Greetings from Washington! We hope this note finds you well. We are writing to share our thoughts on efforts to advance the marine energy industry here in the United States and around the world. We see exciting progress, along with some challenges as well, in the work underway to commercialize wave, current, tidal and riverine power converters and create new maritime markets for these products.
2018 has been an exciting year so far with multiple positive events for the marine energy industry. The U.S. Department of Energy’s Water Power Technologies Office is funded at $105 million for Fiscal Year 2018, a record level. The Vigor shipyard in Portland, Oregon is constructing the Ocean Energy USA wave power converter which will be deployed at the U.S. Navy’s Wave Energy Test Site (WETS) at Marine Corps Base Hawaii later this year. Oregon State University and its partners continue development of PacWave, a 20 megawatt grid connected open water wave energy test site near Newport, Oregon. Just one grid-connected Scotrenewables Tidal Power Limited SR 2000 power converter has now generated approximately three Gigawatt hours of electricity since deployment at the European Marine Energy Centre in October 2016. In addition, the April Issue of Hydro Review magazine featured several marine energy project updates from around the world. These are exciting developments for those of us who have been working for years to increase governmental support for getting “steel in the water” at various global testing facilities.
Additionally, we encourage you review the recent IEA Ocean Energy Systems Country report and TETHYS reports for recent developments in the marine energy sector. Also, a European Commission report on wave and tidal energy has forecast global installed capacity to hit up to 3.9GW by 2030 based on current levels of political support.
Our team at SMI has a proven and successful track record in supporting our clients as they navigate the processes and challenges in partnering with the U.S. Federal Government to develop new marine energy technologies. Please contact us if your company or organization could benefit from SMI’s federal marketing and lobbying services. We also encourage our readers to join the National Hydropower Association’s Marine Energy Council which plays an important role supporting critical industry advocacy efforts here in Washington.
Thanks for your ongoing interest and support for marine energy technology development. We look forward to talking with you soon.
Damian Kunko and Paul Gay
DOE Water Power Technologies Office Update
Since our last update, we have worked to increase funding from Congress for the research and development projects supported by the Water Power Technologies Office (WPTO) at the U.S. Department of Energy (DOE). We also continue our federal marketing activities related to these efforts.
This has been a productive year so far for the DOE WPTO. As previously mentioned, the office is funded at historic levels. It released a peer review report on past projects and announced a substantial new technology development funding opportunity which will fund up to $23 million for next generation wave and tidal/current systems; support early stage design of power take-off and control systems; and, develop tools and methodologies that capture recent advances in the scientific understanding of environmental impacts of marine renewable energy. Additionally, the program recently provided $6.7 million to six previously selected awardees.
Maritime Markets RFI
Most importantly in the near term, the WPTO has released a Request for Information (RFI) on a draft report that details the current economic and technical landscapes for 12 maritime markets where applications may exist for marine energy technologies. The markets are: Ocean Observations; Unmanned Underwater Vehicles/Autonomous Underwater Vehicles Recharge; Data Centers; High Cost Utility Grids; Isolated Community Grids; Canal Power; Aquaculture; Algae; Desalination of Seawater; Seawater Mining; Shoreline Protection; and, Disaster Relief and Recovery
The WPTO is seeking feedback on the content of the draft report, input on the value of each market, and recommendations on next steps and future efforts to investigate these potential markets. The office seeks stakeholder feedback by 5:00 pm (ET) on July 31, 2018. Read more.
It is critical that the marine energy industry provide feedback as this information will be used to guide future funding opportunities. By responding to the program RFI, it could allow decision makers to prioritize new funding opportunities for the technologies relevant to your organization. Please review the draft report and submit information on how your technology can support the identified markets. There is no need to address the entire report – just focus on describing how your technology works and markets you are seeking to support. We strongly urge each company hoping to partner with DOE in the future to respond to this RFI.
Congressional Funding Action
Despite facing multiple challenges, we have had great success working with our Congressional champions, industry partners and other interested parties to increase federal investments in water power during the first eighteen months of the Trump Administration. In addition, many of SMI’s clients have received some level of support during this timeframe to develop new technologies, build testing infrastructure and expand research capabilities, for which we are grateful.
We have been disappointed that President Trump and his Administration has now twice proposed to greatly curtail the marine energy technology research and development activities of the DOE WPTO through the Fiscal Year 2018 and 2019 budget funding cycles. Fortunately, water power has been one of the areas which has seen strong bipartisan support on Capitol Hill from Republicans and Democrats alike. We have been able to rally a growing list of bipartisan water power Congressional champions to block President Trump’s harmful proposed cuts and position the WPTO for increased funding. We appreciate the Members of Congress and staff who have helped to make this happen! The end result has been a substantial win for the water power industry with the highest levels of federal investments in technology R&D seen since the program was restarted in Fiscal Year 2008.
Earlier this year, the President signed into law the Fiscal Year 2018 omnibus appropriations legislation, which included $70 million for DOE Marine Energy R&D - an increase of $11 million from Fiscal Year 2017 levels. The final directive report language from Congress to the Department of Energy is below:
“Water Power. ln lieu of Senate report direction, the agreement provides $70,000,000 for marine and hydrokinetic technology research, development, and deployment activities, including research into mitigation of marine ecosystem impacts of these technologies. The Department is directed to continue development of the open-water wave energy test facility with previously provided funds. The Department is directed to continue competitive solicitations to increase energy capture, reliability, and survivability at lower costs for a balanced portfolio of wave and current (ocean, river, tidal) energy conversion systems and components. Within available funds, the agreement provides $30,000,000 for industry- and university-led basic and applied research, development, and validation projects encompassing a pipeline of higher and lower technology readiness levels. The funds shall be used for new awards or to bring existing and validation awards toward completion. The agreement provides not less than $8,000,000 to support collaborations between the previously designated university-based Marine Renewable Energy Centers and the national laboratories, including personnel exchanges, to support industry by conducting research, development, and deployment of marine energy components and systems. In addition, the Department is directed to continue its coordination with the U.S. Navy on marine energy technology development for national security applications at the Wave Energy Test Site and other locations. Within available funds, the Department is directed to prioritize the necessary infrastructure upgrades at marine industry testing sites operated by the national laboratories or the National Marine Renewable Energy Centers. The agreement provides not less than $1,000,000 for these efforts.”
Fiscal Year 2019
A key to our success has been the bipartisan two year budget deal which covered Fiscal Years 2018 and 2019 to provide increased resources to various funding accounts across the federal government. Also critical to our efforts has been the bipartisan work of the Appropriations Committee and other staff to ensure Congressional directives are followed by the Executive Branch.
With regard to funding levels for the WPTO in Fiscal Year 2019, both the House and Senate have approved the annual energy and water development appropriations bill and the measure is in a conference committee to reach a compromise agreement. This is the first time in a decade we have seen a conference committee for an energy and water bill, a good sign for its eventual passage. The House approved funding level for the WPTO is $59 million for Marine Energy R&D, the highest level ever secured in a House approved funding bill. The Senate passed its energy and water bill with $70 million included for marine energy, equal to Fiscal Year 2018.
Although things change daily here in Washington right now, we remain hopeful that the WPTO may receive its funds and program direction from Congress before the start of the upcoming fiscal year on October 1, which would be unfamiliar but welcome territory for the water office staff.
Water Power Reauthorization Update
We continue to monitor bipartisan legislation introduced last year by Senator Lisa Murkowski (R-AK), chair of the Senate Energy and Natural Resources Committee, and Senator Maria Cantwell (D-WA), the committee’s Ranking Member. The Energy and Natural Resources Act (S. 1460) includes Senator Wyden’s Marine Energy Act (S. 1036), which authorizes $300 million in future federal investments to support R&D activities for marine energy technology commercialization efforts. We hope that an opportunity will arise for this bipartisan legislation to be considered by the Senate sometime before the election in November. We are working with Members of the House to introduce companion legislation in that body in the near future.
U.S. Navy Update
SMI continues to support ongoing efforts by the U.S. Navy to invest in the commercialization of marine energy technologies. Our focus remains on securing language in the annual defense authorization and spending bills developed by Congress to provide guidance to the Pentagon, as well as funding and programmatic language in the annual defense appropriations measure.
Special thanks to our congressional champions, including House Armed Services Committee Ranking Member Rep. Adam Smith (D-WA), for inserting the below FY18 language helpful to the marine energy industry:
“Marine and Hydrokinetic Technology - The committee is aware of the U.S. Navy’s vision in the 30-year research and development plan for supporting energy harvesting, undersea sensor nets, and unmanned underwater vehicle operations. In order to conduct many of the development and research projects planned by the Navy, the committee recognizes the need to have sufficient infrastructure to not only test, but also to do a broader range of experimentation, prototyping, and development that will be necessary for future naval capabilities. The committee encourages the Navy, in coordination with its other Federal partners, to continue its support for the development of marine and hydrokinetic technologies, including research, testing, and demonstration of maritime security systems, at-sea persistent surveillance and communications systems, and unmanned undersea vehicle charging. The committee believes that support from existing facilities, such as the Navy’s Wave Energy Test Site in Hawaii and other research facilities that are supporting marine and hydrokinetic energy systems technology development, will be critical to developing the naval force of the future.”
SMI led the effort to ensure Congress provided $35 million in the FY 2018 Defense appropriations bill for the U.S. Navy to support Alternative and Renewable Energy research and development. These funds include the Navy’s various marine energy investments, such as the Wave Energy Test Site in Hawaii and other programs nationwide. These investments are important for developers to access as there are no cost-share requirements.
The U.S. Navy received $35 million for both "Alternative" and "Renewable Energy" R&D and the Senate report language states: “Navy Alternative Energy Research.- The Committee notes the fiscal and operational value of investing in alternative energy research and encourages the Navy to continue research, development, test and deployment of advanced energy systems that have the potential to reduce the cost of energy and increase energy security, reliability and resiliency at Department of Defense facilities. The Committee understands that the integration of emerging land- and ocean-based energy generation and energy efficiency technologies could potentially improve the operational security and resiliency of critical physical and cyber-physical infrastructure and encourages the Navy to invest in energy demonstration activities relating to Department of Defense facilities and activities in coordination with other Federal agencies and entities.”
For FY19, we also secured a $7M plus-up specifically for “Marine Hydrokinetic Energy” research in the Senate Defense Appropriations bill and also lobbied to support the inclusion of authorization language that should benefit academic research activities related to the use of marine energy for autonomous systems:
“Academic partnerships for undersea unmanned warfare research - The budget request contained $58.0 million in PE 62747N for undersea warfare applied research. The committee supports the Navy’s efforts to develop the next generation of nuclear submarines and other undersea systems and capabilities. Specifically, the committee supports research, development, testing, and demonstration of maritime robotic systems that may be used for security and surveillance, inspection and survey, munitions retrieval, and environmental monitoring. The committee understands that there are additional opportunities to enhance development of the next generation submarines and maritime robotics technology in the areas of autonomy, adaptive decision making, docking, 3-D imaging, energy technologies such as marine and hydrokinetic convertors, and data transfer. The committee believes that university-based research and innovation centered on the development of maritime robotic technology and other capabilities required for advanced undersea warfare will be essential in maintaining the Navy's competitive advantage. Therefore, the committee recommends $78.0 million, an increase of $20.0 million, in PE 62747N. Elsewhere in this title, the committee notes the importance of partnerships with academia to advance unmanned platforms and systems in order to maintain a competitive war fighting advantage.”
We continue to participate in major conferences related to marine energy technology advancement, including this year’s International Marine Renewable Energy Conference and the International Conference on Ocean Energy 2018.
The Water Power Technologies Office (WPTO) and national laboratories are the primary sponsors of the annual Waterpower Week in Washington held this year from April 30 - May 2nd. Comprised of three co-located conferences rolled into one—the National Hydropower Association's (NHA's) Annual Conference, the International Marine Renewable Energy Conference, and Marine Energy Technology Symposium—water power professionals discussed the future sustainability of the hydropower and marine energy industries. More than 30 presentations and posters by WPTO staff, national laboratories, and WPTO funding awardees were presented over the course of the week. Next year’s conference will be held April 1-3, 2019.
We also participated in ICOE 2018 in Cherbourg, Normandy – June 12-14. The marine energy development efforts underway in France, the U.K, Spain and other countries gave fresh perspective on future growth opportunities in the U.S. The E.U./regional ministers representing the energy and economic development positions for their respective governments all mentioned that they were motivated by the opportunity to tap into a projected $50 billion marine energy market by 2050. There were at least 70 exhibitors and several country pavilions that hosted their technology developers and related supply chain. It is still clear that the E.U. continues to lead the marine energy sector with tidal arrays being installed and several wave energy technologies being tested at EMEC and other test sites. We conservatively estimate that there is at least $250M+/yr in both private and public funding being spent on R&D/commercialization efforts in Europe.
We are pleased to note that Washington, DC was selected as the host city for the ICOE 2020 event. Stay tuned for details on this important chance to showcase to the world the marine energy market opportunities here in the United States.