SMI's Marine Energy Update: 2019 Mid-Year Review
Greetings from Washington.
It has been an exciting year so far! Below are key highlights from the past six months. Additional details on these items and other news can be found on the following pages. Thank you for your ongoing interest in the marine energy industry.
This summer the U.S. House of Representatives approved $127 million in Fiscal Year 2020 funding for the U.S. Department of Energy (DOE) Water Power Technologies Office (WPTO). At least $82 million is earmarked specifically for marine energy activities. The House also approved a $15 million increase for the Navy Energy Program to support marine energy development.
-Ocean Energy USA has completed construction of its wave energy device at the Vigor shipyard in Portland, Oregon which will be deployed to Hawaii later this year.
-Ocean Renewable Power Company (ORPC) is preparing to deploy its RivGen device in Alaska on the Kvichak River and will supply power to the Village of Igiugig.
-Sustainable Marine Energy successfully demonstrates its tidal energy platform in Nova Scotia.
-Ocean Energy Europe reported that in 2018, European tidal stream installed capacity reached 26.8 MW, and wave energy installations are at 11.3 MW. Europe continues to lead the world in marine energy deployments, and last year its tidal projects produced record volumes of electricity.
-SMI hired Steve Chalk, former DOE Deputy Assistant Secretary for Renewable Power.
-The DOE released a report to Congress on its marine energy research and development activities.
-The WPTO released a separate report on Powering the Blue Economy: Exploring Opportunities for Marine Renewable Energy in Maritime Markets.
-The DOE announced SBIR awards for three Marine Energy Council (MEC) members - ORPC, Oscilla Power and Resolute Marine Energy.
Many of these successes in the United States were supported by the National Hydropower Association (NHA) MEC, which plays a key role in advocating for increased federal support for the industry. We very much appreciate the entire staff at NHA, along with the volunteer executive team of the MEC. We strongly encourage our readers to join or retain membership in the NHA MEC.
Finally, we want to thank NHA President and CEO Linda Church Ciocci for her excellent leadership for the water power industry. Linda's support over the years to enable effective industry advocacy has begun to pay real dividends. Linda is retiring from NHA soon and we wish her all the best in her future endeavors!
Damian Kunko and Paul Gay
Historic Funding for Water Power R&D
Earlier this year President Trump once again proposed significant reductions to DOE water power research and development activities in his annual budget request to Congress. Fortunately, the marine energy industry has fostered a strong bipartisan group of champions on Capitol Hill who are working hard to block these harmful cuts and instead provide a substantial funding increase for water power. We particularly appreciate the 42 members of the House of Representatives who co-signed a letter to the Appropriations Committee in support of robust funding for the WPTO. The letter was led by Rep. Suzanne Bonamici (D OR-1st), Rep. Scott Perry (R PA-4th), and Rep. Chellie Pingree (D ME-1st) and helped secure a record $125 million for water power R&D in Fiscal Year (FY) 2020. Many thanks to the following House members who co-signed the letter:
Alma S. Adams (D NC-12th); Donald Beyer Jr. (D VA-8th); Earl Blumenauer (D OR 3rd); Salud O. Carbajal (D CA-24th); Steve Cohen (D TN-9th); Jim Costa (D CA-16th); Angie Craig (D MN-2nd); Peter DeFazio (D OR-4th); Diana DeGette (D CO-1st); Mark DeSaulnier (D CA-11th); Ted Deutch (D FL-22nd); Tulsi Gabbard (D HI-2nd); Raul M. Grijalva (D AZ-3rd); Alcee Hastings (D FL-20th); Richard Hudson (R NC-8th); Sheila Jackson Lee (D TX-18th); Pramila Jayapal (D WA-7th); Raja Krishnamoorthi (D IL-8th); Rick Larsen (D WA-2nd); Barbara Lee (D CA-13th); Doris Matsui (D CA-6th); Jim McGovern (D MA-2nd); David McKinley (R WV-1st); Cathy McMorris Rodgers (R WA-5th); Jerry McNerney (D CA-9th); Jimmy Panetta (D CA-20th); Donald M. Payne, Jr. (D NJ-10th); Scott Peters (D CA-52nd); Stacey E. Plaskett (D VI-AL); Jamie Raskin (D MD-8th); Bobby L Rush (D IL-1st); Kurt Schrader (D OR-5th); Terri A. Sewell (D AL-7th); Darren Soto (D FL-9th); Adam Smith (D WA-9th); Elise Stefanik (R NY-21st); Mark Takano (D CA-41st); Paul Tonko (D NY-20th); and, Don Young (R AK-AL).
During floor debate in the House on the FY 2020 Energy and Water Development appropriations bill, which funds DOE, Rep. Perry introduced an amendment to provide an additional $2 million to the water power office. The amendment was approved for a total of $127 million for water power R&D. The House then passed the overall energy and water bill. The Senate has not yet taken action on its version of the legislation. We expect the Senate Appropriations Committee to begin its consideration of the energy and water measure sometime after Labor Day. The House directive report language for the WPTO is copied below:
"Water Power - Within available funds, the recommendation provides $82,000,000 for marine and hydrokinetic research, development, and deployment activities, including research into mitigation of marine ecosystems impacts of these technologies. The Committee supports the Department's emerging focus on bringing marine energy to meet near-term opportunities in the blue economy, thereby accelerating marine energy grid readiness. The recommendation provides not more than $10,000,000 to support research and development, testing, and partnership activities for the new Powering the Blue Economy initiative. The Committee encourages the Department to use existing core capabilities within its national laboratories to execute this work, in partnership with universities and industry. Within available funds, the Committee provides $35,000,000 for a balanced portfolio of competitive solicitations to support industry and university-led research, development, and deployment to validate the performance, reliability, maintainability, environmental impact, and cost of marine energy technology components, devices, and systems at a variety of scales, of which not more than $10,000,000 is for the Testing Expertise and Access for Marine Energy Research program. Within available funds, not more than $10,000,000 is provided to address infrastructure needs at marine energy technology testing sites. The Department shall 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."
Marine Energy R&D Bills Introduced in Congress
We are pleased to report that Senator Ron Wyden (D-OR) and Rep. Ted Deutch (D FL-22nd) in June introduced companion bills in the Senate and the House to reauthorize the marine energy activities of the DOE WPTO. The Marine Energy Research and Development Act of 2019(S. 1821 and H.R. 3203) was cosponsored in the Senate by Senators Angus King (I-ME), Jeff Merkley (D-OR), Jack Reed (D-RI) and Brian Schatz (D-HI), and in the House by Rep. Suzanne Bonamici. The legislation would authorize $150 million per year for FY 2020 and 2021. This result would be a significant increase over current funding trends. Congress originally authorized DOE to support marine energy development in its landmark 2007 energy legislation. The marine energy bills have been referred in the Senate to the Committee on Energy and Natural Resources and in the House to the Committee on Science, Space and Technology. We are now working with Congressional staff to review the bills and identify potential revisions in preparation for committee consideration and markup sometime after Labor Day. We will keep you apprised of our progress. Please contact your Member of Congress and ask them to cosponsor the bills or thank them for their support.
U.S. Navy/DARPA Update
We continue to lobby Congress to increase funding for the U.S. Navy to invest in research, development and testing of marine energy technologies. Our focus remains on securing language in the annual defense authorization and appropriations bills developed by Congress to provide programmatic guidance to the Pentagon for those efforts. For FY 2020, we worked with our Congressional champions in the House to secure a $15 million Navy Energy Program increase in the Defense Appropriations measure that could be used to support marine energy efforts. We also successfully lobbied to add funds to programs that benefit academic research activities related to the use of marine energy for autonomous systems.
We expect more interest by the Navy to invest in marine energy technology development as devices and new capabilities continue to be successfully demonstrated at the U.S. Navy Wave Energy Test Site in Hawaii. We expect deployment of the Ocean Energy USA wave energy converter later this year and additional deployments of various wave energy technologies in 2020.
DARPA hosted an industry day in May on a new research program called Manta Ray. The principal objective of Manta Ray is to open a design space for future unmanned underwater vehicles (UUVs) that are capable of both long duration missions and large payload capacity. A secondary goal of the program is to advance key technologies that will benefit other naval designs such as low lifecycle cost UUV operations, long duration undersea energy management techniques, biofouling reduction technologies, and long duration navigational enablers. The DOE WPTO brief ed the attendees on the value and opportunity related to marine energy systems to support program objectives for UUV recharging. Manta Ray BAA is open until August 15th.
SMI Hires DOE Senior Official Steve Chalk
SMI recently announced that Steve Chalk has joined the firm as a Vice President. Steve previously served in the DOE as the Deputy Assistant Secretary (DAS) for both Renewable Power and Energy Efficiency. Steve was a preeminent leader in the federal government's clean energy investment strategy and will be tremendously valuable in support of our water power clients. In addition to his most recent roles, he also served as DAS for Sustainable Transportation, twice as DAS for Renewable Energy, and DAS for Operations. As Chief Operating Officer in DOE's Office of Energy Efficiency and Renewable Energy, he directed the largest one-time clean energy investment in history under the American Recovery and Reinvestment Act. As Acting Assistant Secretary, he led the Presidential transitions from President Bush to President Obama and then to President Trump for DOE's $2B annual investment in efficiency and renewable technologies. Mr. Chalk received three Presidential Rank Awards for his exceptional work as a federal executive.
ARPA-E released a Request for Information (RFI) on "Next Generation of Marine and Riverine Hydrokinetic Energy Systems last month. Thanks to all of the organizations that provided feedback, which we expect will positively impact future federal marine energy investments. We hope to see a funding opportunity released next year from ARPA-E to support marine energy R&D.
PNNL Marine Science Lab RFI
The WPTO is seeking feedback from the renewable energy industry, academia, national laboratories, government agencies, and private entities about the use of Pacific Northwest National Laboratory's (PNNL) Marine Sciences Laboratory (MSL) as a research, development, testing, and validation venue. This RFI addresses the growing interest in the use of MSL facilities for renewable energy, maritime markets-as part of WPTO's Powering the Blue Economy Initiative-and energy storage research, technology development, and testing. Results of this RFI may be used to help DOE and PNNL prioritize MSL resources and investments. Stakeholder feedback is due by 5pm EST on August 8, 2019.
We are excited that Washington, DC was selected as the host city for the International Conference on Ocean Energy 2020 event,May 19-21, 2020. Stay tuned for details on how you can participate in planning for this important chance to showcase to the world the marine energy market opportunities here in the United States. We are also looking forward to participating in several important conferences related to marine energy technology advancement during the second half of 2019. See our list below. Please let us know of any events we may have missed.
-EWTEC - Sept. 1-6 - Napoli, Italy
-Pacific Ocean Energy Trust, Ocean Renewable Energy Conference - Sept. 10-12 - Portland, OR
-OceanObs 19- Sept. 16-20 - Honolulu, HI
-Ocean Energy Europe - Sept. 30-Oct.1 - Dublin, Ireland
-DOE WPTO Peer Review- Oct. 8-10 - Alexandria, VA
-Marine Renewables Canada - energy3- October 16-18 - Halifax, Nova Scotia
-Oceans 19 - Oct. 37-31 - Seattle, WA
SMI has developed the following priority areas that will support our client's interests in commercializing the marine energy sector. We look forward to working with you to advance these recommendations.
1. Continue to increase funding for the DOE WPTO and Navy Energy Program to support R&D and test facility construction and operations.
2. Pursue congressional legislation to re-authorize the WPTO to allow additional funding to be allocated to various industry priorities.
3. Seek legislation to authorize and fund new power production incentives for marine energy to subsidize early stage pre-commercial testing.
4. Support WPTO efforts to encourage new market access related to powering maritime electrification activities, including devices for remote sensing, environmental monitoring, aquaculture, fuel production, etc.
5. Work with other federal programs on cross-cutting R&D with the WPTO - such as the Wind office's increased support for offshore wind and other potential sponsors of marine energy development for applications beyond utility scale power generation.
Marine Energy Opportunity
We strongly believe that marine energy represents the next generation of renewable power technologies. It has tremendous potential to produce significant amounts of clean, renewable power while creating high-quality employment opportunities. In addition, marine energy is a clean, safe, predictable and reliable form of energy. The resource is close to population centers and can provide power to many different maritime markets and the Blue Economy. Marine energy can also revitalize our nation's ports and shipyards as devices can be built and maintained near generation sites.
We continue to be encouraged by the European Commission report on wave and tidal energy which has forecast global installed capacity to hit up to 3.9GW by 2030 based on current levels of political support. Ocean Energy Europe predicts that by 2050, 100GW of marine energy can be installed in Europe and meet ten percent of European electricity demand. The International Energy Agency Ocean Energy Systems 2050 Vision predicts 300 GW of global marine energy installed capacity, with $35 billion in investment and 680,000 direct jobs.