Identifying Solid Opportunities in Renewable Energy
An investor wrote me yesterday about his interest in pursuing a joint venture with a company in ocean wave energy. Like so many others hoping to experience the upside potential of renewable energy and looking to escape the “great recession” a few years ago, he had come out of commercial real estate and begun applying his financial acumen to the budding clean energy industry. He spent a great deal of time reviewing the various flavors of renewables with an eye towards specializing in the one that offered the greatest risk/reward.
Extracting the energy from ocean waves may seem like an odd choice. Solar and wind are established industries, and all forms of ocean energy are still under development. But he asked me a tough question: how much more upside potential is there in the energy resources that the world already understands to be winners, given that all that success is already priced into the market? It’s not an easy question to answer. Obviously, there are people who run private equity firms and hedge funds in this space who are quite bullish indeed, but keep in mind that it’s their job to be bullish. And sure, the price of a share in such a hedge fund could double in the next few years. However, if a certain ocean wave technology takes off, the company that owns it is positioned to experience a growth of its share price of 100 or 1000 to one. Needless to say, that’s quite attractive–to someone who doesn’t mind risking every dime of his investment.
I happily connected him with the company that, by my wits, offers what I believe to be the most promising technology in this space. (After all, that’s MY job.) If the company succeeds, it will mean bringing cost-effective renewable energy to regions of the world that have significant wave resources and which pay dearly for their incumbent source of energy—if only because, in most cases, it comes in the form of bunker diesel shipped across the ocean to arrive at its destination.
Of course, there is another cost of diesel as well: pollution. Tourists (and locals) don’t like seeing toxic garbage spewed into their otherwise unspoiled skies, or cleaning the fallen particulate matter (see photograph above) off their car hoods or condo verandas.
Yet another factor in the equation: the incremental cost of an acre of land in one of the world’s fashionable island nations is incredibly high, meaning that ocean wave has a huge competitive advantage over other forms of renewable energy. Those contemplating using this land for utility-scale solar soon realize that the ultimate cost of energy from the sun will be outrageously high—not because of the cost of the solar arrays, but due to the inability to find an affordable place to put them. Prospective developers of wind face a similar challenge: the aesthetics associated with wind farms in what were once pristine ocean bays. The turbines aren’t out on the grassy plains somewhere; they’re sitting in the very place that people flew thousands of miles to sip mai-tais in front of.
Where does all this leave ocean wave energy? There is a reasonable chance that, for the next 20 years, if it’s developed right this minute, wave energy can be cost-effective in these locations. My advice to the “wave people”: work hard and run fast. You have an opportunity, but the window won’t stay open much longer.
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Look at the underside of boats and docks…filled with barnacles and growth. Maintenance could be a nightmare. Any proposal should be carefully evaluated from this point of view.
Craig, As usual, you present a commentary that results in a lot of deep introspection. We all know the major problems of energy cost and production, especially in Hawaii. And, I believe Tom has a very strong point relative to products in the ocean.
Conversely, an Oregon DOE study projected that before PV, a residence built to our pending transformational method of construction will require but 24% of the electricity of the same plan built to the Model Energy Code, more or less the way the industry builds today. Upon studying its solar encapsulating roof section, four NREL technicians projected it would produce 4 to 10 times the electricity its facility will need. And since, like the rest of the system, it is projected to cost less than a current conventional roof in new construction, those in the know project it will have a major impact, especially since it will not require additional land.
Thanks to very major breakthroughs in the last 4 months, we are preparing to bring this transformational construction system to the attention of those key members of the industry within the next few months. Rest assured that you are on that very limited list. For obvious reasons, we are not publishing our website, especially since it is under total reconstruction.
Technotard
For what it’s worth, see the “Create the Future Contest”, the “Salter-McCloskey Wave Energy Conversion System” for an approach to wave energy conversion devices.
http://contest.techbriefs.com/2014/entries/sustainable-technologies/5037-salter-mccloskey-wave-energy-conversion-system
There are a lot of other interesting ideas in this contest as well.
I’d love to see some test result on this.
Long experience maintaining docks and sailboats has given me a lot of respect for high wind, big waves, high tides and the salt water environment. Very hard to build something mechanical that stays together in that environment and it is likely that tropical islands have less surplus beach than inland space for solar.
Our own grid tied solar system generates a net surplus – enough to power an electric car about 8,000 miles/ year but in our northern climate we are net importers during the winter and 800 miles from the nearest ocean and we need winter heat. What is really needed is small house sized co-generation systems which run on propane or natural gas. Honda has a lovely unit , not available in North American and various others have systems that are over sized and over priced for the super efficient homes we should all be building. There is no new expensive technology here- just a single cylinder water cooled engine with exhaust heat recapture and a grid tied inverter generator. Honda uses a version of the Atkinson cycle to get a higher electricity / heat ratio but that is not essential. Low cost and long run high reliability are.
Anyone out there who identifies with that???
I am working on a new type of wind energy prototype. I should have new pictures on my web site very soon. WindJammer Generators will work in almost any environment including surf zones. They will work in blizzards on your property even when the grid is knocked down. I am also on Face Book.
Craig:
We enjoyed your article and applaud you for connecting an investor interested in helping to solve the crisis. We would like very much for you to do the same for us. Remember global warming cannot be solved by any one source. It will take wind, hydro and solar together to make significant changes. As we told you our revolutionary biomass produces combined heat and Energy without emitting Carbon Dioxide nor Air Derived NITROGEN OXIDE. It eliminates Soot and reduces waste from going to a landfill. It can be used in Urban or Rural areas without connecting to the Grid. Since it can be turned on and off without waiting time it is a perfect fit for refueling Electric Cars. On the Economic side it is far less expensive than most other alternatives and since it is proven and workable it can return a hundred times the original investment within a relatively short period. We know of your deep concern about the environment so here is a chance to help!
Let me ask you to do this: send me any confidential material you can on your approach/capability in this space. I’ll post it here, and let readers comment/get involved as they will.
Craig:
We have patented technology that allows biomass to be placed on site and eliminate delivery costs of electricity. It is revolutionary in that it burns without emitting carbon dioxide nor air derived nitrogen oxide. It is far less expensive than wind, solar or hydro. It can be turned on or off without warm up time making it ideal for electric car refueling. We are working on a liquid fuel that will allow use in factories, hotels, shopping centers, business parks or remote areas without connecting to the grid. We have a working model and are patented in thirty three countries. An investment today can result in an increase of many fold in a relatively short period. nsreef@cs.com
I believe there is a better way to tap ocean energy than using ocean waves and I would be happy to discuss collaboration in an alternative concept that I believe offers a much better way of tapping into ocean energy as it’s much more simple and presents fewer problems by comparison and I believe it’s one that will eventually sideline much of the focus on ocean waves. Les Blevins