Survey of Energy Resources 2007
OTEC - Economics and Finance
Although these additional products offer significant potential improvements to the economy of OTEC, a contributory reason to the lack of commercialisation of OTEC/DOWA to date is that the economic benefits of these products have generally still not been integrated into the scenarios of development. It is difficult at present to measure these benefits accurately, and only the potable water production benefit has been quantified. The relevance of environmental impact was given a considerable boost by the Rio and Kyoto summits, and follow-up actions have included a much greater emphasis on this aspect by a number of countries and energy companies, including the impact of a Carbon Tax in various forms on fossil fuels. When these are brought into full use - as may well be the case in the first decade of the 21st century - then all renewables, including OTEC, will benefit further in terms of competitiveness with hydrocarbons. Calculations of generating costs should already take increasing account of this and other 'downstream environmental factors'. Even without such criteria being included, OTEC/DOWA is now an attractive economic option in a number of locations.
Quite apart from this aspect, technological improvements - such as the much smaller heat exchangers now required - have contributed to significantly reduced capital expenditure - but in common with all other capital plants, expenditure has increased in line with higher material costs. Also, the world-wide trend to whole-life costing benefits all renewables when compared with those energy systems which rely on conventional fuels (and their associated costs), since the fuel for OTEC is totally free. Even when the higher initial maintenance costs of early OTEC/DOWA plants are taken into account, net benefits remain. As a result, when compared with traditional fuels the economic position of OTEC/DOWA is now rapidly approaching equality - and in certain locations surpassing it. Work in Hawaii at the Pacific International Center for High Technology Research (PICHTR) has contributed to realistic comparisons, as well as component development.
Nations which previously might not have contemplated OTEC/DOWA activities have been given legal title over waters throughout the 200 nautical mile EEZ associated with the UN Convention on the Law of the Sea (UNCLOS). Prior to that, no investor - private or public - would seriously contemplate funding a new form of capital plant in such seas and oceans, but since UNCLOS a number of nations have worked steadily to prepare overall ocean policies and recent years have seen a number of these introduced - for example in Australia.
Despite the existence of EEZs, the low first costs of many 'traditional' energy resources in the recent past had not encouraged venture-capital investment in OTEC/DOWA, but the currently very much higher costs of oil, plus the growing recognition of the environmental effects (and their costs) of some traditional fuels, are changing the economics of these in relation to OTEC/DOWA and other renewables.
It is all these factors which now put OTEC/DOWA on a fully economic commercialisation basis in comparison with established energy sources. The 2004 SER suggested that this might occur 'early in the 21st century' - and so it has proved to be. But, whilst most of the components for an OTEC/DOWA plant are either immediately available, or nearly so, the inherent simplicity of a number of key elements of these plants still have opportunities for further refinement through continuing R,D&D investment. But with current competitive economics there remains the need to show clearly to potential investors, via a demonstration-scale plant such as that of 1-1.2 MW now being constructed in Hawaii for operation in 2009, that the integrated system also operates effectively, efficiently, and safely.