California Regulators Reject Finavera Wave Power Contract

November 5, 2008

Photo of a large cylindrical buoy with four small wind turbines and a number of solar panels mounted on its top.

Finavera deployed its prototype AquaBuOY 2.0 wave energy converter off the Oregon coast last year, but the device later sank.
Credit: Finavera Renewables Inc.

The California Public Utilities Commission (CPUC) has rejected a power purchase agreement between Pacific Gas and Electric Company (PG&E) and Finavera Renewables Inc., which had planned to develop a 2-megawatt wave power project off the coast of Humboldt County, near Eureka, California. In its decision, issued on October 16, the CPUC noted that wave power technology is still pre-commercial and that Finavera's prototype buoy sank after it was deployed off the Oregon coast last year. The CPUC also found that the price of power under the contract was too high. Although PG&E argued that the price was tolerable for such a small demonstration project, the CPUC rejected that argument, and suggested instead that Finavera could be supported through a proposed Emerging Renewable Resource Program. PG&E has proposed such a program and the CPUC has proposed to approve the program, but has not yet voted on it. Left without a way to sell the power from its demonstration wave energy project, Finavera plans to focus its effort on wind power opportunities in Canada and Ireland. The company is also investigating the formation of a private consortium to carry out wave energy research and development. Both Finavera and PG&E have argued that the CPUC decision will negatively affect wave power development in California. See the CPUC decision and the Finavera press release (PDF 40 KB). Download Adobe Reader.

The Finavera project also spurred a jurisdictional argument between two federal agencies: the Minerals Management Service (MMS) of the U.S. Department of Interior and the Federal Energy Regulatory Commission (FERC). In late July, the MMS announced that it was moving forward with limited alternative energy leases on the Outer Continental Shelf (OCS), allowing for data collection only. Because two companies—PG&E and Marine Sciences—were interested in the wave energy resource offshore of Humboldt County, the MMS proposed to encourage the two companies to collaborate. However, FERC had already issued a preliminary permit to PG&E, which gave PG&E priority in filing for a license to operate a wave energy project at the site. The MMS then requested a rehearing on the preliminary permit, asserting that FERC only has jurisdiction to issue licenses and preliminary permits for projects within state waters, which is usually defined as being within three miles from the shore. But FERC replied that the Federal Power Act grants it authority to license power projects in navigable waters without limitation, and also grants it authority to issue permits within U.S. "reservations," which include the OCS. As a result, FERC rejected the MMS request for a rehearing, and PG&E still holds the preliminary permit. See the MMS press release and the FERC press release and decision (PDF 161 KB).

And despite the CPUC's assertion that wave power is pre-commercial, a commercial wave power project recently started producing power. As noted in the EERE Network News, project developers inaugurated a 2.25-megawatt wave power facility, located off the coast of Portugal, in late September. Ocean Power Technologies, Inc. (OPT) also deployed one of its "PowerBuoy" wave energy converters off the coast of Spain in late September, as the first step in developing a 10-buoy, 1.39-megawatt power facility. OPT also launched a PowerBuoy device off the coast of New Jersey in mid-October, under a contract for the U.S. Navy. The device will provide power for an ocean monitoring system. Meanwhile, Oregon State University and Columbia Power Technologies successfully tested a wave power device off the coast of Newport, Oregon, in mid-October. The buoyed device includes a moving element that connects to a linear generator, converting the wave's movement directly into electricity. In mild waves, the buoy generated up to 15 kilowatts of power. See the OPT press releases on the projects in Spain and New Jersey, the Oregon State University press release, and the Columbia Power Technologies Web site.