WILL AUSTRALIA CAPTURE THE OCEAN ENERGY PRIZE?

Pioneer ventures to tap ocean power into usable electricity
Morris Kaplan, August 1, 2009 (The Australian)

SUMMARY
BioPower Systems, a start-up owned by Australian Timothy Finnigan and backed by Australian venture capital, has ocean energy pilot programs supplying power to Australia's Flinders Island and King Island, and the big European ocean energy developers are taking note.

Finnigan, a marine engineer, started 5 years ago with his wave and tidal technologies and $5000 and has won $12+ million in private equity investments and government grants. He formed BioPower Systems in 2006 to bring his BioWAVE, BioSTREAM, and BioBASE technologies to market.

BioWave. (click to enlarge)

Experts like the U.S.'s Electric Power Research Institute (EPRI) and Frost & Sullivan, the UK private research authority, agree that the hydrokinetic energies have the potential to supply at least 10% of world power. They are unique among the New Energies because they are predictable and generate 24/7, giving them the potential to be used as base-load power sources.

A recent Pike Research paper (see OCEAN ENERGY ON THE VERGE) catalogued 5 major hydrokinetic technologies: (1) Tidal stream turbines (2) Wave energy (3) River hydrokinetic (4) Ocean current (5) Ocean thermal.

The BioPower Systems devices are designed to capture wave and tidal energies.

Waves are caused by winds blowing across the surface of the water (and winds are caused by temperature changes that result from variations in solar energy between the equator and the poles). Anywhere there are great swaths of open ocean, blowing winds can generate powerful waves. The winds blowing across the Indian, Pacific and Southern Oceans make Australia a triple-edged wave energy powerhouse.

BioStream. (click to enlarge)

The rise and fall of tides are caused by the gravitational tugs of the moon and sun on the oceans. The rising and falling of oceans also cause currents and generate streams, such as the Gulf Stream, and affect other water bodies, causing tidal phenomena.

All these motions (kinetics) in water (hydro) can be captured and used as mechanical energy to turn a turbine to generate electricity.

The basic principle of Finnigan’s technology is no different than other ocean and wind installations. A “farm” of devices is set out. The sum of mechanical energy is transformed into electricity and transferred ashore, into the local grid via local cable transmission.

Now out of the test pool and into the ocean for pilot projects. (click to enlarge)

Beginning with the impulse that he could figure out a way to harvest the ocean’s energy, Finnigan developed his technologies from back-of-the-envelope jottings to computer assessments rigorous enough to win early funding.

The BioPower Systems pilot projects put it now in an early, high-risk stage for investors. It is an especially challenging place to be for the engineer-turned- innovator-turned-entrepreneur trying to win backing in risk-averse Australia where coal is king. Nevertheless, venture firm CVC Reef continues to back him and they recently won recognition from National Geographic television.

The next stage is to demonstrate the technology can produce power at utility-scale volumes. The plan calls for installations with 30 megawatt capacities. Ultimately, Finnigan believes ocean energies will supply 5-to-10% of Australia’s power.

Biopower Systems recently got new financial backing from equity investment firms Lend Lease Ventures and CVC Sustainable Investments which, with the backing from CVC Reef, brings its current private funding to $6 million. Finnigan was also awarded a $5 million Renewable Energy Development Initiative grant from the Australian government. The money will be used for pilot project installations at grid-connected sites in Tasmania.

BioWave. From ceme1991 via YouTube

COMMENTARY
Breakthrough technologies like offshore wind and ocean energies have an enormous disadvantage in places with cheap, abundant coal supplies like the U.S. southeast and Australia. New Energy is economically competitive where electricity supplies are in higher demand and more expensive.

The biggest challenge for ocean energies, however, is enduring the harsh ocean environment and the heavy, incessant pounding of the waves.

According to Pike Research, hydrokinetic energy installations produce more energy per unit of capital cost than solar or wind energy installations. The expense is in the operations and maintenance (O&M) costs. O&M is 10% of solar energy project costs. For wind, it is 20%. Because of the harsh ocean environment, O&M is estimated by Pike Research to be as much as 40% of the cost of hydrokinetic energies. Only by developing technologies that can keep O&M costs down can the hydrokinetic energies expect to be competitive.

Finnigan took a clever approach to meet that challenge. He examined how ocean plants and animals deal with ocean forces and observed that they flex and move and give. This was his design clue. He built flexibiltiy, mobility and adaptability, what he calls “nature's mechanisms for survival and energy conversion,” into his devices and systems. They move and sway and reflexively “streamline” in extreme conditions. To give the technology these qualities, Finnigan had to make it lightweight and this fortuitously makes it less expensive.

There is development activity worldwide. (click to enlarge)

At work, the BioPower devices are fully submerged, making the durable design principles invaluable. Because they are not visible from the land or water surface, there is unlikely to be any aesthetic objection to them. This gives them a competitive advantage over the other hydrokinetic energy devices with which they will also be required to prove they will not harm aquatic life or habitat, not spoil commercial fisheries, not interfere with recreational ocean activity and not be an obstacle to the exercise of naval security operations.

As entrepreneurs like Finnigan forge ahead, the traditional excuses for not developing earth’s biggest environmental feature, its waters, disappear. Ocean, river and lake jurisdictions are settled, technologies are progressing and readily accessible materials and construction methods to generate electricity at cost effective prices are emerging.

The growth is impressive and its just getting started. (click to enlarge)

But Finnigan’s unique approach highlights the biggest remaining obstacle to the advancement of the hydrokinetic energies, the competing good ideas from the more than a hundred companies, mostly small start-ups like BioPower Systems. They are vying to get a piece of what promises to be big action, using original innovation as a wedge. In the absence of a dominant technology (like the wind industry's 3-blade turbine) or a few dominant technologies (like the solar industry's few different kinds of solar panels and few different solar power plant concepts), there can be no economies of scale and no focused technological advancement.

Will Finnigan prevail? Many companies are out ahead of him, especially at European research centers in Portugal and the UK. Perhaps one of them will establish the dominant technologies. Or perhaps the winning idea has yet to emerge but will come in Finnigan's (sic) wake.

BioStream. From ceme1991 via YouTube

QUOTES
- Finnigan, founder and owner, BioPower Systems: "There's huge opportunity; this is not just an environmental breakthrough technology but an economic one…We won't be competing against coal; we'll sit alongside wind and solar as a renewable energy source…"
- Finnigan, on the role of climate change in the development of New Energy: "There's been a change over the last year or two. It's become such an important issue to everyone. People are looking to renewable energy. Investors and government will follow to take a stake in renewable technology."
- Finnigan, explaining his background: "A marine engineer understand the wave mechanics of the ocean and the way wave and ocean imparts forces on structures. They work on design and development of oil rigs and structures like jetties…I moved into hi-tech to try to get wave and tidal energy working. I saw how heavy structures need to resist heavy forces in the ocean. I took a simple approach, looking at what types of systems work well in the ocean…I needed to consider all the elements of what would construe a viable, commercial technology and build them one by one in a design, coming out the other end with a prototype."

The untapped potential is enormous. (click to enlarge)

- William Highland, principal, venture firm CVC Reef: "We did a lot of homework. The ocean and wave as a renewable source of energy is differentiated (from other energy forms). But for us it was also backing the man…Timothy Finnigan had good experience, he had a vision which we liked and he had a mature approach to working with investors. He understood the need to work to milestones in order to go to future funding rounds. Early stage technology ventures will hit hurdles; sometimes things fall over. You need people who will get up and surmount the hurdles."
- Finnigan, on the future of his technology: "Wave and tidal have to contribute to the mix. There are cases where wind and solar don't deliver. Wind is erratic; solar turns off at night; waves are much more regular. It fills that need for stable supply. Currently it's on the fringe because it's not yet commercial. But it is on the brink…We need a commercial-scale demonstration that (it) can compete against other energy sources. At the early stage it'll be on the expensive side; we'll be looking for government subsidy by way of rebates to make it viable while we move down the cost curve…There's a clear path to getting to market in Australia. But there's a global industry too. We see opportunities in Europe. Being a small company, one of the ways to get into markets is with strategic partnerships, like utilities or engineering construction companies or government agencies."