Ocean Energy Blue Tag Study: Bridging the Gap Between the Cost of Wave Energy and its Market Value Public Deposited

http://ir.library.oregonstate.edu/concern/technical_reports/mc87pw043

Descriptions

Attribute NameValues
Creator
Abstract or Summary
  • This report is designed to supplement the Oregon Wave Energy Trust (OWET) Utility Market Initiative (UMI) report released in December of 2009 and other work already undertaken by OWET. The UMI report addresses several early-­‐stage characteristics of the ocean energy industry and how those characteristics relate to bridging the gap between the cost of ocean energy and the price it can command in the marketplace. Several of those characteristics are worth mentioning here, although a deeper analysis of them is beyond the scope of this report. In general, this report does not address the Research, Development and Deployment needs of the industry. This report is focused on the regulatory and non-­‐ regulatory incentives available, or potentially available, to address the above market price of ocean energy produced electricity. The emerging Ocean Energy (OE) industry can provide substantial economic and environmental benefits to the State of Oregon. Energy industry stakeholders and policymakers in Oregon should embrace this emerging industry and support its current phase of development, recognizing that investments at this stage are likely to create the greatest rewards for the State’s economy over time. Based on information in previous Oregon Wave Energy Trust (OWET) reports, we have assumed for purposes of our analysis that the cost of Ocean Energy will be $250/MWH. We have also assumed that the industry has a goal of installing 500 MW of OE along the Oregon coast. It is too early to know precisely how much utilities will pay for the electricity from OE facilities. We have assumed that existing tax incentives and relatively generous power purchase contracts signed under PURPA would together cover approximately $100/MWH, leaving a shortfall of $150/MWH to be covered either by new incentives, or by the market’s willingness to pay above market prices for OE. The $150/MWH gap between what OE will cost and what wholesale power markets will pay is a vexing challenge. OE has essentially two products to sell: electricity, and OE’s environmental and social benefits. These benefits are variously referred to as Renewable Energy Credits or Blue Tags. Given that the term “REC” has become an industry standard, and given that the industry now refers to RECs from solar systems as SRECs, we have coined the phrase “Ocean Renewable Energy Credit,” or “OREC,” which we use throughout this report. ORECs represent the environmental benefits of OE. While ORECs should clearly command a premium in the marketplace and strategies to increase that premium are worthy of pursuit, it is unreasonable to assume that OREC premiums will cover the entire $150/MWH gap. Inexpensive RECs are widely available, primarily from wind and biomass. Those RECs offer customers many of the same benefits offered by ORECs. Through skillful marketing, there may be some appetite for ORECs over other RECs, however the appetite will be limited and will not support the large-­‐scale development of ocean energy at these prices. Efforts to lower the cost of generation must remain the focus. This report looks at both demand drivers for ORECs and existing and potential incentives to lower the cost of OE generation. If the cost of generation can be significantly reduced, it is much more likely that customers can be found for large quantities of ORECs. Unfortunately, government budgets at all levels are under tremendous pressure and legislators are under pressure to do more with less.
Resource Type
Date Available
Date Issued
Citation
  • Robert K. Harmon & Company LLC. 2011. Ocean Energy Blue Tag Study: Bridging the Gap Between the Cost of Wave Energy and its Market Value. Portland: Oregon Wave Energy Trust. 110 pp.
Non-Academic Affiliation
Keyword
Table of Contents
  • Introduction; Section 1: Reducing the Costs of Ocean Energy; Section 2: Regulatory Markets for Ocean Energy; Section 3: Voluntary Markets for Ocean Energy; Conclusions and Recommendations
Rights Statement
Funding Statement (additional comments about funding)
Publisher
Peer Reviewed
Language
Digitization Specifications
  • PDF
Replaces
Additional Information
  • description.provenance : Made available in DSpace on 2011-12-19T20:15:25Z (GMT). No. of bitstreams: 3 R.Harmon_Blue-Tag_Final-Report_July-2011.pdf: 1608644 bytes, checksum: 39b045bcc56abf18650d0c6cfc3908c8 (MD5) license_rdf: 22760 bytes, checksum: bac85fe9b6ed3c96501e045c0f9e0d61 (MD5) license_text: 0 bytes, checksum: d41d8cd98f00b204e9800998ecf8427e (MD5) Previous issue date: 2011-07-11
  • description.provenance : Submitted by Janet Webster (janet.webster@oregonstate.edu) on 2011-12-19T20:15:25Z No. of bitstreams: 3 R.Harmon_Blue-Tag_Final-Report_July-2011.pdf: 1608644 bytes, checksum: 39b045bcc56abf18650d0c6cfc3908c8 (MD5) license_rdf: 22760 bytes, checksum: bac85fe9b6ed3c96501e045c0f9e0d61 (MD5) license_text: 0 bytes, checksum: d41d8cd98f00b204e9800998ecf8427e (MD5)
  • Oregon Wave Energy Trust (OWET) revised the title, changed the cover page and rearranged the contents. The information is the same.

Relationships

In Administrative Set:
Last modified: 10/25/2017 Default
Citations:

EndNote | Zotero | Mendeley

Items