Implementing Wave Energy

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Implementing Wave Energy

• Process and Permitting Issues

Presented by Therese Hampton February 20, 2008
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Oregon Solutions

• Our mission is to develop solutions to community
  based problems that support sustainability
  objectives and are built through the
  collaborative efforts of business, government and
  non-profit organizations.
• Problem or Opportunity Defined by the Community
• Governors Designation
• An Oregon Solutions team
• An Integrated Solution
• A Declaration of Cooperation

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Reedsport as an Oregon Solutions Project

• September 25, 2006Reedsport as Oregon Solutions
  Project
• The Oregon Solutions team will facilitate a
  quicker, more effective application process with
  FERC.
• Governor Ted Kulongoski
• June 2007 Declaration of Cooperation
• 22 signatories Federal, state and local
  organizations
• Defined and documented Federal and State
  Regulatory Process
• Developed a list of issues to be addressed
• Key parties commitment to a settlement process

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Summary of Stakeholder Issues

• Aquatics Issues
• Whale Entanglement
• Alteration of Marine Habitat
• Seal/Sea Lion Haul Out
• Electromagnetic Fields
• General Issues
• Decommissioning
• Anchor Removal

• Crabbing/Fishing Issues
• Lost Productivity
• Lost gear
• Navigation Safety
• Recreation/Public Safety
• Aesthetics (including lighting)
• Surfing, Whale watching
• System Survivability

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FERC Licensing Process

• Developed for relicensing of hydro facilities.
• Estimated to be a 5-year process.
• Includes extensive upfront work to agree upon and
  conduct studies for potential effect.
• Potentially 2 years of study before license
  application.

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Key Differences from Relicensing

• Utility applicant versus new technology
  applicants needs.
• History of hydro relicensing in the Northwest.
• New versus existing facilities.
• Existing use.
• Location specific application requirement.

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Applicant is Different

• Traditional Utility
• REVENUE Existing hydro resource is generating
  revenue throughout process.
• NO RUSH No capital investment or other
  implementation costs incurred until new license
  is issued.
• BELOW MARKET Hydro resource is likely well
  below market, even after relicensing.
• CAN ABSORB COSTS
• Guaranteed recovery of process costs, assuming
  they are reasonable.
• Utility has broad resource and customer base to
  absorb process and investment costs.

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Applicant is Different

• New Technology Company
• NO REVENUE No existing facilities to generate
  revenue. Company revenue provided by investors.
• RUSH Company revenue is dependent on a project
  specific Power Purchase Agreement that doesnt
  generate revenue until the resource is
  operational.
• ABOVE MARKET New resource, independent of
  process and implementation costs, is likely well
  above market.
• CANT ABSORB COSTS
• Company is actively investing capital in
  technology development.
• No guaranteed recovery of process costs. Process
  costs will be absorbed into overall cost of
  resource, which is already above market.
• At this point in development, there is no place
  to absorb costs.

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Applicant is Different

• Impact
• New technology company has a desire for a much
  faster pace for settlement and permitting.
• New technology company is more cost conscious
  relative to studies and operational measures.

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Recent History in Relicensing

• Many Northwest hydro relicensing projects have
  been long and adversarial. The relicensing
  process is characterized by
• Lack of trust of the applicant
• High process costs
• Extensive studies
• For some, discussion of removal of the project
• Impact
• Applicant is assumed to have utility
  characteristics.
• The high process costs and extensive studies
  impacts the cost-conscious developer.
• Discussion of project removal can impact investor
  confidence.

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New versus Existing Facilities

• The current FERC process is premised on
  multi-year studies to inform participants prior
  to license conditions.
• A new facility/technology cannot be studied in
  this way
• With wave energy, there are no existing
  structures to evaluate.
• Further, there is very limited empirical data.
• Methods for study arent clear.
• Impact
• Requires qualitative analysis with a
  forward-looking view of information needs.
• Difficult for resource agencies to make long-term
  decision.
• Requires a rigorous adaptive management program
  to address impacts once study results are known.

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Existing Use

• Existing ocean use by crabbing and fishing
  industry.
• Existing ocean use by recreation.
• Impact
• Either opposition to the project or concern about
  level of overall development.
• Interest in minimizing potential effect to
  existing uses.

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Application is Location Specific

• The FERC permit must be specific about location.
  
• Further, the FERC permitting process grants
  priority to first applicant.
• Given the impact to existing industry and
  recreation, stakeholders want to have input into
  site selection.
• Impact
• Encourages filing of preliminary permit to secure
  location.
• Limits ability to engage collaboratively.
• Tillamook has submitted a permit with multiple
  sites

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Recommendations

• Get to know the community engage with the
  locals and know what is important to them.
• Be flexible in site location if possible, let
  the community play a role in the decision about
  where the site will be located.
• Support regional environmental analysis the
  factors and impacts are fluid. Recognize this
  and encourage a process to address the Coastline.
  
• Partnership Given the uncertainty, expect and
  plan to be in an ongoing collaborative process
  for many years.