Admiralty Inlet is the main entrance to Puget 
Sound, and it is important to note, it is a very large body of 
water. It is nearly three and a half miles across.
    In terms of tidal technology, we have selected OpenHydro as 
our partner for the project. OpenHydro is an Irish company. 
They have licensed tidal turbine technology that was developed 
here in the United States, and they are one of the few 
companies in the world to have already deployed and tested 
large-scale tidal energy devices and generated some data and 
learning from those. In fact, one was deployed last month in 
the Bay of Fundy up in Nova Scotia. The turbines utilized for 
our project will be very similar to those for that project and 
in fact are similar to the ones shown in the picture that you 
seen on the screen. I will also take this opportunity to note 
that the rotor on this turbine rotates at a very low speed, 
only in the range of 10 to 20 RPM.
    Now, we intend that our demonstration project will consist 
of two to three of these OpenHydro turbines connected to the 
electric grid. The project will overall be a very limited scale 
relative to the size of Admiralty Inlet. In fact, it represents 
less than five 100ths of a single percent of the cross-section 
of Admiralty Inlet. This figure shows to scale what a tidal 
turbine in a cross-section of Admiralty Inlet would look like. 
It is also important to note that Admiralty Inlet is the main 
shipping channel in and out of Puget Sound, so all commercial 
traffic, military traffic, naval traffic all goes through 
Admiralty Inlet. So by any standard and definition, Admiralty 
Inlet is a working waterway.
    Lastly, this figure depicts a bird's eye view of two 
turbines to scale in Admiralty Inlet. It might be hard to make 
out but the two small black dots that black arrow is pointing 
to, that is how large these commercial-scale turbines would be 
in Admiralty Inlet.
    To date our project has been granted approximately $2.5 
million in mostly federal funding and primarily from the 
Department of Energy. So the Department of Energy support both 
currently and ongoing will be absolutely critical to our 
project.
    With respect to environmental considerations, one of the 
benefits of working with OpenHydro is they have actual data 
from deployments of these devices elsewhere in the world, 
primarily in Europe, and in fact, their projects have been 
continuously videotaped since 2006 and to date there are 
absolutely no interactions with fish or marine mammals and the 
turbines while the turbines are operating.
    In terms of permitting, we are utilizing the FERC pilot 
process for our permitting effort. This process was developed 
by FERC specifically to facilitate the licensing of small, 
short-term, removable and carefully monitored projects just 
like ours while reducing the baseline study burden, thereby 
facilitating getting these projects into the water so we can 
gather data.
    Over the past three years we have conducted nearly 100 
formal project communications meetings with over 50 various and 
different stakeholder groups, importantly including of course 
tribal governments and resource agencies. Now, one of the key 
challenges that we face with resource agencies in particular is 
balancing the small size and scope of our project with the 
level of baseline information necessary to support permitting. 
It is clearly recognized that if those requirements are too 
burdensome, pilot projects like ours will never be able to 
advance into the water and progress in the United States will 
essentially be at a standstill.
    Now, we believe that some resource agencies perceive that 
their existing regulatory accountability really precludes their 
support of a pilot process-type approach. For instance, the 
National Marine Fisheres Service feels they have little 
latitude to accept anything less than very detailed and 
rigorous baseline studies in order to support their analysis. 
Well, in fact, we are conducting in the neighborhood of $1 
million of pre-installation and baseline studies just for our 
small research and development project and to date National 
Marine Fisheries has been reluctant to state really with any 
certainty that even that will be sufficient. Because these 
studies represent a very significant cost in advance of any 
certainty of actually getting a license for the project, it is 
very easy to see how this could easily prevent even leading 
research and development projects like ours from moving 
forward.
    So in conclusion, it seems clear that so long as key 
resource agencies are not enabled to effectively balance the 
facilitation of renewable energy with their existing 
responsibilities, the advancement of renewable energy in this 
country is unlikely to progress at a pace sufficient to meet 
our energy and environmental challenges.
    Well, thank you again for the opportunity to appear before 
you today. I certainly would be happy to answer any questions.
    [The prepared statement of Mr. Collar follows:]

              Prepared Statement of Craig W. Collar, P.E.

    Thank you Mr. Chairman, Ranking Member Inglis, and Members of the 
Committee for the opportunity to appear before you to provide testimony 
on this important topic. I am Craig Collar, Senior Manager of Energy 
Resource Development for the Snohomish County Public Utility District. 
Snohomish PUD is located in Washington State just north of Seattle and 
serves approximately 318,000 electric customers and nearly 20,000 water 
customers. Our service territory covers over 2,200 square miles, 
including both Snohomish County and Camano Island.

Introduction

    Snohomish PUD is the twelfth largest publically owned utility in 
the nation and is located on the shores of the Puget Sound estuary. We 
believe there is significant potential to generate clean, renewable, 
environmentally benign, and cost effective energy from tidal flows at 
selected sites in the Puget Sound, and that successful tidal energy 
demonstration in the Sound may enable significant commercial 
development in the Sound and elsewhere resulting in important benefits 
for both the northwest region and the country. In order to meet the 
demands of a growing service load, as well as a state renewable 
portfolio standard, Snohomish is conducting exceptionally aggressive 
conservation and energy efficiency programs. Additionally, in just the 
past few years, Snohomish PUD has acquired the highest percentage of 
wind energy of any utility in the Northwest and is actively pursuing 
geothermal energy as well as solar, biomass and other clean resources. 
We believe that tidal energy also has the potential to contribute 
significantly as part of a richly diversified clean energy portfolio, 
but that in-water testing is required to address associated 
uncertainties in performance, cost, and environmental effects. 
Snohomish has made significant progress towards the deployment of such 
an in-water testing program, but while many barriers to this research 
and development effort have been overcome, substantial challenges 
remain to the successful deployment of tidal energy technology in our 
region.
    The marine energy industry today remains in its infancy; even in 
the United Kingdom which has largely led the world in marine energy 
development and testing, marine energy projects are limited to a small 
handful of fairly recent efforts. As a result, little data relative to 
the technical, economic, and environmental viability of ocean energy 
generation has yet been established. Our view is that the most 
effective way to address this data gap is via the responsible 
deployment, testing and monitoring of utility-scale ocean energy 
devices at appropriately selected sites--this in fact is the objective 
of the Snohomish PUD Puget Sound Tidal Energy Demonstration Project. 
The data from this project will inform Snohomish PUD's potential 
development of other sites in and around Puget Sound, as well as 
provide important information for other marine energy developers in the 
nation.

Snohomish PUD Puget Sound Tidal Energy Demonstration Project

    The purpose of the Snohomish tidal project is to gather data by 
conducting the deployment, demonstration, and testing of tidal energy 
conversion technology in the Puget Sound. The project is recognized as 
one of the leading marine energy efforts in the country, has 
substantial support in the region, and has built an exceptionally 
strong project team. Snohomish PUD, in partnership with the U.S. 
Department of Energy (DOE), the University of Washington (UW), the 
Northwest National Marine Renewable Energy Center (NNMREC), and the 
Electric Power Research Institute (EPRI) has conducted a thorough 
evaluation of potential tidal energy sites in the Puget Sound, and has 
selected Admiralty Inlet (Figure 1) as the most appropriate location to 
establish a demonstration project.




    Snohomish PUD and its partners have conducted an extensive suite of 
studies both to establish the suitability of the Admiralty Site for 
tidal energy generation, as well as to characterize important 
environmental characteristics of the site. To date these activities 
have included:

          Acoustic Doppler current profiling and tidal current 
        modeling

          Detailed bathymetry measurements and geotechnical 
        evaluation of the seabed

          Remotely operated vehicle videography of the seabed

          Water quality measurements

          Background acoustics measurements

          Multiple hydro-acoustic surveys to determine the 
        presence, location, and abundance of fish and other marine life

          Passive acoustic monitoring to detect marine mammal 
        echolocation/vocalization

          Passive monitoring for acoustically tagged fish and 
        marine mammals

          Southern Resident Killer Whale (SRKW) observation, 
        tracking, and behavior assessment

          Tidal energy conversion technology assessment and 
        selection

          Preliminary plant design and grid interconnection 
        study

          Navigation, fishing and social considerations

    Snohomish PUD engaged with over 30 tidal energy technology 
developers worldwide as part of its assessment and selection program. 
This effort included visits with the leading technology developers in 
the U.S., Europe, and Canada, as well as to the European Marine Energy 
Center (EMEC) in the Orkney Islands, Scotland. Following a detailed 
evaluation process Snohomish PUD selected OpenHydro as its technology 
partner for the demonstration plant. OpenHydro is an Irish energy 
technology company whose business is the design and manufacture of 
marine turbines for generating renewable energy from tidal currents. 
The OpenHydro turbine technology was developed in the United States in 
the early 1990's and the rights were subsequently licensed by OpenHydro 
in 2004. During 2006 OpenHydro completed the installation of the first 
tidal turbine at EMEC. This installation, mounted on a surface piercing 
testing rig, is shown in Figure 2.




    In May 2008 OpenHydro successfully completed the connection of the 
test structure to the electricity distribution network, making 
OpenHydro the first company to deliver tidal stream power to the UK 
national grid. Since that time OpenHydro has successfully deployed two 
additional turbines on completely submerged gravity bases; one at EMEC 
and one in November 2009 in the Bay of Fundy, Nova Scotia. The turbines 
utilized for the Puget Sound demonstration plant will also be deployed 
on completely submerged gravity foundations (as shown below in Figure 
3) similar to those used for the EMEC and Bay of Fundy efforts.




    Snohomish envisions that the demonstration plant will consist of 
one or two OpenHydro turbines as large as 16 meters in diameter located 
about 1 kilometer offshore in approximately 60 meters of water depth. 
Power would be transferred to the electric grid on Whidbey Island via a 
seabed cable. The cable deployment will utilize horizontal directional 
drilling so as to avoid disturbing nearshore habitats. No anchor 
placements, pilings, or surface-piercing structures would be involved 
with the turbine installations or cable. In fact, both the turbines and 
their foundations are specifically designed to be completely removable 
for scheduled maintenance or other needs. The project would be of very 
limited scale relative to Admiralty Inlet, representing less than 0.05% 
of the Inlet's cross-section. The small scale and temporary nature of 
the project significantly diminish the likelihood of adverse 
environmental effects. Likewise, the water depth at the site and its 
location outside of the shipping channel mitigates navigational 
concerns. Figure 4 depicts a tidal turbine to scale in a cross-section 
of Admiralty Inlet.




    The OpenHydro turbine consists of a horizontal axis rotor with a 
single moving part and power take-off through a direct drive, permanent 
magnet generator. It is principally comprised of the rotor and the 
stator; there is no requirement for a gearbox. The design incorporates 
several key features to avoid or minimize environmental risk:

          No requirement for oil/grease lubrication.

          Rotor blade tips are retained within the outer 
        housing.

          Slow rotational speed.

          Ability for the rotor to be stopped quickly and 
        remotely

          Cavitation prevented by design at specified 
        deployment depth.

          Deployment method and gravity base design eliminate 
        need for drilling or piling operations, as well as facilitate 
        potential relocation and complete removal of both the 
        foundation/base and the turbine.

    To date, the Snohomish PUD project has been granted approximately 
$2.5 million in funding to support technical design and environmental 
study efforts. Funding has been provided by the Bonneville Power 
Administration, energy and water federal appropriations, and most 
substantially by the Department of Energy's (DOE) Advanced Water Power 
Projects program. Specifically, Snohomish PUD has received two separate 
grants from the DOE to support project design and environmental 
studies, and has developed partnerships with numerous entities to carry 
out this work. In addition to the previously mentioned UW, NNMREC, and 
EPRI partnerships, Pacific Northwest National Laboratory and the 
National Renewable Energy Laboratory are also on the Snohomish team.
    Snohomish PUD is also collaborating with the U.S. Navy's Puget 
Sound KHPS Project, which is being conducted with Verdant Power. The 
KHPS project plans for a test deployment of Verdant Power turbines for 
a period of approximately one year. The proposed Navy project is 
located approximately six miles south of the Snohomish PUD project 
location as shown in Figure 5 below. The Navy has chosen the 
southernmost of the two potential sites indicated for their project.




    The KHPS project will be interconnected to facilities at Naval 
Magazine Indian Island and will consistent of 3-6 Verdant Power 
turbines as shown in Figure 6. Snohomish PUD and the Navy have 
conducted some joint studies to share and reduce overall costs, and we 
are actively working to share information and collaborate in developing 
project operations and monitoring plans.




    In addition to the Snohomish and Navy projects, there is also 
consideration being given to the potential establishment of a National 
Tidal Energy Facility (NTEF) in the Puget Sound. This facility would 
utilize the infrastructure that will remain at the KHPS project after 
the Verdant turbines have been removed, and would provide a 
characterized, permitted site for test and demonstration of tidal 
energy systems. The NTEF would be device-independent and would provide 
consistent, comparable performance data for a range of tidal energy 
devices and systems. The NTEF would provide developers with a permitted 
test site so that their resources can be better focused on technology 
development and not on permitting actions. Because the Snohomish and 
KHPS projects will both be in progress prior to the potential 
development of the NTEF, the data (technical, environmental, social, 
etc.) generated by these earlier projects should inform the ultimate 
design, utility and viability of developing the NTEF in the Puget 
Sound.
    Outside the Puget Sound, Oregon State University (OSU), as a NNMREC 
partner, is working primarily to advance the wave energy industry. This 
includes improved wave energy forecasting for both offshore and near 
shore locations, device and array optimization methods and models, 
environmental effects evaluation, and the development of a mobile test 
berth for full scale wave device testing. Testing and evaluation will 
identify best practices for maintenance and quality control of wave 
energy systems and refine wave energy power measurements. The State of 
Oregon has invested significantly in wave energy including the 
formation of the Oregon Wave Energy Trust and designation of State 
capital funds to OSU as direct investment in the development of the 
NNMREC.

Environmental Considerations and Studies

    While they are limited in scope, existing data and assessments 
regarding currently operating and proposed tidal projects are notable 
in that they document no substantial or unanticipated environmental 
risk. Scotland's Orkney Islands (where EMEC and the OpenHydro turbine 
are located) represent a very ecologically diverse and productive 
marine ecosystem which is home to a number of fish and marine mammal 
species. Fish and shellfish species include: mackerel, herring, 
haddock, cod, monkfish, several flat fish species, lobster, crab, and 
scallops. Marine mammal species include: otters, seals, minke whale, 
harbor porpoise, white-sided dolphin, common dolphin, killer whale, and 
pilot whale. Leatherback turtles also regularly visit Scottish waters 
between August and November. Operation of the EMEC OpenHydro turbine 
installation has been continuously videotaped while in operation since 
2006 and to date no marine life incidents have been recorded. Review of 
the videotape data indicates that fish and marine mammals avoid and do 
not interact with the device while it is rotating, but as might be 
expected some fish species do aggregate downstream of the turbine at 
tidal current velocities too low for the turbine to rotate (Figure 7).




    During periods of tidal current velocity energetic enough to turn 
the turbine's rotor the fish have been observed to leave the area 
rather than expend energy to maintain position against the flow of the 
tidal currents. It is also important to note that the flow dynamics of 
the turbine are such that the device will not ``entrain'' fish in any 
conventional hydropower turbine sense, but rather fish or other objects 
in the tidal flow would be drawn through the center opening or around 
the outside of the device. The previously noted OpenHydro installation 
in the Bay of Fundy was recently evaluated in a comprehensive 
Environmental Assessment report to Canadian federal and provincial 
governments; the likely effects of the project were found to be limited 
in scope and duration. While these and similar assessments do not by 
themselves document a lack of environmental effects for the Admiralty 
Inlet Pilot Project, Snohomish PUD believes they provide important 
context that must be considered in developing study plans and 
environmental analyses. Admiralty Inlet supports or includes designated 
critical habitat for eight ESA-listed species managed by the National 
Marine Fisheries Service (and two managed by the US Fish and Wildlife 
Service) and supports a wealth of unlisted marine resources as well. As 
is the case for the entirety of Puget Sound, Admiralty Inlet is 
designated as Essential Fish Habitat for a number of species and 
includes several Habitat Areas of Particular Concern. It is important 
to note that Admiralty Inlet also includes a major shipping lane 
utilized by essentially all commercial and military traffic in and out 
of Puget Sound, substantial shoreline development, and a busy ferry 
route operating directly to the south of the project site.
    Snohomish PUD is conducting environmental analyses by assessing 
potential mechanisms of effect for the species known or believed to 
occur in the project area based on existing information and a suite of 
pre-installation studies. Snohomish is also developing a significant 
monitoring effort to determine if unacceptable impacts occur or are 
likely to occur. An approach focused on monitoring enables direct 
evaluation of the primary unanswered question of how marine life will 
interact with the turbines. The NNMREC has been a key partner in the 
design and execution of project pre-installation studies conducted so 
far. An instrumentation platform designed by the University of 
Washington Applied Physics Laboratory to facilitate the study of tidal 
sites is shown in Figure 8. This platform is currently deployed on the 
seabed at the project site and has already delivered important 
information during the several months that it has been in service.




    Because there is not yet any subsea cable run to the deployment 
site, the platform must be retrieved and redeployed approximately every 
three months to download collected data and replace batteries. While 
pre-installation studies have essentially been completely developed and 
are underway, development of studies intended to monitor the project 
once it is operating continues. Potential project effects identified by 
Snohomish include modifying local habitat by adding new structure, 
blade strike or collision and similar ``near field'' effects, altered 
behavior patterns of some marine mammals or fish, modification of the 
acoustic or hydrodynamic environment, and the accumulation of derelict 
fishing gear. The goal of Snohomish's proposed monitoring efforts is to 
detect and describe in detail the potential for interactions between 
the project and marine species.
    The specific objectives of Snohomish's proposed monitoring efforts 
are:

          Assess near-turbine presence and distribution of 
        marine species;

          Assess near-turbine fish behavior;

          Identify near-turbine species composition;

          Evaluate the Project's acoustic signature;

          Evaluate the Project's effects on hydrodynamics; and

          Monitor and remove derelict gear.

          Evaluate potential effects of construction, 
        decommissioning, or maintenance on aquatic species and water 
        quality.

    To address these objectives, Snohomish proposes to pursue the 
following monitoring efforts:

          Near-turbine monitoring and identification of aquatic 
        species;

          Acoustic monitoring;

          Hydrodynamic effects monitoring;

          Derelict gear monitoring and removal; and

          Construction monitoring.

    Snohomish believes the methods described below represent the best 
current practices for evaluating presence, distribution, and behavior 
of mobile marine species. At the same time, both hydrokinetic and 
hydroacoustic technologies are evolving at a rapid pace that makes it 
likely there will be significant technological advances and new 
information regarding hydrokinetic turbines during the course of pre-
installation licensing efforts for the project. As a result, there is 
an expectation that changes will occur over time and will be addressed 
through an adaptive management program.
    Numerous technical hurdles will need to be considered and addressed 
as part of the successful implementation of the monitoring plan. Chief 
among these are a complex of questions related to selection, placement, 
deployment, and retrieval of monitoring gear. For example, many of the 
sonar transducers and cameras envisioned in the monitoring plan will 
require periodic maintenance, whether scheduled (e.g., lens cleaning) 
or unscheduled (e.g., flooded casings). Servicing this equipment likely 
will require bringing it to the surface, which presents substantial 
challenges related to physical and electrical connections with data and 
power cables, subsequent redeployment of the gear, correct orientation 
and calibration of redeployed equipment, and similar issues. Snohomish 
will pursue a continuing dialogue with technology providers as to 
potential methods of addressing and testing each of these issues; 
however it is important to note that no method to address these 
challenges is currently identified, which may substantially affect 
Snohomish's monitoring abilities and technology decisions.
    Snohomish believes that many of the technical issues described 
above, as well as data interpretation associated with the monitoring 
effort, will warrant review and discussion by a technical working 
group. This group would oversee and evaluate results of pre-
installation and monitoring studies. These results would be used in 
combination with an understanding of the ecosystem and information from 
other relevant sources to make adjustments to study methods as 
appropriate, and to manage aspects of the project operation in a manner 
that avoids or minimizes unexpected or undesirable impacts on 
resources. The adaptive management process allows for immediate action 
where necessary to address a critical adverse effect of the project 
should any occur. Snohomish envisions this as a consensus-based group 
that would include representatives from federal and state resource 
agencies, tribal governments, and other appropriate stakeholders. It 
would administer key topics related to the project, including:

          Consideration of results from pre-installation 
        studies and monitoring efforts and subsequent adjustments to 
        study methods as appropriate.

          Development of monitoring thresholds for inclusion in 
        Project license conditioning.

          Evaluation or initiation of potential mitigation or 
        impact avoidance measures.

    Snohomish believes that the environmental monitoring plan 
represents a critical and particularly challenging element of the 
overall project. Close collaboration with tribes, agencies, and other 
stakeholders; technical support from NNMREC and the Pacific Northwest 
National Lab; and the ongoing and strong support from the DOE's 
Advanced Water Power Projects program will all be important to the 
success of the effort.

Permitting Process, Consultation and Outreach

    Snohomish PUD is utilizing the Federal Energy Regulatory Commission 
(FERC) Hydrokinetic Pilot Plant Licensing Process (Pilot Process) for 
the Admiralty Inlet project. The Pilot Process was proposed by FERC in 
late 2007 specifically to facilitate the licensing of small (rated 
capacity of less than 5 megawatts), short-term, removable, and 
carefully-monitored projects intended to test marine energy 
technologies, sites, or both. FERC recognized that there are a number 
of barriers to realizing the potential of these new technologies but 
that the primary barrier may be that they are as yet unproven, and that 
more data was necessary prior to any large scale commercial 
deployments. The purpose of the Pilot Process is to provide a means of 
testing new technology, including interconnection with the electric 
grid. The process aims to minimize both the up-front baseline study 
burden and the risk of adverse environmental effects by requiring a 
rigorous project operations monitoring effort, as well as project 
shutdown and removal if significant adverse environmental effects occur 
and cannot be mitigated.
    Snohomish was issued a preliminary permit from FERC for the 
Admiralty Inlet site on March 9, 2007, though as early as July of 2006 
Snohomish had informed key stakeholders (tribes, state agencies, 
federal agencies, NGO's, communities, etc.) of its intention to pursue 
tidal energy exploration in the Puget Sound. An initial project meeting 
was held with numerous stakeholders (tribes, state agencies, federal 
agencies, NGOs) on February 23, 2007 to formally introduce the project, 
answer questions, and discuss the consultation approach going forward. 
During the approximately two and one-half years since this initial 
meeting Snohomish has conducted nearly 90 formal project communication 
meetings with various stakeholders. These have included formal 
consultation meetings, community town hall meetings, conference 
presentations, NGO meetings, and more. Groups who have been engaged 
through these efforts have included:

          Washington Department of Ecology

          Washington Department of Fish and Wildlife

          Washington Department of Natural Resources

          Washington Governor's Office of Regulatory Assistance

          Washington Department of Community, Trade, and 
        Economic Development

          Washington State Attorney General's Office

          Washington Energy Facility Site Evaluation Council

          U.S. Department of Energy

          U.S. Navy Region Northwest

          Naval Station Everett

          Naval Magazine Indian Island

          Federal Energy Regulatory Commission

          National Marine Fisheries Service

          U.S. Army Corps of Engineers

          U.S. Department of Fish and Wildlife

          U.S. Environmental Protection Agency

          U.S. National Park Service

          U.S. Coast Guard

          Puget Sound Pilots

          American Waterways Operators

          Puget Sound Harbor Safety Committee

          Washington State Ferries

          Federal Ocean Research and Resources Advisory Panel

          Puget Sound Partnership

          Tulalip Tribes of Washington

          Suquamish Tribe

          Skagit River System Cooperative

          Pacific Northwest National Laboratories

          The National Renewable Energy Lab

          The University of Washington

          Washington State University Energy Extension

          Seattle Pacific University

          People for Puget Sound

          The Orca Network

          The Whale Museum

          The Sea Mammal Research Unit

          Beam Reach Marine Science and Sustainability School

          Northwest Straits Conservation Alliance

          Fort Casey State Park

          Ebey's Landing National Historic Preserve

          Puget Sound Anglers

          Regional county Marine Resources Committees

          Regional city councils

          Numerous local community and service groups

    As indicated by this level of engagement, Snohomish considers 
stakeholder outreach and consultation to be a critical element of 
project success, and believes that these efforts have been invaluable 
in keeping stakeholders informed and in maintaining open lines of 
communication for feedback and dialogue. Additionally and where 
practical, Snohomish has collaborated with regional stakeholders and 
marine experts to design and carry out certain studies. As one example, 
Beam Reach Marine Science and Sustainability School, the Whale Museum, 
and the Orca Network, all strong regional stewards for killer whales in 
Puget Sound, worked with Snohomish to design the project's Marine 
Mammal Study Plan and are currently conducting the study in partnership 
with the Sea Mammal Research Unit. The Sea Mammal Research Unit is 
associated with the University of St. Andrews in Scotland, and is 
currently engaged with efforts to study sea mammal interactions with 
tidal turbines at projects in the UK.
    As required by FERC, Snohomish submitted a pre-application document 
(PAD) for the project in January 2008. The information provided in the 
PAD is intended to enable stakeholders interested in participating in 
the licensing process to become familiar with the project before any 
formal licensing procedure is initiated and assists these participants 
in identifying potential resource issues. The Snohomish PAD consisted 
of over 600 pages of information related to the project and project 
site and drew upon more than 700 different information sources to 
compile. As part of the PAD development effort, Snohomish reached out 
to 20 Indian tribes and organizations, 11 federal agencies, 9 state 
agencies, 13 Washington ports, 9 counties, 5 municipalities, and 49 
non-governmental organizations representing environmental, recreation, 
and business interests.
    With respect to formal permitting requirements, the following is a 
list of the potential regulatory authorizations, licenses, permits, or 
regulatory approvals that may ultimately be required prior to 
constructing and operating a hydrokinetic project within Washington 
State waters:

          License from the Federal Energy Regulatory 
        Commission.

          Clean Water Act Section 401 Water Quality 
        Certification from the Washington Department of Ecology.

          Marine Mammal Protection Act incidental take permit 
        from the National Marine Fisheries Service.

          Endangered Species Act (ESA) compliance through ESA 
        Section 7 consultation with the National Marine Fisheries 
        Service and U.S. Fish and Wildlife Service.

          Essential Fish Habitat Program review from the 
        National Marine Fisheries Service pursuant to the Magnuson-
        Stevens Fishery Conservation and Management Act.

          National Historic Preservation Act Section 106 
        compliance through consultation with the Washington State 
        Historic Preservation Officer, as well as the Tribal Historic 
        Preservation Officer of any affected federally recognized 
        Indian tribe.

          Migratory Bird Treaty Act permit from U.S. Fish and 
        Wildlife Service.

          Clean Water Act Section 404 permit from the U.S. Army 
        Corps of Engineers.

          Rivers and Harbors Act Section 10 permit from U.S. 
        Army Corps of Engineers.

          U.S. Coast Guard review for navigation impacts under 
        the Ports and Waterways Safety Act and Coast Guard and Maritime 
        Transportation Act of 2006.

          Water right for a non-consumptive appropriation of 
        waters of the State.

          Hydraulic Project Approval from Washington Department 
        of Fish and Wildlife.

          Aquatic land lease from Washington Department of 
        Natural Resources.

          National Marine Sanctuary permit (for projects 
        located in National Marine Sanctuaries--will not apply to 
        Admiralty Inlet).

          Minerals Management Services (MMS) lease or right-of-
        way for projects located on the federal Outer Continental Shelf 
        (OCS). If a portion of the project is located outside of waters 
        of Washington State (or Oregon State) on the federal OCS, then 
        authorization from the MMS may be required. (Will not apply to 
        Puget Sound)

          Coastal Zone Management Act (CZMA) Consistency 
        Certification from Washington Department of Ecology. Under 
        Washington's CZMA program, activities that require federal 
        approval and affect any land use, water use or natural resource 
        of the State's coastal zone must comply with the enforceable 
        policies within the six laws identified in the CZMA program 
        document. The six laws are:

                  the Shoreline Management Act (including local 
                government shoreline master programs);

                  the State Environmental Policy Act;

                  the Clean Water Act;

                  the Clean Air Act;

                  the Energy Facility Site Evaluation Council; and

                  the Ocean Resource Management Act.

    A key challenge faced by Snohomish and project stakeholders, 
particularly resource agencies, is balancing the small size and scope 
of the Admiralty Inlet Pilot Project with the level of baseline 
information necessary to evaluate the project and satisfy permitting 
requirements. As noted earlier, the FERC Pilot Process minimizes the 
baseline study burden so as to facilitate the deployment and rigorous 
testing of these new technologies, thereby generating the data 
necessary to fill existing information gaps. FERC and others recognized 
that if baseline information requirements are too burdensome, pilot 
projects will never advance into the water and progress in the U.S. 
will be at a standstill. We agree with the position of FERC that any 
incremental additional risk represented by the Pilot Process approach 
is more than adequately contained by the stringent safeguards within 
the Pilot Process license, i.e. the license only applies to small, 
temporary, closely monitored facilities which are required to be shut 
down and/or removed if significant adverse environmental effects occur 
and cannot be mitigated.
    Some resource agencies, however, perceive that their existing 
regulatory accountability precludes their full support of the FERC 
Pilot Process. For example, we understand that National Marine 
Fisheries Service (NMFS) generally supports the appropriate development 
of hydrokinetic projects in United States waters. Nonetheless, given 
the presence of endangered salmon and killer whales in Puget Sound, 
NMFS feels that they have little latitude to accept anything less than 
extremely detailed and rigorous studies in order to support their 
environmental analysis. While Snohomish has conducted or committed to 
approximately $1 million in pre-installation and baseline studies (the 
data from which will add to the already very substantial body of 
environmental information available for the Admiralty Inlet site) for 
the pilot project, NMFS is reluctant to state with any certainty that 
this baseline information is sufficient. Given that these studies 
necessarily incur significant cost prior to any certainty of actually 
receiving a plant license, it is not difficult to see how the study 
burden could easily prevent even small research and development 
projects like the proposed Admiralty Inlet effort from going forward. 
It seems clear that so long as key resource agencies are not enabled to 
effectively balance the proactive facilitation of renewable energy 
efforts with their existing responsibilities, the progress of renewable 
energy in the U.S. will advance at a pace unlikely to meaningfully 
address our country's energy and environmental challenges.
    Thank you again for the opportunity to appear before you today to 
discuss this important topic. I would be happy to answer any questions.

                  Biography for Craig W. Collar, P.E.

    Mr. Collar has 25 years of operations and program/project 
leadership experience spanning a variety of technical and general 
management assignments. Mr. Collar has been accountable for all 
business results (safety, quality, energy/environmental, production, 
cost, asset management, capital projects, human resource development) 
for several major manufacturing departments (up to $60 million annual 
operating budget) including the leadership of groups of up to 170 team 
members in the production of a variety of consumer products. Mr. Collar 
also has multi-year experience leading the overall operation and 
maintenance of a 50 MW cogeneration facility as well as that for a 
naval submarine nuclear propulsion plant.

Experience

          Senior Manager-Energy Resource Development, Snohomish 
        County Public Utility District No. 1, Everett, WA. (2006-
        Present).

          Engineering and Operations Management, Kimberly-Clark 
        Corporation, Fullerton, CA & Everett, WA. (1990-2006).

          Nuclear Submarine Officer, U.S. Navy, San Diego, CA 
        (1985-1990).

Education and Certification

          Master of Business Administration, Colorado State 
        University, Fort Collins, CO.

          Bachelor of Science in Mechanical Engineering, 
        Montana State University, Bozeman, MT.

          EAN/Six Sigma and Strategic Organizational Leadership 
        Certificates, Villanova University, Villanova. PA.

          Global Management Certificate, Thunderbird--The 
        Garvin School of International Management, Glendale, AZ.

          Utility Executive Leadership Certificate, Willamette 
        University, Salem, OR.

          U.S. Naval Officer Nuclear Power Training, Orlando, 
        FL and Idaho Falls, ID (a one-year graduate level program).

          Registered Professional Mechanical Engineer.

    Chairman Baird. Thank you.
    Ms. Schneider.

   STATEMENT OF GIA D. SCHNEIDER, CO-FOUNDER AND CEO, NATEL 
                          ENERGY, INC.

    Ms. Schneider. Thanks very much, Chairman Baird, Ranking 
Member Inglis and members of the committee.
    I am founder and CEO of a company called Natel Energy and 
we are commercializing a new low-head hydropower technology 
that has the potential to cut the turbine plus generator costs 
of developing low-head projects by as much as 50 percent, and 
at the same time, we look to enable safe downstream fish 
passage.
    Low head is a term of art used in the hydropower industry 
to generally reference the amount of drop that you have 
available to generate energy at any particular site, and when 
we say low head, our particular focus is on sites that have 
greater than five feet but less than 20 feet of drop. The 
reason why we feel this is a really interesting place to focus 
is that there is actually quite a large amount of potential in 
low head in this country. According to a DOE study that was 
done back in 2004 that categorized separately low-head versus 
high-head potential in the country, there are about 71 
gigawatts of remaining undeveloped low-head potential in this 
country, and in comparison, that represents less than two 
percent of the total that has been developed. There are about 
73 gigawatts total, and about 71 remain to be developed. That 
study actually did not even quantify an additional important 
source of low-head hydropower that exists within our existing 
manmade structure like irrigation districts, conduits and 
canals. There are thousands of miles of these existing canals, 
primarily in the western United States. These canals all have 
thousands of existing drop structures. Those drop structures 
were built specifically to dissipate energy to help make sure 
that the water velocities in those canals remained within the 
operating constraints of the canals. That is the place where we 
could actually, in a pretty straightforward fashion, if we had 
effective technology, retrofit those sites to capture energy 
and bring that energy onto the grid.
    The technical challenge is that, you know, the amount of 
power than you can generate at any given site is defined by the 
amount of head and the amount of flow. And the particular 
technical challenge that has prevented the development of low 
head in this country so far is that the technology that exists 
today is just very expensive. When you get down to heads that 
are less than 20 feet, the design constraints mean that using 
conventional technology just becomes way too expensive to 
develop these sites and so that is where we focus most of our 
innovation.
    There also are environmental concerns that have to be 
addressed, and just because you have a site that has a small 
amount of power output or is low head in nature does not 
necessarily mean that that these sites are low impact, so 
therefore, responsible siting is absolutely a factor. This is 
actually where we think manmade conduits and canals could play 
a really interesting role going forward because in a lot of 
those settings you could incur very minimal incremental 
environmental impact to develop those sites. Many of those low 
existing drops are close to roads, close to transmission lines, 
doesn't require getting major new transmission infrastructure 
to be able to bring this power online.
    When you move out of existing canals and move into streams, 
your environmental issues absolutely do go up. So when we look 
at the 40,000 existing low dams in this country, most of which 
also don't produce power, we have to start to look much more 
closely at environmental issues with respect to fish passage 
and water flow level fluctuations. This is also an area where 
development of monitoring technology and tools and R&D support 
into quantifying the environmental impact of putting low-head 
hydropower on these existing structures would be very valuable. 
Beyond that, when you start to look at putting multiple 
installations in series, multiple low-head installations in 
series looking at multiple low-head dams on a particular river 
or stream, the combined impact of those installations also has 
to be evaluated, and that is another very important area for 
focus for environmental impact study and research.
    So what are some of the ways to catalyze innovation in this 
space? Well, we actually have received DOE phase I SBIR grants 
in the latest stimulus bill funding round and we will use that 
to focus on optimizing blade design in our turbines going 
forward. This kind of support is absolutely critical. The 
technology that we are developing is actually coming in at an 
entry cost point that is pretty cost-competitive already. Right 
now we look at about eight cents a kilowatt-hour, so we are 
already, you know, well within the range of where we can start 
to actually develop sites today. At the same time, we think we 
can get that down to about five cents a kilowatt-hour. And 
further support from the DOE, further grant support to look at 
R&D specifically into components to make this technology and 
technology such as ours most cost-effective would be greatly 
used.
    I think the bigger barrier is actually coming on the 
environmental side. In the conduit and in manmade canal systems 
area, the challenges are a lot less from the environmental side 
and the environmental impacts are ones in which, as least 
certainly as we are finding talking to irrigation districts, we 
can start to get a handle on a lot of that. But as we look to 
move into streams, the studies that need to be done to 
effectively go through the licensing process to make sure that 
sites are chosen responsibly and to provide the data that is 
necessary in the licensing process becomes a lot more great, 
the burden becomes much greater. And so this is an area where 
we think additional funding through the DOE or through other 
programs that could focus on helping to collect standardized 
environmental impact assessment data and make that data 
available would be very useful.
    Finally, as private companies such as ourselves and other 
companies in this space, in the hydrokinetic and also in marine 
technology space as well, a lot of us are spending a fair 
amount of our own dollars doing a lot of these kinds of 
environmental assessments and so some form of incentive in the 
form of perhaps a tax credit could be very useful. It would 
help us. We are going to go forward. We have--we make the 
business cases through our investors to invest in this 
technology as they look forward to the role that these kinds of 
technologies could play in addressing our clean energy future. 
We are gathering private support, but at the same time, if we 
could recoup some sort of return or some sort of offset for 
that investment that we are making on our own, that would be 
helpful in itself.
    In summary, a little bit different from the focus from the 
rest of the panelz: Our focus is specifically to talk about 
low-head potential. We believe low-head hydropower is actually 
the low-hanging fruit, one of the true low-hanging fruit 
renewable energy opportunities in this country where we can 
bring, distribute renewable baseload power online relatively 
quickly. Thanks very much.
    [The prepared statement of Ms. Schneider follows:]
                 Prepared Statement of Gia D. Schneider

Introduction

    Good morning Chairman Gordon, Ranking Member Hall, and members of 
the Committee and Subcommittee. My name is Gia Schneider and I am a co-
founder and the chairman and CEO of Natel Energy, Inc. I greatly 
appreciate the opportunity to share Natel Energy's story with the 
Committee, and to discuss the roles of the federal government and 
private industry in developing technologies suitable for low head 
hydropower energy generation.

Natel Energy Background

    Natel Energy, Inc. is a California and Texas-based company that is 
commercializing a new hydropower technology called the Linear 
Hydroengine or SLH, which could cut the cost of low-head turbines by as 
much as 50%. Our mission is to maximize the use of existing water 
infrastructure in the U.S. to bring on-line cost-effective, 
distributed, baseload, renewable energy from low head hydropower 
sources with minimal negative environmental impacts. Indeed, in certain 
cases, we believe the potential exists to implement projects that both 
deliver renewable energy and create positive environmental co-benefits. 
For example, we are evaluating the potential to incorporate renewable 
energy into low dams in the Midwest whose primary purpose is to create 
wetlands that trap nutrient pollutants which are a primary cause of the 
dead zone in the Gulf of Mexico. If we can successfully incorporate low 
head hydropower generation into some of these projects, we could create 
an additional revenue source for Midwest farmers, bring new renewable 
energy onto the grid, and reduce nutrient pollution.
    A patent on Natel Energy's core technology was recently approved by 
the U.S. Patent Office under application number 11/695,358. Natel's 
technology can be packaged into both low head and hydrokinetic 
configurations. We have chosen to focus on the low head market for 
several reasons. First, the economics of low head settings tend to be 
more favorable than hydrokinetic ones simply because the energy density 
is greater where a site has even a small amount of head. Second, there 
are numerous settings in the U.S. where existing low head 
infrastructure could be retrofitted to capture energy that is currently 
wasted. These opportunities include low drops and diversion dams in 
irrigation canals, water treatment plant outfalls and the approximately 
40,000 existing dams less than 25 feet tall in the U.S., the majority 
of which do not produce power. Many of these sites with existing 
infrastructure are relatively close to roads and transmission lines; 
and would incur minimal additional environmental impact by virtue of 
being developed.
    In-line with our focus on low head potential in existing 
infrastructure, our first pilot commercial project is with an 
irrigation district called the Buckeye Water Conservation and Drainage 
District in Arizona. The project is near the town of Buckeye, which is 
west of Phoenix, Arizona. We entered into a joint development agreement 
with the irrigation district in 2008, and filed for a FERC Exemption 
from Licensing in early 2009. The project received the FERC Exemption 
in September 2009; and installation has commenced this week. We hope to 
be online and generating electricity next month in January 2010.
    We have had discussions with more than 10 other irrigation 
districts and several municipal water treatment facilities with 
promising sites totaling over 100 MW of potential capacity. We are in 
the process of working with them to evaluate their sites to identify 
those with the best overall economics. I will discuss the potential we 
see for low head hydropower development in this space in the next 
section, but suffice it to say that we believe that 100 MW is just the 
start--there are over 800 irrigation districts in the U.S.
    Natel Energy has been funded to-date by its founders, and by 
several committed seed investors. We are in the process of raising a 
Series B round of funding, which we hope to close in the first quarter 
of 2010. In addition, we are proud to have recently been awarded an 
ARRA Phase 1 SBIR grant from the Department of Energy.
    Natel Energy is an early-stage company that has its roots in my 
family's, in particular my father Dan Schneider's long-standing vision 
of environmentally friendly hydropower playing a significant role in 
mitigating the impacts of climate change while securing our nation's 
future energy needs. My father first thought of the SLH concept in the 
first energy crisis in the 1970's and was able to build early, small 
prototypes that showed promising efficiency results when tested in 
laboratory settings; a hydraulic efficiency of 80% was demonstrated at 
tests conducted at the University of California, Davis hydraulics 
laboratory in 1979. He then went on to build larger units, using those 
early alpha designs, and install them in field settings. The longest 
running alpha field unit ran for approximately 2 years. While the 
results from those early efforts were promising, the economic rationale 
to invest in further development disappeared when the energy crisis 
ended, and my father wound down his efforts in the early 1980's.
    My brother, Abe, and I grew up tinkering with the early prototypes 
and that planted a seed which would later grow. Both of us went on to 
college at the Massachusetts Institute of Technology. I was a chemical 
engineering major, but decided to work in the energy space after 
school, working for Accenture in their energy practice, then 
Constellation Power, and then helping start the energy and carbon 
trading businesses at the investment bank Credit Suisse. My brother 
received both a bachelors and a masters degree in mechanical 
engineering from MIT and went on to establish himself in product design 
and development, with both large firms like Timken, where he worked in 
Advanced Product Development; and small, innovative startups such as 
the Google-funded high altitude wind company, Makani Power. Several 
years ago, in 2005, my father, Abe and I decided that our current 
energy crisis was here to stay, and that we wanted to put our 
respective talents to work to help solve America's clean energy 
challenge and that led to the start of Natel Energy. We, and the entire 
Natel team, feel blessed to work in a field which gives each of us 
great personal satisfaction and are committed to the cause of 
delivering new, clean energy technologies to America.

Low Head Hydropower Potential, Technology Challenges and Costs

    The potential for new low head hydropower development in the U.S. 
is quite substantial. The last study done by the Department of Energy 
that made a clear distinction between low head and high head potential 
was completed in 2004 and estimated the total developable low head 
resource at 71 GWa.\1\
---------------------------------------------------------------------------
    \1\ GWa is the annual mean power which is a measure of the 
magnitude of a water energy resource's potential power producing 
capability equal to the statistical mean of the rate at which energy is 
produced over the course of 1 year. GWa can be converted to GW of 
installed capacity by dividing by the capacity factor, which on average 
is 50% for the U.S. hydropower resource. See DOE study DOE/ID-11111 
titled ``Water Energy Resources of the United States with Emphasis on 
Low Head/Low Power Resources'' for further details.
---------------------------------------------------------------------------
    The potential is significant, and yet less than 2 GWa of low head 
hydropower has been developed in the U.S. to date. In addition, none of 
the DOE's analysis includes the low head potential that exists in the 
thousands of non-stream low head flows, such as low irrigation drop 
structures. Natel estimates that there is between 1 and 5 GW of low 
head potential that could be harnessed at low, irrigation drop 
structures. Many of these structures are built specifically to 
dissipate energy to keep water velocities within the structural 
requirements of the irrigation canals.



    Before delving further, I would like to lay out several terms 
commonly used, but not necessarily with common definitions, in 
hydropower. Hydropower is most commonly described in several ways as 
follows:

          Power generation potential--large, small, micro

                  Large generally refers to projects greater than 30 
                MW in size, though sometimes the lower end is stretched 
                down to 10 MW

                  Small generally refers to projects anywhere between 
                100 kW and 10MW, though sometimes the upper end is 
                stretched to 30 MW

                  Micro generally refers to projects less than 100 kW 
                in size

          Head available--high, medium, low, hydrokinetic

                  High head generally refers to projects with large 
                dams that are over 500 feet tall

                  Medium head generally refers to projects with 
                between 30 and several hundred feet of drop

                  Low head generally refers to projects with less than 
                20 feet of drop, though some definitions move the low 
                head upper limit to 30 feet

                  Hydrokinetic generally refers to projects where 
                there is no head, and instead the energy is generated 
                solely from the velocity of the water flow. This is 
                analogous to the way wind turbines operate.

          Type of technology--conventional, unconventional

                  Conventional technology generally comes in two 
                types--impulse and reaction turbines. Some common names 
                of impulse turbines are Pelton and Crossflow; common 
                names of reaction turbines are Kaplan, Francis, 
                propeller, bulb, and pit.

                  Unconventional technology is a catchall bucket for a 
                number of new turbine designs primarily aimed at 
                hydrokinetic, marine and low head settings.

    This creates a confusing landscape of terms, as they are not 
mutually exclusive. However, this can be somewhat simplified by 
remembering that for all sites, hydropower generation potential is 
defined by two variables--head and flow. Sites with either large flows 
or high head will generally create substantial amounts of power. Sites 
with both low head and low flows will generate small amounts of power. 
The below diagram illustrates the range of potential power across a 
hypothetical low head sites with 10 and 20 feet of head and varying 
amounts of flow. The photos illustrate the kinds of low head sites that 
would generally fall into the flow ranges described.




    Some additional low head sites are shown below for further 
reference.




    Maricopa-Stanfield Irrigation District Drop Structure; 100 cfs; 10 
feet head; 200 kW potential




    Gila Gravity Canal Headworks; 2,200 cfs max flow; 14 feet head; 2.4 
to 5.9 MW potential
U.S. Low Head Hydropower Potential
    As mentioned above, the potential for low head hydropower in the 
U.S. is significant. There is no one data source that details all 
aspects of the low head hydropower potential, but there are several 
good sources of data. The U.S. Department of Energy has conducted 
several studies of the hydropower potential in the U.S. with the most 
recent studies in 2004 and 2006.\2\ The 2004 report specifically 
identified low head potential separately from high head; but does not 
appear to capture low head potential in man-made channels such as 
irrigation districts. The 2006 report dropped the categorization by 
head, keeping only categorization by rated power potential. However, 
the underlying data for the 2006 report can be queried directly through 
a tool developed by the Idaho National Laboratory called the Virtual 
Hydropower Prospector.\3\ In addition to the DOE studies, there is a 
National Inventory of Dams, which seeks to identify and catalogue all 
existing dams in the U.S.\4\ The Department of Interior, U.S. Army 
Corps of Engineers and the Department of Energy published a report in 
2007 on the hydropower potential at existing federal facilities.\5\ 
Also in 2007, the electric Power Research Institute published a report 
assessing the waterpower potential of the U.S. and development 
needs.\6\
---------------------------------------------------------------------------
    \2\ 2004 DOE Report: http://hydropower.inel.gov/resourceassessment/
pdfs/03-11111.pdf, 2006 DOE Report: http://hydropower.inel.gov/
resourceassessment/pdfs/main_report_appendix_a_
final.pdf
    \3\ Virtual Hydropower Prospector: http://hydropower.inel.gov/
prospector/index.shtml
    \4\ National Inventory on Dams: https://rsgis.crrel.usace.army.mil/
apex/f?p=397:1:128076
6746874154
    \5\ DOI/USACE/DOE Report: http://www.usbr.gov/power/data/1834/
Sec1834_EPA.pdf
    \6\ EPRI Report: http://mydocs.epri.com/docs/public/
000000000001014762.pdf
---------------------------------------------------------------------------
    Based on data from these sources, the overall estimated 71 GWa of 
low head hydropower potential in the U.S. can further be described as 
follows. In the below table, low head refers to sites less than 30 feet 
tall; low power refers to sites with less than 1 MW of potential. All 
numbers in the table below are in MWa.




    The site specific data underlying the 2004 DOE report can be 
further analyzed using the Virtual Hydropower Prospector to 
specifically screen for sites between 5 and 20 feet of head that are 
not in wilderness or other excluded areas. This identifies a total of 
33.5 GWa of potential across 24,000 sites distributed as shown below.




    The equivalent dataset underlying the 2006 DOE report, which 
applies a project development model to the potential to identify 
developable projects, can be analyzed in a similar fashion. From this 
dataset, only sites with between 5 and 20 feet of a head that are not 
in wilderness or other excluded areas, and that are less than 1 mile 
both from roads and from some portion of the power transmission 
infrastructure were selected. This identifies a total of 8 GWa of 
potential across 10,100 sites distributed as shown below.




    As mentioned previously, neither of these datasets appear to 
capture the low head potential in man-made channels and conduits. The 
only study I have seen to date specifically focused on the potential in 
man-made irrigation canals was done by Navigant in California.\7\ They 
identified 255 MW of potential hydropower in man-made channels and 
conduits in California. It is interesting to note that the Navigant 
study identified more hydro potential in man-made channels and conduits 
in California than in in-stream settings in California based on the 
screened 2006 DOE data shown above.
---------------------------------------------------------------------------
    \7\ Navigant Report on Small Hydro in California: http://
www.energy.ca.gov/2006publications/CEC-500-2006-065/CEC-500-2006-
065.PDF
---------------------------------------------------------------------------
    The final data set for analyzing low head potential in the U.S. is 
to look at existing structures identified in the National Inventory on 
Dams. According to the NID, there are over 40,000 existing dams in the 
U.S. less than 25 feet tall. Less than 3% of existing dams in the U.S. 
generate hydropower and the majority of those power-producing dams are 
medium to high head.




Technology Challenges
    The technological challenge of generating electricity from water at 
low head settings comes from the fact described above that power is a 
function of head and flow. At low heads, the only way to scale to 
larger power output is to be able to pass larger volumes of water. 
Overcoming this hurdle, while keeping costs low and minimizing 
environmental impacts, has been the technological barrier to much 
development of low head hydropower resources in general.

Environmental Concerns
    The environmental concerns for low head hydropower are driven by 
the characteristics of the site. Low head hydropower projects developed 
in existing, man-made channels or conduits with existing low drops or 
diversion structures will tend to have low incremental environmental 
impacts. Projects at existing low dams in stream settings will tend to 
higher potential impacts than projects in man-made conduits, though the 
magnitude of the impact will vary again depending on the setting. 
Arguably, putting power generation on existing structures such as locks 
and dams, provided that the installations do not interfere with 
transport and recreational uses, is another minimal impact kind of 
project.
    The environmental concerns that projects in river settings will 
need to address include:

          Fish passage

          Water flow modifications, if any

          Impacts from any required civil works construction

          Disturbed riverbank habitat

    However, I believe that low head hydropower projects also have the 
potential in certain cases to help address certain environmental 
concerns such as nutrient pollution and sediment loading. Indeed, some 
existing research indicates that low dams spread across a watershed can 
mitigate flooding from runoff of large intense storms and can also 
sequester significant amounts of nitrogen and phosphorus. A study 
completed in 2004 of a system of 26 low dams across the Red River Basin 
in south central Manitoba showed significant and consistent retention 
of nitrogen and phosphorous in the small ponds and wetlands created by 
the dams over the four years of study. More research needs to be done 
to better understand how to truly manage our watersheds to deliver 
water for human consumption, for agriculture, for healthy ecosystems, 
for power production, and for recreational uses. However, another tool 
in the waterpower development toolbox that enables cost-effective low 
head hydropower development will have great use in many settings that 
do not have a high degree of environmental sensitivity.

Costs
    A major factor inhibiting the development of America's hydropower 
resources on man-made conduit or water conveyance systems and existing 
low head, non-powered dams has been the high cost of available 
turbomachinery. Conventional low-head waterpower technology, such as 
Kaplan turbines and similar devices (bulb, tube, and even propeller 
turbines) has proven to be too costly for widespread market adoption. 
For example, several recent surveys of low-head hydropower plants built 
with Kaplan turbines have reported values of over $2,800/kW for the 
electromechanical equipment alone, given a 100 kW turbine operating 
with 3 meters of head (Singal 2008, Ogayar 2009).\8\ \9\ Natel's own 
survey of a variety of quotes from Kaplan turbine manufacturers 
indicates that the real market prices might be even higher. A surface 
fit following the same methodology disclosed by Ogayar, but using 
turbine quotes compiled from a range of feasibility studies conducted 
for low head sites, results in a predicted price of roughly $4,200/kW 
for a 100 kW Kaplan turbine at 3 meters of head.\10\ Unfortunately for 
prospective low-head waterpower project developers, these numbers 
represent only the electromechanical equipment component of initial 
capital cost, covering the turbine runner, wicket gates, draft tube, 
generator, control system, and switchgear. Often, civil works and other 
project costs might equal or exceed the electromechanical component, 
leading to total installed costs which require extremely high capacity 
factors, high electricity prices, or both, to justify plant investment.
---------------------------------------------------------------------------
    \8\ Ogayar, B., P.G. Vidal. Cost determination of the electro-
mechanical equipmentof a small hydro-power plant. Renewable Energy 
2009;34:6-13.
    \9\ Singal, S.K., R.P. Saini. Analytical approach for development 
of correlations for cost of canal-based SHP schemes. Renewable Energy 
2008;33:2549-2258.
    \10\ Turbine quotes compiled from feasibility studies including: 
http://library.wrds.uwyo.edu/ims/Park.html; T3http://
www.yorkshiredales.org.uk/hydro-power_feasibilty_study_july2009; 
T3http://mydocs.epri.com/docs/public/TR-112350-V2.pdf
---------------------------------------------------------------------------
    One of the primary reasons for the high cost of conventional 
turbomachinery is the complex blade shape of conventional turbine 
runners. According to the Electric Power Research Institute, the cost 
of a Kaplan runner may exceed 50% of the electromechanical component 
cost.\11\ This is an indication of the complexity and fine 
manufacturing precision by which Kaplan turbine runners are 
characterized, but also is indicative of an opportunity for innovation 
in reducing an important barrier to low head hydropower development: 
cost.
---------------------------------------------------------------------------
    \11\ Gray, D. Hydro Life Extension Modernization Guides Volume 2: 
Hydromechanical Equipment, TR-112350-V2 Final Report, August 2000. 
EPRI.
---------------------------------------------------------------------------
    For comparative purposes, the table below describes the economics 
for a 1 MW site with 10 feet of head using current conventional turbine 
costs, Natel's current SLH cost; and Natel's projected SLH cost at 
full-scale commercial operation. For the purposes of this comparison, 
all non-electromechanical costs are assumed to remain the same and are 
set at $1.48M--this would cover civil works, permitting, interconnect, 
etc. In addition, the capacity factor is assumed to be the same in all 
three cases and is set to 65%. For clear illustrative purposes, the 
payback time period is calculated using a 10  cents/kWh power price 
with no project leverage and no incentives (no Production Tax Credit or 
renewable energy credits).




    The purpose of the above table is simply to highlight that there is 
room for innovation in low head waterpower technology, and that 
innovation, if successful at lowering costs while keeping environmental 
impacts low, will enable the addition of significant new renewable 
generation to the grid. We have developed one new technology and there 
are a number of other companies working hard to innovate in the low 
head, marine and hydrokinetic space as well.

Areas where federal support would useful

    The following kinds of federal support would help to reduce costs 
and transition our technology, and other innovative waterpower 
technologies more quickly into the market:

          RDD&D guidance and funding support to help reduce 
        some of the costs of demonstrating and scaling up new low head 
        waterpower technologies;

          Specific grant funds and research focused on better 
        understanding the environmental issues for low head projects, 
        particularly in river settings;

          Testing facilities for measuring the environmental 
        and operational performance of new waterpower technologies;

          Tax credits or other incentives for companies 
        investing in studies or monitoring programs that gather 
        environmental performance data at installed new waterpower 
        technology power projects;

          Beyond the immediate RDD&D needs:

                  A long term extension of the Production Tax Credit 
                (PTC) and Clean Renewable Energy Bond (CREB) programs 
                would foster investment in retrofitting the many 
                existing low head, non-power structures to produce new, 
                distributed, baseload, renewable energy, by encouraging 
                private sector investment and providing low cost 
                financing to public entities such as most irrigation 
                districts;

                  Section 45 Production Tax Credit parity for all low 
                head hydropower, hydrokinetic, marine and other 
                innovative water power technologies;

                  Inclusion of all low head hydropower, hydrokinetic, 
                marine and other innovative water power technologies at 
                existing, non-powered dams in a federal Renewable 
                Energy Portfolio Standard (RPS).

Closing

    I would like to thank the Committee again for inviting me to 
testify and for its attention to the issues before the Committee. It 
has been a pleasure to appear before the Committee today and Natel 
Energy stands ready to work with the Committee in the future as needed. 
America is in a position to lead the world in clean energy technology 
development, but only by taking decisive action we will catch and 
surpass our international counterparts in waterpower technology 
development. In so doing, we, and many other innovative companies like 
us, will create new manufacturing and power sector jobs and help pave 
the way towards a clean, secure energy future for America while 
tackling the environmental issues we face as a country in an 
increasingly competitive world.
    Thank you for your time.

Contact Information

    If the members of the Committee or their staff would like 
additional information, please do not hesitate to contact Natel Energy 
at your convenience. Contact information is found below.

Gia Schneider
Chairman & CEO
917 558 2718
[email protected]

                     Biography for Gia D. Schneider

    Gia Schneider is the acting CEO of Natel Energy, Inc., which is 
commercializing a new, low-head hydropower technology that will cut the 
non-civil works cost of developing low head projects by as much as 50%. 
She is also a partner at EKO Asset Management and has extensive 
experience in the renewable energy and climate sectors. Previously, she 
worked in the Energy Trading Group at Credit Suisse where she helped 
start the carbon emissions desk. Prior to Credit Suisse, she worked in 
the Strategy Group at Constellation, a leading power generation 
company, and as a consultant with Accenture where she developed and 
implemented trading and risk management solutions for the utility 
industry. Gia received her bachelor of science degree in chemical 
engineering from the Massachusetts Institute of Technology. She has a 
long standing interest in climate change, sustainable development and 
renewable energy.

                               Discussion

    Chairman Baird. Thank you very much, Ms. Schneider. 
Excellent testimony, not surprising, given the backgrounds of 
the distinguished witnesses. I will recognize myself for five 
minutes and then we will proceed in alternating order. We have 
been joined by Mr. Davis, Mr. Tonko and previously--oh, there 
he is, the number one expert on wave energy in the U.S. 
Congress, Mr. Rohrabacher. I say that because he is our surf 
advocate. I hear that Bilbray is a better surfer, however. But 
he is very passionate about the ocean.

         The Problem of Outsourced Manufacturing and Test Beds

    A number of questions come up, more than I could possibly 
cover in five minutes but I will start with a few. One of the 
issues is, it is very troubling. Mr. Dehlsen, you talked about 
it, and Mr. Bedard, you alluded to it. I am so frustrated to 
see U.S.-developed technology consistently, the initial 
technology, developed here and then capitalized and engineered 
elsewhere, then manufactured elsewhere. We are seeing it here 
again apparently. One of the limitations in addition to some of 
the environmental issues that Mr. Collar and Ms. Schneider 
mentioned, it seems to me that the test beds right now are 
elsewhere. We don't have yet, that I know of in place on either 
coast, a reliable place where if I am a manufacturer of some 
equipment I can say okay, I am going to work with FERC and DOE, 
we are going to ship it out there, drop it in the water and see 
what it does. What is being done to do that, Mr. Bedard? You 
talked about some potential facilities. What is being done and 
how is the government helping with that at the federal level 
and what can we do better?
    Mr. Bedard. What is being done is that just last year--I am 
sorry. I will take that back. The fiscal year 2008 
appropriation initiated some national marine energy centers, 
specifically Oregon State University on wave, University of 
Washington on tidal, University of Hawaii on both OTEC and 
wave, and Florida Atlantic University, I believe, received--is 
receiving an earmark on ocean currents. So this country, we are 
just starting. Europeans are 10 years in front of us. Their 
governments have established test facilities that have been in 
place now for more than five years. So we have started. What we 
need is, as I said, consistent, long-term, sustained support to 
these test facilities so that developers do have places to go 
and put their machines into the water and develop the 
technology as step one. And then once that prototype gets 
developed, we then need to have systems test facilities, much 
like PG&E and Snohomish are doing, with a fully integrated grid 
connected array of systems.

                      Pace of Test Bed Development

    Chairman Baird. When we will have these test beds ready to 
go?
    Mr. Bedard. In a number of years. It is really uncertain 
because of the regulatory issues associated with--we have to 
even permit these test beds and so there is uncertainty in 
terms of when--there are literally dozens of regulatory 
agencies that have to be dealt with.
    Chairman Baird. Okay. That is very helpful. That is 
consistent with the concerns of Mr. Collar.

                      Keys to Expediting Projects

    Mr. Collar, let me follow up on that regulatory issue 
because it seems that the test bed issue--as I have read your 
testimony and listened to you, it seems that this test bed 
issue is central. Mr. Dehlsen talked about the reliability of 
funding. You know, this annual extension of the production tax 
credit is not going to cut it. We need a sustainable, 
predictable situation including tax incentives. But this 
regulatory environment issue is very, very central. Talk to us 
a little bit about what you think we ought to do, Mr. Collar.
    Mr. Collar. It really is one of the key challenges to 
moving these kinds of projects forward, and I think a lot of it 
is because really again that lack of data. It is very much a 
chicken or the egg kind of a situation. It is difficult to get 
projects like this permitted because there is no data and you 
can't get the data because you can't get the project permitted 
to get it into the water to generate that information. So I 
think again it is finding ways to strike that balance within 
the agencies between the facilitation of renewable energy and 
fully meeting their existing responsibilities and 
accountability. You know, one of the ways that we seek to do 
that with our project is via the very small, contained scale of 
the project. We wouldn't advocate nor would anyone else that we 
are aware of, you know, the installation of many, many turbines 
in a place like Admiralty Inlet before we first installed one 
or two and learned from those devices. But until we do that and 
until we can do that in a reasonable way in terms of both cost 
and resources and effort, it is going to be very difficult to 
move beyond that stage.
    So I think one of the things is to come to grips or gain 
good alignment with the agencies around, you know, what is an 
appropriate amount of risk to take with some of these early 
projects? But the experts that we talked to in the Puget Sound 
would say the risk of our project is almost vanishingly small 
but it is not zero, and I think that sometimes the agencies 
really have discomfort until they can really see zero risk.

                             Species Safety

    Chairman Baird. Are you dealing with ESA (Endangered 
Species Act) issues? I mean, is this--the question for me is, 
so what is the problem, you know, given the model you talked 
about and the tiny scale, and I understand the baseline data. I 
am proud to be a scientist and happy to be on this Committee, 
but what is it you are--I have been told you have to have at 
least a year of baseline data before you put something in the 
water. Is that accurate?
    Mr. Collar. At least a year. There certainly has been 
pressure to have much more than that, and it is also a degree 
of to what level of detail the data needs to be.
    Chairman Baird. What is the specific concern? Is it that we 
just don't know what the concern is because we haven't done it 
yet or are we saying well, we are expecting salmon or sturgeon 
or ground fish, or what is the story?
    Mr. Collar. The most specific and the largest concerns in 
Puget Sound, Admiralty Inlet in particular, are the effects of 
installations like this on ESA-listed species, particularly 
orca and salmon. Those are the key species. So really, that is 
the question that we are grappling with now is, what is the 
right degree of information in terms of the currents' behavior 
or abundance of salmon species and orca in Admiralty Inlet? And 
of course, there is a lot of information, historical 
information available relative to those questions, so it is 
really, how much more do you need before you can go forward 
with a project like the one we propose?

                             Turbine Design

    Chairman Baird. Ms. Schneider, I grew up in canal country, 
western Colorado. It was irrigated and we used to boogie board 
on those canals. It was pretty dangerous. Periodically one of 
our friends would disappear. It was kind of a bad deal. But it 
seems to me that there is a lot of potential for this. Have you 
actually got--is this just a more efficient turbine design? I 
don't remember seeing in your testimony a picture. Maybe it is 
proprietary and you don't want to share with us lest we branch 
out in new career paths.
    Ms. Schneider. No, no, no.
    Chairman Baird. What does this look like?
    Ms. Schneider. It actually doesn't look like any kind of 
conventional rotary turbine that you have seen. The technical 
term for it would be called a two-stage fully flooded impulse 
turbine.
    Chairman Baird. Oh, yeah, I knew that.
    Ms. Schneider. So it is a new turbine. It is a new turbine 
design, and the specific aspects of it are, basically it has 
very simple blades which kind of allows us to drive down costs. 
So cost of manufacture is a lot lower than conventional 
reaction turbines, the other conventional technology, and at 
the same time the generating side is fairly--the generator 
interface is fairly efficient because it actually has what is 
called a high specificity, without getting into too much 
technical terms.
    Chairman Baird. Vern will explain all this later to us.
    Ms. Schneider. But, I mean, we have an installation that is 
going forward actually with an irrigation district in Arizona. 
We just started installation at the beginning of this week so 
we have been through the FERC exemption process, received the 
FERC exemption in September, and that should be online and 
generating electricity hopefully in January.
    Chairman Baird. That is exciting. Thank you.
    I recognize Mr. Inglis for five minutes.
    Mr. Inglis. Thank you, Mr. Chairman.
    I found it interesting, Ms. Schneider and Mr. Collar both 
spent some time discussing the impact on species. It is worth 
paying some attention to that. It is also worth paying 
attention to if you consider the ocean acidification problem 
related to the incumbent fuels, the tradeoffs in life, and we 
might should put pedal to the metal and--``might should'', that 
is the way we say it down in South Carolina.
    Chairman Baird. That is right good.
    Mr. Inglis. So it is interesting that both of you spent 
considerable time trying to allay those concerns but if you 
compare it to the other concerns, it is really rather small so 
pedal to the metal.

                  Combining Wave and Wind Technologies

    Mr. Dehlsen, we are the happy beneficiaries of all your 
work. I didn't realize we had you to thank, but I thank you for 
having--General Electric is in our district, makes wind 
turbines, and there are 1,500 engineers and 1,500 production 
people, some which work on wind, some on gas turbines, but--so 
you are the father of that and we thank you. So for any of you, 
what do you think about the possibility of combining wave 
barges with wind barges such that you get a two-fer out of the 
lines, I guess, running back to shore? Is this possible?
    Mr. Dehlsen. We are looking at that actually for projects 
in the U.K. Clipper Windpower is currently in advanced 
engineering 10-megawatt offshore wind turbine for deployment in 
U.K. waters, and we believe that for every turbine that goes 
in, we could probably deploy three wave devices of the type 
that we are in design on. Those are each four and a half 
megawatts, so for every 10 megawatts' worth of infrastructure 
that you are putting in, you pick up another thirteen and a 
half megawatts of wave energy. We think it is quite a nice way 
to bring down the cost of energy by combining the two 
technologies.
    Mr. Inglis. In part what you are doing in some of those 
designs is using the weight of the apparatus, right, as the 
tide drops to move turbines or something so that you basically 
end up getting the benefit from the weight of all the stuff you 
got up on doing the wind. Is that--have I got that right? Is 
that one of the designs?
    Mr. Dehlsen. There are designs like that. Ours is one where 
between the turbines, which are centered on about 1,200 meters, 
you would accommodate three of what we call a centipod wave 
generator, which are very long barges there, about 650 feet 
long and have 56 pods on each side so they are fully exposed to 
the wave front and can yaw into the wave front. It is quite an 
unusual design actually.
    Mr. Inglis. So you use the motion through that barge 
apparatus to create the energy?
    Mr. Dehlsen. That is right, through the pods moving up and 
down while the barge itself, and it is really not a barge. It 
is a lattice, open lattice structure that allows the wave to 
pass through it, and as the wave passes through it causes the 
pods go up and down, drive hydraulic fluid through to drive a 
hydroelectric system.
    Mr. Inglis. Yeah, interesting.
    Mr. Bedard.
    Mr. Bedard. There is also another benefit in addition to 
the cost two-foe that you mentioned, and that is the fact that 
you have two resources that have variability to them and you 
put those two together and you get less variability. There are 
less number of hours with no resource available when you have a 
hybrid wind-wave system than either a single wind or wave 
system. I tried to sell one of our EPRI feasibility studies a 
couple of years ago on that very topic and was told by all of 
the state energy agency and utility potential clients that I 
tried to sell that I was 25 years ahead of my time.
    Mr. Inglis. Yes. Of course, the thing that I hope that you 
are prophetic there and maybe ahead of your time but hopefully 
people will catch up with you is that it is economics that will 
drive this. If it is economically viable, then it will be 
deployed. I learned a great new definition of sustainability 
from an entrepreneur in Spartanburg, South Carolina, who 
recycles PET (Polyethylene-terephthalate) to make bottles 
again. He says the definition of sustainability is making a 
profit, and I think that is a very good definition. If you can 
make a profit, it is sustainable. If you can't, it is not, and 
so that is what we need to be focused on is figuring out how 
you can get two-fers or three-fers and so it makes sense 
economically.
    Thanks, Mr. Chairman.
    Chairman Baird. Thank you.
    I recognize--who is on deck? Mr. Davis was next in line.

      Comparing Economic Costs and Benefits of Energy Technologies

    Mr. Davis. As we engage in this debate that we have had for 
some time on all different types of sources of energy and we 
continue to find new sources that we believe will be 
alternatives and renewables and less expensive, oftentimes we 
don't compare the cost of the current methods of producing 
energy and our cleaning up maybe some of those pollutants that 
we have such as coal or look at natural gas or look at other 
sources. We seem to get a great deal of excitement about 
sources of energy that may or may not produce an abundance or 
at least close to the same amount of energy for a similar cost 
as what we produce today. So I think that as we engage in these 
conversations, the hearing we are having today is certainly 
good for us, this Nation to be having these hearings. But I 
would like to hear more from each of you. When you take a 
kilowatt being produced today, what would it cost for the same 
and how quickly can this be put online to where we can start 
using this to benefit economically and job creation? How quick 
can this happen, how soon can we expect to see benefits from 
this and how costly will it be compared to what we produce 
today? That is basically my comment that I want to make. Can 
anyone answer that question?
    Mr. Beaudry-Losique. Thank you for the question. I would 
say it is fairly important for us to always consider a balanced 
portfolio of technologies, some of those being near term and 
being able to deploy and make a difference. We are working on 
some of those, technologies. For example, at DOE like land-
based wind, for example, and some elements of solar 
technologies. So it is important to not neglect longer-term 
very large sources of energy that could also make a difference 
10 or 20 years from now. I believe this is one of the roles of 
government. Some of these resources could include offshore wind 
and some of these marine and hydrokinetic resources, and I 
think the question is, how do we strike the right balance with 
near-term technologies that can make a difference and long-
term, very large-scale sorts of technologies? And I mentioned a 
couple here. And also how do you compare these technologies to 
the cost of existing technology? Will that improve versus 
existing technology? Are we chasing technology that will never 
be competitive? And I would say we are currently going through 
a strategic planning exercise at DOE to address precisely that 
question and see if we can optimize or improve our portfolio of 
technology while we strive to do so.
    Mr. Davis. I have a situation in Kingston, Tennessee, that 
perhaps everyone in this room or certainly if you watched TV in 
the last year would be aware that there was a huge ash spill at 
the Kingston steam plant. We are told it will probably cost 
close to $1 billion plus for that cleanup that will go on the 
bills of almost 8 million users in the Tennessee Valley to help 
pay for that cost. That is a substantial amount of money that 
we have deferred for the last 30 or 40 years. And so as we 
engage in this debate, it is my hope that we look at every 
situation, alternatives, renewables and others, about whether 
or not this will help us get away from that situation. I asked 
the TVA officials and others if we were to take that billion 
dollars and build a solar farm in Tennessee, what percentage of 
the energy being produced at the steam plant could we produce 
with that billion-dollar investment, and I am told somewhere 
between 12 to 25 percent of energy that would be a renewable 
source. So as we engage--the reason I ask the question and made 
the comment is, as we engage in the conversation, it seems that 
we from time to time don't look at the actual total cost of 
what the cost would be to us 10 years, 20, 30 years or 40 years 
down the road. I hope as we engage in this debate as we 
continue to have hearings here and in other committees in the 
House that we become a little bit more focused on the proposals 
we are making and how successful they would be or is this just 
a new concept or idea that may or may never work.
    Thank you all, and thanks, Mr. Chairman, for having the 
hearing.
    Chairman Baird. Thank you, Mr. Davis.
    Mr. Ehlers.

               Hydrokinetic Potential in the Great Lakes

    Mr. Ehlers. Being from Michigan, are there any 
opportunities for hydrokinetic energy in Lake Michigan or some 
of the other Great Lakes? We are talking about putting wind 
energy in the middle of the lake far enough from shore so no 
one can see it but visible enough so boats won't run into it. 
Are there any hydrokinetic energy possibilities in the Great 
Lakes or is it just not worth the trouble? Mr. Bedard?
    Mr. Bedard. Yes, most probably. We have not studied it but 
most probably just from the basic understanding there is not a 
hydrokinetic potential in the Great Lakes. For wave energy one 
needs to have a long distance of ocean, a long fetch of ocean 
where the winds blow across that to build up the waves, and the 
Great Lakes are big but they are just not as big as the Pacific 
Ocean, and certainly there is no tidal energy, there is no 
current flow. Now, there are potential locations where the 
lakes flow when the water flows out of the lakes like they do I 
know in upstate New York, for using hydrokinetic energy. I 
wouldn't look in the lake but I would like where the water 
flows out of the lake.

                          Low Head Hydropower

    Mr. Ehlers. Thank you.
    I also want to mention this is really solar energy, and we 
might as well identify the source correctly. I think solar has 
immense possibilities in many different manifestations. When 
you mention solar, people automatically think of photoelectric 
cells and things like that but there are tremendous 
opportunities created by the wind, and this is just another 
manifestation of that. You talked about low head. How big is a 
low head? When you say low head, I immediately think of a 
submerged restroom but I don't think that is what you are 
talking about. How big a head is low head?
    Ms. Schneider. Well, low head in the context that we are 
focused on, it would be a drop across a structure that is less 
than 20 feet, but in general greater than five, and the reason 
for the cutoff is five is just when we run economic analysis on 
a number of sites, once you get below five feet it just is 
very, very hard.

                      Other Promising Technologies

    Mr. Ehlers. And a lot of effort appears to be going into 
developing appropriate turbines for this. Is that the best way 
to get energy, or can you just anchor something, the generator 
to the ocean bottom and the up-and-down motion of the waves? Is 
there any possibility of somehow extracting energy from the up-
and-down motion of the waves rather than the lateral motion? 
Any comment on that? Mr. Bedard?
    Mr. Bedard. Yes, there are many different ways to convert 
either the potential or kinetic energy in waves. Many of the 
devices do work by using totally the potential energy, the up-
and-down motion of a floating buoy that is then reacted either 
to the bottom or to a reactionary plate which is submerged in 
the water column, so yes, many devices work through the up-and-
down motion of the waves.
    Mr. Ehlers. And which appears to be most promising at this 
point?
    Mr. Bedard. We are not far enough along in the technology 
to know which of the different energy conversion devices will 
turn out to be most cost-effective in the future. Wind has 
obviously gotten there. You look at the wind machines. They are 
all open rotor, three-bladed, you know, machines on a mono 
pile. With wave energy, we are just not there yet. We need to 
test and evaluate the different energy conversion devices 
first.
    Mr. Ehlers. Thank you very much. Yield back.
    Chairman Baird. Mr. Ehlers, thank you.
    Mr. Tonko.

              Lessons from Verdant Power in New York State

    Mr. Tonko. Thank you, Mr. Chair, and good morning to our 
panelists, and Mr. Bedard, thank you for mentioning the 
turbulent flow of waters in upstate New York. That is part of 
my district area.
    Prior to arriving here as a freshman this year in Congress, 
I served as president and CEO of NYSERDA, New York State Energy 
Research and Development Authority, which as you know has this 
demonstration project, had the demonstration project along the 
East River along the island of Manhattan with Verdant Power's 
project, and they did disassemble that project for improvements 
and sent it over to the Colorado lab of DOE, and I believe we 
are back up and running, or not. Okay. We are supposed to be. 
But anyhow, I just want to know what Snohomish--perhaps Mr. 
Collar or Mr. Bedard or whomever on the panel might address 
your comments to what might have been learned from Verdant 
Power's project in that East River demonstration.
    Mr. Collar. Certainly. I think there are a number of 
things. First of all, you really have to applaud Verdant, I 
think, for the effort, really blazing the trail here in a lot 
of ways for efforts like ours. So, I mean, a couple of things 
that were learned were in terms of deployment methodology in 
relatively shallow water. Folks might assume that this would be 
a relatively simple and straightforward evolution. It is not. 
It is very difficult even in places like the East River, so 
there is some learning there obviously in terms of the 
robustness and the design of the turbines themselves and the 
blades in particular. You know, you are going to have some 
failures like that along the road so, you know, learning from 
those and sharing that learning through efforts like the DOE's 
programs is important and has occurred. And then lastly, I 
think we also learned a fair bit in terms of monitoring 
technologies for monitoring the interaction of fish and marine 
life with turbines like the Verdant turbines, specifically in 
that case using the BiosSonics hydroacoustic technology. There 
were some parts of that that worked really well and there were 
some parts that we would choose to do differently in the 
future, so those would probably be the top three things that I 
would point out.
    Mr. Tonko. As I understand it, it was not just the blades 
of that design but also the assembly, the assemblage of the 
blades that had to be improved on.
    Mr. Bedard, were you going to comment on that?
    Mr. Bedard. I was going to add, sir, that Verdant completed 
their experimental phase about six months ago and they took the 
six units out. They got lots of good environmental data. They 
have now filed a draft license application with FERC to go to 
the next phase, which is installation of 30 of the units, about 
one megawatt of rated power, and so they will be in the 
regulatory process now for another year or two years before 
they hopefully get the license to install their next generation 
of turbine in that same location between Roosevelt Island and 
Queens in about two more years.
    Mr. Tonko. And it was interesting to see what that meant to 
the Roosevelt Island population with some of the power that was 
exchanged for them. It is hoped that as much as 1,100 kilowatts 
worth of power could be utilized in kinetic format in New York 
State, so it is rather encouraging to see the promise that it 
holds. And in terms of the PUD plan here with Snohomish, just 
how--what are your plans to interconnect the tidal project to 
the main grid?
    Mr. Collar. They actually intend to connect on Whidbey 
Island, which is adjacent to our site. Specifically we are 
working with Seattle Pacific University. In fact, their marine 
science lab is right on the shores where we would interconnect, 
so currently we are in dialog with them about rebuilding their 
marine science lab into one facility that can both serve their 
educational purposes as well as our need for onshore 
infrastructure and provide them with a pretty neat educational 
opportunity to leverage the results of our project to fulfill 
their mission.
    Mr. Tonko. Thank you. Thank you very much.
    Chairman Baird. Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman, and I 
am sorry I missed the first three witnesses. And Mr. Bedard, I 
remember JPL and--
    Mr. Bedard. Yes, sir, I worked on Mars Rover back in the 
late 1980s.

                Cost Competitiveness of MHK Technologies

    Mr. Rohrabacher. I remember visiting you there once, I 
believe.
    I don't think the question about cost was answered 
correctly, fully. I would like to--obviously if we are 
developing an energy resource that has to be of competitive 
cost in some way or it is just--we are just playing games here, 
so we are going to create technology in order to create 
technology when it is going to be integrated into an energy 
system that has other factors as well that cost. How will 
this--once we develop these technologies that you are talking 
about, how competitive will it be as compared to other sources 
of electricity?
    Mr. Dehlsen. The technologies we are working on I believe 
can be in the 10- to 12-per-kilowatt-hour range, and we are 
pretty confident on those numbers. It is really a function of 
how much steel goes into the machine versus how much power you 
can generate. Yes, you have cost for mooring and that sort of 
thing but that is the main driver, and--
    Mr. Rohrabacher. How would that be interpreted in terms of, 
oil would have to come to a certain barrel price in order to 
permit the electricity to be--for you to be competitive with 
electricity. What would that be?
    Mr. Dehlsen. Well, carbon fuels are in the range of about 
four to seven cents per kilowatt-hour but that is without 
counting the external costs.
    Mr. Rohrabacher. Right.
    Mr. Dehlsen. So if you give credit for that, which is a 
point that came up earlier, these technologies would be 
competitive.

                        Impacts on Scenic Views

    Mr. Rohrabacher. Okay. One of the things that I have 
noticed, seeing that I live along the coast and I spent a lot 
of time in the water, that--and although that is the case, I 
have also been supportive of offshore oil and gas development, 
that wealthy people tend to live near water and they tend not 
to want to have their view disturbed and their view is more 
important than energy for the people. Would your alternatives 
create a view problem for people?
    Mr. Dehlsen. Certainly wind provides a very strong visual 
impact but what I think I have been saying anyway is that 
people now are starting to understand that there are priorities 
beyond the view aspect.
    Mr. Rohrabacher. I would hope so. You know, I would really 
hope that some of the people who are the most--have really 
enjoyed the fruits and benefits of our society would be a 
little bit more considerate of everybody else rather than just 
worrying about their view, seeing that we have about a trillion 
dollars worth of energy in terms of oil and gas that we should 
be utilizing offshore, but I would hate to see situations like 
great alternatives in the future--look, 100 years from now 
whether it is 10 years from now or 100 years from now, the type 
of ideas you are going to bring up are things that mankind is 
going to have to depend upon and you may be exploring an area 
that is really 100 years from now we may get vast amounts of 
energy from what you are doing and might be dependent upon that 
far more than we are on oil and gas.
    Mr. Dehlsen. I would hope so.
    Mr. Rohrabacher. I would hope so. That is correct. So Mr. 
Chairman, thank you for your leadership in this. I see this as 
a visionary approach which I think that we should be exploring 
and I wish you all success.
    Chairman Baird. Thank you for your observations and 
insights.
    Mr. Inslee is recognized. Thanks for joining us today, Mr. 
Inslee.

             Progress to Date and the Power Density of MHK

    Mr. Inslee. Thank you, and thanks, Mr. Chairman, for 
holding this hearing. This is something we are looking in the 
future and I appreciate your willingness to explore this. It is 
something that hasn't totally arrived commercially and your 
willingness to do this I am very appreciative of. I am also 
appreciative of Mr. Ehlers' insight that all this is solar 
power except nuclear and engineered geothermal. I think that is 
a great insight. He is the only other Congressman that I have 
heard share that other than this one, so thanks, Mr. Ehlers.
    Mr. Collar, welcome, and Mr. Dehlsen, I want to thank you 
for being the personification of what I view as a dynamic here 
which basically is following wind into the water as far as the 
dynamic, the economic dynamic. You are the absolute 
personification of that. You may not remember but you and I 
spoke a couple years ago when I was writing a book and you told 
me an interesting story about Clipper Wind and the development 
of wind power about a bolt that broke. Do you want to share 
that? It is kind of a metaphor for what we are talking about 
here. Do you remember the story?
    Mr. Dehlsen. Well, I remember one in the very beginning of 
wind power and it was the first wind conference in Palm 
Springs, and there was a lot of excitement around a machine 
that Bendix had put out that was a Darius machine. It looked 
like a big egg beater. Everybody had gathered out there to 
watch the machine perform. A bolt gave out and fortunately it 
could have decapitated the whole crowd, but that was one of 
the, kind of the early lessons on structures and how these 
things have to really have pretty rigorous kind of engineering.
    Mr. Inslee. Well, I appreciate the story, and the reason 
is, is despite that failure, the industry is now very 
commercially viable and robust and is the most dynamic thing in 
the energy industry probably right now, and I sense that that 
is the kind of experience we are going to have in the 
hydrokinetic field. You said something that was interesting, 
that you were optimistic about this, and maybe it was you or 
Mr. Bedard, I am not sure, that the density of energy 
associated with water as compared to wind may give this 
industry a faster up tick than wind. Do you want to elaborate 
on that, whichever one of you was that said that?
    Mr. Bedard. That was myself, Mr. Inslee, and the point I 
was making was that the fact that the power density of the 
hydrokinetic resource is much, much greater than that for wind 
and solar. That allows smaller machines with less material and 
capital cost--there is a potential capital cost advantage of a 
hydrokinetic machine, say, compared to a wind or solar machine 
but there is another side to that coin, and the other side is 
that it is operating in a very remote, hostile environment so 
the challenge to the marine hydrokinetic industry is going to 
be to develop the deployment technology and the operation and 
maintenance technology that will allow the total lifecycle cost 
to be less than or competitive to other renewable sources.

                     2009 Stimulus Funding for MHK

    Mr. Inslee. Thank you.
    Mr. Beaudry-Losique, I am sorry, I don't know if that is 
the correct pronunciation, we are so far a little bit 
disappointed in the stimulus funding. We haven't seen any of 
the stimulus funding dedicated to this particular industry. Do 
you have any insights on that? Do we have some hope in that 
regard?
    Mr. Beaudry-Losique. I would say the Recovery Act mandates 
are fairly specific. Their focus was on creating jobs that 
would have short-term impact. Regarding the allocation to the 
water budget, we felt that traditional hydro projects could be 
put in operation fairly shortly and that there was no truly 
immediate device that was ready to go at a commercial scale for 
marine hydrokinetics and that our R&D budget for hydrokinetics 
is fairly plentiful right now, and we have what we need.

              The Importance of Consistent Federal Support

    Mr. Inslee. Well, we will continue to kind of provide you 
some additional resources, and I am appreciative of the vision 
that the Department has shown and hope it will continue. One of 
the things, I have introduced a bill and we are looking forward 
to reintroduction of a bill that would establish a dedicated 
department really for this particular technology and 
hydrokinetic. I think it would helpful in focusing, and the 
reason I note that is, I think almost all of the witnesses 
talked about the importance of stability in federal policy of a 
long-term federal commitment that is not dependent on the 
personnel that happens to sit in a particular chair for three 
or four years, it is not dependent on who the majority is in 
Congress but it is a long-term federal commitment, and I think 
the establishment of an office would go a long way to helping 
in that regard and I look forward to talking to Members and the 
Chair about that. I hope we can advance that. Thank you very 
much.
    Chairman Baird. Thank you, Mr. Inslee, and thank you for 
your many years of leadership on not only this particular form 
of energy but the whole issue of alternative energy and your 
book, which you brought with you. What is the title of that 
book, Mr. Inslee?
    Mr. Inslee. Well, I appreciate your efforts, but I don't 
know if I can put you in the five percent plan for marketing, 
Mr. Chair. I appreciate that.
    Chairman Baird. Mr. Inslee wrote an outstanding book, 
Apollo's Fire, and it is an outstanding compendium, a bit dated 
because the transitions are happening so fast, but very few 
Members of Congress know as much about this topic as Mr. 
Inslee, and thank you for your leadership on that.
    Mr. Inslee. If I can note, though, I just want to note, Mr. 
Dehlsen was one of the most interesting people I met in the 
production of this book and I remember very specifically 
getting to talk to him about this story, and Mr. Dehlsen, I 
want to thank you for your leadership now on multiple 
technologies. We really appreciate it.
    Chairman Baird. Are there any other members that are 
wishing for me to plug their book? I would be happy to at this 
point.

                  Permitting and Regulatory Structure

    Let me follow up. I would like to do a brief second round. 
We may have some votes coming up. Mr. Beaudry-Losique, we have 
heard a lot about this issue of permitting and regulatory 
structure. Has your operation sat down with MMS (minerals 
management service) and the other regulatory bodies and said 
how can we work together, what changes do you need, how do we 
make those changes happen, and if you haven't, can we do that?
    Mr. Beaudry-Losique. We are working with other agencies on 
a lot of our different renewable technologies. I would say this 
is a problem that is not unique to marine and hydrokinetics. It 
is shared by offshore wind. It is shared to some extent with 
solar deployment on BLM (Bureau of Land Management) lands. It 
is shared by on-land wind as well. So we have had numerous 
discussions with the Department of Interior, with FERC, within 
the Department of Interior. We are working specifically with 
MMS, which has a lot of the jurisdiction offshore for speeding 
up permitting both for offshore wind and for marine and 
hydrokinetics technology. We hope to have a memorandum of 
understanding in place with them shortly. But I would 
completely agree with my fellow panel participants that this is 
a very serious issue and that we are putting a lot of resources 
against it. Furthermore, we are doing a lot of the 
environmental studies to help pre-permit these marine research 
energy centers so we can have test beds to plug in small-scale 
marine devices fairly quickly, and that is part of our funding 
is actually to establish that pre-permitting that would help 
speed up testing these technologies.
    Chairman Baird. I have done a lot of work on the permitting 
issue back home because we have a lot of water and a lot of 
endangered species where I live, and one of the things that 
really seems to help is to get all the agencies in a room with 
the consumers of the agency services, i.e., the permit 
applicants, and then try to see if you can't come up with some 
standardized permit structures. You know, back home it is not 
the first time a dolphin has ever been put--I don't mean a 
swimming dolphin, I mean the things you moor a boat to--it is 
not the first time we have put one of those in the Columbia 
River over the last couple of centuries, and yet there was a 
long process where each time you had to do a brand-new EIS 
(environmental impact statement) as if nobody had ever done it. 
So they have now got streamlined mechanisms for that. So my 
question would be, has there been a meeting, a conjoined 
meeting of your operation within DOE, the tidal hydro side, 
with the multiple regulatory agencies, with the applicants 
together to say let us figure out how to do this, come up with 
some target timelines, some reasonable expectations for 
baseline and then follow-up data, et cetera, particularly as we 
try to set up this test bed? Has that happened yet?
    Mr. Beaudry-Losique. I would say it is fair to say that 
there has been a series of bilateral discussions with key 
agencies and it is definitely in our work plan, for example, 
with DOE and MMS, to get all the agencies in the same room in a 
working group with applicants to help determine what are the 
best intervention points to speed up the permitting process but 
this meeting has not occurred yet.
    Chairman Baird. Okay. I will ask the witnesses, would that 
make sense to have a meeting like that? Would that be helpful 
to you?
    Mr. Collar. I think from our perspective, it certainly 
would be very helpful. I think it is a logical next step. It is 
something we have not done to this point and I can see where it 
could be pretty useful, yes.
    Mr. Dehlsen. At approximately the same stage in wind going 
back in the early 1980s, what was done in a number of counties 
was to designate zones, and so rather than each time a 
developer having to go through the process, just approving a 
zone would be extremely helpful.
    Chairman Baird. Okay. Mr. Bedard?
    Mr. Bedard. I am fortunate enough, Chairman Baird, to work 
for a technology organization and I don't have to get into the 
permitting. In fact, when I had my three children and needed a 
larger house, I even avoided adding a room on and going through 
the permitting process. I just bought a new house. So I don't 
like to deal with the pain.
    Chairman Baird. Ms. Schneider, I mean, I know your issues 
are somewhat separate but perhaps you have some insights.
    Ms. Schneider. I mean, in the sense of creating, especially 
as you look to low-head applications in streams, it is the same 
general concept that applies in terms of gathering standardized 
information and then feeding that into a streamlined process 
with FERC, not just the resource agencies but also then moving 
on to FERC. One of the things--and we certainly actually had a 
reasonably good path, I guess, through the process on this 
first project but that is also because we put a lot of effort 
in front in talking to all the stakeholders involved.
    Chairman Baird. Shifting topic a bit, you know, Dr. Ehlers 
called much of this solar power. I believe some of it is lunar 
power as well, is it not?
    Mr. Dehlsen. Yes.
    Chairman Baird. Puget Sound I guess would be, the Admiralty 
Inlet source, a fair bit of lunar power. That is a lead-in 
actually to a more substantive question, which is, Dr. Bedard, 
you talked about wave energy being the most promising. We have 
got a lot of big waves off our coast, and I am glad to see that 
has been recognized, but it seems to me the more predictable 
source is tidal flow and we know when it is going to happen, we 
know it is velocity. You know, when I scuba dive up in that 
area, man, you literally start it to the minute in some of 
these dives because if you are not out of that water when that 
tide changes, you have got a real problem up there. So we know 
to the minute, and that is not the case with wind, it is not 
the case with even solar in many cases and it is a real problem 
up in the Northwest as we try to integrate grid with 
unpredictable sources. Yet tidal is probably more predictable 
than wind. What is your take on that? Yeah, I think it is 
clearly more predictable than wind, probably more predictable 
than wave as well.
    Mr. Bedard. It certainly is. As a matter of fact, one can 
predict the tidal speeds centuries in advance because they are 
totally dependent upon the relative location of the earth-moon-
sun system. With waves, it is also a good situation in that the 
waves are created from storms in the Pacific Northwest off 
Japan, the Gulf of Alaska, so we know three days in advance 
before the waves are going to hit the beaches. Mr. Rohrabacher, 
who is a surfer, would know that the maverick competition at 
Half Moon Bay, they call in the expert surfers one day in 
advance before the biggest waves are going to hit. So that 
definitely--the predictability is definitely an advantage. When 
I said that wave is the most significant, in the lower 48 
states, there is only maybe a handful or a dozen or so really 
good tidal sites. Most of--the ocean energy in our country is 
in the State of Alaska. They have by far the most wave and 
tidal resources.
    Chairman Baird. We have got, I mean actually a little bit 
north of us but off Vancouver Island there are some 
hellacious--and Point Defiance.
    Mr. Bedard. Absolutely.
    Chairman Baird. I almost said whitewater kayaked. I sea 
kayaked there and it is like whitewater kayaking at times, 
pretty exciting.
    Mr. Dehlsen. I would like to offer another source of energy 
and that is the rotation of the planet and the Coriolis effect, 
which drives the Gulf Stream, and the energy resource off of 
the southeastern United States by the Gulf Stream is quite 
enormous. It is equal to about 50 times the rivers of the 
planet and it flows 12 to 15 miles off the coast of Florida, 
which doesn't have much else in the way of renewable energy, 
geothermal, et cetera. So that is a very important one, and the 
technology for doing that is very much like what you see coming 
out of wind power. So that is the area we are focusing on 
actually, that and wave power.
    Chairman Baird. Thank you. One last comment. I drove by San 
Francisco Bay a while back and saw all those ships moored way 
up the bay there, they are permanently moored there. And I 
thought, Archimedes tells us there is an awful lot of weight 
being lifted every day and lowered back down every day and 
lifted every day. It is too bad we can't attach that to some 
kind of generator, and maybe somebody can figure it out.
    Mr. Inglis.
    Mr. Inglis. Thank you, Mr. Chairman.
    Dr. Ehlers, do you have--
    Mr. Ehlers. A quick comment.
    Mr. Inglis. Sure.
    Chairman Baird. I am going to get a lecture on Archimedes 
here.
    Mr. Ehlers. No, except that apparently there is no 
historical evidence that he ran through the streets naked 
shouting ``Eureka.''
    Chairman Baird. That was my favorite part.

                 Energy Production From the Gulf Stream

    Mr. Ehlers. I know. It is most everyone's favorite part.
    No, I was just going to comment on the Gulf Stream. I am 
very afraid of tampering with the Gulf Stream because we don't 
know how stable it is, and it would be disastrous for Europe if 
our attempts to extract energy from it somehow interfered with 
the flow of the Gulf Stream, and I have no idea what--you know, 
I just don't know what the tipping point is and I am not sure 
anyone knows, so I just wanted to toss that in.
    Mr. Dehlsen. Can I respond to that?
    Chairman Baird. I will tell you what. Let me recognize Mr. 
Inglis for his five minutes and Dr. Ehlers will get his shot, 
unless Mr. Inglis wants to hear about the Gulf Stream.
    Mr. Inglis. That would be great. I would be happy for you 
to answer that question.
    Mr. Dehlsen. We had the University of Delaware do a study 
in that topic and their conclusion was that at 10,000 megawatts 
it was essentially within the noise of natural variability, so 
effectively you could extract that from the Gulf Stream, say, 
off of Florida, and really have no impact on that circulation 
pattern. That is a very important topic to be aware of.
    Mr. Inglis. And just two observations. One is, you know, as 
a guy that is into sailing, I think that the scene of being 
able to see wind turbines off shore is like looking at 
sailboats, and for the well-heeled that Dana was speaking of 
that don't like their view interrupted, I think they need to 
rethink that and just imagine that that is a beautiful sailboat 
out there. In fact, maybe we could put some colorful sort of 
spinnaker kind of sails on them or ribbons and make them look 
more like sailboats. I think they are really beautiful, 
particularly when you think about how they are out there 
producing no emissions. It is a rather beautiful scene. You 
should invite people over to see out of your window what we are 
doing out there, it seems to me.
    The other thing is, since we are plugging, and I am not 
plugging a book, I am plugging a bill. I mentioned earlier 
Carlos Gutierrez' definition of sustainability that is making a 
profit. The challenge that we hear from this witness table a 
lot in transportation fuels is that incumbent fuel there being 
petroleum doesn't have all the costs in. If the costs were all 
in and a proper cost accounting, even for the simple thing of 
the defense expenditures associated with protecting that supply 
line, even if that were only attributed to the price of 
petroleum, then a lot of what we hear from that witness table 
would become economically viable. What we are hearing today is 
that this wave energy, tidal energy could become viable if the 
costs were in on coal, the dominant incumbent technology. If 
all the costs were in there, wow, you would be in business. So 
these ideas would not be ideas, they would be actually being 
deployed and being developed. So I have got a bill that does 
that. It is 15 pages compared to cap and trade, which is a 
1,200-page monstrosity, and so it is 15 pages of a simple 
concept, a revenue-neutral tax swap, reduce payroll taxes, 
impose a tax on emissions, make it border adjustable so it is 
removed on export, imposed on import, and it is pretty 
exciting. Fifteen pages gets the job done. And it would change 
the economics and make it so what we hear from that table would 
suddenly become viable and fit with Carlos Gutierrez' 
definition of sustainability. If you can make a profit, it is 
sustainable; if you can't, it is not. But when the incumbent 
technologies get to hide the cost with negative externalities 
that are not internalized, there is a market distortion and 
especially conservatives should rise up and say we can't 
tolerate market distortions because we believe in the power of 
markets and we believe in the power of free enterprise.
    Thank you, Mr. Chairman, for that opportunity to plug my 
bill as well as a book.
    Chairman Baird. I fully support your bill, and the only 
drawback is that it sinks less carbon in the text of the bill 
than does the competing cap-and-trade model, but I think it is 
a much more elegant and likely to succeed strategy than the 
cap-and-trade model. The key point, though, to make this 
technology work, you have got to purely value carbon in some 
fashion and I think yours is a better way to do it, frankly.
    Dr. Ehlers.
    Mr. Ehlers. Thank you. Very briefly, I totally agree with 
the comments of Mr. Inglis, and it is certainly a more 
intelligent approach to take to the cap and trade, simply add a 
tax and give the money back to the people in a different way. I 
also commend Mr. Inglis on his comments about the view and I 
decided after your discussion of how beautiful they are that 
you obviously could improve your salary by selling real estate. 
You have a real talent there for making property look good. 
With that, I yield back.

                 Thermal Energy Potential in the Oceans

    Chairman Baird. One final topic. The bells imply that we 
have a vote. We have not talked about thermal potential within 
the oceans, and I wonder if any of you would like to chat about 
that briefly. It may not be within your purview but possibly 
Mr. Beaudry-Losique could talk a little bit about the thermal 
potential energy because I understand it is fairly significant.
    Mr. Beaudry-Losique. We agree that the potential of ocean 
thermal is fairly enormous. However, because of the relatively 
low difference in temperature between the top and the bottom of 
the ocean, we need still fairly large-scale device, enormous 
devices with very high capital cost. So we are going to spend 
the next year or two to try to validate the economics of OTEC 
and try to--and work also with the Navy on that topic and try 
to determine what is going to be the ultimate potential of 
driving that cost down. That will drive where would it best 
fit: a tropical island or for more mainstream applications.
    Chairman Baird. Does anyone else wish to comment on that?
    Mr. Dehlsen. Yes. With the Gulf Stream application, the 
machine that we are developing is one that can also--other than 
generating electricity, you can generate high-pressure water to 
shore and use that water for reverse osmosis desalinization 
because if you are drawing the water off of depths, you pick up 
about a 20-degree differential. So central cooling of Miami, 
for example, is a possibility. And the energy payback on that 
is enormous. If you combine the residual electricity that you 
could generate off of the reverse osmosis flow that remains 
plus the central cooling, it really helps significantly the 
economics of that technology.
    Chairman Baird. Maybe some low-head hydro applications 
there as well.

                                Closing

    I want to thank our witnesses for very, very fascinating 
work and in all of your case lifetime of contribution to this 
important issue. As always, the record of this hearing will 
remain open for two weeks for additional statements from the 
members and for answers to any of the follow-up questions the 
Committee may ask of the witnesses. I would like personally to 
maybe follow up with some of you about the idea of a joint 
meeting with some of the regulators, some of the applicants and 
the research side so we can possibly get this thing moving a 
little bit faster and maybe a lot bit faster, and with that, 
the witnesses are thanked for their time. My colleagues, thank 
you for your input as always and thanks to the staff, and the 
hearing is now adjourned. Thank you very much.
    [Whereupon, at 11:31 a.m., the Subcommittee was adjourned.]

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