Commercial Viability of Ocean Current Generators in California

This is the Business Summary of a project proposing to build a “Flowing saline water magnetohydrodynamic electric generator” (Inventor: Frank J. Hendel) on the California cost.

Patent Abstract:

A magnetohydrodynamic electric generator for the direct energy conversion of the kinetic energy of saline water flowing through a magnetic field, preferably in the constricted part of a duct. Means may be provided to increase the kinetic energy of the flowing saline water using wave-powered air compressors and/or water pumps. Also described are sea platforms containing a multitude of electricity generators in a configuration to maximize the conversion of the kinetic energy of flowing saline water into electric energy.

Source: https://patents.google.com/patent/US4151423A/en

Introduction:

This business summary evaluates the commercial practicality of building ocean current generators in California, taking into account the current regulatory environment, the strength of currents close to the shore, and maintenance costs.

Regulatory Environment:

The regulatory environment in California plays a pivotal role in determining the commercial viability of ocean current generators. California has been proactive in supporting renewable energy initiatives. However, the approval and permitting process for ocean energy projects may still present challenges, given the need to safeguard marine ecosystems and coastal interests.

In California, several major regulatory acts and frameworks are essential to consider and maintain when applying ocean current generators for commercial use:

• California Environmental Quality Act (CEQA): CEQA is a critical regulatory act that requires businesses and public agencies to identify and mitigate the environmental impacts of their projects. Any ocean current generator installation must undergo a thorough environmental review and impact assessment to comply with CEQA.
• Marine Life Protection Act (MLPA): The MLPA is aimed at conserving and protecting marine life and ecosystems. Businesses deploying ocean current generators near the California coast must adhere to MLPA regulations to ensure minimal harm to the marine environment.
• Coastal Act (California Coastal Act): The Coastal Act governs development and land use along the state’s coastline. It plays a significant role in regulating structures and projects in the coastal zone, which includes ocean current generators. Compliance with Coastal Act policies is crucial for project approval.
• State Lands Commission (SLC) Regulations: The SLC has authority over the use of state-owned lands and waters. Businesses must work closely with the SLC to secure the necessary permits and leases for deploying ocean current generators in state waters.
• California Public Utilities Commission (CPUC): If the generated electricity is to be fed into the grid or sold to utilities, CPUC regulations come into play. Businesses must adhere to CPUC guidelines for grid interconnection and energy sales.
• California Energy Commission (CEC): The CEC is responsible for overseeing and promoting renewable energy projects in the state. Any business looking to implement ocean current generators as a part of the renewable energy infrastructure should engage with the CEC for guidance and possible funding opportunities.
• Federal Regulatory Agencies: In addition to state regulations, businesses must also consider federal regulations imposed by agencies such as the Federal Energy Regulatory Commission (FERC) when deploying ocean current generators in federal waters or when interconnecting with the national grid.

Compliance with these regulatory acts is essential to ensure the environmental and legal integrity of ocean current generator projects in California. Engaging with state and federal regulatory agencies, conducting thorough environmental impact assessments, and obtaining the required permits and approvals are crucial steps in navigating the complex regulatory landscape for such renewable energy initiatives.

The cost of maintaining compliance with the regulatory acts in California can vary significantly depending on the size and scope of the private company’s operations, the complexity of the project, and the specific regulations involved. Here are some general cost considerations:

1. Legal and Regulatory Expertise: Many companies require legal and regulatory experts to navigate the complex compliance requirements. Costs for legal counsel and compliance experts can range from thousands to tens of thousands of dollars per year.
2. Environmental Impact Assessments: Environmental impact assessments are a crucial part of compliance, and the cost can vary depending on the project’s complexity. These assessments can range from several thousand to hundreds of thousands of dollars.
3. Permitting and Application Fees: Businesses often need to pay permitting and application fees to various regulatory agencies. The cost depends on the type and scale of the project, but they can range from hundreds to thousands of dollars.
4. Monitoring and Reporting: Ongoing monitoring and reporting to ensure compliance can be a recurring expense. This cost depends on the scale of the project and the frequency of reporting and monitoring required.
5. Regulatory Compliance Software: Some companies invest in regulatory compliance software to streamline the process and manage documentation. Costs for such software solutions can vary widely.
6. Mitigation Measures: If a project has adverse environmental impacts, there may be additional costs associated with mitigation measures to offset these impacts.
7. Public Relations and Stakeholder Engagement: Depending on the project, companies may need to engage in public relations and stakeholder engagement efforts to address concerns and build community support. Costs can vary.

It’s challenging to provide a precise average cost as it depends on the specific circumstances of each project and company. However, compliance costs can add up significantly, and for larger and more complex projects, they can run into the hundreds of thousands or even millions of dollars. Smaller projects or those with less regulatory complexity may have lower compliance costs. It’s essential for private companies to budget for these expenses and work with experts in the field to ensure they meet all regulatory requirements while managing costs effectively.

Strength of Nearshore Currents:

The strength of nearshore currents along the California coast varies significantly. The California Current, mentioned in the provided calculations, is a major oceanic flow off the coast. However, its speed near the shore tends to be slower than in offshore regions. To make ocean current generators commercially viable, it’s crucial to identify locations with sufficiently strong currents that can provide consistent kinetic energy. Precise measurement and analysis of local current speeds and patterns are essential to ensure the feasibility of such projects.

Maintenance Costs:

Maintenance costs are a substantial factor in the commercial viability of ocean current generators. These devices are exposed to harsh marine conditions, and maintenance can be both challenging and expensive. Maintenance requirements include periodic inspection, repair, and replacement of mechanical and electrical components, as well as dealing with fouling and biofouling issues. The cost will depend on factors such as the device design, location, and the scale of the project.

The maintenance costs for ocean current generators can vary significantly based on factors like the generator’s design, location, scale, and the specific maintenance needs. However, as a rough estimate, maintenance costs for ocean current generators can range from thousands to hundreds of thousands of dollars annually. Here’s a breakdown of potential maintenance expenses:

1. Routine Maintenance: This includes regular inspections, cleaning, and basic upkeep. Costs for routine maintenance can vary, but they might range from a few thousand to tens of thousands of dollars per year.
2. Mechanical and Electrical Component Repairs: Repairing or replacing mechanical and electrical components can be a significant cost, especially if specialized parts are needed. These costs can vary widely depending on the complexity of the generator, but they might range from thousands to tens of thousands of dollars annually.
3. Biofouling and Fouling Prevention: Fouling, such as the growth of marine organisms on the generator, is a common issue. Costs for anti-fouling measures, cleaning, and maintenance can vary, potentially ranging from thousands to tens of thousands of dollars per year.
4. Emergency Repairs: Unforeseen issues or damages can necessitate emergency repairs, which can be costly and are challenging to estimate.
5. Location-Related Costs: Maintenance costs may also be influenced by the generator’s location, with remote or offshore installations incurring higher transportation and logistics expenses.
6. Scale of the Project: Larger projects may have higher maintenance costs due to the increased number of components and greater complexity.

It’s important to note that these are rough estimates, and actual maintenance costs can vary widely based on the specific circumstances. To obtain a more accurate estimate, a private company planning to implement ocean current generators should conduct a thorough analysis and engage with experienced maintenance and engineering experts to develop a detailed maintenance plan and cost projection tailored to their project.

Profits

What can be a profit of such generator given that 10x10x10 meter module in the Gulf Stream would be generating approximately 17.39 kW of electrical energy or 17.39 kilowatt-hours per hour?

To estimate the potential profit of an ocean current generator, we need to consider the revenue generated from the electricity it produces and subtract the operating and maintenance costs. However, it’s important to note that revenue from electricity generation depends on the electricity rates, which can vary significantly by location and market conditions. As of January 2022, electricity prices in the United States, including California, can vary, but they often range from 10 to 20 cents per kilowatt-hour (kWh).

(According to the most recent data from the California Public Utilities Commission (CPUC), the average electricity rate for residential customers in California in October 2023 was 19.90 cents per kilowatt-hour. This is up from 19.39 cents per kilowatt-hour in October 2022.)

Let’s assume an average electricity rate of 15 cents per kWh for this estimate. Using the provided information that a 10x10x10 meter module in the Gulf Stream generates approximately 17.39 kW of electrical energy per hour, here’s how you can calculate the potential profit:

Revenue from Electricity Generation:

Electricity generated per hour = 17.39 kW
Electricity rate = $0.15 per kWh
Revenue per hour = 17.39 kW x $0.15/kWh = $2.6095 per hour

Annual Revenue: To calculate annual revenue, you can multiply the hourly revenue by the number of hours in a year (assuming continuous operation):

Hours in a year ≈ 8,760 hours (24 hours a day, 365 days a year)
Annual revenue = $2.6095/hour x 8,760 hours/year = approximately $22,893.84 per year

Costs

The cost to build ocean current generators can vary significantly based on several factors, including the generator’s design, size, location, and technology used. Generally, the costs are associated with the following elements:

• Generator Design and Technology: The design and technology used in the generator play a significant role in determining the cost. More advanced and efficient designs may have higher upfront costs but could yield better long-term returns.
• Size and Capacity: Larger generators with higher energy output capacity will generally have higher construction costs. The dimensions (10x10x10 meters) will also impact costs, and larger modules might require more material and resources.
• Location: The location of the generator, including the depth and type of water body (e.g., nearshore or offshore), can influence construction costs. Offshore installations often have higher construction costs due to logistics and engineering challenges.
• Materials and Components: The materials and components used in the generator, such as turbines, electrical systems, and structural elements, will affect costs. High-quality and durable materials may increase construction expenses.
• Labor and Engineering: Skilled labor and engineering expertise are required for designing and constructing these generators. Labor costs can vary by location and the complexity of the project.
• Permitting and Regulatory Costs: The process of obtaining permits and complying with regulations can involve additional expenses, such as application fees and consulting costs.
• Environmental Assessments: Assessments to ensure minimal environmental impact may add to the overall cost.
• Site Preparation: Preparing the installation site, which may include seabed surveys, anchoring systems, and other site-specific preparations, can contribute to costs.

It’s challenging to provide a specific cost estimate without detailed project specifications. However, as a rough reference, construction costs for ocean energy projects can range from several million to tens of millions of dollars, or even more for larger and more complex installations.

To obtain an accurate cost estimate for a specific project, it’s essential to engage with engineering and construction experts, conduct a feasibility study, and develop a detailed project plan that accounts for all the variables mentioned above. The cost estimates should consider both initial construction expenses and ongoing operational costs.

Conclusion:

The commercial viability of ocean current generators in California depends on several factors, including the regulatory environment, the strength of nearshore currents, and maintenance costs. Navigating regulatory challenges is essential, and selecting optimal locations with strong currents is crucial. Accurate financial projections and a robust maintenance strategy are also key elements in determining the practicality and profitability of such renewable energy projects. Up-to-date research and consultation with regulatory bodies will be necessary to assess the current regulatory landscape in California for these projects.

On a financial side there are must be several hundreds of such generators to substantiate the construction, regulatory and maintenance costs. Even then it will takes many years to make that project breakeven given a traditionally low margin for such types of projects.

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