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Renewable Ocean Energy Sources: Part I—Ocean Thermal Energy Conversion May 1978 NTIS order #PB-283104

Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

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Page 1: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Renewable Ocean Energy Sources: PartI—Ocean Thermal Energy Conversion

May 1978

NTIS order #PB-283104

Page 2: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Library of Congress Catalog Card Number 78400053

For sale by the Superintendent of Documents, U.S. Government Printing OfficeWashington, D.C. 20402, Stock No. 0524034)0536-1

Page 3: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy


This report on ocean thermal energy conversion is the first part ofthe Office of Technology Assessment’s study of renewable oceanenergy sources which are now being considered as possible con-tributors to the future energy supply of this country. Other oceanenergy sources, such as tides, waves, winds, currents, and salinity gra-dients, will be included in a second part of the study. The completework, requested by Senator Ernest F. Hollings on behalf of the na-tional Ocean Policy Study of the U.S. Senate, will tell Congress wherewe are in developing the means to use ocean energy, what problemshave been solved, and what difficulties are still to be surmounted. It ishoped that the reports will be useful to decisionmakers in Governmentand industry for guiding and evaluating research on ocean energytechnologies and in making funding decisions or choices among manypossible options.

The work undertaken by OTA was confined to an assessment ofthe technical feasibility and an evaluation of current research and de-velopment programs for each possible source of ocean energy.Because the technologies are not yet developed to the point wherematerials, sizes, sites, and costs can be precisely estimated, OTAfound it inappropriate to attempt a detailed environmental or socialimpact assessment at this time.

This analysis of ocean thermal energy conversion was preparedby the Oceans Program staff of OTA with the assistance of advisorsfrom industry, Government, and academia who provided guidanceand reviewed draft materials. A working paper, which providestechnical background data used in the analysis, is also being publishedat this time as a separate document. The remainder of the OTA studyof renewable ocean energy sources will be published in late 1978.

RUSSELL W. PETERSONDirectorOffice of Technology Assessment


Page 4: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Renewable Ocean Energy SourcesAd Hoc Advisory Group

Benjamin H. Barnett, Jr.Merrill, Lynch, Pierce,

Fenner and Smith, Inc.

Don DunlopFlorida Power and Light Co.

Hal GoodwinMarine Policy Consultant

Edward HelminskiNational Governors Conference

Richards T. MillerU.S. Navy (Retired)

Ocean Thermal EnergyReview Panel

A. Douglas CarmichaelMassachusetts Institute of Technology

James A. FinneranPullman Kellogg

William HeronemusUniversity of Massachusetts

James L. JohnsonStandard Oil of Indiana

David JoplingFlorida Power and Light Co.

Richards T. MillerU.S. Navy (Retired)

Willard Pierson, Jr.CUNY Institute for Marine and

Atmospheric Sciences

Oswald ReelsUniversity of Texas Marine

Sciences Institute

Robert SteinInternational Institute for

Environment and Development


Louis RoddisConsulting Engineer

Oswald ReelsUniversity of Texas Marine

Sciences Institute

Herman SheetsUniversity of Rhode Island

Robert SnyderOceanographer

Robert TaggartMarine Consultant

Greg ThomasSierra Club

Danzil PauliNational Academy of Engineering


Page 5: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

OTA Oceans Program Staff

Robert W. Niblock, Program Manager

Bennett L. Silverstein, Project Director

Prudence S. Adler Anne FennKathleen A, Beil Emilia L. GovanThomas A. Cotton Peter A. JohnsonRenee M. Crawford Judith M. Roales


Gary BahamIrvin C. Bupp

Richard C. RaymondRalph D. SmalleyByron J. Washom

OTA Publishing Staff

John C. Holmes, Publishing Officer

Kathie S. BOSS Joanne Heming

Page 6: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy



Chapter Page

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7An Idea to Fill a Need. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7The Source of Ocean Thermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . 7The Attractions of OceanThermal Energy . . . . . . . . . . . . . . . . . . . . . . . . 7The Supply of Ocean Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8The Status of Ocean Energy Extraction . . . . . . . . . . . . . . . . . . . .......10The Purpose of This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....11

2. TECHNICAL AND ECONOMIC STATUS . . . . . . . . . . . . . . . . . . . . . .......15Technical Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......16

Heat Exchangers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......16Cold Water Pipe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......19Working Fluid... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....20Ocean Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......20Underwater Transmission Lines . . . . . . . . . . . . . . . . . . . . . . . . ....21Open-Cycle System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....22Construction and Deployment of an OTECPlant. . . . . . . . .......23Reliability of an OTEC Plant . . . . . . . . . . . . . . . . . . . . . . . .......23Summary of TechnicalProblems . . . . . . . . . . . . . . . . . . . . .......24

Economic Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......24ElectricPowerGeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....24Power for Production of Ammonia. . . . . . . . . . . . . . . . . . . .......29Power for Production of Aluminum . . . . . . . . . . . . . . . . . . . . . ....33Summary of Economic Considerations . . . . . . . . . . . . . . . .......34

3. STATUS OF GOVERNMENT FUNDING . . . . . . . . . . . . . . . . . . . . . .......39History of Government funding. . . . .Effect of Government Funding on StatFuture Funding Possibilities . . . . . . . .Summary of Government Funding . . .

. . . . . . . . . . . . . . . . . . 39Of OTEC . . . . . . . . . . . . . . . ..40. . . . . . . . . . . . . . . . . . . . . . . . . . 42. . . . . . . . . . . . . . . . . . . . . . . . . . 44


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TableNo. Page

Countries Bordering Potential OTEC Sites, . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Power Potential of OTEC Plants at Some Potential Sites. . . . . . . . . . .......10Estimated Capital Costs of an OTEC Electric Generating Plant. . . . . .......25Plant Output and Cost per Unit as a Function of Temperature Difference .. .25Busbar Cost of Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . .......26Effect of Some Variables on Cost of Busbar OTEC Electricity. . . . . . .......26OTEC Funding for Fiscal Years 1972 -77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39


FigureNo. Page1.



Potential Marginal Costs of Baseload Electricity in the Year 2000 forCoal or Oil-Fired Powerplants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......28Possible Range of Uncertainty in Future Cost of Busbar Electricity . . . .......29Number of 1,650 Ton per Day OTEC/Ammonia Plants Necessary ToCapture Significant Portion of World Plant Capacity. . . . . . . . . . . . . . .. ....32OTEC Program Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......41

. . .Vlll

Page 8: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy


Ocean Thermal Energy Conversion (OTEC) is a concept for using the tem-perature difference that exists between warm waters at the surface of oceansand cold waters in the deep oceans to release stored solar energy to power aturbine.

The number of sites where a sufficient temperature difference exists be-tween the surface and a reasonable ocean depth is limited—there are few off thecontinental United States—but at these sites the solar energy stored in the oceanis an abundant, renewable source of power. However, harnessing this energ y

requires complex and potentially expensive equipment of enormous size.

Research on OTEC has been underway since the early 19th century and hasbeen funded by the U.S. Government since 1972. The concept has been toutedas one which may be used to provide an important source of energy for thegeneration of electricity or power for manufacturing energy-intensive productssuch as ammonia and aluminum.

The Office of Technology Assessment (OTA) Oceans Program, in thecourse of this assessment, has found that OTEC technology is not yet provenand probably could not become a viable part of the U.S. energy supply systemin this century. The concept was demonstrated by Georges Claude on a smallscale in 1926, proving that thermal energy can, in fact, be extracted from thetemperature difference in the waters of the oceans. But the technology is notdeveloped to the point where acceptably precise estimates can be made aboutthe technical feasibility of large-scale systems, potential products of those sys-tems, the economics of the systems, or the social and environmental impacts.

No scientific breakthroughs are needed to build an OTEC plant, but thetechnology is not in routine use. Proposed OTEC designs use standard heat-engine cycles which are typical of those used in all powerplants when the heatf rom burning fue l i s conver ted in to e lec t r i ca l power . In convent iona lpowerplants, temperature differences of hundreds or thousands of degrees aresought to get maximum efficiency. An OTEC design will attempt to createuseful power from the temperature difference that is usually discarded asunusable in a conventional powerplant.


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● ocean Thermal Energy Conversion

No OTEC plant has been fully designed; many components of the systemhave not yet been proven reliable in the hostile marine environment. No oceanenergy plant of any size has ever been built and operated which generated moreenergy than was required to operate the equipment. The technical problemswhich must be solved are by no means minor, and satisfactory solutions to thecritical engineering problems will require long-term laboratory and at-seatesting.

The primary technical problems in the types of OTEC plants currently be-ing proposed involve the heat exchangers, the cold water pipe, the workingfluid, the ocean platforms, and the underwater transmission lines from plantswhich would generate electricity.

Even when a plant is designed and proven, there is little engineering ex-perience which is directly pertinent to the at-sea assembly and mooring prob-lems which may be encountered. And finally, it is not yet possible to projecthow reliable an OTEC plant would be once it is sited and operating.

The economics of OTEC depend primarily on the capital cost of construct-ing OTEC plants and the cost per kilowatt hour of the energy produced.

Because no OTEC sysyem is yet fully designed, quantitatively preciseknowledge about these costs is impossible and there are large uncertaintiesabout lifetime reliability and the interruptions in production which resultshould an OTEC plant fail.

The basic product of most current OTEC concepts is power—power foruse in the U.S. electric grid or for use in the production of other products. Thebusbar cost of producing electricity is dependent upon a number of variables,including the thermal resource available, capital cost of the plant, plant capac-ity factor, fixed annual charge rate, cost of fuel, and the cost of operation andmaintenance. Reliable estimates for these variables cannot yet be made. There-fore, it is impossible to predict the busbar cost of electricity from OTEC.Unknown electrical transmission costs add another element of uncertainty.

These still unknown costs will determine whether or not OTEC is useful inthe future production of other products.

In the case of ammonia, for example, the most promising market areas arelocated near the most promising OTEC sites; however, these areas are theLesser Developed Countries which require very low-cost products. In addition,existing producers are expanding their ammonia facilities to meet present andfuture demands with existing processes and there are potentially low-cost alter-natives to OTEC/ammonia, especially ammonia made from flare gas in theMiddle East nations.

For aluminum, world production capacity is currently greater than con-sumption of the product and little expansion is predicted in the foreseeablefuture. However, in theory, the use of OTEC could allow aluminum plants to

Page 10: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Summary . 3

be located in coastal areas nearer dependable sourcescase, the price and dependability of electricity fromfactors.

The relative value of OTEC depends heavily on

of raw materials. In thatOTEC would be crucial

the future price of alter-native energy sources. At this time, there is no economically competitive prod-uct among those which have been proposed in connection with OTEC. Butthese economic considerations are based on short-term projections of supplyand demand for specific commodities compared with the uncertainties asso-ciated with present OTEC technology. The value of developing OTEC technol-ogy, however, cannot be measured by simple economic projections because inthe long term alternative energy supply options could become much morecritical to the United States and to the world. Sometime during the 21st centurya renewable source of energy could become a necessity.

Because of the uncertain technical status of OTEC and the lack of con-clusive information about its feasibility, there is no obvious amount of fundingwhich should be committed for future research on the concept.

In the long term, decisions about funding are ideally made in the context ofan evaluation of the total Department of Energy budget for research on futurealternative energy sources. In the absence of such a comparison of alternativeenergy concepts at this time, Congress could cease to fund a separate researchprogram for OTEC or it could continue to investigate the possibility of OTECas an ultimately usable technology.

If funding is continued, fairly level research and development money in thetens of millions of dollars for the next 5 to 10 years could result in a programgeared toward solving important technical problems. This type of fundingwould probably result in continuation of many of the present OTEC researchprojects, but would not result in construction of a large-scale prototype untildecisions about type of plants, construction, location, and products could bemade in the light of solutions to the major engineering problems.

Large appropriations rapidly amounting to billions of dollars, could in-fluence the program toward development of a working prototype plant as soonas possible. This is a high-risk approach. It could produce the most rapiddemonstration of some technology, but it could also result in skipping essentiallong-term testing and environmental studies. It could also force a prematurechoice among several concepts and possible products in order to concentrate ondevelopment of one specific system.

Page 11: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy



Page 12: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy



An Idea to Fill a Need

In 1926, Georges Claude announced to theFrench Academy of Science his intention todevelop equipment which would produce “tor-rents of power” from the difference in tempera-ture between the top and the bottom of theoceans. 1

Claude, the industrial and physical chemistwhose work with gases in tubes led to the devel-opment of the neon sign, called for immediateaction on his ocean energy plan because “theFederal Oil Conservation Board of the UnitedStates estimates that the United States has onlyenough oil to last for 6 years.”2

These dire 1926 predictions ascribed to theFederal Oil Conservation Board did not cometrue on schedule. But the oil crisis of that periodheightened Claude’s interest in extracting energyfrom the oceans. Now, 50 years later, theUnited States is faced with an energy crisis, andthe dwindling supplies and high prices of fuelhave rekindled interest in the oceans.

The Source of Ocean Thermal Energy

The source of ocean thermal energy is theSun. The oceans act as huge natural collectors,catching and storing solar energy as heat in thesurface waters. This stored energy can be ex-tracted by using the heat from the surfacewaters to evaporate a fluid; passing the resultingvapor through a turbine; and then returning thevapor to liquid state by chilling it with coldwater from the deep ocean. The turbine, in turn,can be used to power equipment or to generateelectricity. The process is similar to that used insteam powerplants.

‘Daniel Behrman, The New World of the Oceans,(Boston: Little Brown and Co., 1969), p. 60.


A G@mrk OTEC Plant

The idea of convertingthe stored ocean energyto useful power origi-nated with French physi-cist Jacques d’Arsonvalin 1881. But in the cen-tury since d’Arsonval’swork, the technical feasi-bility of ocean thermalenergy conversion hasbeen demonstrated ononly a limited scale. Thefirst plant was built andoperated in MantanzasBay, Cuba, by d’Arson-val’s pupil , GeorgesClaude.

Claude’s model plantproduced 22 kilowatts ofelectricity but requiredabout 80 kilowatts ofelectricity y to run its

equipment. 3 Nevertheless, it was enough to con-vince scientists and researchers during the sub-sequent 50 years that the oceans’ stored solarenergy could be tapped by using the tempera-ture difference between surface and deep waters.

The Attractions of Ocean Thermal Energy

In the light of the fuel shortages and risingfuel prices of the 1970’s, the attractiveness ofocean thermal energy conversion is easy tounderstand: It offers an almost inexhaustiblesupply of fuel.

The oceans are massive natural storage basinsfor solar energy, so that the energy collected isavailable 24 hours a day. The natural collectionand storage capacity of the oceans eliminate

3Georges Claude, “Power from the Tropical Seas, ”Mechanical Engineering 52 (December 1930): 1039-44.


Page 13: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

● Ocean Thermal Energy Conversion

problems associated withthe sporadic availabilityof energy that marksmost other systems fordirect use of solar en-ergy.

This around-the-clockavailability makes theenergy usable for base-load power, that steadystream of power thatanswers the rout ineneeds of man. Further, ofcourse, the Sun and trop-ical currents continue towarm the surface oceanwaters while polar cur-rents and other factorscontinue to chill the deepwaters. Thus, there is anatural and dependablesupply of the fuel— solar



energy—and of the temperature difference usedin processes for extracting the energy.

These characteristics, coupled with the expec-tation that use of the stored solar energy will benonpolluting, make ocean thermal energy con-version attractive.

The Supply of Ocean Energy

There appears to be an abundant supply ofthis stored energy since the oceans cover morethan 70 percent of the Earth’s surface. However,the apparent vastness of supply can be mislead-ing since only a very small percentage of thestored energy can be extracted.

There are a number of factors which limit themeans of extracting useful ocean thermalenergy. Initially, practical OTEC systems needto be located at very favorable sites. Some im-portant site criteria are:




High thermal differences between thewarm surface and the cold deep water,

Low-velocity currents,

Absence of storms (minimal wind andwaves), and

4. Nearness to the market for the OTECproducts.

The temperature difference between the sur-face water and deep water has the most signifi-cant bearing on extraction of ocean energy. Asthe temperature difference decreases the energyoutput will decrease drastically and the effectivecost of each unit of energy will increase.

Current concepts for extracting ocean energyrequire a temperature difference of 330 to 400 F.With a temperature difference of 30

0 F, a plantwould produce approximately 37 percent lessoutput than with a temperature difference of4 0

0 F. With a temperature difference of lessthan 300 F, there is a marked loss of power out-put. For that reason, 300 F can be considered aminimum usable temperature difference to gen-erate net power from a turbine. With a tempera-ture difference of less than 150 F, there may beno net power output at all. That is, all the powerproduced would be consumed by the plant inrunning its own equipment and loads.4

Even a temperature difference of 40° F pre-sents technical problems. For example, the tech-nology proposed for OTEC designs uses stand-ard heat engine cycles which are typical of thoseused in all powerplants when the heat fromburning fuel is converted into electrical power.In conventional powerplants, temperature dif-ferences of hundreds or thousands of degrees aresought to get maximum efficiency. An OTECdesign will attempt to create useful power fromthe temperature difference that is usually dis-carded as unusable in a conventional power-plant.

This temperature difference requirementmeans that most potential sites for ocean energyplants are in the tropics because the amount ofsolar energy absorbed by the surface waters ofthe ocean is greatest there. The best potentialsites for plants to extract ocean energy are lo-cated within 200 of latitude north or south ofthe equator and along the routes of currentswhich carry warmed waters away from theequator.

There appear to be only two regions off the

4 Internal Memorandum to F. E. Naef from M. I. LeitnertLockheed Missiles and Space Company, “Data for SigGronich, ” Oct. 27, 1977, Sunnyvale, Calif.

Page 14: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy



General Site Location Map


Gulf Of MEXiCO




0 0




‘ y A Q m P I X T A o),ON F C t 4 C E TuNA





Ch. 1 Introduction ● 9

continental United States which are promisingsites—the Florida Gulf Stream and the Gulf ofMexico. Other areas of interest to the UnitedStates exist off Hawaii, Puerto Rico, the VirginIslands, Guam, and Micronesia, but at least 37other countries are closer than the United Statesto regions of the oceans where there are favor-able thermal gradients. Table 1 is one of severalavailable lists which identify countries whichare most favorably located relative to potentialOTEC sites. An attempt to identify all potentialsites worldwide is now underway. Some esti-mates indicate that an amount of energy equalto about 3 percent of the current U.S. electricalproduction capacity could be extracted from a200,000-square-mile section of the Gulf of Mex-

Table 1 .—Countries Bordering Potential OTEC Sites(Minimum distance from coast to suitable OTEC location

for countries that border warm tropical waters)

Distance, km Distance, km

Countries bordering Indian Ocean (clockwise order):

Madagascar. . . . . . . . . . . . . . . . . . . . . . . . . 32Mozambique . . . . . . . . . . . . . . . . . . . . . . . . 25Tanzania. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Kenya. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Somali Republic . . . . . . . . . . . . . . . . . . . . . 25Southern Yemen . . . . . . . . . . . . . . . . . . . . . 32Muscat and Oman. . . . . . . . . . . . . . . . . . . . 6Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Pakistan. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32India:

West Coast . . . . . . . . . . . . . . . . . . . . . . . 120East Coast. . . . . . . . . . . . . . . . . . . . . . . . 65

Burma. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Countries bordering Pacific Ocean (clockwise order):

Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Guatemala. . . . . . . . . . . . . . . . . . . . . . . . . . 32El Savador . . . . . . . . . . . . . . . . . . . . . . . . . . 65Honduras. . . . . . . . . . . . . . . . . . . . . . . . . . .Nicaragua . . . . . . . . . . . . . . . . . . . . . . . . . .Costa Rica. . . . . . . . . . . . . . . . . . . . . . . . . . 7Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Australia:

Northeast corner. . . . . . . . . . . . . . . . . . . 65Otherwise . . . . . . . . . . . . . . . . . . . . . . . . 300

New Guinea... . . . . . . . . . . . . . . . . . . . . . . 5Java . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . 5Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75Sumatra . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Countries bordering Atlantic Ocean (clockwise order):

SierraLeone . . . . . . . . . . . . . . . . . . . . . . . .Liberia . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cote d’lvoire . . . . . . . . . . . . . . . . . . . . . . . .Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dahomey . . . . . . . . . . . . . . . . . . . . . . . . . . .Cameroun . . . . . . . . . . . . . . . . . . . . . . . . . .Brazil:

1°t020 South . . . . . . . . . . . . . . . . . . . .Otherwise . . . . . . . . . . . . . . . . . . . . . . . .

French Guiana. . . . . . . . . . . . . . . . . . . . . . .Surinam . . . . . . . . . . . . . . . . . . . . . . . . . . . .English Guiana . . . . . . . . . . . . . . . . . . . . . .Venezula . . . . . . . . . . . . . . . . . . . . . . . . . . .Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . .Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . .Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . .Nicaragua . . . . . . . . . . . . . . . . . . . . . . . . . .Honduras . . . . . . . . . . . . . . . . . . . . . . . . . . .Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . .United States of America:

Florida . . . . . . . . . . . . . . . . . . . . . . . . . . .PuertoRico . . . . . . . . . . . . . . . . . . . . . . .

Cuba. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . .Haiti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dominican Republic. . . . . . . . . . . . . . . . . .Guadelope(French) . . . . . . . . . . . . . . . . . .

Dominica(British b). . . . . . . . . . . . . . . . . . . . .Martinique(French) . . . . . . . . . . . . . . . . . .St. Lucia(Britisha). . . . . . . . . . . . . . . . . . . .St. Vincent (Britisha). . . . . . . . . . . . . . . . . .Grenada(British b). . . . . . . . . . . . . . . . . . . .







aDistance to5”C waterat 500 meters.b F r e e l Y as so c i a t e d w i t h B r i t a i n .SOURCE: LavL A. “Plumbing the Ocean Depths: A New Sourceof Powec” IEEESpectrum, 10, 22-270ctober 1973.

j . 1 . 1 , ( ) - -j -

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10 ● Ocean Thermal Energy Conversion

Table 2.—Power Potential of OTEC Plants at Some Potential Sites

Percent o f Number ofArea in square Power U.S. electric 500 M W OTEC’S

nautical potential in generating required to pro-miles M W ea capacityb duce potential power

PAC-l C . . . . . . . . . . . . . . . . . 900,000 69,400 13.0 139Micronesia. . . . . . . . . . . . . . 3,000,000 231,400 43.6 462ATL-l d. . . . . . . . . . . . . . . . . . 360,000 27,800 5.2 53Gulf of Mexico. . . . . . . . . . . 200,000 15,400 2.9 31

a OTEC plant efficiency 1.5 percent; capacity factor = 75 percent.bus electrical generating capacity = 530,000 MWe.P h y s i c s L a b . s t u d y s i t e

140° to 170” Long. East20° to 30° Lat. North

d Applied physics Lab. study site400 to 500 West Long.

5° to 15° North Lat.NOTE: The estimates shown on this table area based upon an assumed gross power production rate of 2

MW/km 2. 2MW/km2 is the additional solar radiation captured at the sea surface due to a temperaturedepression or anomaly created by the OTEC plant. This is the total thermal input to OTEC, not after con-version by OTEC, assuming that 200 MW/kmz is the solar input to the surface. Two preliminary studiesmade by NRL estimate solar heat flux rate of 4.65 and 1.94 MWe/km2 from heat added by solr re-radiationat two different tropical ocean sites. These heat flux rates were estimated on the basis of a 0.1 “Cdepression in the surface temperature of the water. (Data from Ocean Thermal Energy Conversion(OTEC), Program Summary, ERDA, Washington, D. C., October 1976. Also phone conversation with staffmembers of DOE, Washington, D. C., Jan. 23, 1978.)

In determining the amount of power which potentially could be generated and the number of 500MW OTEC plants which would be used to generate that much power, the size of the temperature depres-sion deemed acceptable is a critically limiting factor. Since there is currently much uncertainty aboutthe effects of changes in the temperature of ocean waters, this chart uses a very small temperaturedepression. If a larger temperature depression is allowed, more OTEC plants could be placed in anygiven area and more-power could be produced

SOURCE: -Office of Technology Assessment.

ice s while the equivalent of more than 43 per-cent of current U.S. electrical productioncapacity could be extracted from a 3-million-square-mile area in Mircronesia. b However,much of this energy is available at locations farat sea where there is currently no demand for it.In addition, to extract this much energy fromthese two areas alone would require about 500ocean energy plants of the 500 MW size.7 (Seetable 2.) Discussions about materials and equip-ment later in this text will indicate that it is notlikely the United States would be able, during atleast the next 20 years, to construct the amount

of hardware, much of it larger than any power-plant equipment in existence today, whichwould be required to extract such large amountsof ocean energy.

A total assessment of the oceans’ thermal re-sources and their relationship to the amount andkind of energy needed in specific places has notbeen made. However, the ocean energy whichmight be extracted is diffuse and making use ofit will pose difficult technical and economicproblems which are discussed later in thisreport.

‘L. C. Trimble, et al., Ocean Thermal Energy Conver-sion (OTEC) Power plant Technical and EconomicFeasibility Technical Report, Vol. 1, (Washington, D. C.:Lockheed Missiles and Space Company, Inc., April 1975).

‘U.S. Congress, Office of Technology Assessment calcu-lations.

‘Ibid. (A 500 MW plant is half the size of a conventionalnuclear powerplant. )

The Status of Ocean Energy Extraction

The concept of extracting energy from theoceans has become known in the United Statesby the acronym OTEC—Ocean Thermal EnergyConversion. Funding of Government researchon OTEC began with an $85,000 budget from

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Ch. I Intrduction 11

the National Science Foundation’s Research Ap-plied to National Needs (NSF-RANN) programin 1972. In 1975, the research was transferred tothe Solar Energy Division of the EnergyResearch and Development Administration(ERDA) which is now a part of the new Depart-ment of Energy (DOE).

Through fiscal year 1977, the Federal Govern-ment had spent about $27 million 8 on OTECresearch. The money brought proposals forseveral concepts to generate electricity fortransmission to existing electrical grids onshoreor to generate power to be used in the at-seaproduction of such energy-intensive products asammonia, aluminum, or hydrogen. In fiscalyear 1978, $35 million is budgeted for OT’ECresearch, most of which will be spent designing,building, and testing component parts of aprototype OTEC plant.

OTEC is still a research and developmentproject. There is, as yet, no working OTECplant; there is no working pilot model. But

8 S . Piacsek, et al., Recirculation and Therrnoc/ine Per-turbations from O c e a n Thermal Power Plants ,(Washington, D. C.: Naval Research Laboratory, 1976).

research is continuing and ● quests for funds aregrowing, aimed at demonstration if the conceptduring the 1980’s.

The Purpose of This Report

The future of OTEC research is now beforethe U.S. Congress, which must choose whatlevel of support to give by annually a p-propriating funds for further research anddevelopment. Ultimately, Congress may befaced with questions about the regulation andoperation of OTEC if it becomes a viable energy


To aid Congress in making its decisions, thefollowing sections of this report will detail thecurrent status of OTEC technology with par-ticular attention to areas in which significantproblems exist. They will also discuss theeconomic considerations which are pertinent toan OTEC system and outline economic prob-lems facing some of the products most oftensuggested for OTEC production. The final sec-tions of the report will deal with the present andpossible future Government role in fundingOTEC research.

Page 17: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy


Technicaland EconomicStatus

Page 18: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Technicaland EconomicStatus

The scientif ic feasibil i ty of OTEC wasdemonstrated on a very limited scale byGeorges Claude as early as 1926. Claude’s ex-periences, however, pointed up the need formore advanced ocean engineering technologybefore success of a large-scale system could beexpected.

The United States, with the Division of SolarTechnology of the Department of Energy as leadagency, is now attempting to develop the tech-nology and demonstrate the feasibility of OTECon a scale vastly larger than Claude’s work.When developed, OTEC could be used to pro-vide power for the production of such productsas electricity, ammonia, aluminum, hydrogen,magnesium, and methanol, or for ocean farm-ing. No scientific breakthrough is necessary inorder to use OTEC as a power source for theseproducts. However, there are major engineeringdevelopment problems which must be solvedbefore OTEC could become an accepted part ofany manufacturing system.

Many troublesome technical concerns en-countered during research stem from a singlefactor: low thermal efficiency. Thermal effi-ciency is the percentage of heat which can beconverted to useful work. Because the heat usedin OTEC must be extracted from a low tempera-ture difference, the resulting efficiency is low.At best only about 7 percent of the heat energystored in the ocean can be converted into usefulenergy. In practice, however, OTEC plants areprojected to operate with net efficiencies be-tween 1 and 4 percent depending on assump-tions made regarding auxiliary power require-ments.1 (By contrast, the thermal efficiency of a

‘Memorandum to G. L. Dugger from H. L. Olsen, Ap-plied Physics Laboratory, “Efficiency of OTEC PowerPlants, ” July 7, 1976, Laurel, Md.

steam plant driven with a nuclear or coal-firedheat source is as high as 42 percent.z) An offset-ting feature is that no fuel is required for theOTEC cycle. However, the result is that verylarge quantities of solar-heated surface waterand cold deep water are required. For a typical100 MW OTEC design, which is one-tenth of thesize of an existing 1,000 MW nuclear-generatingstation, Is,000 cubic feet per second of surfacewater must pass through the evaporator and alike quantity of deep water must pass throughthe condenser heat exchangers. The combinedflow rate of 30,000 cubic feet per second isslightly larger than the average flow at themouth of the Susquehanna River or more thantwo and one-half times the flow of the PotomacRiver at Washington.3

Handling this volume of fluids will requiresome pieces of equipment, such as pumps,motors, and turbines, which are larger than anynow in existence. If OTEC plants are to produceenergy economically, great care will be neces-sary to minimize parasitic losses of energy fromfriction in pumps, heat exchangers, and otherequipment. Equally important, however, themargins for design and/or operating error inOTEC plants will be quite narrow.

Beyond the inherent problem of low effi-ciency, there are many unresolved engineeringproblems. The primary concerns involve:

● the heat exchangers,● the cold water pipe,● the working fluid,● ocean platforms,● underwater transmission lines,s de-emphasis of the open-cycle system, and● the constructability and reliability of the

entire plant.

Until major problems in these areas have beenresolved, it will not be possible to estimate themany economic and environmental factorswhich will determine OTEC’S commercial pros-pects.

This study has not looked at the possible en-vironmental impact of OTEC plants because

2S. S. Penner and L. Iceman, Energy, (Reading, Mass.:Addison-Wesley Publishing Co., 1974), p. XXV.

3Phone conversation with staff members of U.S. Geo-logical Survey, Reston, Va., Jan. 30, 1978.

7 R

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16 . Ocean Thermal Energy Conversion

that impact would be tremendously dependentupon specifics which are not yet known, such asthe type, size, and number of OTEC plants, thelocation of the plants, substances used in proc-esses aboard the OTEC plant, and the productproduced. However, there are a number of en-vironmental factors which should be consideredindepth when more is known about a specificsystem, such as:

The size and effects of the reduction in thetemperature of surface waters of the oceanat OTEC sites.

The effects of the working fluid on theocean environment in the event of a leak.

Possible pollution caused by chemicals andtechniques used in the construction of com-ponents of the OTEC plant.

The effects of changes in the nutrient con-tent of the surface waters caused by upwell-ing deep ocean waters.

The effects of increased marine traffic.

The effects of laying underwater transmis-sion lines if the OTEC were to produce elec-tricity for a grid.

These unknown environmental considera-tions and the better known technical problemsall cause significant economic uncertaintiesabout the cost of useful energy or energy-relatedcommodities which might be produced, In fact,contrary to the impression created by some ofthe popular literature on OTEC,4 this study hasfound the technical and economic problems tobe such that there is no obvious competitiveproduct to be produced by OTEC systems dur-ing the coming 10 to 15 years.

Currently, all of the products proposed forOTEC plants (including electricity) are existingcommodities. This means that anything pro-duced by OTEC systems will be in competitionin world or national markets with identicalcommodities produced by other means. For thisreason, a potential investor in an OTEC systemwould have to be highly confident that OTEC-produced commodities would be dependableand price-competitive.

40ne of the most recent examples is John F. Judge,“Ocean Power: Is the U.S. Afraid of It, ” Government Ex-ecutive (December 1977): 29-32.

When considering costs of the system to pro-duce these products, the fact that OTEC usesseawater as “fuel” and therefore may not be sub-ject to continually rising fuel costs is an attrac-tive aspect. In addition, the cost of site acquisi-tion and the cost of operating OTEC plants,once they are constructed, are projected to besmall, and adverse environmental impacts areprojected to be minimal.

Even so, these positive factors are not enoughto outweigh the assortment of technical prob-lems which are also currently associated withOTEC and are identified throughout this report.But as technical problems relating to OTEC aresolved and as more information is gained aboutthe future cost and availability of traditionaland alternative sources of energy, OTEC couldbecome more attractive than it currently ap-pears to be.

However, it is difficult to draw conclusionsabout OTEC or to make comparisons withother energy alternatives until there is adefinitive system to evaluate—that is, a specificplant, located at a known site, receiving mater-ials for the production of a certain product, andshipping that product out to consumers.

The following sections of this chapter willdiscuss the principal technical problems and theeconomic uncertainties about the cost of usablepower from OTEC. They will also discuss someof the economic implications of products whichcould be manufactured using OTEC as a powersource. For each of these products, the existingindustry was reviewed; the supply and demandrelationships of feedstocks and of finished prod-ucts were analyzed; and the substitution ofOTEC as the power source was evaluated.


Heat Exchangers

Heat exchangers are the most critical compo-nent, i.e., largest and most expensive, of theclosed-cycle OTEC plants currently being devel-oped. Their function is to evaporate and con-dense the working fluid using the warm andcold seawater. The capital cost of the heat ex-changer is a primary factor in the total cost of

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Ch. II Technical and Economic Status . 17


v A P C + ?IN


the plant. It has beenestimated that approx-imately one-third to one-half the cost may beassigned to the heat ex-changer elements of thesystem.5 Heat transfereffectiveness is also a pri-mary factor in the cost ofpower generated by anOTEC plant.

Currently the impor-tant unresolved develop-ment problems for heatexchangers include ques-tions about materials tobe used, methods fordealing with biofouling’and corrosion, and theconstruction techniqueswhich will be necessary.

Materials: Candidate materials which havebeen considered for OTEC heat exchangers in-clude copper-nickel alloys, fiber-reinforcedplastic, stainless steel alloys, titanium, andaluminum alloys.

● Copper-nickel alloys have been the stand-ard material for marine heat exchangersand seawater piping systems for manyyears. However, while this material isrelatively inexpensive and abundant, it isnot compatible with ammonia, the prin-cipal compound being considered for a

‘R. H. Douglass, et al., Ocean Thermal Energy Conver-sion Research on an Engineering Evaluation and Test Pro-gram, (Redondo Beach, Calif.: TRW Systems Group,February 197.s) I-.5. Also, L. C. Trimble, et al., O c e a nThermal Energy Conversion (OTEC) Power Plant Tech-nical and Economic Feasibility Technical Report, Vol. I,87-90.

‘Biofouling—Biof ouling is the result of certain marineorganisms attaching themselves to submerged objects, Bio-fouling may be detrimental to the system in a number ofways; it may completely block the flow of seawater in thetubes, it may lead to sharply reduced heat transfer acrossthe tube wall, and it may lead to increased corrosive attackunder deposits, i.e., crevice corrosion. It also increases theresistance of the coldwater pipe to currents and to waterflowing through the pipe.

working fluid in closed-cycle designs. T Ifthe working fluid is Freon, however,copper-nickel is very attractive.

Fiber-reinforced plastic heat exchangershave been studied for possible OTEC ap-plications, but the feasibility of variousproposed composite plastic cores is specu-lative. Predicted lifetime between replace-ments has been estimated to be 5 years. sThus, the low initial cost of fiber-reinforcedplastic must be balanced with its poor heattransfer rate and the necessity for frequentreplacement.

Titanium has been introduced into marineservice in recent years, and two of the ma-jor OTEC studies selected titanium as thematerial for evaporators and condensersbecause operating experience indicatesgood resistance to pitting, stress, and in-tergranular corrosion can be achieved.Titanium is compatible with ammonia andhas high strength for its weight, The usefullife of titanium heat exchangers has beenpredicted to be 30 years. ’

However, there are also problems asso-ciated with titanium. It has high suscep-tibility to biofouling in stagnant seawater,and welding and joining techniques for ti-tanium in very large, complex structureshave not been satisfactoril y d e m o n -strated. 10

A major problem with titanium is thatthe high cost and limited supply would pro-hibit large-scale use of the material in thenear future. Titanium is about 3 times asexpensive as aluminum, anothe r seriouscandidate. However, since only some partsof the heat exchanger would be constructedof titanium, the total cost would not be 3times larger. In addition, life-cycle cost of

7A. M. Czikk, Ocean Thermal Power Plant Heat Ex-changers, (Tonawanda, N. Y.: Union Carbide Corpora-tion, May 21, 1976), p. 100.

BM1tre Corporation, systems ~escri~tion and Engineer-

ing Costs for Solar-Related Technologies, Vol. VII,(McLean, Va.: Mitre Corporation, June 1977), p. 73

‘Ibid.‘“L. C. Trimble, et al., Ocean Thermal Energy Conver-

sion (OTEC) Power Plant Technical and Economic Feasi-bility, p. S-60.

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. . . —. .. .-— — . .

18 ● ocean Thermal Energy Conversion

titanium could prove to be less if com-ponents constructed from it are moredurable. Presently, the production oftitanium is limited. Construction of theheat exchangers for one 100 MWe OTECplant would require a supply of titaniumequal to about one-quarter the totaltitanium mill products shipped in 1974.1


Although the industry capacity is expectedto double by 1985, it would still be inade-quate for large-scale production of OTECplants.

● Stainless steel alloys are similar to titaniumin life expectancy and are in better supply.According to the U.S. Bureau of Mines, thepeak in stainless steel production came in1974 at 1,345,000 tons, compared to ti-tanium production of 17,600 tons. ]2 (How-ever, not all that quantity of stainless is of aquality suitable for use in an OTEC. ) Theunit cost of stainless steel is about 40 per-cent that of titanium welded tube. How-ever, a greater thickness of stainless steel isrequired because of the lower strength ofstainless; and the resulting total heat ex-changer costs would be about equivalent. 13

. Aluminum alloy is also a leading candidatefor OTEC plants. The welding and formingtechniques for aluminum are far betterestablished than for other candidate mater-ials and the existing production base ismuch larger. However, the compatibility ofaluminum with seawater and ammoniamust still be demonstrated.

So far, there is no obvious best material forthe heat exchangers. Only design and testing ofthe heat exchanger over a substantial period oftime, in connection with specific water condi-tions at a given site with known types of bio-fouling with prescribed cleaning and recleaningtechniques and with a known working fluid will

1 ILetter t. T.A.V. Cassel, Bechtel Corporation, fromStanley L. Hones, Titanium Metals Corps. of America, Ir-vine, Calif., Dec. 9, 1974.

IZExtrapolated from U.S. Department of the Interior,Bureau of Mines, Commodity Data Summaries 1977,(Washington, D. C,: U.S. Department of the Interior,January 1977). p. 178.

13A. M. Czikk, et al., “Ocean Thermal Power Plant HeatExchangers, ” Sharing the Sun, A Joint Conference of theInternational Solar Energy Society and Solar Energy Socie-ty of Canada, Inc., Winnipeg, Canada, August 1976.

determine if there is an acceptable material at anacceptable cost. Some testing has begun underthe DOE program.

Biofouling: As biofouling builds up, theoverall heat transfer is reduced. Net power out-put and overall plant efficiency are reducedbecause more power is required to move theheating and cooling water through the system.However, the rate of biofouling of heat ex-changer surfaces—which is dependent uponmany site-specific factors such as water tem-perature and nutrient concentration—is only

partially known at this time. Periodic cleaningwill be necessary to keep the seawater side of theevaporators and condensers free of biofouling.Some means of conducting this cleaning arebeing studied, but it is not known what effectsuch cleaning will have on the rate of corrosionand on the life expectancy of equipment. Like-wise it is not known how often cleaning will benecessary or the length of time the OTEC plantwill be out of operation due to biofouling. Dataare just now becoming available from DOE testswhich address these problems,

An overall assessment of the impact of bio-fouling and tube cleaning on the capacity of theplant has not yet been made for any of theOTEC concepts, but tests are underway.

Construction: Several types of heat exchangerdesigns have been proposed, using tube andshell, with fluted, enhanced, and serpentine sur-faces, Plate and fin exchangers are also beingdesigned. Yet the construction of heat exchang-ers of these designs in the size required forOTEC is not now common practice. The largestheat exchangers constructed to date have hadtube surface areas of about 500,000 square feet.A 100 MW OTEC will require 10 times that, orabout 5 million square feet of heat exchangersurface area. The surface area will be providedby a number of heat exchangers, ranging in sizefrom 200,000 square feet each to 1.2 millionsquare feet each. It is likely that this increase insize will result in problems which are not en-countered in present heat exchanger designs.Also, depending on the material selected for theheat exchanger, there may be problems of weld-ing, forming, and extruding sections.

14L. C. Trirnble, et al., Ocean Thermal Energy conver-sion (OTEC) Power Plant Technical and Economic Feasi-bility.

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Ch. 11 Technical and Economic Status “ 19

One engineering company, in response to aquery about OTEC, put the construction prob-lem in these terms:

We are dealing with a conceptual designwhich does not fit within the limits of our pres-ent range of experience. We believe that theseexchangers can be built, but that the technolog-ical and practical problems which would have tobe solved would be—in the least—challengingand possibly—in the long run, when consideringcosts and manufacturing capability— prohibi-tive. 15

Cold Water Pipe

The purpose of the cold water pipe is to bringcold. water from the deep ocean to provide cool-ing water for the condensers.

The cold water pipe is one of the most signifi-cant engineering challenges in OTEC design.Several types and materials have been consid-ered to date. These include structures of steel,aluminum, reinforced concrete, fiber-reinforcedplastic, and rubberized materials. All these ma-terials raise questions as to the size of the struc-tures which can be built and deployed at thedepths at which they must be used, For example,the largest diameter reinforced-concrete andfiber-reinforced plastic pipes currently used fornuclear powerplant cooling water and sewer ef-fluent outfalls range from 10 to 12 meters indiameter. ” Steel pipe outfalls have been builtwith d iameters o f about 20 meters . However , a100 MW OTEC may require a co ld water p ipe

that is more than 40 meters in diameter*7 a n dmore than 800 meters long. The length of theOTEC cold water pipe would be the equivalentof 20 to 30 Baltimore Harbor Tunnel tubeshanging vertically in the deep ocean. 18

Two distinct types of pipeline problems exist:one for stationary plants located on shore andone for floating offshore platforms.

‘sIbid.16 T. R.w,, Oceans System Division, December 1976.

“U.S. Congress, House Committee on Science andTechncdogy, Subcommittee on Advanced Energy Technol-ogies and Energy Conservation Research, Developmentand Demonstration, FY 1979 Authorization Hearings,“Statement of Eric H. Willis, ” U.S. Department of Energy,Jan. 26, 1978.

‘8 Phone conversation with administrator of BaltimoreHarbor Tunnel, Feb. 7, 1978.

In a stationary, land-based OTEC plant, thecold water pipe would be anchored to the sea-floor and be designed to conform to the contouralong a sloping seabed to considerable depths.The cold water pipe from an OTEC plant willhave to reach depths of 300 to 1,500 meters inorder to tap the cold water resources which arerequired for OTEC operation .19 This is a dif-ficult engineering problem because the pipemight be handled in sections due to the length ofthe pipeline, which may reach 10 kilometers ormore, depending on the bottom contour of thesite. The current state-of-the-art for underwaterpipelaying is limited to water depths of approx-imately 150 meters. Small pipes have been laidat greater depths, but there is no experience withlarge diameter pipes at great depths.

Most recent conceptual designs have utilizedfloating offshore platforms rather than bottom-mounted platforms or land-based plant sites. Inthese floating plants, the cold water pipe wouldbe connected to the bottom of the platform.While the floating platforms will require pipesto reach the same depths of water as stationary

plants, pipes from the floating plants would beexposed to dynamic loads and stresses whichwould not be encountered on pipes which areanchored to the bottom. Pipe design and de-ployment for floating platforms would be dif-ficult. Tried and proven methods for couplingthe pipe to the platform, as well as reliablemethods for predicting the behavior of the pipeunder cyclic loading are not available. Some ex-perience has been gained with Shell Oil’s Spar I

floating oil loading and storage unit in theNorth Sea. The spar measures 169 meters fromits base to the highest point, the height of a 40-story office building, and is anchored in approx-imately 100-meter water depth. The largest cy-lindrical section is 29 meters in diameter.’” Ex-perience from this unit may contribute to thedesign and deployment of an OTEC plant’s coldwater pipe.

The pipe cannot be designed without an anal-ysis of subsurface flows of currents at varyingdepths in specific locations, the effect of oscilla-tions caused by a platform’s motions at sea, and

I g Je r o m e W i ] ] i a m s , Oceanography, (n.p.: Little, Brownand Co., 1962).

‘“’’Spar Connection Brings Brent Field Closer to Produc-tion, ” Ocean lndustr-y 11 (August 1976), 45.

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20 ● Ocean Thermal Energy Conversion

the resultant loadings. The effects of biofoulingon the inside and outside of the pipe must alsobe analyzed. In addition, the large amount ofdrag caused by a large pipe would tremendouslyincrease power requirements if dynamic posi-tioning were used to keep the platform on site.

Working Fluid

The working fluid is a compound which is va-porized in the plant’s evaporator by the use ofwarm seawater, expanded in the turbine wherepower is extracted, and finally condensed to aliquid by the use of cold seawater. Open-cyclesystems use warm surface seawater as the work-ing fluid. The water is vaporized in a vacuumand is not recycled. Closed-cycle plants such asthose currently being proposed use a secondarymedium as the working fluid and continuouslyrecycle it. Most of the currently proposedclosed-cycle OTEC plant concepts use ammoniaas the working fluid. Some concepts use Freonsand propane.

Ammonia has been chosen for two reasons: 1)the work extracted by the turbine from eachpound of ammonia is at least 3 times that ex-tracted from propane and 2) the higher thermalconductivity and heat capacity of ammoniamay make it possible to reduce the size of theheat exchanger. There have been no tradeoffstudies on complete OTEC systems that clearlydetermine the appropriate working fluid. Freonsand propane may well be superior to ammoniafor some applications.






?M R MwATERC i l n s l

Working Flutid Flow


In the event of a spill of the working fluid or aleak from the OTEC plant, ammonia is highlytoxic and slightly flammable. Low-level leaksare to be expected, and there could be im-mediate damage to the environment which hasnot yet been assessed. But the detrimental effectsof ammonia should be less long term than thosewhich might be caused by Freons or propanebecause ammonia decomposes into compoundswhich are nutrients. In addition, ammonia caneasily be detected because of its odor.

Ammonia will readily dissolve in seawater toform ammonium hydroxide, which may be in-compatible with some materials. Therefore, theuse of ammonia may limit the selection ofmaterials to those which are compatible andresistant to corrosion, such as titanium andstainless steel alloys.

Thus, selection of working fluid and materialswhich are compatible and protection of the sur-rounding environment from leakage are impor-tant engineering considerations which affectevery facet of plant design and materials selec-tion.

Ocean Platforms

The structures required to house OTECequipment in the open ocean may be stationaryplatforms anchored to the seafloor or floatingplatforms moored or dynamically positioned ata particular site.

To date several configurations have been sug-gested, including semisubmersible and spar-buoy shapes, ship-like forms, and disk-shapedhulls. It is expected that although OTEC plat-forms may well be larger than any platform yetdesigned by the petroleum industry, the designsand accomplishments of that industry will playan important role in development of OTECstructures. A few oil storage and productionplatforms in the North Sea approximate the sizenecessary for OTEC platforms exclusive of thecold water pipe, mooring systems, and trans-mission lines. zl Operating experience with eventhese platforms, however, is as yet very limited.

The major technical problem which must bedealt with in designing the platform is the dif-

2’Ronald Greer, Ocean Engineering Capabilities and Re-quirements for the Offshore Petroleum Industry, (NewYork: American Society of Mechanical Engineers, 1976).

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Ch. II Technical and Economic Status “ 21




3 Types CM Platlorms


.ficult one of connecting a heavy submergedstructure (the cold water-pipe) to a surface plat-form subjected to wave action. Claude’s earlyexperiments with much smaller floating struc-tures resulted in failure and lost cold waterpipes. Semisubmerged or completely submergedplatforms may minimize dynamic action, butthe structural dynamics of floating platformsand cold water pipes appear to be a majortechnical problem.

Another difficult task is keeping the platformonsite in the open ocean which may be subjectto high winds, waves, currents, etc. Mooring aplatform of the size required for OTEC in verydeep waters would be a difficult engineeringproblem requiring unique designs and materials.Dynamic positioning could be used but may re-quire large amounts of power in even moderateocean currents. Warm and cold water whichmust be ejected from the machinery could beused to position the platform.

Underwater Transmission Lines

Dependability of the underwater transmissionlines which would be needed to move OTEC-produced electricity to shore would be critical tothe success of any OTEC electric powerplant.However, these lines pose a particular problembecause of the limited state-of-the-art in sub-marine cables, Two 250 MW DC power cableshave recently been laid across the NorwegianTrench in more than s50 meters of water” andFrench and British electric companies are con-sidering a 2,000 MW cable across the English

Channel .23 This technology is equivalent to thatwhich would be required for an OTEC plant de-livering electricity from a site reasonably closeto shore.

The economics of transmitting electricity toshore is greatly affected by the distance whichmust be covered by cables and the fact that theremust be a number of cables taking differentroutes to shore in order to ensure reliability.With the cost of underwater transmission linesat roughly $1 million/mile or more, 24

at some

potential OTEC sites 200 miles from shore in theGulf of Mexico, the cost of a single cable couldequal the capital cost of constructing the OTECplant. (In coal-fired or nuclear power systemsonshore, construction of the transmission cableis roughly 12 percent of the total constructioncost .25 )


CENTER CORE W 31 mm 112 ~





/.AJTEIA.SPUALT 6 117mr71 {4 6 ,

-CwlmISIw - tL611z8w Prod.wedTcdal Lm@

L Tdal Weqht

,550T ( 1802 !!,117 mm ,4646 kg T

12 km130 Nm ,7&ml63MI ton

Skagerrak HVDC Cable

In addition, construction of the electricalcable connecting the OTEC plant to the sub-marine cable wifi be difficult. For example, thereis no known method of disconnecting and re-connecting the OTEC to the cables if this needarises due to severe winds and waves.

‘z’’ Power Cables Cross Norwegian Trench, ” Ocea)] IH-dustry 12 (March 1977).

231bid.“L. C. Trimble, et al., Ocean Thermal Energy Conver-

sion (O TEC) Pouler Plant Technical and Economic Feasi-bility.

“Edison Electric Institute, Statistical Yearbook of theElectric Utility ]ndustry for 2975, (New York: Edison Elec-tric Institute, October 1976), p. 59.

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22• . ocean Thermal Energy Conversion




c 0 u 0 E t 4 s E R


L~. Cycle OTEC

Open-Cycle System

The open-cycle con-cept, which does not re-cover the working fluidand reuse it, was basical-ly eliminated from con-sideration about 8 yearsago when research wasunder the direction of theNational Science Foun-dation. Until recently,ERDA has directed mostof its funding toward theclosed-cycle concept, inwhich the working fluidis continuously recycled.

The f irst importantdevelopment of the opencycle was accomplishedby Georges Claude in the1920’s. Claude reasonedthat the major disad-vantage to closed-cycleocean thermal power-

plants is that the evaporator and condenser useabout one-half of the temperature difference toget the heat into the working fluid. Thus onlyhalf the temperature difference is available forwork by the turbine. Claude’s assessment of theproblem is summarized in the following state-ment:

Manifestly such a solution is burdened by anumber of inconveniences, one of them beingthe high cost of such evanescent substances(working fluids, i.e., ammonia), and another thenecessity of transmitting enormous quantities ofheat through the inevitably dirty walls of im-mense boilers with such a small difference oftemperature. 26

The open or “Claude” cycle uses ocean wateras the working fluid as well as the heat source.The warm surface water is evaporated in aboiler at very low pressure, in a vacuum of ap-proximately 0.5 psig. The resulting steam is thenexpanded in a very large diameter turbine.Finally the steam is condensed by either mixingdirectly with cold water pumped from ocean

26 Ge o r g e s Claude, “Power from the Tropical Seas, ”Mechanical Engineering 52 (December 1930): 1039.

depths or in a surface-type heat exchangersimilar to the closed-cycle type. The lattermodification permits production of potablewater from the steam condensate.

The use of direct contact heat exchangers inboth the evaporator and condenser eliminatesthe need for enormous heat transfer surfacearea. Thus the area subject to corrosion andfouling, particularly in the evaporator which isat a higher water temperature, is greatly re-duced.

The reason most often given for the choice ofa closed-cycle concept is that the open cyclewould require a turbine of prohibitive size. Forexample, a single turbine yielding 100 MWecould be as much as 57 meters in diameter.However, no practical proposal would considera single turbine. The smaller (3 to 5 MWe) tur-bines which are more likely to be used are veryclose to the size of conventional low-pressuresteam turbines now in existence. z7 Problems ofcorrosion and deareation are also inherent in anopen-cycle plant. Noncondensible gases re-leased from feedwater are the greatest source ofair in the boiler. The effect of this air is to lowerturbine output and to seriously limit the capaci-ty of the condenser, thus, this air must beremoved prior to condensation. 28 The use oflow-pressure flash distillation chambers andother methods of controlling this problem arebeing investigated .29

De-emphasis of the open cycle in current re-search and development appears to be a ques-tionable decision because the massive heat ex-changer required for a closed-cycle OTEC plantmay limit the size of each OTEC unit. Open-cycle machinery, particularly small turbines,condensers, and ejectors could be developedalong with closed-cycle machinery. Use of the

z7p L Schereschewsky, Electric Power G e n e r a t i o n F r o m. .the Tropical Sea, Geothermal Water, Wells and OtherSources of Low Temperature Water . . . Modernization ofthe Claude Process, (n. p.: United Nations Division ofResources and Transport, August 1972), p. 23.

2’Andr& Nizery, Utilization of the Therma/ Potential ofthe Sea for the Production of Power and Fresh Water,(Berkeley, Engineering Research, Sea Water Project, March1954), p. 5.

*’Donald F. Othmer, “Power, Fresh Water, and Foodfrom the Sea, ” Mechanical Engineering 98 (September1976): 27.

Page 26: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy


Ch. II Technical and Economic Status “ 23




c o


- - — l i ~Closed Cycle OTEC

open cycle, which turns out desalinated water as. .a byproduct of the process, may be especiallyattractive on some isolated island or in coastalcommunities.

Construction and Deployment of an OTEC Plant

There are conflicting views about the facilitywhich will be required. One school of thoughtbelieves that any large shipbuilding facilitycould undertake the construction. Anotherholds that the construction facility itself wouldbe a novel endeavor. Such a construction facil-ity could be a several hundred million dollar in-vestment.

Deployment and mooring of OTEC plants ina potentially hostile environment at sea mayako be a problem. There appears to be littleengineering experience which is directly perti-nent to final onsite assembly of a large OTECsystem, although much can be learned from theexperience of the petroleum industry in theNorth Sea and elsewhere. The cold water pipeand undersea electric transmission cables areparticularly challenging deployment problems.

Reliability of an OTEC PIant

Once an OTEC plant is actualiy constructedand sited, it will have to continue to operatereliably for at least 20 years in order to amortizethe very large capital investment which will berequired. Reliability is often expressed in termsof plant capacity factor. The plant capacity fac-

tor is the ratio of the power actually producedduring a given period to the total which a plantoperated at constant full power could produceduring the same period, Most of the currentOTEC plant concepts claim a capacity factor of90 or 95 percent .30 This appears to be highly op-timistic for new technology with no provenrecord of operation.

The capacity factor will be reduced primarily

by scheduled and unscheduled maintenance andrepair; seasonal variations in ocean tempera-tures; variations in ocean currents and windconditions which may increase the power re-quirements for operating equipment; and thebuildup of biofouling organisms which reduceheat transfer rates and may require that equip-ment be shutdown for cleaning.

Based on experience with ship machinery,large pieces of equipment operating in the oceanrequire a periodic overhaul, typically lasting 1to 3 months, at least once every 2 years .31 Thisgives a capacity ioss of approximately 4 to 12percent. There will also be periods when capac-ity is reduced due to equipment outages. OneOTEC design concept projects one failure last-ing 24 hours every 68 days.32 This reduces ca-pacity by another 1.5 percent. In total, sched-uled and unscheduled maintenance alone can beexpected to reduce the capacity factor below 90percent. The effects of temperature variationsand biofouling will reduce plant capacity stillfurther.

Thus, it appears that an 80- to 85-percentplant capacity factor is the maximum whichshould be projected for OTEC plants. Even thatfigure is open to question based on experiencewith other large energy systems. For example, inthe late-1960’s many nuclear powerplants weresold with the promise that over their operatinglifetime they would realize capacity factors of 80percent or better. 33 Those expectations are now

30L C. Trimble, et al., Ocean Thermal Energy Conz~er-

sion (OTEC) Powerplant Technical and E~onoml~Feasibility, p. 2-100,5-21.

3’Ibid.UTRW Systems croup, Ocean Thermal Energy c~n~er-

sion, Vol. 3, (Redondo Beach, Calif. : TRW SystemsGroup, June 1975), pp. 4-15.

331rvin C. Bupp, The Commercial Prospects for OTECSystems, unpublished, (Cambridge, Mass.: HarvardUniversity, March 1977).

Page 27: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

24 . ocean Thermal Energy Conversion

recognized as having been extremely optimistic.Although there is a wide range of variations inthe performance of different types of equipmentand there is only a limited amount of informa-tion on the most modern plants, it appears thatcapacity factors in large (greater than 800 MW)nuclear and coal-fired powerplants range fromabout so to 7S percent and are dependent on awide variety of local circumstances .34 There aresome nuclear plants which have achieved 80percent, but this was only after considerable ex-perience.

Given that record for systems which are muchmore completely developed and working in astable and familiar environment, it appearsunrealistic to expect that OTEC plants, withmany unknowns, would achieve plant capacityfactors in excess of 90 percent.

Summary of Technical Problems

No scientific breakthroughs are needed tobuild an OTEC plant, but the technology forseveral major components of OTEC is not engi-neering state-of-the-art. No plant has been fullydesigned; many components of the system havenot yet been developed. The technical problemswhich must be solved are significant, and satis-factory solutions to the critical engineeringproblems are likely to require laboratory and at-sea testing. Even when the plant is designed andproven, there is little engineering experiencewhich is directly pertinent to the at-sea as-sembly and mooring problems which may beencountered. And finally, it is not now possibleto project how reliable an OTEC plant will beonce it is sited and operating.

NOTE: The OTA Working Paper on Ocean ThermalEnergy Conversion, which is being published separately,contains a detailed technical discussion of designs thathave been proposed.


Meaningful economic analyses can only beconducted for specific power systems. To date,however, the technical uncertainties of OTECare so great that only broad economic over-views are sensible, and care should be taken toavoid detailed economic calculations that createa specious aura of accuracy.341bid.

The following sections provide an overallview of three potential OTEC product systems(electricity, ammonia, and aluminum). Othersystems are, of course, possible and may, infact, prove more useful in the future. However,most Government-sponsored research has fo-cused on these three potential systems. Data areprovided on potential markets and on factorsinfluencing the range of costs of OTEC systems.

Electric Power Generation

OTEC plants are first of all powerplants. Thispower may be fed into an electric utility grid fordistribution to customers or it may be used in anenergy-intensive manufacturing process whichis coupled with the OTEC plant, such as anOTEC/ammonia system or an OTEC/alumi-num system.

In any of the foregoing cases, the economicsof generating power can be expressed in twotypes of cost: the capital cost of constructingOTEC plants and the cost per kilowatt hour ofenergy produced.

Capital Cost of Constructing an OTEC Plant:The conventional method of expressing the costof building a powerplant is in terms of dollarsper net kilowatt of capacity. Existing literatureon OTEC reflects an extraordinarily wide rangeof estimates about the total investment requiredfor the first several plants. The data presentedare for different temperature gradients, sizes,and designs of OTEC plants with differing com-ponents and equipment and differing learningcurves, The capital costs presented range from$500/kW to $3,700/kW. These cost estimatesare displayed in table 3.

It is even quite possible that the actual costscould exceed this range because all the impor-tant variables which will determine the costs arenot yet known. For example:

The choice of material for the heat ex-changers may radically affect the cost ofconstruction because the price of candidatematerials varies widely;

The choice of sites will radically affect thecost of construction because the site will in-fluence the type of platform and mooring,the length of the cold water pipe, the dis-

Page 28: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Ch. II Technical and Economic Status . 25

Table 3.—Estimated Capital Costs of an OTEC Electric Generating Plant

t r e dAPLa TRWb LSMDC (Roberts) M i tree

Capital costs in $/kW. . . . . . . . 500-1,000 2,100 2,600-3,700 1,600-1,900 1,600-2,800aw. H. Avery, et al., Maritime and Construction Aspects of ocean Therma/ Energy Conversion (OTEC) plan;

Ships, (Laurel, Md: Applied Physics Laboratory, April 1976), pp. 5-25.bM itre corporation, systems f)escriptlons anci Engineering Costs for Solar Engineering cOStS fOr Solar-Related

Technologies, vol. V1l.Cl bid. dlbid. elbid.

tance the product must be transported toshore, and the precautions which must betaken to protect the environment;

The rate of biofouling may radically affectthe cost because fouling _reduces the effi-ciency and thus the output of the plant.

Solutions to these and other technical prob-lems are necessary before rational estimates ofOTEC construction costs can be made. In addi-tion, to the capital cost of an OTEC plant mustbe added the cost of transmission cables toshore. With cable costs at about $1 million amile,ss th e transmission lines for a 5oo MwOTEC 100 miles offshore would be about$200/kW at a switching station on the beach.The need for multiple cables could double ortriple this cost.

If OTEC plants could be built at the very op-timistic investment cost of about $500/kW(1976 dollars), OTEC plants would be more at-tractive than nuclear powerplants built duringthe mid-1970’s 3b if the OTEC operating costswere modest.

However, it is prudent to remember that forthe past 10 years, engineering estimates of thecapital cost of new generating capacity havebeen persistently low. Early commercial nuclearpowerplants actually cost 2 to 3 times more thanoriginal estimates indicated they would .37

If the capital cost of an OTEC plant reachesor exceeds the high end of the estimates,$3,700/kW, construction is less likely to start.

3SL. C. ~rimb)e, et al., Ocean Thermal h~rgy ConZ’er-sion (O TEC) Power Plant Technical and EconomicFeasibility.

3 6 1 ~ v i n C . B u p p , Th e C o m m e r c i a l p r o s p e c t s f o r O T E C

Systems, March 1977.371rvin C. Bupp, et al., “The Economics of Nuclear

Power, ” Technology Review 77 (February 1975).


Cost per Kilowatt Hour of Energy Produced:The busbar cost38 of producing electricity byOTEC or any other method is dependent upon acollection of variables. First, the amount oftemperature difference has a direct bearing onthe net power output of an OT’EC plant and thecost of each unit of energy. For example, con-sider a 100 MW OTEC plant designed for a 400F temperature difference, with capital costs of$2,000/kW. If that temperature differencedecreases, the plant output would decrease andthe cost per unit of output would increase asshown in table 4.

Table 4.—Plant Output and Cost per Unitas a Function of Temperature Difference

Temperature Plant $/kW per unitdifference (“F) output (MW) of output

40 .., . . . . . . . . . . . . 100 2,00030 . . . . . . . . . . . . . . . 56 3,50020 . . . . . . . . . . . . . . . 25 8,00010 . . . . . . . . . . . . . . . 6 32,000

Source: Office of Technology Assessment.

36The busbar is an assembly of conductors for collectingelectric currents and distributing them to outgoing feeders.Thus, the busbar cost is the cost of electricity beforedistribution to consumers.

Page 29: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

26 ● ocean Thermal Energy conversion

Table 5.—Busbar Cost of Electricity

Busbar cost of electricity = (FCR) C/kw x 1,000 + (CF) + (COM)in mills per kilowatt hour (FA) T

Busbar cost—cost in mills/kWh at the point of production with no transmission charges (one mill =one/tenth of one cent)

FCFt-fixed charged rate: a percentage figure representing estimates about the long-term costs ofdebt and equity capital. During the 1960’s FCRS of 8 to 10 percent were standard for theAmerican utility industry. During the 1970’s, 16 and 17 percent FCRS have been common.

C/kVV-capital investment in dollars per kilowatt as discussed previously in this chapter.

1000-a conversion figure used to convert dollars to mills.

FA—capacity factor: the ratio of the kilowatt hours actually produced during a given period to thetotal which a plant operated at constant full power could theoretically produce during the sameperiod.

T—total hours in a year: 8,760.

CF—cost of fuel in mills per kilowatt hour: seawater is the equivalent of fuel for OTEC and there isno charge.

COM#-cost of operation and maintenance in mills per kilowatt hour: 4 mills/kWh is an estimate usedby proponents of OTEC.

Other variables also affect the per kW cost ofelectricity produced. The major ones include thecapital cost of the plant, the plant capacity fac-tor, the fixed annual charge rate, cost of fuel,and the cost of operation and maintenance.

These costs cannot yet be predicted accurate-ly. If only favorable assumptions are used, thecost of electricity can be made to appear verycompetitive. If less optimistic assumptions are

used for one or more variables, the cost of elec-tricity rises rapidly. The equation in table 5 de-monstrates how the cost changes with thesevariables.

Some of unknowns in this formula are thefixed charge rate, the plant capacity factor, andthe capital investment in construction of theOTEC plant. Table 6 varies these three numbersto show how their uncertainty makes a firm

Table 6.—Effect of Some Variables on Cost of Busbar OTEC Electricity*

cost ofCost of operation and

Fixed Capital Total fuel in maintenance Busbarcharge investment/ Conversion Capacity hours in mills/kWh in mills/kWh cost in

rate (FCR) kW(C/kW) figure factor (FA) a year(T) (CF) (COM)** mills/kWh

16%. . . . . . . . $600 1,000 95% 8,760 0 4 1616°/0. . . . . . . . $1,200 1,000 60% 8,760 0 4 41

16%. . . . . . . . $2,400 1,000 600/0 8,760 0 4 771670. . . . . . . . $4,000 1,000 800/0 8,760 0 4 952070 . . . . . . . . $4,000 1,000 800/0 8,760 0 4 11816%. . . . . . . . $4,000 1,000 600/0 8,760 0 4 126

(FCR) C/kW x 1,000 + (CF) + (COM) = Busbar cost


● No transmission and distribution costs are included in busbar figures.● ● Operating and maintenance costs are less predictable than initial investment. They are influenced by the

design of capital equipment and are resolved further in the future.

Source: Office of Technology Assessment.

Page 30: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

estimate of the final busbar cost of electricityimpossible. The first line uses numbers based ona study which produced the lowest of the capitalcost/kW estimates shown earlier. Other linessimply use a range of plausible numbers.

Although changes in the variables are ratherarbitrarily selected for purposes of this illustra-tion, they do reflect possible values for fixedcharge rates, capital investment, and OTECplant capacity, and they demonstrate how esti-mates of busbar cost of OTEC electricity can in-crease by more than 100 mills /kWh.

It is almost as difficult to determine the futurecost of power generated by any conventionalplant because many unforeseen factors, includ-ing political decisions, will determine the con-struction, fuel, and equipment cost of thefuture.

Figure 1 displays how increases in the in-stalled costs and fuel costs will affect the cost ofelectricity from conventional powerplants. Forexample, a coal-fired powerplant which cost$400/kW to build and has fuel costs of $20/toncould produce busbar electricity at about 18mills/kWh. If the plant cost $1,00()/kW to buildand coal was $60/ton, it would produce busbarelectricity at 50 mills /kWh. 39

Since there are as yet unpredictable costswhich coal plants will incur to meet air qualityregulations, nuclear plants will incur to disposeof radioactive wastes, and so on, it is again dif-ficult to predict future costs. However, projec-tions for conventional powerplants do reflectsome years of experience while OTEC projec-tions are strictly rough guesses.

Based on the history of cost escalations forcoal and nuclear powerplants and on discus-sions with personnel who have studied theOTEC concept, figure 2 pictures the differencein the range ofof electricityfigures shouldvery generalranges.

So far, this

uncertainty about the busbar costgenerated in the future. Thesebe read with caution, as they areand demonstrate only possible

wide range of uncertainty abouttechnical problems and about the cost of elec-tricity from OTEC plants has been a major fac-

“Federal Power Commission, Bureau of Pozoer, AnnualSummary of Cost and Quality of Electric Utility PlantFuels, 1976, (Washington, D. C.: Federal Power Commis-sion, May 1977).

Ch, II Technical and Economic Status 27

tor in discouraging utility company decision-makers from considering OTEC plants for partof their future generating capacity .40

Other Factors: In addition to capital cost andcost per kWh, there are other factors whichutilities take into consideration before a decisionis made to invest in a particular source of energyor type of facility which would supply electric-ity to the grid. In order to determine whetherpublic utilities could be expected to provide amajor market for electricity generated by OTECif economics were favorable in the future, OTAhas studied the planning process used by utilitiesand the variables which are analyzed before adecision is made to invest in a particular sourceof energy or type of facility. Some other majorvariables considered by the utilities include: 4


long-term availability of fuel,environmental assessment,reserve and reliability of generating capac-ity,construction and licensing time,site costs, “transmission cost estimates, andcandidate site selection.

All the variables are not of equal importancein the planning process; however several signifi-cant ones show potentially unfavorable aspectsof OTEC. Those are: 1) probable lengthy con-struction and licensing time, based on the dif-ficulty of constructing complex systems in theoceans; 2) high transmission costs, based on ex-pense of undersea cables and distance fromshores; and 3) the limited availability of sitesnear the United States.

Other factors, which show favorable aspectsof OTEC, are the possibility that it offers 1)long-term reliability of fuel; 2) low-acquisitioncosts for offshore sites; and 3) minimal en-vironmental impacts.

However, most public utilities are very con-servative when planning new facilities and haveindicated to OTA 42 that they consider onl y

PhO~e conversation between OTA and six coastal area

utilities, Feb. 7, 1978.4 I B J Washom and J, M. Niles, ]~zcenfzues for the c o m -. .

mercialization of Ocean Thermal Energy Con~~ersionTec/lno/ogy (OTEC), (Los Angeles, Calif.: University ofSouthern California, January 1977), p. 8.

‘zOffice of Technology Assessment staff meeting, Dec.28, 1976, Washington, D.C.

Page 31: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

..—— —

Ocean Thermal Energy Conversion

Figure 1Potential Marginal Costs of

Baseload Electricity in the Year 2000for Coal or Oil-Fired Powerplants

Annual Escalation in Installed Cost (above inflation)

0% 1% 2% 3% 4 % 5% 6 %

II II l l I I I Io 500 1,000 1,500 2,000 2,500

Installed cost in 1976 $/kW

Assumptions:—75-percent capacity factor — 1976 installed cost $500/kW—35-percent efficiency in generation and transmission–Transmission and distribution cost $300 to $400/kW—Operating costs (exclusive of fuel) = $0.01/kW—Fixed charge rate = 0.15

Source: Office of Technology Assessment





4 0





Page 32: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy







%— 60






Ch. II Technical and Economic Status • 29

Figure 2Possible Range of Uncertainty in Future Cost of Busbar Electricity

Based on someindustry experience


● ● ● ● c



-— —— Optimistic

. . . ● . . . PessimisticSource: Office of Technology Assessment.


technology which is successfully demonstratedand commercially available when they begin theplanning process. The long leadtime required tobuild and license most facilities requires that thedecision to add new capacity generally be madeabout 10 years in advance of need for the elec-tricity. Therefore, the lack of demonstratedOTEC technology, the lack of dependable esti-mates for the variables which will be analyzed,and the uncertainties of operating a floatingplant in a hostile marine environment ensurethat OTEC plants will not be incorporated for

Based on no industryexperience




— -- — Optimistic

● s.. ● . . Pessimistic

commercial use by electric utilities for manyyears to come.

Power for Production of Ammonia

The production of anhydrous ammonia (NH,)has been proposed as an attractive way to useOTEC. Ammonia is used in the manufacture ofmany chemicals, with about three-fourths of theU.S. production of ammonia being used tomake fertilizers for agriculture.

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30 . ocean Thermal Energy Conversion

.---_____ l_.____n

Ammonia is a com-pound of hydrogen andnitrogen, and presentlylarge amounts of naturalgas are used as feedstockin the production of thehydrogen. Approximate-ly 40,000 cubic feet ofnatural gas is needed toproduce 1 ton of ammo-nia. The ammonia indus-try used approximately 4percent of thenatural gasconsumed in the UnitedStates in 1976.43 T h a tfigure is expected to risetomore than 5 percent ofthe natural gas consump-tion by 1980 and to morethan 11 percent by1990.44

A P L s C o n c e p t O T C A

If hydrogen could be produced atan OTECplant by electrolysis of seawater, the natural gasnow used as a feedstock could be eliminated.The hydrogen produced aboard an OTEC andnitrogen from the air could be fed to a ship-board commercial synthesizer, and the resultingammonia could be transferred to shuttle carriersfor delivery to consumers.

It is the savings in natural gas which makesthe OTEC/ammonia concept attractive. Thevariables which influence private industry deci-sions about ammonia production are:

expected supply and demand alternatives to existing processes and/or

OTEC, and● economic competitiveness of OTEC.

Expected Supply and Demand: World de-mand for ammonia is expected to grow duringthe next 15 to 20 years at an average annual rateof about 3 to 5 percent. Domestic demand is ex-

43 B. J. Washom and J. M. Niles, lrzcentiues for the c o m -

mercialization of Ocean Thermal Energy ConversionTechnology (O TEC), P.8.

AA]rvin ~. Bu p p, The Commercial Prospects for OTEC

Systems, p.8.

pected to grow at a slightly higher rate of 5 to 6percent .45

Demand for nitrogenous fertilizer, the largestsingle user of ammonia, is also expected togrow. The U.S. Fertilizer Institute projects an-nual growth of about 5 percent in demandthrough at least the 1980’s.46 World demand isexpected to grow at about 6.5 percent per yeardue to the increasing use of fertilizers in theLesser Developed Countries.47 Demand in theLesser Developed Countries, which accountedfor 19 percent of the world’s nitrogenous fer-tilizer use in 1975/76, is expected to increase by89 percent between 1975/76 and 1981/82. 4a

These countries will then account for nearly aquarter of the world’s use of nitrogenous fer-tilizers.

It is clear, then, that fertilizer demand in theLesser Developed Countries is of interest to am-monia producers, The demand is also partic-ularly meaningful for OTEC/ammonia plantssince many of the Lesser Developed Countrieshave easy access to areas of the oceans wherethere is a significant thermal resource whichcould be used in producing power by OTEC.However, the United Nations Food and Agricul-ture Organization projects that by 1982 theLesser Developed Countries will have increasedtheir ammonia production capacity by 151 per-cent, giving them control over 20 percent of theworld’s nitrogenous fertilizer production49 andexerting downward pressure on world prices.

In the United States, the domestic ammoniaproduction capacity is expected to increaseabout 15 percent by 1980 as plants currentlyunder construction come on stream. Althoughthe United States has been a net importer of am-monia since 1973, during the 1980’s and 1990’sdomestic production capacity is expected tokeep pace with consumption needs .’”

Meanwhile, world production capacity willalso continue to grow. The World Bank is

451bid.AbEdwin Wheeler, president of Fertilizer Institute, speech

at the Institute’s fall 1977 conference, New Orleans, La.“U.S. Department of Agriculture, Economic Research

Service, 1978 Fertilizer Situation, (Washington, D. C.: U.S.Department of Agriculture, December 1977) p. 19.


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Ch, 11 Technical and Economic Status . 31

presently financing a number of ammonia pro-duction projects. The Soviet Union and Chinaare expanding their ammonia production capac-ity, Saudi Arabia, Iran, and Kuwait are con-structing large facilities to produce ammoniaand petro-chemicals from natural gas which isnow being flared .5* It is clear that by the mid-1980’s, the Middle East may be a major sourceof inexpensive ammonia supplies. In all, worldconsumption of ammonia is expected to increase47 percent by 1982, reaching 82 million metrictons .52 However, considering the current stateof the technology, it is unlikely that OTEC/-ammonia plants could be a part of that massivegrowth.

Alternatives to Exist ing Processes and/orOTEC Plants: As stated earlier in this report,natural gas is critical to the current methods ofproducing ammonia. A1though ammonia pro-ducers currently benefit from a high-priorityrating in the allocation of scarce natural gas,curtailments have occurred in the past and willundoubtedly occur in the future. However, theammonia plant expansions now underway ap-pear to indicate that the domestic industry isconfident that existing technology and knownnatural gas reserves will support ammonia pro-duction at least into the 1990’s. 53 I n d u s t r ysources say they feel there is not sufficient threatto traditional ammonia production to justifymajor capital investment in an unproven tech-nology, such as OTEC, for at least the next 15 to20 years .54

Therefore, for the near term at least, theprimary alternative to OTEC/ammonia plantsis the traditional production system.

In addition, industry-sponsored studies haveshown that coal and fuel oil can be used toreplace natural gas as both a fuel and afeedstock in existing or planned ammoniaplants.

About 60 percent of the natural gas used in atypical ammonia plant is for feedstock while the

511bid.521bid.“Irvin C. Bupp,

Systems, p.9.“Ibid., p, 10,

The Commercial Prospects for OTEC

remaining 40 percent is used as fuel .55 Conver-sion of the system to be fueled by oil rather thannatural gas is a straightforward, conmicaloperation which can be accomplished duringnormal maintenance downtime and does notsignificantly increase the cost of the ammoniabeyond that resulting from any change in fuelPrice. 56 It is, however, somewhat more difficultto convert to oil as a feedstock. Such a conver-sion at existing plants would take 2 to 3 years,including a 6-month to l-year downtime. As aresult, the cost of ammonia would go up at least25 percent for the more expensive oil feedstock.The cost of the downtime and the cost of con-verting equipment would raise the price of am-monia still more.57 Converting the system to usecoal as a feedstock would result in even higherprices.

For the near term, imported liquefied naturalgas and domestic synthetic gas are also cited aspossible alternative feedstocks.

From the perspective of the U.S. ammonia in-dustry, the most important fact about near-termammonia production is the certainty of growingcompetition from low-cost foreign products,

Among the most likely competitors are theMiddle East nations, particularly Kuwait andIran, which appear likely to put large supplies ofammonia on the market as a result of produc-tion using natural gas which is currently flared.Although transportation costs may preventMiddle East ammonia from making any majorimpact in the European and North Americanmarkets, the Middle East would have a cost ad-vantage in supplying Lesser Developed Coun-tries. In the domestic market, competition fromMiddle East ammonia could be countered withtariffs on imported products, however, it islikely that any effort to impose such chargeswould meet with strong opposition from agri-cultural users.

55 L . J. Buividas, J . A. Finneran, a n d 0. J. QUartUllj,“Alternate Ammonia Feedstocks, ” American Institute ofChemical Engineers, 78th National Meeting, Salt Lake Ci-ty, Utah, Aug. 19, 1974.

‘*’’Allied Solves a Burning Problem, New SystemVaporizes Oil, Permits It to be Burned in Furnaces Equip-ped with Gas Burners Systems Also Works in Gas Tur-bines, ” Chemical Week (June 8, 1977), p. 35.

“Private communication between OTA and J. A. Fin-neran, Pullman-Kellogg Co., July 1977.

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32 . ocean Thermal Energy Conversion

Economic Competitiveness of OTEC/Am-monia Plants: One key to the competitive suc-cess of OTEC will be the capital cost of a com-mercial OTEC plant. While the ammonia pro-duction component is expected to cost roughlythe same as a traditional onshore ammoniaplant, the OTEC generating component wouldbean expensive addition to the capital outlay.

Figure 3 indicates that a large fleet of OTEC/-ammonia plants would be necessary in order tocapture a significant portion of the world am-monia production capacity. This would meanan investment of billions of dollars in an un-proven technology which would have to com-pete with existing plants.

In addition, existing and planned traditionalammonia plants will not be fully amortized untilearly in the next century. From a business pointof view, this is a crucial consideration becauseunamortized capacity would not be shut downunless ammonia from an OTEC facility werecertain to be considerably cheaper than am-monia from existing plants. Such a guaranteedlow cost is extremely unlikely for any novel pro-

duction system, especially one with the tech-nical and operational uncertainties which areassociated with OTEC.

Fluctuations in world ammonia prices—caused at least in part by the price andavailability of natural gas and the price andavailability of foreign ammonia products—would also be a major factor in the ability ofOTEC/ammonia plants to compete in the worldmarket.

If an OTEC plant could be constructed for thelowest cost estimates discussed earlier, i.e.,$500/kW, 58 and if the price of ammonia were$180/ton, as suggested by the World Bank,59 thebefore tax return on equity for capital invest-ment of $367 million could be 16.5 percent.Such a return does compare favorably with in-dustry standards. But if the price of ammonia isreduced, the consequences for the return on

5 8W. H. Avery, et al. , Maritime and ConstructionAspects of Ocean Thermal Energy Conversion (OTEC)Plant Ships, pp. 5-25.

“Graham F. Donaldson,and Beyond, ” Development

“Fertilizer Issues in the 1970’sDigest XIIZ, (October 1975):5.

Figure 3Number of 1,650 Ton per Day OTEC/Ammonia Plants Necessary

To Capture Significant Portion of World Plant Capacity

Percent ofworldammoniaplantcapacity(1985)







10 20 30 40Number of OTEC/ammonia plant ships

Source: Extrapolated from estimates by the Fertilizer Institute.

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equity would be severe. For example, at$120/ton, the return on equity would be about 7percent.’” At the 1978 price of about $100/ton,the return on equity would be less than 3 per-cent. Consequently, ammonia production else-where in the world and the balance of supplyand demand would be critical to the competitivesuccess of OTEC even with the most favorableassumptions about construction, operatingcosts, and reliability. As noted earlier, reliableestimates of construction and operating costscannot yet be made, and there is no experienceon which to judge the operational reliability ofOTEC plants.

Due to the technical and economic uncertain-ties discussed in this chapter, it is unlikely thatOTEC production of ammonia would be aviable business in the next 10 to 20 years .However, fertilizer for food production maybecome a critical commodity in the next centurywhen fossil fuels become very scarce. Therefore,the possibility that OTEC could produce am-monia for fertilizer is one incentive for develop-ing and proving or disproving this technology.

Power for Production of Aluminum

OTEC plants have been proposed as thesource of power for the electricity-intensivealuminum production industry. The rationale isthat offshore OTEC plants could provide elec-trical power to onshore production plants inregions which have a large supply of the rawmaterial, bauxite, but lack the necessary accessto inexpensive power.

There appear to be several major factorswhich influence whether or not OTEC would beaccepted into the aluminum industry:

● the cost and reliability of the power supply,● the need for a constant, dependable supply

of raw materials, and● the supply/demand picture combined with

current low prices and rising costs in thealuminum industry.

‘“Byron J. Washom, “Economic Evaluation of ThreeCommercial Applications for Ocean Thermal Energy Con-version, ” unpublished.

Ch. 11 Technical and Economic Status ●




- - - - - - - - - I



I- - - - - - - - - - - - - - - - - - -

O N B o a r dOTEC

OTEC Aluminum

Cost and Reliability


ofPower: Aluminum pro-duction is a two-stageprocess: bauxite is re-fined into alumina; alu-mina is then reduced toaluminum. The aluminareduction stage is themost intensive user ofelectricity, consuming anaverage of 8 kWh of elec-tricity to produce apound of aluminum .61The estimated total costof producing a pound ofaluminum in 1976 w a s44.7 cents. 62 By compar-ison, the cost of the elec-tricity alone for pro-ducing a pound of alum-inum could range from12 cents to 96 cents ifOTEC costs from table 6

were considered. There are some efforts underway to reduce the kWh/lb ratio, 63 however, it isclear that the cost of electricity is a major factorin the profitability of aluminum production.Further increases in the cost of fuel used in othertypes of electric-generating facilities will reducethe cost differential; however—as discussed ear-lier—it is impossible to predict what the costs ofeither conventional or OTEC electricity will be.

Profitability could also hinge on reliableoperation of the OTEC plant. As discussed inthe section on technical problems, there is cur-rently no experience on which to base estimatesof the reliability of OTEC plants. However, ex-perience with large nuclear and coal-firedpowerplants has shown that these units operateat only 50 to 75 percent capacity. 64 Most costestimates for OTEC plants have been based onestimates of operation at 90 to 95 p e r c e n tcapacity, which, as mentioned earlier, is highly

“U.S. Depar tment o f Commerce , U.S. IndustrialOutlook, (Washington, D. C.: U.S. Department of Com-merce, 1976), p, 60.

6ZU. S. Department of the Interior, Bureau of Mines,Commodity Data Summaries, 1977, (Washington, D. C.:U.S. Department of the Interior, 1977), p. 5.

‘3U. S. Department of Commerce, U.S. IndustrialOudook, 1976, p. 60.

“I rv in C . Bupp, et al., “The Economics of NuclearPower. ”

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34 ● Ocean Thermal Energy Conversion

unlikely for a new technology operating in ahostile marine environment.

In addition, the industry will be skeptical ofsiting new aluminum plants where they dependsolely on OTEC as a power source. Traditional-ly, plants are located where they can be inter-connected to a major utility power grid and thushave alternate sources of power. A large-scaledemonstration of the dependability of OTECand a backup supply of power will probably benecessary before industry is seriously interested.

Supply of Raw Materials: The raw materialfor aluminum production is bauxite, one of themost common ores in the world. However, dif-ferences in grades and qualities of ores are suffi-cient to make supplies from some areas muchmore economical than others. The major pro-ducers of bauxite are Australia, Jamaica,Surinam, Guyana, Guinea, India, Indonesia,Dominican Republic, Malaysia, Haiti, Brazil,and Ghana. Three tons of bauxite are requiredto produce one ton of alumina, and this reduc-tion generally is accomplished near the source ofthe raw material. Alumina is then shipped toaluminum manufacturers. Fifty-seven percent ofthe alumina consumed in the United Statescomes from Australia. Presently, this amount ofalumina, at twice the weight of the finishedproduct, is shipped 11,000 miles to manufactur-ing sites near cheap hydroelectric power in theUnited States. It appears likely that the industrywould be interested in OTEC plants at thesource of the alumina only if the cost of pro-ducing OTEC electricity and shipping light-weight aluminum was less than shippingalumina to cheap power sites.

Supply/Demand, Cost, and Prices: U.S. de-mand for aluminum primary metal in 1975 wasapproximately 5.1 million tons. The aluminumindustry estimates growth at a rate of 8 percentper year during the next 10 years, reaching atotal demand of 11 million tons by 1985.65

Presently, there is no problem in meeting thedemand. Until at least 1974, there was an over-supply of aluminum due to the Government’sreduction of its strategic stockpile of aluminum,Through the early 1970’s, the stockpile providedabout 10 percent of the annual supply. As of

“U.S. Department of Commerce, U, S. IndustrialOutlook, p. 67.

1975, U.S. capacity was approximately 5million tons. World capacity was 14.5 milliontons .66

The oversupply and a general economic slow-down left many companies with idle plants ormarginal operations as late as 1976, leadinganalysts to predict only nominal growth incapacity in the foreseeable future.

In addition to the problems caused by over-supply, the aluminum industry has faced risingproduction costs brought on by increased costof raw materials, electricity, transportation,and labor. As a result, the nominal purchaseprice of a pound of aluminum ingot has risenfrom 39 cents in 1974 to 48 cents in 1976.’7

As a result of these uncertain costs in anOTEC/aluminum system and the ability of sup-ply to meet demand, at least in the near term,OTEC is unlikely to be an attractive source ofpower for the aluminum industry.

Summary of Economic Considerations

The economics of OTEC depend primarily onthe capital cost of constructing OTEC plantsand the cost per kilowatt hour of the energy pro-duced.

Because no OTEC system is yet fully de-signed, quantitatively precise knowledge aboutthese costs is impossible and there are largeuncertainties about lifetime reliability and theinterruptions in production which result shouldan OTEC plant fail.

The basic product of most current OTEC con-cepts is power—power for use in the U.S. elec-tric grid or for use in the production of otherproducts. The busbar cost of producing elec-tricity is dependent upon a collection of varia-bles, including the thermal resource available,capital cost of the plant, plant capacity factor,fixed annual charge rate, cost of fuel, and thecost of operation and maintenance. Reliableestimates for these variables cannot yet bemade. Therefore, it is impossible to predict thebusbar cost of electricity from OTEC. Unknown

“U.S. Department of the Interior, Bureau of Mines,Mineral Facts and Problems, (Washington, D. C.: U.S.Department of the Interior, Dec. 9, 1975).

“U.S. Department of the Interior, Bureau of Mines,Commodity Data Summaries, 1977, p. 5.

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Ch. 11 Technical and Economic Status •35

electrical transmission costs add another ele-ment of uncertainty.

These still unknown costs will determinewhether or not OTEC is useful in the future pro-duction of other products.

For ammonia, for example, the most promis-ing market areas are located near the most pro-mising OTEC sites; however, these areas are theLesser Developed Countries which will requirevery low-cost products. In addition, already ex-isting producers are expanding their ammoniafacilities to meet present and future demandswith existing processes and there are potentiallylow-cost alternatives to OTEC/ammonia, espe-cially ammonia made from flare gas in the Mid-dle East nations. For aluminum, world produc-tion capacity is currently greater than consump-tion of the product and little expansion is

predicted in the foreseeable future. However, intheory, the use of OTEC could allow aluminumplants to be located in coastal areas nearerdependable sources of raw materials. In thatcase, the price and dependability of electricityfrom OTEC would be crucial factors.

At this time, there is no economically com-petitive product among those which have beenproposed in connection with OTEC. These eco-nomic considerations are based on short-termprojections of supply and demand for somespecific commodities compared with the uncer-tainties associated with present OTEC technol-ogy. In the long term, however, alternativeenergy supply options could become much morecritical to the United States and to the world,and the value of developing OTEC technology,if successful, cannot be measured by simpleeconomic projections.

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Status ofGovernmentFunding

Page 40: Renewable Ocean Energy Sources: Part I‘Ocean Thermal Energy

Status ofGovernmentFunding

History of Government Funding

The National Science Foundation (NSF)began funding OTEC research in 1972 when itsResearch Applied to National Needs programfunded $85,000 worth of OTEC systems studies

and workshops. In 1975, the Energy Researchand Development Administration (ERDA)became the lead agency in OTEC research withan initial budget of about $3 million for a vari-ety of tasks on energy utilization, environmen-tal impacts, heat exchangers, and biofoulingand corrosion. By 1977, total funding had risento $14.5 million in ERDA.1 OTEC funding for1972 through 1977 is detailed in table 7.

Concept designs have been developed byLockheed Missiles and Space Company, TRWSystems Inc., and Johns Hopkins University Ap-plied Physics Laboratory.

Government agencies other than NSF andERDA have also made modest expenditures forresearching OTEC concepts, including the Mari-

1Energy Research and Development Administration,Ocean Thermal Energy Conversion (OTEC) ProgramsSummary, October 1976, and phone conversation withstaff member of ERDA, Washington, D. C., Jan. 23, 1978.

Table 7.—OTEC Funding for Fiscal Years 1972-77(Budgetary Obligations in Thousands of Dollars: ERDA and NSF combined)

Fiscal yearProgram activity 1972 1973 1974 1975 1976* 1977

Program support. . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . ., . . . . . . . 111Definition and systems planning

—Systems studies andworkshops. . . . . . . . . . . . . . . 85 230 530 786

—Test program requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .—Mission analysis. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . .—Energy utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360—Marine environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .—Environment impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 : :—Thermal resource assess-

ment and siting studies . . . . . . . . . . . . . . . . . . . . . . 50 172 . .—Legal and institutional

studies. . . . . . . . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . . . . . . . . 61Engineering development

—Heat exchangers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




. . . . . .




1,440. . . . . . . . .

328. . . . . . . . .




1,721—Electric cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Advanced research andtechnology

—Heat exchangers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 435 1,669 2,834—Exploratory power cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 . . . . . . . . . 118—Submarine electrical cables . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 . . . . . . . . . . . . . . . . . .—Biofouling and corrosion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 1,303 2,702—Ocean engineering. ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505 497 25

Engineering test and evaluation . . . . . . . . . . ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,498TOTALS . . . . . . . . . . . . . . . 85 230 730 2,955 8,585* 13,500

● Includes funding for Transition Period (July 1, 1976 to Sept. 30, 1976).

Source: Department of Energy.


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0—.. .

4 0 ●

t i m e

Ocean Thermal Energy Conversion

Administration and the Office of Sea Grant(both agencies of the Department of Com-rierce); the Federal Energy Administration; andthe Department of the Navy.

In fiscal year 1978, $36 million is budgeted forOTEC research by the Department of Energy(DOE). The program includes study of biofoul-ing and corrosion rates and cleaning methods,design and testing of heat exchangers, design ofcold water pipe and mooring systems, evalua-tion of platform shapes, and planning for a pilotplant. z The 1978 OTEC program schedule (fig-ure 4) sets a target of 1982 for having a 5 MWOTEC plant at sea for tests.

ERDA’s choice as the primary OTEC missionhad been to develop electrical power generationfor transmission to the United States or a U.S.territory by underwater cable from an offshoreOTEC plant.3 With the 1978 funding, however,DOE was ordered by Congress to also pursuedevelopment of an OTEC plant ship to manu-facture a product such as ammonia, but otherpossible applications of OTEC, such asdesalination, air-conditioning, and cooling ofconventional or nuclear powerplants, are re-ceiving little, if any, attention at DOE. In addi-tion, current research is geared toward large-scale OTEC plants, and there is apparently littleeffort to determine if OTEC plants in the 1 to 5MW size might have more commercial valuethan larger plants.

Effect of Government Funding onStatus of OTEC

None of the research to date has concludedthat an OTEC plant cannot be made to operate.However, the technology for the plants has notyet been proven and many of the componentswhich will be required are considerably largerthan similar equipment now in use or otherwisepose difficult design, construction, or develop-ment problems.

No OTEC plant has been completely designedand there are critical technical problems. Until

‘Meeting with ERDA staff, Washington, D. C., Sept. 28,1977.

3Letter to W. H. Avery from H. R. Blieden, ERDA,Washington, D. C., Nov. 17, 1976.

these problems are resolved, it is premature tothink firm estimates can be made about the costof OT’EC power or the potential uses of OTECplants.

Conclusions about the technical and eco-nomic success or failure and the environmentalimpact of OTEC plants should be based on con-sideration of specific OTEC devices at specificsites, manufacturing and marketing specificproducts, and transporting raw materials intothe device and products out to the users. OTEChas not yet been developed to the level wheresuch an assessment is meaningful,

In the past, many claims for OTEC’S valuehave been too optimistic for the state of OTECdevelopment. Such claims have assumed quickand economic solutions to all the many tech-nical problems which exist. They have assumedmarket conditions which make OTEC financial-ly attractive. Thus, it is not difficult to deflatethe claims simply by making less optimisticassumptions about the timing and cost of solu-tions to technical problems or by using less op-timistic assumptions to assess the market situa-tion in which OTEC will compete. In addition,private investors and industry are currently un-willing to risk their capital on building OTECplants, and such reluctance on the part of in-dustries which stand to benefit from OTEC is anargument against over-enthusiastic claims.

It is possible that with sufficient time, money,and effort OTEC could be in the national in-terest. However, as with many new technologieswhich offer hope of contributing to the solutionof some pressing national problem, the neededtime, money, and effort will have to be suppliedby the U.S. Government until private industryis convinced OTEC is an economically attrac-tive venture,

It is still too early to estimate when—or evenif —OTEC will achieve that level of develop-ment. It is impossible to reliably estimate thetotal amount of time and money the FederalGovernment could expect to invest in the long-term development, testing, and commercializa-tion of OTEC. The answers to several unsolved,critical technical problems discussed in thisreport are necessary before such estimates canbe made.

It is also impossible with existing information

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Ch. 111 Status of Government Funding “ 41

Figure 4OTEC Program Schedule

1977 1978 1979





IEEE1981 I 1982

1 1 2 1 3 1 4




I v 3 I F A B h i C A T I O N —








# ’G N _ FABRiCATE i ! I jv

I y






Programmatic review PlatformsHeat exchangers —OTEC-I (early ocean test platform)— Bench scale tests –OTEC-5 (pilot plant)— Biofouling and corrosion Power cable—Power modules-1 1 MWe Demonstrate ion

5 MWe Open cycle—Power modules- IMMWE —Subsystems tests

5 MWe— Early 1 MWe test article

Source: Department of Energy.

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. Ocean Thermal Energy Conversion

to determine the future value or potential ofOTEC in comparison with other energy technol-ogies, such as fusion, the breeder reactor, solardirect heating and cooling, photovoltaics, wind-mills, tidal power, and others. The best way tojudge the desirability of OTEC development isrelative to alternative uses of the requiredtechnical, financial, and administrativeresources.

In 1977, ERDA projected that, within itsresearch budget for solar electric energy proj-ects, it would allocate about 20 percent of thefunding to OTEC through 1986 .4 That projec-tion would make OTEC second only to solarthermal in the amount of research money spent.However, the high funding does not reflect apriority or choice of OTEC as the most promis-ing solar electric technology so much as itreflects the fact that OTEC requires massivepieces of equipment which must be operated andmaintained in the marine environment.

The present results of Government-fundedresearch suggest that the investment in OTEC isneither clearly foolish nor clearly desirable.They show only that it is unreasonable to expectthat OTEC offers a significant source of newand economical energy before the 21st century.

However, in a future when energy becomesincreasingly scarce and expensive, an OTECwhich successfully feeds electricity into a grid orprovides energy for the production of somecommodity could be an important componentof the mix of energy alternatives. The exactposition of OTEC in the energy supply mix thenwill depend on the development status, cost,and availability of other alternatives.

However, even if it were safe to assume thatOTEC would never compete as a commercialventure it should not be discarded strictly onthat basis. There are numerous examples of in-dustries which are supported by the FederalGovernment because they have been judged tobe in the national interest. In addition, some ofthe equipment which is being developed forOTEC may be usable by the existing power in-dustry for energy conversion and thermal pollu-tion control purposes.

4Michae1 Mulcahy, “Ocean Thermal Energy Conversionis One of ERDA’s Exciting New Programs, ” SeaTechnology 18, (August 1977).

Future Funding Possibilities

Considering energy requirements over a longperiod of time, such as 50 to 100 years, it is evi-dent that some source of renewable energy mustbe developed. However, it is too early in thedevelopment of OTEC technology to say re-liably if OTEC can make a significant contribu-tion to the energy production capability of thiscountry or other countries and if it can do so ata price which is acceptable, with or withoutGovernment subsidies. For ‘that reason, there isno obvious amount of money which should beallocated to OTEC research in the future.

Instead, there are three approaches to fundingwhich Congress may wish to consider before ap-propriating new money for OTEC research:

a “no funding” approach which implies apullback of Government involvement, withfunding, probably through NSF, of lessthan a few million dollars a year relegatedto basic research and special applications ofOTEC principles;

an “R & D funding” approach which pro-vides funding, in the tens of millions ofdollars annually, sufficient to methodicallysolve all technical problems, prove thefeasibility of the concept, and investigatesites, uses of the energy, and impacts;

a “system development funding” approachwhich would increase funding rapidly tohundreds of millions of dollars a year withthe expressed goal of building an OTECwhich would produce a product as soon aspossible.

Ideally, funding decisions should be made inthe context of an evaluation of the total DOEbudget for research on future alternative energysources. The evaluation should consider foreach alternative energy system such factors as:

the chances that technical problems can besolved;

the probability that the system will gener-ate net energy;

the importance of the uses which can bemade of the energy;

the cost of developing a working system;

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Ch. III Status of Government Funding ● 43

● the cost of the energy which will be gener-ated; and

● the time required to develop a workingsystem.

No such comparison of alternative energyconcepts has been made. Supporters and op-ponents address each energy concept separately,not relative to each other. Perhaps it is too earlyin the investigation of most of these alternativesto make meaningful comparisons. However, itis unlikely the Nation can afford system devel-opment funding on all the many alternativeswhich are now being considered. Eventuallyhard choices will have to be made to determinewhich alternatives deserve priority funding.

No Funding: If the Congress believes that it isunlikely the technical problems will be solved,that OTEC systems probably will not generatenet energy, that the time and cost of solving theproblems are excessive, or that OTEC systemswill not be competitive, then it may wish to stopprogram funding for OTEC. If this happens, it isunlikely that OTEC research would stop entire-ly. Small exploratory projects would probablycontinue with funding from NSF or privatesources. However, it is doubtful that muchfinancial commitment to research would bemade by industry if the Government withdrewits support.

A decision to stop program funding forOTEC would mean the elimination of the ex-isting team of OTEC program managers, con-sultants, and contractors at DOE. It wouldresult in phasing out most current design,testing, and equipment development projects,and additional information about OTEC wouldbe acquired more slowly and principallythrough industry-sponsored work.

R & D Funding: Since there is currently noevidence that the technical problems relating toOTEC cannot be solved given time and funds, itappears that continued research could lead todevelopment of a workable system. However, itis not known how much money or time wouldbe required to solve the problems. If Congresswishes to attack these problems, funding ap-propriated at a fairly level amount for the next 5to 10 years could produce an OTEC program inwhich solutions to major impeding technicalproblems are a primary goal and future plans

are tied very closely to the outcome of keyresearch tasks.

The philosophy of R & D funding would be tosupport research and test projects with a goal ofdeveloping a feasible system and providing sub-stantial proof of feasibility by working proto-type subsystems, engineering designs, and reas-onable cost estimates for construction andoperation. This approach would not produceworking, large-scale machinery in the nearfuture, but would enable program managers tomake more informed decisions on the size, loca-tion, materials, construction techniques, anduses of OTEC plants.

Level R & D funding for the OTEC programwould probably result in continuation of manyof the present OTEC research projects. It would,however, delay schedules proposed by somewho envision large-scale use of OTEC for gen-erating electricity or power for manufacturingother products in this century. This approach tofunding would keep OTEC as a future energyoption and would continue to generate neededinformation about OTEC at a reasonable costuntil choices could be made among the manyalternative energy technologies in the Federalresearch program. It would also result in theestablishment of a stable management organiza-tion within the Federal Government for initiat-ing projects and evaluating results, and a long-range research capability would be built.

The DOE program for OTEC is currentlygeared to R & D funding. With this philosophy,requests for rapidly increasing funds are inap-propriate until the technology has been proven.

With R & D funding, more specific 5- to 15-year research goals could be set to help clarifyprogram objectives and Congress could estab-lish a procedure for making funding decisionsabout OTEC on a more informed basis in thefuture.

More specific research goals could take manyforms. Some combination of theoretical anal-yses, laboratory tests, field surveys and pilotprojects would probably be necessary. Thefollowing are some examples which have beensuggested as short-term goals that could be in-tegrated into an ongoing research program:

c development of scale models of low-

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44 ● ocean Thermal Energy Conversion

temperature difference machinery whichcould be tested at nuclear powerplant out-fall sites.

● development of small-scale shore-basedOTEC systems for testing at a suitableisland site;

● development of a small floating pilot plantwhich could be tested at a site where verylarge temperature differences are availablerelatively near the surface; and

s development of a small pilot plant for com-parative testing of open and closed cyclesystems.

System Development Funding: The cost ofproposed OTEC technology is so high that theonly way to develop a working prototype plantas soon as possible—that is, to have a large-scale plant at sea producing a product within 10to 20 years—is to commit large amounts offunds which escalate to hundreds of millions ofdollars within a few years.

This is a high-risk approach to funding, notonly because it would require billions of dollars,but also because it would probably force apremature choice among several concepts andpossible products in order to concentrate ondevelopment of one specific system. Although itwould include enough testing to gain insights onreliability, cost, maintainability, and onlinetime, this approach could result in skippinglong-term testing and environmental studieswhich would not fit into an accelerated sched-ule. But it could produce the most rapid demon-stration of the one system selected for develop-ment. It could also require such a commitmentof funds that money would not be allocated toresearch on other alternative energy sources.

If an OTEC plant were developed quickly, it

is possible there would be a significant, thoughnot necessarily large or economically com-petitive, impact on the Nation’s energy produc-tion capability sometime well into the 21st cen-tury.

Summary of Government Funding

Since 1972, Government funding for OTECresearch has grown from $85,000 a year to thepresent budget of $35 million for the fiscal 1978program in DOE.

To date, no large amount of private moneyhas been invested in OTEC research anddevelopment, and it is likely that Governmentfunding will be the major support for any fur-ther work in the foreseeable future.

It is too early in the development of O T E Ctechnology to say definitely that OTEC can orcannot make a significant contribution to theenergy production capability of this country.For that reason, there is no obvious amount ofmoney which should be appropriated for furtherresearch.

In the long term, decisions about funding areideally made in the context of an evaluation ofthe total DOE budget for research on futurealternative energy sources. In the absence ofsuch a comparison of alternative energy con-cepts, a “no funding” approach could be used toeliminate the OTEC program and reduce futureefforts to basic research and investigation ofspecial applications; an “R & D funding” ap-proach could be used to keep OTEC as a futureenergy option while generating solutions to im-portant technical problems at a reasonable cost;or a “system development funding” approachcould be used to attempt to develop a large-scaleworking prototype of one specific OTEC systemas soon as possible.

, ,