Is the time now for an “avalanche of spending” on Ocean Thermal Energy Conversion” OTEC.

98 nations with the appropriate ocean thermal resource within their EEZ’s have been identified sine the 1980s.  

By Michael Markrich and Luis Vega Ph.D.

Each year the United Nations group known as the association of Small Island Developing States (SIDS) spends an estimated $20 billion on the oil to power their small isolated electrical grids. The cost of supplying these small isolated communities in the Caribbean, the Indian Ocean, the South China Sea, The Pacific Ocean and Africa is largely by fuel barges and has always been more expensive because of the small individual markets they represent and the additional transportation costs. But since the war in the Ukraine began disrupting supply chains, the price of providing base power to these small isolated communities is said to be “astronomical”. There is therefore a need for an alternative that can economically provide a steady source of base power.

For this reason 2022 may be the moment Luis Vega Ph.D believes that Ocean Thermal Energy Technology (OTEC) finds its market. Particularly for OTEC plant-ships housing power plants rated at 10 MW to 100 MW. For example, ten 100 MW plants would be required for Oahu. One 10 MW plant for American Samoa. There is also a market for land-based OTEC plants sized at 1 MW to 2 MW that could be used in smaller SIDS like, for example, Kiribati, Palau etc.

 OTEC technology uses the temperature difference between surface warmer water and deeper colder water encountered in the tropical oceans as the source of thermal energy. At this time, OTEC systems are in the pre-commercial phase. In this context, “commercialization” means that a project can be financed under terms that yield cost competitive electricity and desalinated water.  This of course depends on site-specific conditions. Several relatively small experimental projects have already demonstrated that the base load technology works 24/7.

98 Potential markets

Ninety-eight (98) nations with access to the required ocean thermal resources within their 200 nautical mile exclusive economic zone (EEZ) have been previously identified.  There is also a market for industrialized nations that could manufacture and supply the equipment required for OTEC plants, even if they do not have the required ocean thermal resource within their EEZ.  The world-wide resource is equivalent to more than 7 TW {equivalent to 70,000 one hundred megawatt (100 MW) plants}.  Each 100 MW plant would require a capital investment of about ¾ billion dollars such that the ultimate market, in a few decades, would be valued in trillions of dollars.

In this fashion, two distinct markets were previously identified:  (i) industrialized nations; and, (ii) small island developing states (SIDS) with modest needs for power and fresh water.  OC-OTEC plants could be sized at 1MW to 10 MW, and 450 thousand to 9.2 million gallons of fresh water per day (1,700 to 35,000 m3/day) to meet the needs of developing communities with populations ranging from 4,500 to 100,000 residents.  This range encompasses the majority of SIDS throughout the world.

Floating plants of at least 50 MW capacity would be required for the larger island nations such as for the Philippines.  These would be moored or dynamically positioned a few kilometers from land, transmitting the electricity to shore via submarine power cables.  The moored vessel could also house an OC-OTEC plant and transport the desalinated water produced via flexible pipes. 

The major analytical conclusion continues to be:  there is a potential world-wide market of more than 7 Trillion Watts for OTEC plants that produce electricity and desalinated water.  However, operational records must be obtained by building and operating floating pilot plants which are scaled down from sizes identified as potentially cost effective. 

How it Works

OTEC is a century old technology, first envisioned by French engineer Jacque-Arsene d’Arsonoval which uses the nominal 20 degree difference between cold deep ocean water and warm surface water found in tropical and some sub tropical climates to provide base power 24/7. It emerged as a series of futuristic inventions in the 1880’s era of Jules Verne. It was first successfully tested in 1926.

The closed-cycle concept uses the relatively warm (24 °C to 30 °C) surface water of the tropical oceans to vaporize pressurized ammonia through a heat exchanger (i.e., evaporator) and use the resulting vapor to drive a turbine-generator. The cold ocean water transported (upwelled) to the surface from 800 m to 1000 m depths, with temperatures ranging from 8 °C to 4 °C, would condense the ammonia vapor through another heat exchanger (i.e., condenser).  Because the ammonia circulates in a closed loop, this concept has been named closed-cycle OTEC (CC-OTEC)   

Alternatively, the open-cycle uses the ocean water as the working fluid.  In this cycle the surface water is flash-evaporated in a vacuum chamber.  The resulting low-pressure steam is used to drive a turbine-generator and the relatively colder deep seawater is used to condense the steam after it has passed through the turbine.  This cycle can, therefore, be configured to produce desalinated water as well as electricity.  This cycle is referred to as open-cycle OTEC (OC-OTEC) because the working fluid flows once through the system.

But Can it work financially

The possibility of providing a new OTEC for 98 such potential markets (in plant-ships or land based) has so excited a new generation of OTEC entrepreneurs that a new global OTEC fund has been started and two new pilot projects set in motion. Promoters believe there may be $25 trillion market over 25 years supplying these sites with permanent base power. The new possibilities have encouraged investors in Korea, Japan and Europe.

The demonstration plants will have to be funded by governments as tests of concept as in many other early renewable technologies. In the case of relatively small land-based OTEC plants there is enough engineering and operational information available but the smaller SIDS do not possess the required investment capital  of creating this power source have always been too high.  But the present cost of fuel and concerns over climate change may have created a new impetus for governments and international aid organizations to underwrite one or two trial plants.

Currently the only operational plant is a relatively small 100 kW plant on Kumejima Island near Okinawa. It is owned by the Okinawa Prefectural Government with MITSUI OSK Lines, Saga University, and Kumejima Town borrowing it for research and development. Benjamin Martin the Secretary General of the Ocean Thermal Energy Association and as part of Xenesys Inc, operates the plant on behalf of the prefecture.

Another plant, built and tested off Korea is being scheduled for a pilot project. It is a 1 MW built designed for Tarawa Atoll in Kiribati by the Korea Research Institute of Ships and Ocean Engineering (KRISOE). The plant was tested on a barge before the Pandemic hit in 2019 and generated 338 kilowatts continually. This 1 MW barge mounted plant was “mothballed” due to the Pandemic. Dr. Kim is currently seeking foreign aid funding from the S. Korean government to install in Kiribati.

Two other projects that are still in the conceptual stage are a potential plant in Mauritius by Mitsui OSK Lines and a plant in Nauru.

Whether or not these projects get funded is still in question but proponents who have spent entire careers waiting for the technology to take off are hoping as one scientist put it for an “avalanche”of funding.

Into the future:

Vega believes that that the science has been proven as a result of research done in Japan, Okinawa, South Korea and Hawaii over the past fifty years. As a consequence he believes scientists have solved the problems facing 24hour/365 day plants that can produce electricity with no CO2 emissions.

“24/365 electricity and desalinated water generation with no CO2 emissions has already been demonstrated and documented. These plants could either be installed on plant-ships or in certain areas on land – if there is close proximity to deep cold water. Return water- the ocean water is continuously pumped and return to the ocean. “said Vega.

He estimates that with government funding for the proto-types that the first 5 MW plants could be up and running within five years. These experimental projects usually find commercial backers on a large scale if successful after proof of concept is proven by government support.

The major conclusion continues to be:

There is a market for OTEC plants that produce electricity and desalinated water, however, operational data must be obtained by building and operating demonstration plant-ships scaled down from sizes identified as potentially world-wide cost effective.

The major challenge continues to be:

How to finance relatively high capital investments that must be balanced by the expected but yet to be demonstrated low operational costs?’

Although the concept may seem expensive new analysis based on the externalities of the true cost of a barrel of oil in today’s world may make this technology affordable. These inputs include; estimates of costs due to corrosion, health impacts, crop losses, radioactive waste, military expenditures, employment loss, subsidies (tax credits and research funding for present technologies) can be found in the literature. In the USA, for example, the range of all estimates is equivalent to adding from $80/barrel to over $400/barrel.  Accounting for these externalities changes cost benefit arguments and makes OTEC feasible says Vega.

For more than 100 years people have envisioned turning the energy difference between surface and temperature waters into electricity. Perhaps the time for this particular dream has finally arrived.