Holding Back the Tide

In late 2013, the U.S. Department of Energy invested a whopping $16.9 million in seventeen projects aimed at developing wave and tidal energy sources.  Some of projects were set up to build devices durable enough to withstand the harsh forces of the ocean movement.  The rest of the projects were to gather and analyze environmental data from wave and tidal power demonstration sites. 

Friends of the environment are probably not impressed with the government’s ocean power investment budget, which suggests more a token acknowledgement than a real interest in building up the power source.  There might be a good reason for the paltry allocation.

Unlike a bucolic meadow where a tall wind tower can be constructed in the warm sun, the sea is a challenging place to work.  Even if there is certainty in the efficiency of the energy capture device, installation and maintenance is fraught with danger in the tumultuous movement of the waters.  Did I mention the corrosive salt? The design and construction of the device must be effective for the location to ensure use over the full expected life.

The engineering challenges of harnessing tidal power present significant capital requirements.  Many have argued that the price tag for tidal power far outweighs the energy potential. The Department of Energy has invested $16.9 million to answer the cost-benefit question with more than a guess.

There is another more critical matter holding back ocean power in the U.S.  -  the oceans themselves.  It appears on that only the seas off coasts in the Pacific Northwest and Alaska are considered optimum for tidal power harvesting with strong water flow and exceptional force.  That has not stopped the US Department of Energy from providing a generous estimate for a potential of 1, 170 terawatt-hours per year from tidal and wave power generation projects.  That would satisfy about one-quarter of the power needs in the U.S. 

More recently in August 2015, the DOE awarded another $7.4 million to four projects aimed at solving particular engineering and mechanical problems that have cropped up in ocean power demonstration projects.  The bureaucrats have even applied an all inclusive name -  marine and hydrokinetic (MHK) systems  - to the ocean power arena.  Even if the budget seems skimpy, an official acronym makes it clear that federal policy has not given up entirely on the tides.

The next few posts will feature companies devoted to building “MHK” systems in for the U.S. power market.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.