Marine industry banking on climate regs

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By Katie Howell, E&E reporter

(04/17/2009)- The fledgling marine energy industry needs incentives offered in possible federal climate regulations and about $200 million in private capital to lift its prospects, experts said at a Washington conference yesterday.
Generating energy from ocean waves, tides and temperature changes has long been a goal of the nation’s renewable energy sector, but interest has increased and waned with shifts in energy prices and growing attention to wind, solar and other renewable energy sources (Greenwire, April 14).
Energy experts at the Global Marine Renewable Energy Conference stressed the importance of developing ocean power.
“We view this as an insurance policy against future price volatility, oil peaks and supply shortages,” said Mirko Previsic of re vision consulting LLC. “We’ve got to be able to diversify.”
Previsic said $200 million would help the industry install about 40 megawatts of wave and tidal capacity, enough to demonstrate the viability of the technology and spur commercial development.
But it will not be easy to get that money. Bill Staby, co-founder and president of Resolute Marine Energy Inc., a technology development firm, said his company is competing with about 80 others for limited funding since credit markets dried up last fall.
“It’s a marathon, not a sprint,” he said. “We need to create a level playing field.”
Staby’s suggestion: Establish a carbon tax or carbon cap-and-trade system to curb the use of cheap fossil fuels, giving renewable energy that “level playing field.”
“It guarantees a certain amount of energy will come from renewables going forward,” Staby said. “And that’s truly what spurs private capital formation in this particular industry.”
Legislative aides said lawmakers on Capitol Hill were aware of the situation and working to both pass a cap-and-trade bill and to implement other policies that would specifically benefit the marine renewable energy industry.
Beth Osborne, legislative director for Rep. Jay Inslee (D-Wash.), said the lawmaker was considering including an ocean hydrokinetic research and development component in House energy legislation that would provide federal funding for installation, evaluation, environmental impact studies and accelerated depreciation of turbines and other marine energy equipment.
“We’re working in Congress to make sure we have the market incentives in place to make marine energy competitive with other renewable energy in the marketplace,” Osborne said.
Chuck Kleeschulte, a Republican staffer for the Senate Energy and Natural Resources Committee and Sen. Lisa Murkowski (R-Alaska), stressed the importance of increased federal funding during the credit crunch to help the industry get off the ground.
He said the Energy Department currently has about $37 million to $40 million slated for ocean energy research projects in the 2009 budget and that a number of senators and House members had written to the agency requesting that it bump that number up to $250 million from the stimulus.
But Kleeschulte warned about the dangers of developing an industry and new technology on the basis on government support.
“The basic rule is that the federal government is a fickle partner. Teenage loves last longer than” federal support, he said. “Over the long term, if you allow your businesses to develop a model where they become dependent on federal government support,” it could be cut. “You will be jilted in the end.”
Previsic noted a possible safeguard: Any federal policy should reward electricity generation rather than technology development.
“We know the key risks are technology-related, but we need to start putting a policy in place that rewards companies for electricity delivered, not some intermediate product,” Previsic said.