Renewable Ocean Energy Sources: Part

I—Ocean Thermal Energy Conversion

May 1978

NTIS order #PB-283104
Library of Congress Catalog Card Number 78400053

For sale by the Superintendent of Documents, U.S. Government Printing Office

Washington, D.C. 20402, Stock No. 0524034)0536-1
Foreword

This report on ocean thermal energy conversion is the first part of

the Office of Technology Assessment’s study of renewable ocean

energy sources which are now being considered as possible contributors to the future energy supply of this country. Other ocean

energy sources, such as tides, waves, winds, currents, and salinity gradients, will be included in a second part of the study. The complete

work, requested by Senator Ernest F. Hollings on behalf of the national Ocean Policy Study of the U.S. Senate, will tell Congress where

we are in developing the means to use ocean energy, what problems

have been solved, and what difficulties are still to be surmounted. It is

hoped that the reports will be useful to decisionmakers in Government

and industry for guiding and evaluating research on ocean energy

technologies and in making funding decisions or choices among many

possible options.

The work undertaken by OTA was confined to an assessment of

the technical feasibility and an evaluation of current research and development programs for each possible source of ocean energy.

Because the technologies are not yet developed to the point where

materials, sizes, sites, and costs can be precisely estimated, OTA

found it inappropriate to attempt a detailed environmental or social

impact assessment at this time.

This analysis of ocean thermal energy conversion was prepared

by the Oceans Program staff of OTA with the assistance of advisors

from industry, Government, and academia who provided guidance

and reviewed draft materials. A working paper, which provides

technical background data used in the analysis, is also being published

at this time as a separate document. The remainder of the OTA study

of renewable ocean energy sources will be published in late 1978.

RUSSELL W. PETERSON

Director

Office of Technology Assessment

111
Renewable Ocean Energy Sources

Ad Hoc Advisory Group

Benjamin H. Barnett, Jr.

Merrill, Lynch, Pierce,

Fenner and Smith, Inc.

Don Dunlop

Florida Power and Light Co.

Hal Goodwin

Marine Policy Consultant

Edward Helminski

National Governors Conference

Richards T. Miller

U.S. Navy (Retired)

Ocean Thermal Energy

Review Panel

A. Douglas Carmichael

Massachusetts Institute of Technology

James A. Finneran

Pullman Kellogg

William Heronemus

University of Massachusetts

James L. Johnson

Standard Oil of Indiana

David Jopling

Florida Power and Light Co.

Richards T. Miller

U.S. Navy (Retired)

Willard Pierson, Jr.

CUNY Institute for Marine and

Atmospheric Sciences

Oswald Reels

University of Texas Marine

Sciences Institute

Robert Stein

International Institute for

Environment and Development

Conversion

Louis Roddis

Consulting Engineer

Oswald Reels

University of Texas Marine

Sciences Institute

Herman Sheets

University of Rhode Island

Robert Snyder

Oceanographer

Robert Taggart

Marine Consultant

Greg Thomas

Sierra Club

Danzil Pauli

National Academy of Engineering

iv
OTA Oceans Program Staff

Robert W. Niblock, Program Manager

Bennett L. Silverstein, Project Director

Prudence S. Adler Anne Fenn

Kathleen A, Beil Emilia L. Govan

Thomas A. Cotton Peter A. Johnson

Renee M. Crawford Judith M. Roales

Consultants

Gary Baham

Irvin C. Bupp

Richard C. Raymond

Ralph D. Smalley

Byron J. Washom

OTA Publishing Staff

John C. Holmes, Publishing Officer

Kathie S. BOSS Joanne Heming
.

Contents

Chapter Page

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

An Idea to Fill a Need. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Source of Ocean Thermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Attractions of OceanThermal Energy . . . . . . . . . . . . . . . . . . . . . . . . 7

The Supply of Ocean Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Status of Ocean Energy Extraction . . . . . . . . . . . . . . . . . . . .......10

The Purpose of This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....11

2. TECHNICAL AND ECONOMIC STATUS . . . . . . . . . . . . . . . . . . . . . .......15

Technical Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......16

Heat Exchangers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......16

Cold Water Pipe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......19

Working Fluid... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....20

Ocean Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......20

Underwater Transmission Lines . . . . . . . . . . . . . . . . . . . . . . . . ....21

Open-Cycle System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....22

Construction and Deployment of an OTECPlant. . . . . . . . .......23

Reliability of an OTEC Plant . . . . . . . . . . . . . . . . . . . . . . . .......23

Summary of TechnicalProblems . . . . . . . . . . . . . . . . . . . . .......24

Economic Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......24

ElectricPowerGeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....24

Power for Production of Ammonia. . . . . . . . . . . . . . . . . . . .......29

Power for Production of Aluminum . . . . . . . . . . . . . . . . . . . . . ....33

Summary of Economic Considerations . . . . . . . . . . . . . . . .......34

3. STATUS OF GOVERNMENT FUNDING . . . . . . . . . . . . . . . . . . . . . .......39

History of Government funding. . . . .

Effect of Government Funding on Stat

Future Funding Possibilities . . . . . . . .

Summary of Government Funding . . .

. . . . . . . . . . . . . . . . . . 39

Of OTEC . . . . . . . . . . . . . . . ..40

. . . . . . . . . . . . . . . . . . . . . . . . . . 42

. . . . . . . . . . . . . . . . . . . . . . . . . . 44

vii
LIST OF TABLES

Table

No. Page

1.

2.

3.

4.

5.

6.

7.

Countries Bordering Potential OTEC Sites, . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Power Potential of OTEC Plants at Some Potential Sites. . . . . . . . . . .......10

Estimated Capital Costs of an OTEC Electric Generating Plant. . . . . .......25

Plant Output and Cost per Unit as a Function of Temperature Difference .. .25

Busbar Cost of Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . .......26

Effect of Some Variables on Cost of Busbar OTEC Electricity. . . . . . .......26

OTEC Funding for Fiscal Years 1972 -77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

LIST OF FIGURES

Figure

No. Page

1.

2.

3.

4.

Potential Marginal Costs of Baseload Electricity in the Year 2000 for

Coal or Oil-Fired Powerplants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......28

Possible Range of Uncertainty in Future Cost of Busbar Electricity . . . .......29

Number of 1,650 Ton per Day OTEC/Ammonia Plants Necessary To

Capture Significant Portion of World Plant Capacity. . . . . . . . . . . . . . .. ....32

OTEC Program Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......41

. . . Vlll
Summary

Ocean Thermal Energy Conversion (OTEC) is a concept for using the temperature difference that exists between warm waters at the surface of oceans

and cold waters in the deep oceans to release stored solar energy to power a

turbine.

The number of sites where a sufficient temperature difference exists between the surface and a reasonable ocean depth is limited—there are few off the

continental United States—but at these sites the solar energy stored in the ocean

is an abundant, renewable source of power. However, harnessing this energy

requires complex and potentially expensive equipment of enormous size.

Research on OTEC has been underway since the early 19th century and has

been funded by the U.S. Government since 1972. The concept has been touted

as one which may be used to provide an important source of energy for the

generation of electricity or power for manufacturing energy-intensive products

such as ammonia and aluminum.

The Office of Technology Assessment (OTA) Oceans Program, in the

course of this assessment, has found that OTEC technology is not yet proven

and probably could not become a viable part of the U.S. energy supply system

in this century. The concept was demonstrated by Georges Claude on a small

scale in 1926, proving that thermal energy can, in fact, be extracted from the

temperature difference in the waters of the oceans. But the technology is not

developed to the point where acceptably precise estimates can be made about

the technical feasibility of large-scale systems, potential products of those systems, the economics of the systems, or the social and environmental impacts.

No scientific breakthroughs are needed to build an OTEC plant, but the

technology is not in routine use. Proposed OTEC designs use standard heatengine cycles which are typical of those used in all powerplants when the heat

from burning fuel is converted into electrical power. In conventional

powerplants, temperature differences of hundreds or thousands of degrees are

sought to get maximum efficiency. An OTEC design will attempt to create

useful power from the temperature difference that is usually discarded as

unusable in a conventional powerplant.

1
 ● ocean Thermal Energy Conversion

No OTEC plant has been fully designed; many components of the system

have not yet been proven reliable in the hostile marine environment. No ocean

energy plant of any size has ever been built and operated which generated more

energy than was required to operate the equipment. The technical problems

which must be solved are by no means minor, and satisfactory solutions to the

critical engineering problems will require long-term laboratory and at-sea

testing.

The primary technical problems in the types of OTEC plants currently being proposed involve the heat exchangers, the cold water pipe, the working

fluid, the ocean platforms, and the underwater transmission lines from plants

which would generate electricity.

Even when a plant is designed and proven, there is little engineering experience which is directly pertinent to the at-sea assembly and mooring problems which may be encountered. And finally, it is not yet possible to project

how reliable an OTEC plant would be once it is sited and operating.

The economics of OTEC depend primarily on the capital cost of constructing OTEC plants and the cost per kilowatt hour of the energy produced.

Because no OTEC sysyem is yet fully designed, quantitatively precise

knowledge about these costs is impossible and there are large uncertainties

about lifetime reliability and the interruptions in production which result

should an OTEC plant fail.

The basic product of most current OTEC concepts is power—power for

use in the U.S. electric grid or for use in the production of other products. The

busbar cost of producing electricity is dependent upon a number of variables,

including the thermal resource available, capital cost of the plant, plant capacity factor, fixed annual charge rate, cost of fuel, and the cost of operation and

maintenance. Reliable estimates for these variables cannot yet be made. Therefore, it is impossible to predict the busbar cost of electricity from OTEC.

Unknown electrical transmission costs add another element of uncertainty.

These still unknown costs will determine whether or not OTEC is useful in

the future production of other products.

In the case of ammonia, for example, the most promising market areas are

located near the most promising OTEC sites; however, these areas are the

Lesser Developed Countries which require very low-cost products. In addition,

existing producers are expanding their ammonia facilities to meet present and

future demands with existing processes and there are potentially low-cost alternatives to OTEC/ammonia, especially ammonia made from flare gas in the

Middle East nations.

For aluminum, world production capacity is currently greater than consumption of the product and little expansion is predicted in the foreseeable

future. However, in theory, the use of OTEC could allow aluminum plants to
Summary . 3

be located in coastal areas nearer dependable sources

case, the price and dependability of electricity from

factors.

The relative value of OTEC depends heavily on

of raw materials. In that

OTEC would be crucial

the future price of alternative energy sources. At this time, there is no economically competitive product among those which have been proposed in connection with OTEC. But

these economic considerations are based on short-term projections of supply

and demand for specific commodities compared with the uncertainties associated with present OTEC technology. The value of developing OTEC technology, however, cannot be measured by simple economic projections because in

the long term alternative energy supply options could become much more

critical to the United States and to the world. Sometime during the 21st century

a renewable source of energy could become a necessity.

Because of the uncertain technical status of OTEC and the lack of conclusive information about its feasibility, there is no obvious amount of funding

which should be committed for future research on the concept.

In the long term, decisions about funding are ideally made in the context of

an evaluation of the total Department of Energy budget for research on future

alternative energy sources. In the absence of such a comparison of alternative

energy concepts at this time, Congress could cease to fund a separate research

program for OTEC or it could continue to investigate the possibility of OTEC

as an ultimately usable technology.

If funding is continued, fairly level research and development money in the

tens of millions of dollars for the next 5 to 10 years could result in a program

geared toward solving important technical problems. This type of funding

would probably result in continuation of many of the present OTEC research

projects, but would not result in construction of a large-scale prototype until

decisions about type of plants, construction, location, and products could be

made in the light of solutions to the major engineering problems.

Large appropriations rapidly amounting to billions of dollars, could influence the program toward development of a working prototype plant as soon

as possible. This is a high-risk approach. It could produce the most rapid

demonstration of some technology, but it could also result in skipping essential

long-term testing and environmental studies. It could also force a premature

choice among several concepts and possible products in order to concentrate on

development of one specific system.
Chapter

Introduction
.—

Introduction

An Idea to Fill a Need

In 1926, Georges Claude announced to the

French Academy of Science his intention to

develop equipment which would produce “torrents of power” from the difference in temperature between the top and the bottom of the

oceans. 1

Claude, the industrial and physical chemist

whose work with gases in tubes led to the development of the neon sign, called for immediate

action on his ocean energy plan because “the

Federal Oil Conservation Board of the United

States estimates that the United States has only

enough oil to last for 6 years.”2

These dire 1926 predictions ascribed to the

Federal Oil Conservation Board did not come

true on schedule. But the oil crisis of that period

heightened Claude’s interest in extracting energy

from the oceans. Now, 50 years later, the

United States is faced with an energy crisis, and

the dwindling supplies and high prices of fuel

have rekindled interest in the oceans.

The Source of Ocean Thermal Energy

The source of ocean thermal energy is the

Sun. The oceans act as huge natural collectors,

catching and storing solar energy as heat in the

surface waters. This stored energy can be extracted by using the heat from the surface

waters to evaporate a fluid; passing the resulting

vapor through a turbine; and then returning the

vapor to liquid state by chilling it with cold

water from the deep ocean. The turbine, in turn,

can be used to power equipment or to generate

electricity. The process is similar to that used in

steam powerplants.

‘Daniel Behrman, The New World of the Oceans,

(Boston: Little Brown and Co., 1969), p. 60.

2

1bid.

A G@mrk OTEC Plant

The idea of converting

the stored ocean energy

to useful power originated with French physicist Jacques d’Arsonval

in 1881. But in the century since d’Arsonval’s

work, the technical feasibility of ocean thermal

energy conversion has

been demonstrated on

only a limited scale. The

first plant was built and

operated in Mantanzas

Bay, Cuba, by d’Arsonval’s pupil, Georges

Claude.

Claude’s model plant

produced 22 kilowatts of

electricity but required

about 80 kilowatts of

electricity y to run its

equipment. 3 Nevertheless, it was enough to convince scientists and researchers during the subsequent 50 years that the oceans’ stored solar

energy could be tapped by using the temperature difference between surface and deep waters.

The Attractions of Ocean Thermal Energy

In the light of the fuel shortages and rising

fuel prices of the 1970’s, the attractiveness of

ocean thermal energy conversion is easy to

understand: It offers an almost inexhaustible

supply of fuel.

The oceans are massive natural storage basins

for solar energy, so that the energy collected is

available 24 hours a day. The natural collection

and storage capacity of the oceans eliminate

3Georges Claude, “Power from the Tropical Seas, ”

Mechanical Engineering 52 (December 1930): 1039-44.

7
 ● Ocean Thermal Energy Conversion

problems associated with

the sporadic availability

of energy that marks

most other systems for

direct use of solar energy.

This around-the-clock

availability makes the

energy usable for baseload power, that steady

stream of power that

answers the routine

needs of man. Further, of

course, the Sun and tropical currents continue to

warm the surface ocean

waters while polar currents and other factors

continue to chill the deep

waters. Thus, there is a

natural and dependable

supply of the fuel— solar

/

ANTARCTICA

energy—and of the temperature difference used

in processes for extracting the energy.

These characteristics, coupled with the expectation that use of the stored solar energy will be

nonpolluting, make ocean thermal energy conversion attractive.

The Supply of Ocean Energy

There appears to be an abundant supply of

this stored energy since the oceans cover more

than 70 percent of the Earth’s surface. However,

the apparent vastness of supply can be misleading since only a very small percentage of the

stored energy can be extracted.

There are a number of factors which limit the

means of extracting useful ocean thermal

energy. Initially, practical OTEC systems need

to be located at very favorable sites. Some important site criteria are:

1.

2.

3.

High thermal differences between the

warm surface and the cold deep water,

Low-velocity currents,

Absence of storms (minimal wind and

waves), and

4. Nearness to the market for the OTEC

products.

The temperature difference between the surface water and deep water has the most significant bearing on extraction of ocean energy. As

the temperature difference decreases the energy

output will decrease drastically and the effective

cost of each unit of energy will increase.

Current concepts for extracting ocean energy

require a temperature difference of 330 to 400 F.

With a temperature difference of 30

0 F, a plant

would produce approximately 37 percent less

output than with a temperature difference of

40

0 F. With a temperature difference of less

than 300 F, there is a marked loss of power output. For that reason, 300 F can be considered a

minimum usable temperature difference to generate net power from a turbine. With a temperature difference of less than 150 F, there may be

no net power output at all. That is, all the power

produced would be consumed by the plant in

running its own equipment and loads.4

Even a temperature difference of 40° F presents technical problems. For example, the technology proposed for OTEC designs uses standard heat engine cycles which are typical of those

used in all powerplants when the heat from

burning fuel is converted into electrical power.

In conventional powerplants, temperature differences of hundreds or thousands of degrees are

sought to get maximum efficiency. An OTEC

design will attempt to create useful power from

the temperature difference that is usually discarded as unusable in a conventional powerplant.

This temperature difference requirement

means that most potential sites for ocean energy

plants are in the tropics because the amount of

solar energy absorbed by the surface waters of

the ocean is greatest there. The best potential

sites for plants to extract ocean energy are located within 200 of latitude north or south of

the equator and along the routes of currents

which carry warmed waters away from the

equator.

There appear to be only two regions off the

4 Internal Memorandum to F. E. Naef from M. I. Leitnert

Lockheed Missiles and Space Company, “Data for Sig

Gronich, ” Oct. 27, 1977, Sunnyvale, Calif.
—

I HAWAIAN ISLANDS

KAUAI

General Site Location Map

~

Gulf Of MEXiCO

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Ch. 1 Introduction ● 9

continental United States which are promising

sites—the Florida Gulf Stream and the Gulf of

Mexico. Other areas of interest to the United

States exist off Hawaii, Puerto Rico, the Virgin

Islands, Guam, and Micronesia, but at least 37

other countries are closer than the United States

to regions of the oceans where there are favorable thermal gradients. Table 1 is one of several

available lists which identify countries which

are most favorably located relative to potential

OTEC sites. An attempt to identify all potential

sites worldwide is now underway. Some estimates indicate that an amount of energy equal

to about 3 percent of the current U.S. electrical

production capacity could be extracted from a

200,000-square-mile section of the Gulf of MexTable 1 .—Countries Bordering Potential OTEC Sites

(Minimum distance from coast to suitable OTEC location

for countries that border warm tropical waters)

Distance, km Distance, km

Countries bordering Indian Ocean (clockwise order):

Madagascar. . . . . . . . . . . . . . . . . . . . . . . . . 32

Mozambique . . . . . . . . . . . . . . . . . . . . . . . . 25

Tanzania. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Kenya. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Somali Republic . . . . . . . . . . . . . . . . . . . . . 25

Southern Yemen . . . . . . . . . . . . . . . . . . . . . 32

Muscat and Oman. . . . . . . . . . . . . . . . . . . . 6

Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Pakistan. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

India:

West Coast . . . . . . . . . . . . . . . . . . . . . . . 120

East Coast. . . . . . . . . . . . . . . . . . . . . . . . 65

Burma. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Countries bordering Pacific Ocean (clockwise order):

Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Guatemala. . . . . . . . . . . . . . . . . . . . . . . . . . 32

El Savador . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Honduras. . . . . . . . . . . . . . . . . . . . . . . . . . .

Nicaragua . . . . . . . . . . . . . . . . . . . . . . . . . .

Costa Rica. . . . . . . . . . . . . . . . . . . . . . . . . . 7

Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Australia:

Northeast corner. . . . . . . . . . . . . . . . . . . 65

Otherwise . . . . . . . . . . . . . . . . . . . . . . . . 300

New Guinea... . . . . . . . . . . . . . . . . . . . . . . 5

Java . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Sumatra . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Countries bordering Atlantic Ocean (clockwise order):

SierraLeone . . . . . . . . . . . . . . . . . . . . . . . .

Liberia . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cote d’lvoire . . . . . . . . . . . . . . . . . . . . . . . .

Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dahomey . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cameroun . . . . . . . . . . . . . . . . . . . . . . . . . .

Brazil:

1°t020 South . . . . . . . . . . . . . . . . . . . .

Otherwise . . . . . . . . . . . . . . . . . . . . . . . .

French Guiana. . . . . . . . . . . . . . . . . . . . . . .

Surinam . . . . . . . . . . . . . . . . . . . . . . . . . . . .

English Guiana . . . . . . . . . . . . . . . . . . . . . .

Venezula . . . . . . . . . . . . . . . . . . . . . . . . . . .

Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . .

Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . .

Nicaragua . . . . . . . . . . . . . . . . . . . . . . . . . .

Honduras . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

United States of America:

Florida . . . . . . . . . . . . . . . . . . . . . . . . . . .

PuertoRico . . . . . . . . . . . . . . . . . . . . . . .

Cuba. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Haiti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dominican Republic. . . . . . . . . . . . . . . . . .

Guadelope(French) . . . . . . . . . . . . . . . . . .

Dominica(British b

). . . . . . . . . . . . . . . . . . . . .

Martinique(French) . . . . . . . . . . . . . . . . . .

St. Lucia(Britisha

). . . . . . . . . . . . . . . . . . . .

St. Vincent (Britisha

). . . . . . . . . . . . . . . . . .

Grenada(British b

). . . . . . . . . . . . . . . . . . . .

50

50

50

50

50

65

15

100

130

130

130

3

32

25

15

150

24

7

1

6

2

2

2

2

2

5

2

2

2

2

aDistance to5”C waterat 500 meters. b FreelY a s sociated with Britain .

SOURCE: LavL A. “Plumbing the Ocean Depths: A New Sourceof Powec” IEEESpectrum, 10, 22-270ctober 1973.

j .1.1, ()- -j -
10 ● Ocean Thermal Energy Conversion

Table 2.—Power Potential of OTEC Plants at Some Potential Sites

Percent o f Number of

Area in square Power U.S. electric 500 M W OTEC’S

nautical potential in generating required to promiles M W e

a

capacityb duce potential power

PAC-l C 

. . . . . . . . . . . . . . . . . 900,000 69,400 13.0 139

Micronesia. . . . . . . . . . . . . . 3,000,000 231,400 43.6 462

ATL-l d. . . . . . . . . . . . . . . . . . 360,000 27,800 5.2 53

Gulf of Mexico. . . . . . . . . . . 200,000 15,400 2.9 31

a OTEC plant efficiency 1.5 percent; capacity factor = 75 percent.

bus electrical generating capacity = 530,000 MWe.

Physics Lab. study sit e

140° to 170” Long. East

20° to 30° Lat. North

d Applied physics Lab. study site

400 to 500 West Long.

5° to 15° North Lat.

NOTE: The estimates shown on this table area based upon an assumed gross power production rate of 2

MW/km 2

. 2MW/km2 is the additional solar radiation captured at the sea surface due to a temperature

depression or anomaly created by the OTEC plant. This is the total thermal input to OTEC, not after conversion by OTEC, assuming that 200 MW/kmz is the solar input to the surface. Two preliminary studies

made by NRL estimate solar heat flux rate of 4.65 and 1.94 MWe/km2 from heat added by solr re-radiation

at two different tropical ocean sites. These heat flux rates were estimated on the basis of a 0.1 “C

depression in the surface temperature of the water. (Data from Ocean Thermal Energy Conversion

(OTEC), Program Summary, ERDA, Washington, D. C., October 1976. Also phone conversation with staff

members of DOE, Washington, D. C., Jan. 23, 1978.)

In determining the amount of power which potentially could be generated and the number of 500

MW OTEC plants which would be used to generate that much power, the size of the temperature depression deemed acceptable is a critically limiting factor. Since there is currently much uncertainty about

the effects of changes in the temperature of ocean waters, this chart uses a very small temperature

depression. If a larger temperature depression is allowed, more OTEC plants could be placed in any

given area and more-power could be produced

SOURCE: -Office of Technology Assessment.

ices while the equivalent of more than 43 percent of current U.S. electrical production

capacity could be extracted from a 3-millionsquare-mile area in Mircronesia. b However,

much of this energy is available at locations far

at sea where there is currently no demand for it.

In addition, to extract this much energy from

these two areas alone would require about 500

ocean energy plants of the 500 MW size.7 (See

table 2.) Discussions about materials and equipment later in this text will indicate that it is not

likely the United States would be able, during at

least the next 20 years, to construct the amount

of hardware, much of it larger than any powerplant equipment in existence today, which

would be required to extract such large amounts

of ocean energy.

A total assessment of the oceans’ thermal resources and their relationship to the amount and

kind of energy needed in specific places has not

been made. However, the ocean energy which

might be extracted is diffuse and making use of

it will pose difficult technical and economic

problems which are discussed later in this

report.

‘L. C. Trimble, et al., Ocean Thermal Energy Conversion (OTEC) Power plant Technical and Economic

Feasibility Technical Report, Vol. 1, (Washington, D. C.:

Lockheed Missiles and Space Company, Inc., April 1975).

‘U.S. Congress, Office of Technology Assessment calculations.

‘Ibid. (A 500 MW plant is half the size of a conventional

nuclear powerplant. )

The Status of Ocean Energy Extraction

The concept of extracting energy from the

oceans has become known in the United States

by the acronym OTEC—Ocean Thermal Energy

Conversion. Funding of Government research

on OTEC began with an $85,000 budget from
—-

Ch. I Intrduction 11

the National Science Foundation’s Research Applied to National Needs (NSF-RANN) program

in 1972. In 1975, the research was transferred to

the Solar Energy Division of the Energy

Research and Development Administration

(ERDA) which is now a part of the new Department of Energy (DOE).

Through fiscal year 1977, the Federal Government had spent about $27 million 8 on OTEC

research. The money brought proposals for

several concepts to generate electricity for

transmission to existing electrical grids onshore

or to generate power to be used in the at-sea

production of such energy-intensive products as

ammonia, aluminum, or hydrogen. In fiscal

year 1978, $35 million is budgeted for OT’EC

research, most of which will be spent designing,

building, and testing component parts of a

prototype OTEC plant.

OTEC is still a research and development

project. There is, as yet, no working OTEC

plant; there is no working pilot model. But

8 S . Piacsek, et al., Recirculation and Therrnoc/ine Perturbations from Ocean Thermal Power Plants,

(Washington, D. C.: Naval Research Laboratory, 1976).

research is continuing and ● quests for funds are

growing, aimed at demonstration if the concept

during the 1980’s.

The Purpose of This Report

The future of OTEC research is now before

the U.S. Congress, which must choose what

level of support to give by annually a p

-

propriating funds for further research and

development. Ultimately, Congress may be

faced with questions about the regulation and

operation of OTEC if it becomes a viable energy

system.

To aid Congress in making its decisions, the

following sections of this report will detail the

current status of OTEC technology with particular attention to areas in which significant

problems exist. They will also discuss the

economic considerations which are pertinent to

an OTEC system and outline economic problems facing some of the products most often

suggested for OTEC production. The final sections of the report will deal with the present and

possible future Government role in funding

OTEC research.
Chapter

Technical

and Economic

Status
Technical

and Economic

Status

The scientific feasibility of OTEC was

demonstrated on a very limited scale by

Georges Claude as early as 1926. Claude’s experiences, however, pointed up the need for

more advanced ocean engineering technology

before success of a large-scale system could be

expected.

The United States, with the Division of Solar

Technology of the Department of Energy as lead

agency, is now attempting to develop the technology and demonstrate the feasibility of OTEC

on a scale vastly larger than Claude’s work.

When developed, OTEC could be used to provide power for the production of such products

as electricity, ammonia, aluminum, hydrogen,

magnesium, and methanol, or for ocean farming. No scientific breakthrough is necessary in

order to use OTEC as a power source for these

products. However, there are major engineering

development problems which must be solved

before OTEC could become an accepted part of

any manufacturing system.

Many troublesome technical concerns encountered during research stem from a single

factor: low thermal efficiency. Thermal efficiency is the percentage of heat which can be

converted to useful work. Because the heat used

in OTEC must be extracted from a low temperature difference, the resulting efficiency is low.

At best only about 7 percent of the heat energy

stored in the ocean can be converted into useful

energy. In practice, however, OTEC plants are

projected to operate with net efficiencies between 1 and 4 percent depending on assumptions made regarding auxiliary power requirements.1 (By contrast, the thermal efficiency of a

‘Memorandum to G. L. Dugger from H. L. Olsen, Applied Physics Laboratory, “Efficiency of OTEC Power

Plants, ” July 7, 1976, Laurel, Md.

steam plant driven with a nuclear or coal-fired

heat source is as high as 42 percent.z

) An offsetting feature is that no fuel is required for the

OTEC cycle. However, the result is that very

large quantities of solar-heated surface water

and cold deep water are required. For a typical

100 MW OTEC design, which is one-tenth of the

size of an existing 1,000 MW nuclear-generating

station, Is,000 cubic feet per second of surface

water must pass through the evaporator and a

like quantity of deep water must pass through

the condenser heat exchangers. The combined

flow rate of 30,000 cubic feet per second is

slightly larger than the average flow at the

mouth of the Susquehanna River or more than

two and one-half times the flow of the Potomac

River at Washington.3

Handling this volume of fluids will require

some pieces of equipment, such as pumps,

motors, and turbines, which are larger than any

now in existence. If OTEC plants are to produce

energy economically, great care will be necessary to minimize parasitic losses of energy from

friction in pumps, heat exchangers, and other

equipment. Equally important, however, the

margins for design and/or operating error in

OTEC plants will be quite narrow.

Beyond the inherent problem of low efficiency, there are many unresolved engineering

problems. The primary concerns involve:

● the heat exchangers,

● the cold water pipe,

● the working fluid,

● ocean platforms,

● underwater transmission lines,

s de-emphasis of the open-cycle system, and

● the constructability and reliability of the

entire plant.

Until major problems in these areas have been

resolved, it will not be possible to estimate the

many economic and environmental factors

which will determine OTEC’S commercial prospects.

This study has not looked at the possible environmental impact of OTEC plants because

2

S. S. Penner and L. Iceman, Energy, (Reading, Mass.:

Addison-Wesley Publishing Co., 1974), p. XXV.

3

Phone conversation with staff members of U.S. Geological Survey, Reston, Va., Jan. 30, 1978.

7 R
16 . Ocean Thermal Energy Conversion

that impact would be tremendously dependent

upon specifics which are not yet known, such as

the type, size, and number of OTEC plants, the

location of the plants, substances used in processes aboard the OTEC plant, and the product

produced. However, there are a number of environmental factors which should be considered

indepth when more is known about a specific

system, such as:

●

●

●

●

●

●

The size and effects of the reduction in the

temperature of surface waters of the ocean

at OTEC sites.

The effects of the working fluid on the

ocean environment in the event of a leak.

Possible pollution caused by chemicals and

techniques used in the construction of components of the OTEC plant.

The effects of changes in the nutrient content of the surface waters caused by upwelling deep ocean waters.

The effects of increased marine traffic.

The effects of laying underwater transmission lines if the OTEC were to produce electricity for a grid.

These unknown environmental considerations and the better known technical problems

all cause significant economic uncertainties

about the cost of useful energy or energy-related

commodities which might be produced, In fact,

contrary to the impression created by some of

the popular literature on OTEC,4 this study has

found the technical and economic problems to

be such that there is no obvious competitive

product to be produced by OTEC systems during the coming 10 to 15 years.

Currently, all of the products proposed for

OTEC plants (including electricity) are existing

commodities. This means that anything produced by OTEC systems will be in competition

in world or national markets with identical

commodities produced by other means. For this

reason, a potential investor in an OTEC system

would have to be highly confident that OTECproduced commodities would be dependable

and price-competitive.

4

0ne of the most recent examples is John F. Judge,

“Ocean Power: Is the U.S. Afraid of It, ” Government Executive (December 1977): 29-32.

When considering costs of the system to produce these products, the fact that OTEC uses

seawater as “fuel” and therefore may not be subject to continually rising fuel costs is an attractive aspect. In addition, the cost of site acquisition and the cost of operating OTEC plants,

once they are constructed, are projected to be

small, and adverse environmental impacts are

projected to be minimal.

Even so, these positive factors are not enough

to outweigh the assortment of technical problems which are also currently associated with

OTEC and are identified throughout this report.

But as technical problems relating to OTEC are

solved and as more information is gained about

the future cost and availability of traditional

and alternative sources of energy, OTEC could

become more attractive than it currently appears to be.

However, it is difficult to draw conclusions

about OTEC or to make comparisons with

other energy alternatives until there is a

definitive system to evaluate—that is, a specific

plant, located at a known site, receiving materials for the production of a certain product, and

shipping that product out to consumers.

The following sections of this chapter will

discuss the principal technical problems and the

economic uncertainties about the cost of usable

power from OTEC. They will also discuss some

of the economic implications of products which

could be manufactured using OTEC as a power

source. For each of these products, the existing

industry was reviewed; the supply and demand

relationships of feedstocks and of finished products were analyzed; and the substitution of

OTEC as the power source was evaluated.

TECHNICAL PROBLEMS

Heat Exchangers

Heat exchangers are the most critical component, i.e., largest and most expensive, of the

closed-cycle OTEC plants currently being developed. Their function is to evaporate and condense the working fluid using the warm and

cold seawater. The capital cost of the heat exchanger is a primary factor in the total cost of
..————

Ch. II Technical and Economic Status . 17

WC+iNING

FLtJ!O

vAPC+?

IN

‘,CA MATER IN

the plant. It has been

estimated that approximately one-third to onehalf the cost may be

assigned to the heat exchanger elements of the

system.5 Heat transfer

effectiveness is also a primary factor in the cost of

power generated by an

OTEC plant.

Currently the important unresolved development problems for heat

exchangers include questions about materials to

be used, methods for

dealing with biofouling’

and corrosion, and the

construction techniques

which will be necessary.

Materials: Candidate materials which have

been considered for OTEC heat exchangers include copper-nickel alloys, fiber-reinforced

plastic, stainless steel alloys, titanium, and

aluminum alloys.

● Copper-nickel alloys have been the standard material for marine heat exchangers

and seawater piping systems for many

years. However, while this material is

relatively inexpensive and abundant, it is

not compatible with ammonia, the principal compound being considered for a

‘R. H. Douglass, et al., Ocean Thermal Energy Conversion Research on an Engineering Evaluation and Test Program, (Redondo Beach, Calif.: TRW Systems Group,

February 197.s) I-.5. Also, L. C. Trimble, et al., Ocea n

Thermal Energy Conversion (OTEC) Power Plant Technical and Economic Feasibility Technical Report, Vol. I,

87-90.

‘Biofouling—Biof ouling is the result of certain marine

organisms attaching themselves to submerged objects, Biofouling may be detrimental to the system in a number of

ways; it may completely block the flow of seawater in the

tubes, it may lead to sharply reduced heat transfer across

the tube wall, and it may lead to increased corrosive attack

under deposits, i.e., crevice corrosion. It also increases the

resistance of the coldwater pipe to currents and to water

flowing through the pipe.

●

●

working fluid in closed-cycle designs. T If

the working fluid is Freon, however,

copper-nickel is very attractive.

Fiber-reinforced plastic heat exchangers

have been studied for possible OTEC applications, but the feasibility of various

proposed composite plastic cores is speculative. Predicted lifetime between replacements has been estimated to be 5 years. s

Thus, the low initial cost of fiber-reinforced

plastic must be balanced with its poor heat

transfer rate and the necessity for frequent

replacement.

Titanium has been introduced into marine

service in recent years, and two of the major OTEC studies selected titanium as the

material for evaporators and condensers

because operating experience indicates

good resistance to pitting, stress, and intergranular corrosion can be achieved.

Titanium is compatible with ammonia and

has high strength for its weight, The useful

life of titanium heat exchangers has been

predicted to be 30 years. ’

However, there are also problems associated with titanium. It has high susceptibility to biofouling in stagnant seawater,

and welding and joining techniques for titanium in very large, complex structures

have not been satisfactoril y demon -

strated. 10

A major problem with titanium is that

the high cost and limited supply would prohibit large-scale use of the material in the

near future. Titanium is about 3 times as

expensive as aluminum, another serious

candidate. However, since only some parts

of the heat exchanger would be constructed

of titanium, the total cost would not be 3

times larger. In addition, life-cycle cost of

7A. M. Czikk, Ocean Thermal Power Plant Heat Exchangers, (Tonawanda, N. Y.: Union Carbide Corporation, May 21, 1976), p. 100.

BM1tre Corporation, systems ~escri~tion and Engineering Costs for Solar-Related Technologies, Vol. VII,

(McLean, Va.: Mitre Corporation, June 1977), p. 73

‘Ibid.

‘“L. C. Trimble, et al., Ocean Thermal Energy Conversion (OTEC) Power Plant Technical and Economic Feasibility, p. S-60.
. . . —. .. .-— — . .

18 ● ocean Thermal Energy Conversion

titanium could prove to be less if components constructed from it are more

durable. Presently, the production of

titanium is limited. Construction of the

heat exchangers for one 100 MWe OTEC

plant would require a supply of titanium

equal to about one-quarter the total

titanium mill products shipped in 1974.1

1

Although the industry capacity is expected

to double by 1985, it would still be inadequate for large-scale production of OTEC

plants.

● Stainless steel alloys are similar to titanium

in life expectancy and are in better supply.

According to the U.S. Bureau of Mines, the

peak in stainless steel production came in

1974 at 1,345,000 tons, compared to titanium production of 17,600 tons. ]2 (However, not all that quantity of stainless is of a

quality suitable for use in an OTEC. ) The

unit cost of stainless steel is about 40 percent that of titanium welded tube. However, a greater thickness of stainless steel is

required because of the lower strength of

stainless; and the resulting total heat exchanger costs would be about equivalent. 13

. Aluminum alloy is also a leading candidate

for OTEC plants. The welding and forming

techniques for aluminum are far better

established than for other candidate materials and the existing production base is

much larger. However, the compatibility of

aluminum with seawater and ammonia

must still be demonstrated.

So far, there is no obvious best material for

the heat exchangers. Only design and testing of

the heat exchanger over a substantial period of

time, in connection with specific water conditions at a given site with known types of biofouling with prescribed cleaning and recleaning

techniques and with a known working fluid will

1 ILetter t. T.A.V. Cassel, Bechtel Corporation, from

Stanley L. Hones, Titanium Metals Corps. of America, Irvine, Calif., Dec. 9, 1974.

IZExtrapolated from U.S. Department of the Interior,

Bureau of Mines, Commodity Data Summaries 1977,

(Washington, D. C,: U.S. Department of the Interior,

January 1977). p. 178.

13A. M. Czikk, et al., “Ocean Thermal Power Plant Heat

Exchangers, ” Sharing the Sun, A Joint Conference of the

International Solar Energy Society and Solar Energy Society of Canada, Inc., Winnipeg, Canada, August 1976.

determine if there is an acceptable material at an

acceptable cost. Some testing has begun under

the DOE program.

Biofouling: As biofouling builds up, the

overall heat transfer is reduced. Net power output and overall plant efficiency are reduced

because more power is required to move the

heating and cooling water through the system.

However, the rate of biofouling of heat exchanger surfaces—which is dependent upon

many site-specific factors such as water temperature and nutrient concentration—is onl y

partially known at this time. Periodic cleaning

will be necessary to keep the seawater side of the

evaporators and condensers free of biofouling.

Some means of conducting this cleaning are

being studied, but it is not known what effect

such cleaning will have on the rate of corrosion

and on the life expectancy of equipment. Likewise it is not known how often cleaning will be

necessary or the length of time the OTEC plant

will be out of operation due to biofouling. Data

are just now becoming available from DOE tests

which address these problems,

An overall assessment of the impact of biofouling and tube cleaning on the capacity of the

plant has not yet been made for any of the

OTEC concepts, but tests are underway.

Construction: Several types of heat exchanger

designs have been proposed, using tube and

shell, with fluted, enhanced, and serpentine surfaces, Plate and fin exchangers are also being

designed. Yet the construction of heat exchangers of these designs in the size required for

OTEC is not now common practice. The largest

heat exchangers constructed to date have had

tube surface areas of about 500,000 square feet.

A 100 MW OTEC will require 10 times that, or

about 5 million square feet of heat exchanger

surface area. The surface area will be provided

by a number of heat exchangers, ranging in size

from 200,000 square feet each to 1.2 million

square feet each. It is likely that this increase in

size will result in problems which are not encountered in present heat exchanger designs.

Also, depending on the material selected for the

heat exchanger, there may be problems of welding, forming, and extruding sections.

14L. C. Trirnble, et al., Ocean Thermal Energy conversion (OTEC) Power Plant Technical and Economic Feasibility.
Ch. 11 Technical and Economic Status “ 19

One engineering company, in response to a

query about OTEC, put the construction problem in these terms:

We are dealing with a conceptual design

which does not fit within the limits of our present range of experience. We believe that these

exchangers can be built, but that the technological and practical problems which would have to

be solved would be—in the least—challenging

and possibly—in the long run, when considering

costs and manufacturing capability— prohibitive. 15

Cold Water Pipe

The purpose of the cold water pipe is to bring

cold. water from the deep ocean to provide cooling water for the condensers.

The cold water pipe is one of the most significant engineering challenges in OTEC design.

Several types and materials have been considered to date. These include structures of steel,

aluminum, reinforced concrete, fiber-reinforced

plastic, and rubberized materials. All these materials raise questions as to the size of the structures which can be built and deployed at the

depths at which they must be used, For example,

the largest diameter reinforced-concrete and

fiber-reinforced plastic pipes currently used for

nuclear powerplant cooling water and sewer effluent outfalls range from 10 to 12 meters in

diameter. ” Steel pipe outfalls have been built

with diameters of about 20 meters. However, a

100 MW OTEC may require a cold water pipe

that is more than 40 meters in diameter*7 a n d

more than 800 meters long. The length of the

OTEC cold water pipe would be the equivalent

of 20 to 30 Baltimore Harbor Tunnel tubes

hanging vertically in the deep ocean. 18

Two distinct types of pipeline problems exist:

one for stationary plants located on shore and

one for floating offshore platforms.

‘

s

Ibid.

16 T. R.w,, Oceans System Division, December 1976.

“U.S. Congress, House Committee on Science and

Techncdogy, Subcommittee on Advanced Energy Technologies and Energy Conservation Research, Development

and Demonstration, FY 1979 Authorization Hearings,

“Statement of Eric H. Willis, ” U.S. Department of Energy,

Jan. 26, 1978.

‘

8 Phone conversation with administrator of Baltimore

Harbor Tunnel, Feb. 7, 1978.

In a stationary, land-based OTEC plant, the

cold water pipe would be anchored to the seafloor and be designed to conform to the contour

along a sloping seabed to considerable depths.

The cold water pipe from an OTEC plant will

have to reach depths of 300 to 1,500 meters in

order to tap the cold water resources which are

required for OTEC operation .19 This is a difficult engineering problem because the pipe

might be handled in sections due to the length of

the pipeline, which may reach 10 kilometers or

more, depending on the bottom contour of the

site. The current state-of-the-art for underwater

pipelaying is limited to water depths of approximately 150 meters. Small pipes have been laid

at greater depths, but there is no experience with

large diameter pipes at great depths.

Most recent conceptual designs have utilized

floating offshore platforms rather than bottommounted platforms or land-based plant sites. In

these floating plants, the cold water pipe would

be connected to the bottom of the platform.

While the floating platforms will require pipes

to reach the same depths of water as stationary

plants, pipes from the floating plants would be

exposed to dynamic loads and stresses which

would not be encountered on pipes which are

anchored to the bottom. Pipe design and deployment for floating platforms would be difficult. Tried and proven methods for coupling

the pipe to the platform, as well as reliable

methods for predicting the behavior of the pipe

under cyclic loading are not available. Some experience has been gained with Shell Oil’s Spar I

floating oil loading and storage unit in the

North Sea. The spar measures 169 meters from

its base to the highest point, the height of a 40-

story office building, and is anchored in approximately 100-meter water depth. The largest cylindrical section is 29 meters in diameter.’” Experience from this unit may contribute to the

design and deployment of an OTEC plant’s cold

water pipe.

The pipe cannot be designed without an analysis of subsurface flows of currents at varying

depths in specific locations, the effect of oscillations caused by a platform’s motions at sea, and

I g Jerome Wi]]iams , Oceanography, (n.p.: Little, Brown

and Co., 1962).

‘“’’Spar Connection Brings Brent Field Closer to Production, ” Ocean lndustr-y 11 (August 1976), 45.
20 ● Ocean Thermal Energy Conversion

the resultant loadings. The effects of biofouling

on the inside and outside of the pipe must also

be analyzed. In addition, the large amount of

drag caused by a large pipe would tremendously

increase power requirements if dynamic positioning were used to keep the platform on site.

Working Fluid

The working fluid is a compound which is vaporized in the plant’s evaporator by the use of

warm seawater, expanded in the turbine where

power is extracted, and finally condensed to a

liquid by the use of cold seawater. Open-cycle

systems use warm surface seawater as the working fluid. The water is vaporized in a vacuum

and is not recycled. Closed-cycle plants such as

those currently being proposed use a secondary

medium as the working fluid and continuously

recycle it. Most of the currently proposed

closed-cycle OTEC plant concepts use ammonia

as the working fluid. Some concepts use Freons

and propane.

Ammonia has been chosen for two reasons: 1)

the work extracted by the turbine from each

pound of ammonia is at least 3 times that extracted from propane and 2) the higher thermal

conductivity and heat capacity of ammonia

may make it possible to reduce the size of the

heat exchanger. There have been no tradeoff

studies on complete OTEC systems that clearly

determine the appropriate working fluid. Freons

and propane may well be superior to ammonia

for some applications.

WARM

WATER

INTAME

s

HEAT EXCMAffiERS HEAT EXCHANGERS

I

-

?

M R M

wATER

Cilnsl

Working Flutid Flow !!?!r PuMP t

COLD

WATER

INTAKE

In the event of a spill of the working fluid or a

leak from the OTEC plant, ammonia is highly

toxic and slightly flammable. Low-level leaks

are to be expected, and there could be immediate damage to the environment which has

not yet been assessed. But the detrimental effects

of ammonia should be less long term than those

which might be caused by Freons or propane

because ammonia decomposes into compounds

which are nutrients. In addition, ammonia can

easily be detected because of its odor.

Ammonia will readily dissolve in seawater to

form ammonium hydroxide, which may be incompatible with some materials. Therefore, the

use of ammonia may limit the selection of

materials to those which are compatible and

resistant to corrosion, such as titanium and

stainless steel alloys.

Thus, selection of working fluid and materials

which are compatible and protection of the surrounding environment from leakage are important engineering considerations which affect

every facet of plant design and materials selection.

Ocean Platforms

The structures required to house OTEC

equipment in the open ocean may be stationary

platforms anchored to the seafloor or floating

platforms moored or dynamically positioned at

a particular site.

To date several configurations have been suggested, including semisubmersible and sparbuoy shapes, ship-like forms, and disk-shaped

hulls. It is expected that although OTEC platforms may well be larger than any platform yet

designed by the petroleum industry, the designs

and accomplishments of that industry will play

an important role in development of OTEC

structures. A few oil storage and production

platforms in the North Sea approximate the size

necessary for OTEC platforms exclusive of the

cold water pipe, mooring systems, and transmission lines. zl Operating experience with even

these platforms, however, is as yet very limited.

The major technical problem which must be

dealt with in designing the platform is the dif2

’Ronald Greer, Ocean Engineering Capabilities and Requirements for the Offshore Petroleum Industry, (New

York: American Society of Mechanical Engineers, 1976).
Ch. II Technical and Economic Status “ 21

I

I

IL

3 Types CM Platlorms

SHIP

.

ficult one of connecting a heavy submerged

structure (the cold water-pipe) to a surface platform subjected to wave action. Claude’s early

experiments with much smaller floating structures resulted in failure and lost cold water

pipes. Semisubmerged or completely submerged

platforms may minimize dynamic action, but

the structural dynamics of floating platforms

and cold water pipes appear to be a major

technical problem.

Another difficult task is keeping the platform

onsite in the open ocean which may be subject

to high winds, waves, currents, etc. Mooring a

platform of the size required for OTEC in very

deep waters would be a difficult engineering

problem requiring unique designs and materials.

Dynamic positioning could be used but may require large amounts of power in even moderate

ocean currents. Warm and cold water which

must be ejected from the machinery could be

used to position the platform.

Underwater Transmission Lines

Dependability of the underwater transmission

lines which would be needed to move OTECproduced electricity to shore would be critical to

the success of any OTEC electric powerplant.

However, these lines pose a particular problem

because of the limited state-of-the-art in submarine cables, Two 250 MW DC power cables

have recently been laid across the Norwegian

Trench in more than s50 meters of water” and

French and British electric companies are considering a 2,000 MW cable across the English

Channel .23 This technology is equivalent to that

which would be required for an OTEC plant delivering electricity from a site reasonably close

to shore.

The economics of transmitting electricity to

shore is greatly affected by the distance which

must be covered by cables and the fact that there

must be a number of cables taking different

routes to shore in order to ensure reliability.

With the cost of underwater transmission lines

at roughly $1 million/mile or more, 24 at some

potential OTEC sites 200 miles from shore in the

Gulf of Mexico, the cost of a single cable could

equal the capital cost of constructing the OTEC

plant. (In coal-fired or nuclear power systems

onshore, construction of the transmission cable

is roughly 12 percent of the total construction

cost .25 )

/

CENTER CORE W 31 mm 112 ~

/

OiL lMPREf3NATE0 PAPER

n

GALVANIZED STEEL

/

.AJTEIA.SPUALT 6 117mr71 {4 6 ,

-

CwlmISI

w - t

L611z8w Prod.wed

Tcdal Lm@

L

Tdal Weqht

,550T ( 1802 !!,

117 mm ,46

46 kg T

12 km

130 Nm ,7&ml

63MI ton

Skagerrak HVDC Cable

In addition, construction of the electrical

cable connecting the OTEC plant to the submarine cable wifi be difficult. For example, there

is no known method of disconnecting and reconnecting the OTEC to the cables if this need

arises due to severe winds and waves.

‘

z

’’ Power Cables Cross Norwegian Trench, ” Ocea)] IHdustry 12 (March 1977).

231bid.

“L. C. Trimble, et al., Ocean Thermal Energy Conversion (O TEC) Pouler Plant Technical and Economic Feasibility.

“Edison Electric Institute, Statistical Yearbook of the

Electric Utility ]ndustry for 2975, (New York: Edison Electric Institute, October 1976), p. 59.
22• . ocean Thermal Energy Conversion

N&TER

cXXOSEA WATEU

“ r

NOT SO CCiD WATER

c0u0Et4sER

FRESHWATER

L~. Cycle OTEC

Open-Cycle System

The open-cycle concept, which does not recover the working fluid

and reuse it, was basically eliminated from consideration about 8 years

ago when research was

under the direction of the

National Science Foundation. Until recently,

ERDA has directed most

of its funding toward the

closed-cycle concept, in

which the working fluid

is continuously recycled.

The first important

development of the open

cycle was accomplished

by Georges Claude in the

1920’s. Claude reasoned

that the major disadvantage to closed-cycle

ocean thermal powerplants is that the evaporator and condenser use

about one-half of the temperature difference to

get the heat into the working fluid. Thus only

half the temperature difference is available for

work by the turbine. Claude’s assessment of the

problem is summarized in the following statement:

Manifestly such a solution is burdened by a

number of inconveniences, one of them being

the high cost of such evanescent substances

(working fluids, i.e., ammonia), and another the

necessity of transmitting enormous quantities of

heat through the inevitably dirty walls of immense boilers with such a small difference of

temperature. 26

The open or “Claude” cycle uses ocean water

as the working fluid as well as the heat source.

The warm surface water is evaporated in a

boiler at very low pressure, in a vacuum of approximately 0.5 psig. The resulting steam is then

expanded in a very large diameter turbine.

Finally the steam is condensed by either mixing

directly with cold water pumped from ocean

26 George s Claude, “Power from the Tropical Seas, ”

Mechanical Engineering 52 (December 1930): 1039.

depths or in a surface-type heat exchanger

similar to the closed-cycle type. The latter

modification permits production of potable

water from the steam condensate.

The use of direct contact heat exchangers in

both the evaporator and condenser eliminates

the need for enormous heat transfer surface

area. Thus the area subject to corrosion and

fouling, particularly in the evaporator which is

at a higher water temperature, is greatly reduced.

The reason most often given for the choice of

a closed-cycle concept is that the open cycle

would require a turbine of prohibitive size. For

example, a single turbine yielding 100 MWe

could be as much as 57 meters in diameter.

However, no practical proposal would consider

a single turbine. The smaller (3 to 5 MWe) turbines which are more likely to be used are very

close to the size of conventional low-pressure

steam turbines now in existence. z7 Problems of

corrosion and deareation are also inherent in an

open-cycle plant. Noncondensible gases released from feedwater are the greatest source of

air in the boiler. The effect of this air is to lower

turbine output and to seriously limit the capacity of the condenser, thus, this air must be

removed prior to condensation. 28 The use of

low-pressure flash distillation chambers and

other methods of controlling this problem are

being investigated .29

De-emphasis of the open cycle in current research and development appears to be a questionable decision because the massive heat exchanger required for a closed-cycle OTEC plant

may limit the size of each OTEC unit. Opencycle machinery, particularly small turbines,

condensers, and ejectors could be developed

along with closed-cycle machinery. Use of the

z7p L Schereschewsky, . . Electric Power Generation From

the Tropical Sea, Geothermal Water, Wells and Other

Sources of Low Temperature Water . . . Modernization of

the Claude Process, (n. p.: United Nations Division of

Resources and Transport, August 1972), p. 23.

2

’Andr& Nizery, Utilization of the Therma/ Potential of

the Sea for the Production of Power and Fresh Water,

(Berkeley, Engineering Research, Sea Water Project, March

1954), p. 5.

*’Donald F. Othmer, “Power, Fresh Water, and Food

from the Sea, ” Mechanical Engineering 98 (September

1976): 27.
.

Ch. II Technical and Economic Status “ 23

~

PIJMP

W(4

WA

LIOUIO

c o

WA

--—li Closed Cycle OTEC ~

open cycle, which turns out desalinated water as . .

a byproduct of the process, may be especially

attractive on some isolated island or in coastal

communities.

Construction and Deployment of an OTEC Plant

There are conflicting views about the facility

which will be required. One school of thought

believes that any large shipbuilding facility

could undertake the construction. Another

holds that the construction facility itself would

be a novel endeavor. Such a construction facility could be a several hundred million dollar investment.

Deployment and mooring of OTEC plants in

a potentially hostile environment at sea may

ako be a problem. There appears to be little

engineering experience which is directly pertinent to final onsite assembly of a large OTEC

system, although much can be learned from the

experience of the petroleum industry in the

North Sea and elsewhere. The cold water pipe

and undersea electric transmission cables are

particularly challenging deployment problems.

Reliability of an OTEC PIant

Once an OTEC plant is actualiy constructed

and sited, it will have to continue to operate

reliably for at least 20 years in order to amortize

the very large capital investment which will be

required. Reliability is often expressed in terms

of plant capacity factor. The plant capacity factor is the ratio of the power actually produced

during a given period to the total which a plant

operated at constant full power could produce

during the same period, Most of the current

OTEC plant concepts claim a capacity factor of

90 or 95 percent .30 This appears to be highly optimistic for new technology with no proven

record of operation.

The capacity factor will be reduced primarily

by scheduled and unscheduled maintenance and

repair; seasonal variations in ocean temperatures; variations in ocean currents and wind

conditions which may increase the power requirements for operating equipment; and the

buildup of biofouling organisms which reduce

heat transfer rates and may require that equipment be shutdown for cleaning.

Based on experience with ship machinery,

large pieces of equipment operating in the ocean

require a periodic overhaul, typically lasting 1

to 3 months, at least once every 2 years .31 This

gives a capacity ioss of approximately 4 to 12

percent. There will also be periods when capacity is reduced due to equipment outages. One

OTEC design concept projects one failure lasting 24 hours every 68 days.32 This reduces capacity by another 1.5 percent. In total, scheduled and unscheduled maintenance alone can be

expected to reduce the capacity factor below 90

percent. The effects of temperature variations

and biofouling will reduce plant capacity still

further.

Thus, it appears that an 80- to 85-percent

plant capacity factor is the maximum which

should be projected for OTEC plants. Even that

figure is open to question based on experience

with other large energy systems. For example, in

the late-1960’s many nuclear powerplants were

sold with the promise that over their operating

lifetime they would realize capacity factors of 80

percent or better. 33 Those expectations are now

30L C. Trimble, et al., Ocean Thermal Energy Conz~ersion (OTEC) Powerplant Technical and E~onoml~

Feasibility, p. 2-100,5-21.

3

’Ibid.

UTRW Systems croup, Ocean Thermal Energy c~n~ersion, Vol. 3, (Redondo Beach, Calif.: TRW Systems

Group, June 1975), pp. 4-15.

331rvin C. Bupp, The Commercial Prospects for OTEC

Systems, unpublished, (Cambridge, Mass.: Harvard

University, March 1977).
24 . ocean Thermal Energy Conversion

recognized as having been extremely optimistic.

Although there is a wide range of variations in

the performance of different types of equipment

and there is only a limited amount of information on the most modern plants, it appears that

capacity factors in large (greater than 800 MW)

nuclear and coal-fired powerplants range from

about so to 7S percent and are dependent on a

wide variety of local circumstances .34 There are

some nuclear plants which have achieved 80

percent, but this was only after considerable experience.

Given that record for systems which are much

more completely developed and working in a

stable and familiar environment, it appears

unrealistic to expect that OTEC plants, with

many unknowns, would achieve plant capacity

factors in excess of 90 percent.

Summary of Technical Problems

No scientific breakthroughs are needed to

build an OTEC plant, but the technology for

several major components of OTEC is not engineering state-of-the-art. No plant has been fully

designed; many components of the system have

not yet been developed. The technical problems

which must be solved are significant, and satisfactory solutions to the critical engineering

problems are likely to require laboratory and atsea testing. Even when the plant is designed and

proven, there is little engineering experience

which is directly pertinent to the at-sea assembly and mooring problems which may be

encountered. And finally, it is not now possible

to project how reliable an OTEC plant will be

once it is sited and operating.

NOTE: The OTA Working Paper on Ocean Thermal

Energy Conversion, which is being published separately,

contains a detailed technical discussion of designs that

have been proposed.

ECONOMIC CONSIDERATIONS

Meaningful economic analyses can only be

conducted for specific power systems. To date,

however, the technical uncertainties of OTEC

are so great that only broad economic overviews are sensible, and care should be taken to

avoid detailed economic calculations that create

a specious aura of accuracy.

341bid.

The following sections provide an overall

view of three potential OTEC product systems

(electricity, ammonia, and aluminum). Other

systems are, of course, possible and may, in

fact, prove more useful in the future. However,

most Government-sponsored research has focused on these three potential systems. Data are

provided on potential markets and on factors

influencing the range of costs of OTEC systems.

Electric Power Generation

OTEC plants are first of all powerplants. This

power may be fed into an electric utility grid for

distribution to customers or it may be used in an

energy-intensive manufacturing process which

is coupled with the OTEC plant, such as an

OTEC/ammonia system or an OTEC/aluminum system.

In any of the foregoing cases, the economics

of generating power can be expressed in two

types of cost: the capital cost of constructing

OTEC plants and the cost per kilowatt hour of

energy produced.

Capital Cost of Constructing an OTEC Plant:

The conventional method of expressing the cost

of building a powerplant is in terms of dollars

per net kilowatt of capacity. Existing literature

on OTEC reflects an extraordinarily wide range

of estimates about the total investment required

for the first several plants. The data presented

are for different temperature gradients, sizes,

and designs of OTEC plants with differing components and equipment and differing learning

curves, The capital costs presented range from

$500/kW to $3,700/kW. These cost estimates

are displayed in table 3.

It is even quite possible that the actual costs

could exceed this range because all the important variables which will determine the costs are

not yet known. For example:

●

●

The choice of material for the heat exchangers may radically affect the cost of

construction because the price of candidate

materials varies widely;

The choice of sites will radically affect the

cost of construction because the site will influence the type of platform and mooring,

the length of the cold water pipe, the dis-
Ch. II Technical and Economic Status . 25

Table 3.—Estimated Capital Costs of an OTEC Electric Generating Plant

●

tre d

APLa TRWb LSMDC (Roberts) M i tree

Capital costs in $/kW. . . . . . . . 500-1,000 2,100 2,600-3,700 1,600-1,900 1,600-2,800

aw. H. Avery, et al., Maritime and Construction Aspects of ocean Therma/ Energy Conversion (OTEC) plan;

Ships, (Laurel, Md: Applied Physics Laboratory, April 1976), pp. 5-25.

bM itre corporation, systems f)escriptlons anci Engineering Costs for Solar Engineering cOStS fOr Solar-Related

Technologies, vol. V1l.

Cl bid. dlbid. elbid.

tance the product must be transported to

shore, and the precautions which must be

taken to protect the environment;

The rate of biofouling may radically affect

the cost because fouling _reduces the efficiency and thus the output of the plant.

Solutions to these and other technical problems are necessary before rational estimates of

OTEC construction costs can be made. In addition, to the capital cost of an OTEC plant must

be added the cost of transmission cables to

shore. With cable costs at about $1 million a

mile,ss the transmission lines for a 5oo Mw

OTEC 100 miles offshore would be about

$200/kW at a switching station on the beach.

The need for multiple cables could double or

triple this cost.

If OTEC plants could be built at the very optimistic investment cost of about $500/kW

(1976 dollars), OTEC plants would be more attractive than nuclear powerplants built during

the mid-1970’s 3b if the OTEC operating costs

were modest.

However, it is prudent to remember that for

the past 10 years, engineering estimates of the

capital cost of new generating capacity have

been persistently low. Early commercial nuclear

powerplants actually cost 2 to 3 times more than

original estimates indicated they would .37

If the capital cost of an OTEC plant reaches

or exceeds the high end of the estimates,

$3,700/kW, construction is less likely to start.

3SL. C. ~rimb)e, et al., Ocean Thermal h~rgy ConZ’ersion (O TEC) Power Plant Technical and Economic

Feasibility.

361~vin C. B upp , The Commercial prospects for OTE C

Systems, March 1977.

371rvin C. Bupp, et al., “The Economics of Nuclear

Power, ” Technology Review 77 (February 1975).

CON SUMEB

Cost per Kilowatt Hour of Energy Produced:

The busbar cost38 of producing electricity by

OTEC or any other method is dependent upon a

collection of variables. First, the amount of

temperature difference has a direct bearing on

the net power output of an OT’EC plant and the

cost of each unit of energy. For example, consider a 100 MW OTEC plant designed for a 400

F temperature difference, with capital costs of

$2,000/kW. If that temperature difference

decreases, the plant output would decrease and

the cost per unit of output would increase as

shown in table 4.

Table 4.—Plant Output and Cost per Unit

as a Function of Temperature Difference

Temperature Plant $/kW per unit

difference (“F) output (MW) of output

40 .., . . . . . . . . . . . . 100 2,000

30 . . . . . . . . . . . . . . . 56 3,500

20 . . . . . . . . . . . . . . . 25 8,000

10 . . . . . . . . . . . . . . . 6 32,000

Source: Office of Technology Assessment.

36The busbar is an assembly of conductors for collecting

electric currents and distributing them to outgoing feeders.

Thus, the busbar cost is the cost of electricity before

distribution to consumers.
26 ● ocean Thermal Energy conversion

Table 5.—Busbar Cost of Electricity

Busbar cost of electricity = (FCR) C/kw x 1,000 + (CF) + (COM)

in mills per kilowatt hour (FA) T

Busbar cost—cost in mills/kWh at the point of production with no transmission charges (one mill =

one/tenth of one cent)

FCFt-fixed charged rate: a percentage figure representing estimates about the long-term costs of

debt and equity capital. During the 1960’s FCRS of 8 to 10 percent were standard for the

American utility industry. During the 1970’s, 16 and 17 percent FCRS have been common.

C/kVV-capital investment in dollars per kilowatt as discussed previously in this chapter.

1000-a conversion figure used to convert dollars to mills.

FA—capacity factor: the ratio of the kilowatt hours actually produced during a given period to the

total which a plant operated at constant full power could theoretically produce during the same

period.

T—total hours in a year: 8,760.

CF—cost of fuel in mills per kilowatt hour: seawater is the equivalent of fuel for OTEC and there is

no charge.

COM#-cost of operation and maintenance in mills per kilowatt hour: 4 mills/kWh is an estimate used

by proponents of OTEC.

Other variables also affect the per kW cost of

electricity produced. The major ones include the

capital cost of the plant, the plant capacity factor, the fixed annual charge rate, cost of fuel,

and the cost of operation and maintenance.

These costs cannot yet be predicted accurately. If only favorable assumptions are used, the

cost of electricity can be made to appear very

competitive. If less optimistic assumptions are

used for one or more variables, the cost of electricity rises rapidly. The equation in table 5 demonstrates how the cost changes with these

variables.

Some of unknowns in this formula are the

fixed charge rate, the plant capacity factor, and

the capital investment in construction of the

OTEC plant. Table 6 varies these three numbers

to show how their uncertainty makes a firm

Table 6.—Effect of Some Variables on Cost of Busbar OTEC Electricity*

cost of

Cost of operation and

Fixed Capital Total fuel in maintenance Busbar

charge investment/ Conversion Capacity hours in mills/kWh in mills/kWh cost in

rate (FCR) kW(C/kW) figure factor (FA) a year(T) (CF) (COM)** mills/kWh

16%. . . . . . . . $600 1,000 95% 8,760 0 4 16

16°/0. . . . . . . . $1,200 1,000 60% 8,760 0 4 41

16%. . . . . . . . $2,400 1,000 600/0 8,760 0 4 77

1670. . . . . . . . $4,000 1,000 800/0 8,760 0 4 95

2070 . . . . . . . . $4,000 1,000 800/0 8,760 0 4 118

16%. . . . . . . . $4,000 1,000 600/0 8,760 0 4 126

(FCR) C/kW x 1,000 + (CF) + (COM) = Busbar cost

(FA)T

● No transmission and distribution costs are included in busbar figures.

● ● Operating and maintenance costs are less predictable than initial investment. They are influenced by the

design of capital equipment and are resolved further in the future.

Source: Office of Technology Assessment.
estimate of the final busbar cost of electricity

impossible. The first line uses numbers based on

a study which produced the lowest of the capital

cost/kW estimates shown earlier. Other lines

simply use a range of plausible numbers.

Although changes in the variables are rather

arbitrarily selected for purposes of this illustration, they do reflect possible values for fixed

charge rates, capital investment, and OTEC

plant capacity, and they demonstrate how estimates of busbar cost of OTEC electricity can increase by more than 100 mills /kWh.

It is almost as difficult to determine the future

cost of power generated by any conventional

plant because many unforeseen factors, including political decisions, will determine the construction, fuel, and equipment cost of the

future.

Figure 1 displays how increases in the installed costs and fuel costs will affect the cost of

electricity from conventional powerplants. For

example, a coal-fired powerplant which cost

$400/kW to build and has fuel costs of $20/ton

could produce busbar electricity at about 18

mills/kWh. If the plant cost $1,00()/kW to build

and coal was $60/ton, it would produce busbar

electricity at 50 mills /kWh. 39

Since there are as yet unpredictable costs

which coal plants will incur to meet air quality

regulations, nuclear plants will incur to dispose

of radioactive wastes, and so on, it is again difficult to predict future costs. However, projections for conventional powerplants do reflect

some years of experience while OTEC projections are strictly rough guesses.

Based on the history of cost escalations for

coal and nuclear powerplants and on discussions with personnel who have studied the

OTEC concept, figure 2 pictures the difference

in the range of

of electricity

figures should

very general

ranges.

So far, this

uncertainty about the busbar cost

generated in the future. These

be read with caution, as they are

and demonstrate only possible

wide range of uncertainty about

technical problems and about the cost of electricity from OTEC plants has been a major fac-

“Federal Power Commission, Bureau of Pozoer, Annual

Summary of Cost and Quality of Electric Utility Plant

Fuels, 1976, (Washington, D. C.: Federal Power Commission, May 1977).

Ch, II Technical and Economic Status 27

tor in discouraging utility company decisionmakers from considering OTEC plants for part

of their future generating capacity .40

Other Factors: In addition to capital cost and

cost per kWh, there are other factors which

utilities take into consideration before a decision

is made to invest in a particular source of energy

or type of facility which would supply electricity to the grid. In order to determine whether

public utilities could be expected to provide a

major market for electricity generated by OTEC

if economics were favorable in the future, OTA

has studied the planning process used by utilities

and the variables which are analyzed before a

decision is made to invest in a particular source

of energy or type of facility. Some other major

variables considered by the utilities include: 4

1

●

●

●

●

●

●

●

long-term availability of fuel,

environmental assessment,

reserve and reliability of generating capacity,

construction and licensing time,

site costs, “

transmission cost estimates, and

candidate site selection.

All the variables are not of equal importance

in the planning process; however several significant ones show potentially unfavorable aspects

of OTEC. Those are: 1) probable lengthy construction and licensing time, based on the difficulty of constructing complex systems in the

oceans; 2) high transmission costs, based on expense of undersea cables and distance from

shores; and 3) the limited availability of sites

near the United States.

Other factors, which show favorable aspects

of OTEC, are the possibility that it offers 1)

long-term reliability of fuel; 2) low-acquisition

costs for offshore sites; and 3) minimal environmental impacts.

However, most public utilities are very conservative when planning new facilities and have

indicated to OTA42 that they consider onl y

PhO~e conversation between OTA and six coastal area

utilities, Feb. 7, 1978.

4 I B J Washom and J, M. Niles, ]~zcenfzues for the com -

. .

mercialization of Ocean Thermal Energy Con~~ersion

Tec/lno/ogy (OTEC), (Los Angeles, Calif.: University of

Southern California, January 1977), p. 8.

‘

zOffice of Technology Assessment staff meeting, Dec.

28, 1976, Washington, D.C.
..—— —

Ocean Thermal Energy Conversion

Figure 1

Potential Marginal Costs of

Baseload Electricity in the Year 2000

for Coal or Oil-Fired Powerplants

Annual Escalation in Installed Cost (above inflation)

0% 1% 2% 3% 4 % 5% 6 %

II II l l I I I I

o 500 1,000 1,500 2,000 2,500

Installed cost in 1976 $/kW

Assumptions:

—75-percent capacity factor — 1976 installed cost $500/kW

—35-percent efficiency in generation and transmission

–Transmission and distribution cost $300 to $400/kW

—Operating costs (exclusive of fuel) = $0.01/kW

—Fixed charge rate = 0.15

Source: Office of Technology Assessment

120

100

80

60

4 0

20

0

E

c
120

110

100

90

80

70

—% 60

50

40

30

20

10

Ch. II Technical and Economic Status • 29

Figure 2

Possible Range of Uncertainty in Future Cost of Busbar Electricity

Based on some

industry experience

I

I

I

 ● ● ● ● c

Nuclear

o

3-.—

-— —— Optimistic

. . . ● . . . Pessimistic

Source: Office of Technology Assessment.

Coal

technology which is successfully demonstrated

and commercially available when they begin the

planning process. The long leadtime required to

build and license most facilities requires that the

decision to add new capacity generally be made

about 10 years in advance of need for the electricity. Therefore, the lack of demonstrated

OTEC technology, the lack of dependable estimates for the variables which will be analyzed,

and the uncertainties of operating a floating

plant in a hostile marine environment ensure

that OTEC plants will not be incorporated for

Based on no industry

experience

OTEC

0

3—.

— -- — Optimistic

● s.. ● . . Pessimistic

commercial use by electric utilities for many

years to come.

Power for Production of Ammonia

The production of anhydrous ammonia (NH,)

has been proposed as an attractive way to use

OTEC. Ammonia is used in the manufacture of

many chemicals, with about three-fourths of the

U.S. production of ammonia being used to

make fertilizers for agriculture.
30 . ocean Thermal Energy Conversion

.---_____ l_.____n

Ammonia is a compound of hydrogen and

nitrogen, and presently

large amounts of natural

gas are used as feedstock

in the production of the

hydrogen. Approximately 40,000 cubic feet of

natural gas is needed to

produce 1 ton of ammonia. The ammonia industry used approximately 4

percent of thenatural gas

consumed in the United

States in 1976.

43 Tha t

figure is expected to rise

tomore than 5 percent of

the natural gas consumption by 1980 and to more

than 11 percent by

1990.

44

APLs Concept OTC A

If hydrogen could be produced atan OTEC

plant by electrolysis of seawater, the natural gas

now used as a feedstock could be eliminated.

The hydrogen produced aboard an OTEC and

nitrogen from the air could be fed to a shipboard commercial synthesizer, and the resulting

ammonia could be transferred to shuttle carriers

for delivery to consumers.

It is the savings in natural gas which makes

the OTEC/ammonia concept attractive. The

variables which influence private industry decisions about ammonia production are:

 expected supply and demand

 alternatives to existing processes and/or

OTEC, and

● economic competitiveness of OTEC.

Expected Supply and Demand: World demand for ammonia is expected to grow during

the next 15 to 20 years at an average annual rate

of about 3 to 5 percent. Domestic demand is ex43 B. J. Washom and J. M. Niles, lrzcentiues for the com -

mercialization of Ocean Thermal Energy Conversion

Technology (O TEC), P.8.

AA]rvin ~. Bupp , The Commercial Prospects for OTEC

Systems, p.8.

pected to grow at a slightly higher rate of 5 to 6

percent .45

Demand for nitrogenous fertilizer, the largest

single user of ammonia, is also expected to

grow. The U.S. Fertilizer Institute projects annual growth of about 5 percent in demand

through at least the 1980’s.46 World demand is

expected to grow at about 6.5 percent per year

due to the increasing use of fertilizers in the

Lesser Developed Countries. 47 Demand in the

Lesser Developed Countries, which accounted

for 19 percent of the world’s nitrogenous fertilizer use in 1975/76, is expected to increase by

89 percent between 1975/76 and 1981/82. 4a

These countries will then account for nearly a

quarter of the world’s use of nitrogenous fertilizers.

It is clear, then, that fertilizer demand in the

Lesser Developed Countries is of interest to ammonia producers, The demand is also particularly meaningful for OTEC/ammonia plants

since many of the Lesser Developed Countries

have easy access to areas of the oceans where

there is a significant thermal resource which

could be used in producing power by OTEC.

However, the United Nations Food and Agriculture Organization projects that by 1982 the

Lesser Developed Countries will have increased

their ammonia production capacity by 151 percent, giving them control over 20 percent of the

world’s nitrogenous fertilizer production49 and

exerting downward pressure on world prices.

In the United States, the domestic ammonia

production capacity is expected to increase

about 15 percent by 1980 as plants currently

under construction come on stream. Although

the United States has been a net importer of ammonia since 1973, during the 1980’s and 1990’s

domestic production capacity is expected to

keep pace with consumption needs .’”

Meanwhile, world production capacity will

also continue to grow. The World Bank is

451bid.

AbEdwin Wheeler, president of Fertilizer Institute, speech

at the Institute’s fall 1977 conference, New Orleans, La.

“U.S. Department of Agriculture, Economic Research

Service, 1978 Fertilizer Situation, (Washington, D. C.: U.S.

Department of Agriculture, December 1977) p. 19.

4aIbid.

491bid.

‘“Ibid.
Ch, 11 Technical and Economic Status . 31

presently financing a number of ammonia production projects. The Soviet Union and China

are expanding their ammonia production capacity, Saudi Arabia, Iran, and Kuwait are constructing large facilities to produce ammonia

and petro-chemicals from natural gas which is

now being flared .5* It is clear that by the mid1980’s, the Middle East may be a major source

of inexpensive ammonia supplies. In all, world

consumption of ammonia is expected to increase

47 percent by 1982, reaching 82 million metric

tons .52 However, considering the current state

of the technology, it is unlikely that OTEC/-

ammonia plants could be a part of that massive

growth.

Alternatives to Existing Processes and/or

OTEC Plants: As stated earlier in this report,

natural gas is critical to the current methods of

producing ammonia. A1though ammonia producers currently benefit from a high-priority

rating in the allocation of scarce natural gas,

curtailments have occurred in the past and will

undoubtedly occur in the future. However, the

ammonia plant expansions now underway appear to indicate that the domestic industry is

confident that existing technology and known

natural gas reserves will support ammonia production at least into the 1990’s. 53 Industry

sources say they feel there is not sufficient threat

to traditional ammonia production to justify

major capital investment in an unproven technology, such as OTEC, for at least the next 15 to

20 years .54

Therefore, for the near term at least, the

primary alternative to OTEC/ammonia plants

is the traditional production system.

In addition, industry-sponsored studies have

shown that coal and fuel oil can be used to

replace natural gas as both a fuel and a

feedstock in existing or planned ammonia

plants.

About 60 percent of the natural gas used in a

typical ammonia plant is for feedstock while the

511bid.

521bid.

“Irvin C. Bupp,

Systems, p.9.

“Ibid., p, 10,

The Commercial Prospects for OTEC

remaining 40 percent is used as fuel .55 Conversion of the system to be fueled by oil rather than

natural gas is a straightforward, conmical

operation which can be accomplished during

normal maintenance downtime and does not

significantly increase the cost of the ammonia

beyond that resulting from any change in fuel

Price. 56 It is, however, somewhat more difficult

to convert to oil as a feedstock. Such a conversion at existing plants would take 2 to 3 years,

including a 6-month to l-year downtime. As a

result, the cost of ammonia would go up at least

25 percent for the more expensive oil feedstock.

The cost of the downtime and the cost of converting equipment would raise the price of ammonia still more.57 Converting the system to use

coal as a feedstock would result in even higher

prices.

For the near term, imported liquefied natural

gas and domestic synthetic gas are also cited as

possible alternative feedstocks.

From the perspective of the U.S. ammonia industry, the most important fact about near-term

ammonia production is the certainty of growing

competition from low-cost foreign products,

Among the most likely competitors are the

Middle East nations, particularly Kuwait and

Iran, which appear likely to put large supplies of

ammonia on the market as a result of production using natural gas which is currently flared.

Although transportation costs may prevent

Middle East ammonia from making any major

impact in the European and North American

markets, the Middle East would have a cost advantage in supplying Lesser Developed Countries. In the domestic market, competition from

Middle East ammonia could be countered with

tariffs on imported products, however, it is

likely that any effort to impose such charges

would meet with strong opposition from agricultural users.

 55 L. J. Buividas, J. A. Finneran, and 0. J. QUartUllj,

“Alternate Ammonia Feedstocks, ” American Institute of

Chemical Engineers, 78th National Meeting, Salt Lake City, Utah, Aug. 19, 1974.

‘*’’Allied Solves a Burning Problem, New System

Vaporizes Oil, Permits It to be Burned in Furnaces Equipped with Gas Burners Systems Also Works in Gas Turbines, ” Chemical Week (June 8, 1977), p. 35.

“Private communication between OTA and J. A. Finneran, Pullman-Kellogg Co., July 1977.
32 . ocean Thermal Energy Conversion

Economic Competitiveness of OTEC/Ammonia Plants: One key to the competitive success of OTEC will be the capital cost of a commercial OTEC plant. While the ammonia production component is expected to cost roughly

the same as a traditional onshore ammonia

plant, the OTEC generating component would

bean expensive addition to the capital outlay.

Figure 3 indicates that a large fleet of OTEC/-

ammonia plants would be necessary in order to

capture a significant portion of the world ammonia production capacity. This would mean

an investment of billions of dollars in an unproven technology which would have to compete with existing plants.

In addition, existing and planned traditional

ammonia plants will not be fully amortized until

early in the next century. From a business point

of view, this is a crucial consideration because

unamortized capacity would not be shut down

unless ammonia from an OTEC facility were

certain to be considerably cheaper than ammonia from existing plants. Such a guaranteed

low cost is extremely unlikely for any novel production system, especially one with the technical and operational uncertainties which are

associated with OTEC.

Fluctuations in world ammonia prices—

caused at least in part by the price and

availability of natural gas and the price and

availability of foreign ammonia products—

would also be a major factor in the ability of

OTEC/ammonia plants to compete in the world

market.

If an OTEC plant could be constructed for the

lowest cost estimates discussed earlier, i.e.,

$500/kW, 58 and if the price of ammonia were

$180/ton, as suggested by the World Bank,59 the

before tax return on equity for capital investment of $367 million could be 16.5 percent.

Such a return does compare favorably with industry standards. But if the price of ammonia is

reduced, the consequences for the return on

5 8W. H. Avery, et al., Maritime and Construction

Aspects of Ocean Thermal Energy Conversion (OTEC)

Plant Ships, pp. 5-25.

“Graham F. Donaldson,

and Beyond, ” Development

“Fertilizer Issues in the 1970’s

Digest XIIZ, (October 1975):5.

Figure 3

Number of 1,650 Ton per Day OTEC/Ammonia Plants Necessary

To Capture Significant Portion of World Plant Capacity

Percent of

world

ammonia

plant

capacity

(1985)

18

15

12

9

6

3

10 20 30 40

Number of OTEC/ammonia plant ships

Source: Extrapolated from estimates by the Fertilizer Institute.
equity would be severe. For example, at

$120/ton, the return on equity would be about 7

percent.’” At the 1978 price of about $100/ton,

the return on equity would be less than 3 percent. Consequently, ammonia production elsewhere in the world and the balance of supply

and demand would be critical to the competitive

success of OTEC even with the most favorable

assumptions about construction, operating

costs, and reliability. As noted earlier, reliable

estimates of construction and operating costs

cannot yet be made, and there is no experience

on which to judge the operational reliability of

OTEC plants.

Due to the technical and economic uncertainties discussed in this chapter, it is unlikely that

OTEC production of ammonia would be a

viable business in the next 10 to 20 years .

However, fertilizer for food production may

become a critical commodity in the next century

when fossil fuels become very scarce. Therefore,

the possibility that OTEC could produce ammonia for fertilizer is one incentive for developing and proving or disproving this technology.

Power for Production of Aluminum

OTEC plants have been proposed as the

source of power for the electricity-intensive

aluminum production industry. The rationale is

that offshore OTEC plants could provide electrical power to onshore production plants in

regions which have a large supply of the raw

material, bauxite, but lack the necessary access

to inexpensive power.

There appear to be several major factors

which influence whether or not OTEC would be

accepted into the aluminum industry:

● the cost and reliability of the power supply,

● the need for a constant, dependable supply

of raw materials, and

● the supply/demand picture combined with

current low prices and rising costs in the

aluminum industry.

‘“Byron J. Washom, “Economic Evaluation of Three

Commercial Applications for Ocean Thermal Energy Conversion, ” unpublished.

Ch. 11 Technical and Economic Status ●

(6T0U518AUXITE

/

21272320

--------- 

I

I

I

(2 TONS) ALUMUNI

I

I

----------------- - -

ON Board

OTEC

OTEC Aluminum

Cost and Reliability

33

of

Power: Aluminum production is a two-stage

process: bauxite is refined into alumina; alumina is then reduced to

aluminum. The alumina

reduction stage is the

most intensive user of

electricity, consuming an

average of 8 kWh of electricity to produce a

pound of aluminum .61

The estimated total cost

of producing a pound of

aluminum in 1976 w a s

44.7 cents. 62 By comparison, the cost of the electricity alone for producing a pound of aluminum could range from

12 cents to 96 cents if

OTEC costs from table 6

were considered. There are some efforts under

way to reduce the kWh/lb ratio, 63 however, it is

clear that the cost of electricity is a major factor

in the profitability of aluminum production.

Further increases in the cost of fuel used in other

types of electric-generating facilities will reduce

the cost differential; however—as discussed earlier—it is impossible to predict what the costs of

either conventional or OTEC electricity will be.

Profitability could also hinge on reliable

operation of the OTEC plant. As discussed in

the section on technical problems, there is currently no experience on which to base estimates

of the reliability of OTEC plants. However, experience with large nuclear and coal-fired

powerplants has shown that these units operate

at only 50 to 75 percent capacity. 64 Most cost

estimates for OTEC plants have been based on

estimates of operation at 90 to 95 percen t

capacity, which, as mentioned earlier, is highly

“U.S. Department of Commerce, U.S. Industrial

Outlook, (Washington, D. C.: U.S. Department of Commerce, 1976), p, 60.

6ZU. S. Department of the Interior, Bureau of Mines,

Commodity Data Summaries, 1977, (Washington, D. C.:

U.S. Department of the Interior, 1977), p. 5.

‘3U. S. Department of Commerce, U.S. Industrial

Oudook, 1976, p. 60.

“Irvin C. Bupp, et al., “The Economics of Nuclear

Power. ”
34 ● Ocean Thermal Energy Conversion

unlikely for a new technology operating in a

hostile marine environment.

In addition, the industry will be skeptical of

siting new aluminum plants where they depend

solely on OTEC as a power source. Traditionally, plants are located where they can be interconnected to a major utility power grid and thus

have alternate sources of power. A large-scale

demonstration of the dependability of OTEC

and a backup supply of power will probably be

necessary before industry is seriously interested.

Supply of Raw Materials: The raw material

for aluminum production is bauxite, one of the

most common ores in the world. However, differences in grades and qualities of ores are sufficient to make supplies from some areas much

more economical than others. The major producers of bauxite are Australia, Jamaica,

Surinam, Guyana, Guinea, India, Indonesia,

Dominican Republic, Malaysia, Haiti, Brazil,

and Ghana. Three tons of bauxite are required

to produce one ton of alumina, and this reduction generally is accomplished near the source of

the raw material. Alumina is then shipped to

aluminum manufacturers. Fifty-seven percent of

the alumina consumed in the United States

comes from Australia. Presently, this amount of

alumina, at twice the weight of the finished

product, is shipped 11,000 miles to manufacturing sites near cheap hydroelectric power in the

United States. It appears likely that the industry

would be interested in OTEC plants at the

source of the alumina only if the cost of producing OTEC electricity and shipping lightweight aluminum was less than shipping

alumina to cheap power sites.

Supply/Demand, Cost, and Prices: U.S. demand for aluminum primary metal in 1975 was

approximately 5.1 million tons. The aluminum

industry estimates growth at a rate of 8 percent

per year during the next 10 years, reaching a

total demand of 11 million tons by 1985.65

Presently, there is no problem in meeting the

demand. Until at least 1974, there was an oversupply of aluminum due to the Government’s

reduction of its strategic stockpile of aluminum,

Through the early 1970’s, the stockpile provided

about 10 percent of the annual supply. As of

“U.S. Department of Commerce, U, S. Industrial

Outlook, p. 67.

1975, U.S. capacity was approximately 5

million tons. World capacity was 14.5 million

tons .66

The oversupply and a general economic slowdown left many companies with idle plants or

marginal operations as late as 1976, leading

analysts to predict only nominal growth in

capacity in the foreseeable future.

In addition to the problems caused by oversupply, the aluminum industry has faced rising

production costs brought on by increased cost

of raw materials, electricity, transportation,

and labor. As a result, the nominal purchase

price of a pound of aluminum ingot has risen

from 39 cents in 1974 to 48 cents in 1976.’7

As a result of these uncertain costs in an

OTEC/aluminum system and the ability of supply to meet demand, at least in the near term,

OTEC is unlikely to be an attractive source of

power for the aluminum industry.

Summary of Economic Considerations

The economics of OTEC depend primarily on

the capital cost of constructing OTEC plants

and the cost per kilowatt hour of the energy produced.

Because no OTEC system is yet fully designed, quantitatively precise knowledge about

these costs is impossible and there are large

uncertainties about lifetime reliability and the

interruptions in production which result should

an OTEC plant fail.

The basic product of most current OTEC concepts is power—power for use in the U.S. electric grid or for use in the production of other

products. The busbar cost of producing electricity is dependent upon a collection of variables, including the thermal resource available,

capital cost of the plant, plant capacity factor,

fixed annual charge rate, cost of fuel, and the

cost of operation and maintenance. Reliable

estimates for these variables cannot yet be

made. Therefore, it is impossible to predict the

busbar cost of electricity from OTEC. Unknown

“U.S. Department of the Interior, Bureau of Mines,

Mineral Facts and Problems, (Washington, D. C.: U.S.

Department of the Interior, Dec. 9, 1975).

“U.S. Department of the Interior, Bureau of Mines,

Commodity Data Summaries, 1977, p. 5.
Ch. 11 Technical and Economic Status •35

electrical transmission costs add another element of uncertainty.

These still unknown costs will determine

whether or not OTEC is useful in the future production of other products.

For ammonia, for example, the most promising market areas are located near the most promising OTEC sites; however, these areas are the

Lesser Developed Countries which will require

very low-cost products. In addition, already existing producers are expanding their ammonia

facilities to meet present and future demands

with existing processes and there are potentially

low-cost alternatives to OTEC/ammonia, especially ammonia made from flare gas in the Middle East nations. For aluminum, world production capacity is currently greater than consumption of the product and little expansion is

predicted in the foreseeable future. However, in

theory, the use of OTEC could allow aluminum

plants to be located in coastal areas nearer

dependable sources of raw materials. In that

case, the price and dependability of electricity

from OTEC would be crucial factors.

At this time, there is no economically competitive product among those which have been

proposed in connection with OTEC. These economic considerations are based on short-term

projections of supply and demand for some

specific commodities compared with the uncertainties associated with present OTEC technology. In the long term, however, alternative

energy supply options could become much more

critical to the United States and to the world,

and the value of developing OTEC technology,

if successful, cannot be measured by simple

economic projections.
Chapter

Status of

Government

Funding
Status of

Government

Funding

History of Government Funding

The National Science Foundation (NSF)

began funding OTEC research in 1972 when its

Research Applied to National Needs program

funded $85,000 worth of OTEC systems studies

and workshops. In 1975, the Energy Research

and Development Administration (ERDA)

became the lead agency in OTEC research with

an initial budget of about $3 million for a variety of tasks on energy utilization, environmental impacts, heat exchangers, and biofouling

and corrosion. By 1977, total funding had risen

to $14.5 million in ERDA.1 OTEC funding for

1972 through 1977 is detailed in table 7.

Concept designs have been developed by

Lockheed Missiles and Space Company, TRW

Systems Inc., and Johns Hopkins University Applied Physics Laboratory.

Government agencies other than NSF and

ERDA have also made modest expenditures for

researching OTEC concepts, including the Mari1

Energy Research and Development Administration,

Ocean Thermal Energy Conversion (OTEC) Programs

Summary, October 1976, and phone conversation with

staff member of ERDA, Washington, D. C., Jan. 23, 1978.

Table 7.—OTEC Funding for Fiscal Years 1972-77

(Budgetary Obligations in Thousands of Dollars: ERDA and NSF combined)

Fiscal year

Program activity 1972 1973 1974 1975 1976* 1977

Program support. . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . ., . . . . . . . 111

Definition and systems planning

—Systems studies and

workshops. . . . . . . . . . . . . . . 85 230 530 786

—Test program requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—Mission analysis. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . .

—Energy utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360

—Marine environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—Environment impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 : :

—Thermal resource assessment and siting studies . . . . . . . . . . . . . . . . . . . . . . 50 172 . .

—Legal and institutional

studies. . . . . . . . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . . . . . . . . 61

Engineering development

—Heat exchangers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,062

237

1,091

360

202

312

457

. . . . . .

145

250

2,381

1,440

. . . . . . . . .

328

. . . . . . . . .

10

136

77

33

1,721

—Electric cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Advanced research and

technology

—Heat exchangers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 435 1,669 2,834

—Exploratory power cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 . . . . . . . . . 118

—Submarine electrical cables . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 . . . . . . . . . . . . . . . . . .

—Biofouling and corrosion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 1,303 2,702

—Ocean engineering. ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505 497 25

Engineering test and evaluation . . . . . . . . . . ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,498

TOTALS . . . . . . . . . . . . . . . 85 230 730 2,955 8,585* 13,500

● Includes funding for Transition Period (July 1, 1976 to Sept. 30, 1976).

Source: Department of Energy.

39
0—.. .

40 ●

tim e

Ocean Thermal Energy Conversion

Administration and the Office of Sea Grant

(both agencies of the Department of Comrierce); the Federal Energy Administration; and

the Department of the Navy.

In fiscal year 1978, $36 million is budgeted for

OTEC research by the Department of Energy

(DOE). The program includes study of biofouling and corrosion rates and cleaning methods,

design and testing of heat exchangers, design of

cold water pipe and mooring systems, evaluation of platform shapes, and planning for a pilot

plant. z The 1978 OTEC program schedule (figure 4) sets a target of 1982 for having a 5 MW

OTEC plant at sea for tests.

ERDA’s choice as the primary OTEC mission

had been to develop electrical power generation

for transmission to the United States or a U.S.

territory by underwater cable from an offshore

OTEC plant.3 With the 1978 funding, however,

DOE was ordered by Congress to also pursue

development of an OTEC plant ship to manufacture a product such as ammonia, but other

possible applications of OTEC, such as

desalination, air-conditioning, and cooling of

conventional or nuclear powerplants, are receiving little, if any, attention at DOE. In addition, current research is geared toward largescale OTEC plants, and there is apparently little

effort to determine if OTEC plants in the 1 to 5

MW size might have more commercial value

than larger plants.

Effect of Government Funding on

Status of OTEC

None of the research to date has concluded

that an OTEC plant cannot be made to operate.

However, the technology for the plants has not

yet been proven and many of the components

which will be required are considerably larger

than similar equipment now in use or otherwise

pose difficult design, construction, or development problems.

No OTEC plant has been completely designed

and there are critical technical problems. Until

‘Meeting with ERDA staff, Washington, D. C., Sept. 28,

1977.

3

Letter to W. H. Avery from H. R. Blieden, ERDA,

Washington, D. C., Nov. 17, 1976.

these problems are resolved, it is premature to

think firm estimates can be made about the cost

of OT’EC power or the potential uses of OTEC

plants.

Conclusions about the technical and economic success or failure and the environmental

impact of OTEC plants should be based on consideration of specific OTEC devices at specific

sites, manufacturing and marketing specific

products, and transporting raw materials into

the device and products out to the users. OTEC

has not yet been developed to the level where

such an assessment is meaningful,

In the past, many claims for OTEC’S value

have been too optimistic for the state of OTEC

development. Such claims have assumed quick

and economic solutions to all the many technical problems which exist. They have assumed

market conditions which make OTEC financially attractive. Thus, it is not difficult to deflate

the claims simply by making less optimistic

assumptions about the timing and cost of solutions to technical problems or by using less optimistic assumptions to assess the market situation in which OTEC will compete. In addition,

private investors and industry are currently unwilling to risk their capital on building OTEC

plants, and such reluctance on the part of industries which stand to benefit from OTEC is an

argument against over-enthusiastic claims.

It is possible that with sufficient time, money,

and effort OTEC could be in the national interest. However, as with many new technologies

which offer hope of contributing to the solution

of some pressing national problem, the needed

time, money, and effort will have to be supplied

by the U.S. Government until private industry

is convinced OTEC is an economically attractive venture,

It is still too early to estimate when—or even

if —OTEC will achieve that level of development. It is impossible to reliably estimate the

total amount of time and money the Federal

Government could expect to invest in the longterm development, testing, and commercialization of OTEC. The answers to several unsolved,

critical technical problems discussed in this

report are necessary before such estimates can

be made.

It is also impossible with existing information
FY

Ch. 111 Status of Government Funding “ 41

Figure 4

OTEC Program Schedule

1977 1978 1979

*

SHELL

BIOFOULING PLATE I ADVANCED

1980

IEEE

1981 I1982

11213 1 4

LEGEND

1—RFP RELEASE

3–LONG LEADTIMES

OR

CONCEPT DESIGN _ DESIGN

I

v 3 I FABhiCATION —

o

1

CONCEPT I

I

DESIGN _ DESIGN FABRICATION I

I

I

3 FABRICATION ,I

I I T

ERED

i

# ’

G N _ FABRiCATE i !

I j

v

I

y

I I

I I

I

I I

I I

I

I

TEST

Programmatic review Platforms

Heat exchangers —OTEC-I (early ocean test platform)

— Bench scale tests –OTEC-5 (pilot plant)

— Biofouling and corrosion Power cable

—Power modules-1 1 MWe Demonstrate ion

5 MWe Open cycle

—Power modules-IMMWE —Subsystems tests

5 MWe

— Early 1 MWe test article

Source: Department of Energy.
 . Ocean Thermal Energy Conversion

to determine the future value or potential of

OTEC in comparison with other energy technologies, such as fusion, the breeder reactor, solar

direct heating and cooling, photovoltaics, windmills, tidal power, and others. The best way to

judge the desirability of OTEC development is

relative to alternative uses of the required

technical, financial, and administrative

resources.

In 1977, ERDA projected that, within its

research budget for solar electric energy projects, it would allocate about 20 percent of the

funding to OTEC through 1986.

4 That projection would make OTEC second only to solar

thermal in the amount of research money spent.

However, the high funding does not reflect a

priority or choice of OTEC as the most promising solar electric technology so much as it

reflects the fact that OTEC requires massive

pieces of equipment which must be operated and

maintained in the marine environment.

The present results of Government-funded

research suggest that the investment in OTEC is

neither clearly foolish nor clearly desirable.

They show only that it is unreasonable to expect

that OTEC offers a significant source of new

and economical energy before the 21st century.

However, in a future when energy becomes

increasingly scarce and expensive, an OTEC

which successfully feeds electricity into a grid or

provides energy for the production of some

commodity could be an important component

of the mix of energy alternatives. The exact

position of OTEC in the energy supply mix then

will depend on the development status, cost,

and availability of other alternatives.

However, even if it were safe to assume that

OTEC would never compete as a commercial

venture it should not be discarded strictly on

that basis. There are numerous examples of industries which are supported by the Federal

Government because they have been judged to

be in the national interest. In addition, some of

the equipment which is being developed for

OTEC may be usable by the existing power industry for energy conversion and thermal pollution control purposes.

4Michae1 Mulcahy, “Ocean Thermal Energy Conversion

is One of ERDA’s Exciting New Programs, ” Sea

Technology 18, (August 1977).

Future Funding Possibilities

Considering energy requirements over a long

period of time, such as 50 to 100 years, it is evident that some source of renewable energy must

be developed. However, it is too early in the

development of OTEC technology to say reliably if OTEC can make a significant contribution to the energy production capability of this

country or other countries and if it can do so at

a price which is acceptable, with or without

Government subsidies. For ‘that reason, there is

no obvious amount of money which should be

allocated to OTEC research in the future.

Instead, there are three approaches to funding

which Congress may wish to consider before appropriating new money for OTEC research:

●

●

●

a “no funding” approach which implies a

pullback of Government involvement, with

funding, probably through NSF, of less

than a few million dollars a year relegated

to basic research and special applications of

OTEC principles;

an “R & D funding” approach which provides funding, in the tens of millions of

dollars annually, sufficient to methodically

solve all technical problems, prove the

feasibility of the concept, and investigate

sites, uses of the energy, and impacts;

a “system development funding” approach

which would increase funding rapidly to

hundreds of millions of dollars a year with

the expressed goal of building an OTEC

which would produce a product as soon as

possible.

Ideally, funding decisions should be made in

the context of an evaluation of the total DOE

budget for research on future alternative energy

sources. The evaluation should consider for

each alternative energy system such factors as:

●

●

●

●

the chances that technical problems can be

solved;

the probability that the system will generate net energy;

the importance of the uses which can be

made of the energy;

the cost of developing a working system;
Ch. III Status of Government Funding ● 43

● the cost of the energy which will be generated; and

● the time required to develop a working

system.

No such comparison of alternative energy

concepts has been made. Supporters and opponents address each energy concept separately,

not relative to each other. Perhaps it is too early

in the investigation of most of these alternatives

to make meaningful comparisons. However, it

is unlikely the Nation can afford system development funding on all the many alternatives

which are now being considered. Eventually

hard choices will have to be made to determine

which alternatives deserve priority funding.

No Funding: If the Congress believes that it is

unlikely the technical problems will be solved,

that OTEC systems probably will not generate

net energy, that the time and cost of solving the

problems are excessive, or that OTEC systems

will not be competitive, then it may wish to stop

program funding for OTEC. If this happens, it is

unlikely that OTEC research would stop entirely. Small exploratory projects would probably

continue with funding from NSF or private

sources. However, it is doubtful that much

financial commitment to research would be

made by industry if the Government withdrew

its support.

A decision to stop program funding for

OTEC would mean the elimination of the existing team of OTEC program managers, consultants, and contractors at DOE. It would

result in phasing out most current design,

testing, and equipment development projects,

and additional information about OTEC would

be acquired more slowly and principally

through industry-sponsored work.

R & D Funding: Since there is currently no

evidence that the technical problems relating to

OTEC cannot be solved given time and funds, it

appears that continued research could lead to

development of a workable system. However, it

is not known how much money or time would

be required to solve the problems. If Congress

wishes to attack these problems, funding appropriated at a fairly level amount for the next 5

to 10 years could produce an OTEC program in

which solutions to major impeding technical

problems are a primary goal and future plans

are tied very closely to the outcome of key

research tasks.

The philosophy of R & D funding would be to

support research and test projects with a goal of

developing a feasible system and providing substantial proof of feasibility by working prototype subsystems, engineering designs, and reasonable cost estimates for construction and

operation. This approach would not produce

working, large-scale machinery in the near

future, but would enable program managers to

make more informed decisions on the size, location, materials, construction techniques, and

uses of OTEC plants.

Level R & D funding for the OTEC program

would probably result in continuation of many

of the present OTEC research projects. It would,

however, delay schedules proposed by some

who envision large-scale use of OTEC for generating electricity or power for manufacturing

other products in this century. This approach to

funding would keep OTEC as a future energy

option and would continue to generate needed

information about OTEC at a reasonable cost

until choices could be made among the many

alternative energy technologies in the Federal

research program. It would also result in the

establishment of a stable management organization within the Federal Government for initiating projects and evaluating results, and a longrange research capability would be built.

The DOE program for OTEC is currently

geared to R & D funding. With this philosophy,

requests for rapidly increasing funds are inappropriate until the technology has been proven.

With R & D funding, more specific 5- to 15-

year research goals could be set to help clarify

program objectives and Congress could establish a procedure for making funding decisions

about OTEC on a more informed basis in the

future.

More specific research goals could take many

forms. Some combination of theoretical analyses, laboratory tests, field surveys and pilot

projects would probably be necessary. The

following are some examples which have been

suggested as short-term goals that could be integrated into an ongoing research program:

c development of scale models of low-
44 ● ocean Thermal Energy Conversion

temperature difference machinery which

could be tested at nuclear powerplant outfall sites.

● development of small-scale shore-based

OTEC systems for testing at a suitable

island site;

● development of a small floating pilot plant

which could be tested at a site where very

large temperature differences are available

relatively near the surface; and

s development of a small pilot plant for comparative testing of open and closed cycle

systems.

System Development Funding: The cost of

proposed OTEC technology is so high that the

only way to develop a working prototype plant

as soon as possible—that is, to have a largescale plant at sea producing a product within 10

to 20 years—is to commit large amounts of

funds which escalate to hundreds of millions of

dollars within a few years.

This is a high-risk approach to funding, not

only because it would require billions of dollars,

but also because it would probably force a

premature choice among several concepts and

possible products in order to concentrate on

development of one specific system. Although it

would include enough testing to gain insights on

reliability, cost, maintainability, and online

time, this approach could result in skipping

long-term testing and environmental studies

which would not fit into an accelerated schedule. But it could produce the most rapid demonstration of the one system selected for development. It could also require such a commitment

of funds that money would not be allocated to

research on other alternative energy sources.

If an OTEC plant were developed quickly, it

is possible there would be a significant, though

not necessarily large or economically competitive, impact on the Nation’s energy production capability sometime well into the 21st century.

Summary of Government Funding

Since 1972, Government funding for OTEC

research has grown from $85,000 a year to the

present budget of $35 million for the fiscal 1978

program in DOE.

To date, no large amount of private money

has been invested in OTEC research and

development, and it is likely that Government

funding will be the major support for any further work in the foreseeable future.

It is too early in the development of OTE C

technology to say definitely that OTEC can or

cannot make a significant contribution to the

energy production capability of this country.

For that reason, there is no obvious amount of

money which should be appropriated for further

research.

In the long term, decisions about funding are

ideally made in the context of an evaluation of

the total DOE budget for research on future

alternative energy sources. In the absence of

such a comparison of alternative energy concepts, a “no funding” approach could be used to

eliminate the OTEC program and reduce future

efforts to basic research and investigation of

special applications; an “R & D funding” approach could be used to keep OTEC as a future

energy option while generating solutions to important technical problems at a reasonable cost;

or a “system development funding” approach

could be used to attempt to develop a large-scale

working prototype of one specific OTEC system

as soon as possible.

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