The best way to commercialize tidal technology is to put turbine systems into the water and test and develop them by trial and error, says William ”Trey” Taylor III, president of Verdant Power, New York City. Verdant did just that, underestimating the strength of the current in New York City’s East River: the blades on its turbine broke just a few months after they started operation. Without demonstrations, says Taylor, no one will know whether tidal energy really works or how it affects the environment. But until someone can demonstrate that it works, people are loath to invest in the technology.
The problem is magnified by a licensing process that can cost millions. By clearing the red tape for small, low-power projects, FERC’s new tidal pilot license reduces that cost significantly. With the new regulations in place, tidal energy developers don’t get ”eaten alive” by the process, says John C. Topping Jr., director of Oceana Energy Co., Washington, D.C., whose subsidiary secured the coveted San Francisco permit.
The lengthy, costly permit and licensing processes the new rules replace were established long ago to regulate more sedate and established technologies like dams. Getting a preliminary permit was easy, because the permit does not allow any construction—it merely reserves the site for three years. During that time, a company gathered the information needed for its FERC license application. Then FERC did its own environmental assessments at the company’s (considerable) expense before allowing construction.
FERC began to revise its permitting process amid suspicions that the three-year ”reservation periods” were being abused. In 2006, Verdant filed a grievance against Oceana, accusing the company of behaving like the Internet domain-name squatters of the 1990s. ”As soon as the EPRI report came out, Oceana snapped up all these permits under the names of different companies,” thus tying up the sites for three years, says Taylor. Based on the company’s permit applications, some critics speculated that Oceana had no available technology but would try instead to leverage the permits to win investors. FERC vowed to apply greater scrutiny to its new permit applications to discourage site banking. ”We wanted to make sure that those who held the permits were seriously pursuing them,” says FERC spokeswoman Celeste Miller. EPRI’s Bedard says the change was long overdue.
Oceana vehemently denies intentionally blocking development for any of its 11 preliminary permits. Topping, who has held posts at the Climate Institute—a renowned environmental group in Washington, D.C.—and the U.S. Environmental Protection Agency says his credentials should speak for themselves. ”I’ve got my reputation on the line,” he says. Topping says Oceana is partnering with the U.S. Navy to create cutting-edge turbine technology, and the designs are now being finalized. He disagrees with the EPRI’s estimate that San Francisco can generate 35 megawatts of power at most—he thinks the number is closer to 300, which could provide over a third of San Francisco’s energy. Topping says Oceana applied for several permits not to impede other developments but to be able to choose the best sites for the company’s technology.
In any case, tidal energy may fill fewer pockets than you’d expect. ”It’s not a gold rush,” says Bedard. ”It’s peanuts.” At most, he estimates that the citizenry will allow 15 percent of the coastlines to be populated with turbines, which might provide 6.5 percent of total American energy usage. But that does not mean he thinks it shouldn’t be pursued. ”It should be part of a portfolio approach to renewables,” he says. ”But if you’re in it to get rich, you’re going to be sorely disappointed.”