Happy New Year!

We are writing to update you on progress made in 2019 to commercialize marine energy technologies, the next generation of renewable power. On a personal note, 2020 marks a milestone here at SMI related to our support for the marine energy industry.  This will be the fifteenth anniversary since we successfully lobbied to make “ocean energy” officially recognized by the U.S. Federal Government as a renewable power resource.  It has also been fifteen years since I co-founded the Ocean Renewable Energy Coalition (OREC) with Sean O’Neill and Carolyn Elefant.  OREC merged with the National Hydropower Association (NHA) five years ago and became the Marine Energy Council (MEC).

From early successes to significant challenges, including broken moorings, failed gearboxes, leaking hydraulics, and even boat collisions, it’s been fun (and slightly agonizing) to watch this sector develop since I joined SMI in 2003. Now, with robust marine energy systems being deployed, some of which have produced multiple gigawatt (GW) hours of electricity – I can say it has truly been a privilege to support the growth of a new clean energy industry.

Thirteen years ago, we lobbied Congress to create a new water power program at the U.S. Department of Energy (DOE) with a start-up budget in Fiscal Year (FY) 2008 of only $10 million to support R&D for both marine energy and conventional hydropower. While the U.S. still lags behind Europe and other international collaborators in overall financial support for marine energy technology development, funding has now reached $148 million in FY 2020. We are catching up to the rest of the world and creating new research and testing support mechanisms through our excellent university-based marine energy centers, National Laboratories, the DOE Water Power Technologies Office (WPTO) and the U.S. Navy.

Much work remains to be done before we achieve our goal of a thriving marine energy industry producing cost effective, utility scale power. However, I’m confident that with your support and creative ideas, we can see thousands of megawatts deployed over the next fifteen years.
Finally, we would like to note a few folks who have had a lasting impact on the marine energy industry. One day these individuals may be in the founding class of the future Marine Energy Hall of Fame! First, we reported on Linda Church Ciocci’s retirement from NHA in 2019 and thank her once again for her years of service to the water power industry. We also thank industry pioneer and co-founder of ORPC, Chris Sauer, for his contributions to elevating marine energy as a competitive renewable resource. We also appreciate the outstanding work of Alexandra DeVisser, the Navy’s lead program manager for the Hawaii Wave Energy Test Site (WETS) at the Kaneohe Bay Marine Corps Base. We are grateful for her tireless efforts to develop WETS into a world-class testing facility. Chris and Alexandra are retiring soon and we wish them all the best in their future endeavors.

Also, special thanks to my colleague Paul Gay who leads our water power lobbying efforts and ensures that we have the best strategies for engaging our government leaders.

Below are key highlights since our 2019 mid-year newsletter and September update. Additional details on these items and other news can be found on the following pages. Thank you for your interest and support of the marine energy industry. All the best for a successful and prosperous 2020.

Damian Kunko

Marine Energy Opportunity

We strongly believe that marine energy represents the next generation of renewable power technologies. Marine energy has tremendous potential to produce significant amounts of clean, renewable electricity while creating high-value employment opportunities. In addition, marine energy is reliable, predictable and environmentally friendly. The resource is close to population centers and can provide power to many different maritime markets. In addition, the excellent team at the DOE WPTO has positioned the U.S. as a global leader in efforts to utilize marine energy technologies to power emerging Blue Economy opportunities. Finally, marine energy can also help to revitalize our nation’s ports and shipyards as devices can be built and maintained near generation sites.

We continue to be encouraged by the European Commission report on wave and tidal energy which has forecast global installed capacity to hit up to 3.9 GW by 2030 based on current levels of political support. Ocean Energy Europe predicts that by 2050, 100 GW of marine energy can be installed in Europe which would meet ten percent of European electricity demand. The International Energy Agency Ocean Energy Systems 2050 Vision predicts 300 GW of global marine energy installed capacity, with $35 billion in investment and 680,000 direct jobs. Our goal is to see a significant portion of these benefits accrue to the United States along with our friends and allies.

Recent news on marine energy projects from around the world can be found at RENews – Wave and Tidal or the IEA-Ocean Energy Systems Country Reports. You can also find updates on the PNNL Tethys or the DOE Water Power News sites.

Recent News

For FY 2020, Congress approved a record amount of funding ($148M) for the DOE WPTO. This is an increase of $103 million above President Trump’s budget request and thirty percent more than the FY 2019 budget. $109 million is earmarked specifically for marine energy activities. Congress also approved an $11.5 million increase above the budget request for the Navy Energy Program to support marine energy development and testing activities.

–Ocean Energy USA has completed construction of its wave energy device at the Vigor shipyard in Portland, Oregon. It was towed to Hawaii and had a ribbon cutting ceremony prior to its eventual deployment at the Navy’s Wave Energy Test Site.
–Orbital Marine Power initiated construction of its first commercial 02 tidal turbine device, capable of generating 2 MW (enough to power 1,700 homes).
-Finnish developer AW Energy deployed its 350kW WaveRoller device in Portugal.
-Nova Innovation plans a 1.5MW tidal array in the Bay of Fundy, Nova Scotia.
-Minesto resumes kite system testing in North Wales.
-The WPTO announced awards for several MEC members.
-Ocean Energy Systems (OES), a technology collaboration program of the International Energy Agency (IEA), released an excellent new video on the vast potential of ocean energy.
-The Pacific Marine Energy Center (PMEC), led by the University of Washington, Oregon State University and the University of Alaska Fairbanks, developed a great new video promoting its capabilities.
-The DOE WPTO announced a new $3 million Ocean Observing prize with NOAA.  The prize is for companies developing marine energy power solutions for ocean observing platforms.
-SMI hired Jeff Leahey, former NHA Executive Vice President for Government Affairs.

2019 Highlights

Planning is well underway for the upcoming International Conference on Ocean Energy (ICOE), taking place in Washington, DC on May 19-21, 2020. Please make your plans now to attend this important conference.

–Ocean Renewable Power Company (ORPC) deployed its RivGen device in Alaska on the Kvichak River and will supply power to the Village of Igiugig.
–Sustainable Marine Energy successfully demonstrated its tidal energy platform in Nova Scotia.
–SIMEC Atlantis Energy continued to set records with its tidal power project at MeyGen in Scotland.
–Ocean Energy Europe reported that in 2018, European tidal stream installed capacity reached 26.8 MW, and wave energy installations are at 11.3 MW. Europe continues to lead the world in marine energy deployments, and last year its tidal projects produced record volumes of electricity.
–SMI hired Steve Chalk, former DOE Deputy Assistant Secretary for Renewable Power.
-The WPTO released a report on Powering the Blue Economy: Exploring Opportunities for Marine Renewable Energy in Maritime Markets.
-The DOE WPTO hosted the 2019 Project Peer Review on October 8-10, 2019 in Alexandria, Virginia. The majority of WPTO 2017-2018 R&D projects were presented and reviewed by external subject-matter experts.
-Many of these successes in the United States were supported by the National Hydropower Association (NHA) MEC, which plays a key role in advocating for increased federal support for the marine energy sector. We very much appreciate the entire staff at NHA, along with the volunteer executive team of the MEC. We strongly encourage our readers to join or retain membership in the NHA MEC!

Historic Funding (Again!) for Water Power R&D

Earlier this year the President once again proposed significant and potentially debilitating reductions to DOE water power research and development activities in his annual budget request to Congress. Fortunately, the marine energy industry has fostered a strong bipartisan group of champions on Capitol Hill who work hard to block these harmful cuts and instead provide substantial funding support for water power.  We appreciate the 42 members of the House of Representatives who co-signed a letter back in March 2019 to the Appropriations Committee in support of robust funding for the WPTO.  The full list of supporters can be found in our 2019 mid-year newsletter. The funding letter was led by Rep. Suzanne Bonamici (D Oregon-1st), Rep. Scott Perry (R Pennsylvannia-4th), and Rep. Chellie Pingree (D Maine-1st) and their staff. We also greatly appreciate the bipartisan group of Senators from across the country who strongly support increased resources for marine energy technology development and deployment. Finally, we particularly appreciate the support of the Energy and Water Development Appropriations Subcommittee leadership, Rep. Marcy Kaptur (D Ohio-9th), Rep. Mike Simpson (R Idaho-2nd), Senator Lamar Alexander (R Tennessee), and Senator Diane Feinstein (D California), along with their excellent staff. These Members of Congress helped secure a record $148 million for water power R&D in FY 2020.

The final FY 2020 directive report language for the WPTO is copied below:

“Water Power – The agreement provides $109,000,000 for marine and hydrokinetic technologies. The agreement supports research and development, testing, and partnership activities for the Powering the Blue Economy Initiative within available funds. Within funding for marine and hydrokinetic technologies, $40,000,000 is provided for competitive grants to support industry- and university-led projects to validate the performance, reliability, maintainability, environmental impact, and cost of marine energy technology components, devices, and systems at a variety of scales, including full scale prototypes. Awards shall support a balanced portfolio of marine and hydrokinetic technologies. Awards shall support wave, ocean current, tidal, and in-river energy conversion components and systems across the high-and low-technology readiness spectrum to increase energy capture, reliability, survivability, and integration into local or regional grids for lower costs and to assess and monitor environmental effects. Within funds for competitive solicitations, not more than $10,000,000 is for the Testing Expertise and Access for Marine Energy Research Program.

Within available funds, $10,000,000 is provided to address infrastructure needs at marine energy technology testing sites. The agreement provides $26,000,000 under 42 U.S.C. 16352(b)(4) for the open-water wave energy test facility. Not later than 60 days after enactment of this Act, the Department shall brief the Committees on Appropriations of both Houses of Congress on its plan for completing the wave energy test facility and funding its operations thereafter. The agreement provides not less than $5,000,000 to establish an Atlantic Marine Energy Center.”

Other provisions in the House and Senate bills are still applicable including:

“The Department shall continue its coordination with the U.S. Navy on marine energy technology development for national security applications at the Wave Energy Test Site and other locations.”

“Furthermore, the Committee encourages close coordination between the Department and the Federal Energy Regulatory Commission, the Bureau of Ocean Energy Management, the National Oceanic and Atmospheric Administration, other relevant agencies and industry to reduce the amount of time to permit marine energy test and validation projects.”

Marine Energy R&D Bills Make Progress in Congress

We are pleased to report that Congress has made some progress since our last newsletter on efforts to reauthorize and increase funding for the marine energy R&D activities of the DOE WPTO. Congress first authorized the DOE to support marine energy development for a five year period (FY 2008-FY 2012) in its landmark 2007 energy legislation. Unfortunately, Congress has not approved follow up legislation during the intervening years despite our best efforts. Legislation was introduced last year to reauthorize the WPTO marine energy activities. Below are quick updates on the House and Senate companion bills:

The Senate version of the Marine Energy Research and Development Act of 2019, S. 1821, was introduced by Senator Ron Wyden (D-Oregon) on June 12, 2019. The legislation was cosponsored by Senators Angus King (I-Maine), Jeff Merkley (D-Oregon), Jack Reed (D-Rhode Island) and Brian Schatz (D-Hawaii). S. 1821 was referred to the Senate Energy and Natural Resources (ENR) Committee which held a hearing on the bill on September 25th. S. 1821 would authorize annual expenditures in FY 2020 and FY 2021 of $160 million per year for marine energy activities. This would be a significant increase above current funding levels. The committee approved the marine energy R&D bill on October 23rd and it was placed on the full Senate Legislative Calendar for future consideration. This is the first time that a stand-alone marine energy bill is available for debate in the U.S. Senate. Click here for a copy of the legislation and here for a copy of the related report.
The House companion bill, H.R. 3203, was introduced by Rep. Ted Deutch (D Florida-22nd) and Rep. Suzanne Bonamci (D Oregon-1st) on June 11, 2019, and was referred to the House Committee on Science, Space, and Technology. The legislation has been co-sponsored by Rep. Peter DeFazio (D Oregon-4th), Rep. Paul Tonko (D New York-20th) and Rep. Alcee Hastings (D Florida-20th). The legislation would authorize $150 million per year for FY 2020 and 2021. A copy of the bill can be found here. On November 14, the House Science Committee held a hearing on a discussion draft of legislation to reauthorize all of the R&D activities of the DOE WPTO (hydropower, pumped storage and marine energy). The hearing featured Dr. Bryson Robertson from the PMEC team at Oregon State University. Thanks to Bryson and Gabrielle Serra from OSU for making the cross-country trip to attend the hearing. Great job! Please click here for a video link to the hearing along with the opening statements.

We are now working with Congressional staff to review the bills and identify potential revisions in preparation for committee consideration and markup in the House and floor votes in the Senate sometime in the near future. We will keep you apprised of our progress. Please contact your Members of Congress and ask them to cosponsor these bills or thank them for their ongoing support. Please get in touch with us if you would like to review the House water power R&D discussion draft legislation.

U.S. Navy Update

We very much appreciate the critical role of the U.S. Navy in supporting marine energy technology development and testing. We continue to lobby Congress to increase funding for the U.S. Navy to invest in research, development and testing of marine energy technologies.  Our focus remains on securing language in the annual defense authorization and appropriations bills developed by Congress to provide programmatic guidance to the Department of Defense for those efforts. For FY 2020, we worked with our Congressional champions to secure an additional $11.5 million Navy Energy Program in the Defense Appropriations measure that could be used to support marine energy efforts. We also successfully lobbied to add funds to programs that benefit academic research activities related to the use of marine energy for autonomous undersea systems.

We expect more interest by the Navy to invest in marine energy technology development as devices and new capabilities continue to be successfully demonstrated at the U.S. Navy Wave Energy Test Site in Hawaii. We expect deployment of the Ocean Energy USA wave energy converter soon and additional deployments of various wave energy technologies in 2020.

SMI Hires NHA Executive Vice President for Government Affairs, Jeff Leahey

Jeff comes to SMI as a Vice President after seventeen years at NHA, where he led the organization’s legislative, regulatory and legal policy work to advance the hydropower, pumped storage and marine energy industries. Jeff represented NHA before Congress, Administration, Federal Energy Regulatory Commission and federal resource agencies on matters including climate and clean energy policy, renewable energy tax incentives, hydropower licensing reform, R&D funding for water power technologies and many others. He has experience testifying before Congress, drafting legislative policy and developing comments on regulatory and administrative proposals.

Jeff has developed and implemented successful lobbying campaigns, led complex policy negotiations, and overseen public affairs messaging initiatives. He also has association management experience with strategic planning, budgeting, financial management and reporting, and more.
Throughout his career, Jeff has worked with many of the country’s leading electric utilities, environmental groups, as well as utility and renewable energy trade associations and organizations. He currently serves on the Board of the National Energy Resources Organization (NERO) and is an advisory board member for NHA. Jeff is an attorney, licensed to practice in Massachusetts, who graduated from Northeastern University School of Law in Boston, MA. Jeff is also a graduate of Washington University in St. Louis, MO, where he received his BA in biology and political science.

Jeff looks forward to bringing his government affairs and association experience to assist SMI clients with their government affairs needs. Feel free to reach out to Jeff and welcome him at jeff@strategicmi.com.

ARPA-E RFI

ARPA-E released a Request for Information (RFI) on “Next Generation of Marine and Riverine Hydrokinetic Energy Systems. Thanks to all of the organizations that provided feedback, which we expect will positively impact future federal marine energy investments. We hope to see a funding opportunity released next year from ARPA-E to support marine energy R&D. While the President attempted to eliminate ARPA-E during the past funding cycle, Congress opposed that plan and instead provided $425 million for technology advancement efforts in FY 2020.

Upcoming Conferences

We are excited that Washington, DC will be hosting the upcoming International Conference on Ocean Energy (ICOE) 2020 event, May 19-21, 2020. Planning is well underway to pull together excellent panels and content related to marine energy commercialization efforts. There are many ways to give involved to ensure we host a successful conference. Most importantly, please make plans now to visit the nation’s capital to ensure your voice is heard during this critical opportunity to showcase to U.S. Federal Government leaders the role marine energy can play in economic development and the fight against climate change. We also look forward to highlighting to the rest of the world the marine energy market opportunities here in the United States.

We hope to participate in several other important conferences related to marine energy technology advancement in 2020. Please let us know of any events we may have missed.

–Pan American Marine Energy Conference (PAMEC) 2020 – San Jose, Costa Rica, January 26-28, 2020.
–Pacific Ocean Energy Trust – Ocean Renewable Energy Conference, Portland, Oregon, September 16-17, 2020.
–Marine Renewables Canada Annual Conference – Halifax, Nova Scotia, November 3-5, 2020.
–Ocean Energy Europe – Brussels, Belgium, December 1-2, 2020.

Future Activities

We continue to focus on the following priority areas that will support our client’s interests in commercializing the marine energy sector. We look forward to working with you to advance these recommendations.

1. Continue to increase funding for the DOE WPTO and Navy Energy Program to support R&D and test facility construction and operations.
2. Pursue congressional legislation to re-authorize the WPTO to allow additional funding to be allocated to various industry priorities.
3. Seek legislation to authorize and fund new power production incentives for marine energy to subsidize early stage pre-commercial testing.
4. Support WPTO efforts to encourage new market access related to powering maritime electrification activities, including devices for remote sensing, environmental monitoring, aquaculture, fuel production, etc.
5. Work with other federal programs on cross-cutting R&D with the WPTO – such as the Wind office’s increased support for offshore wind and other potential sponsors of marine energy development for applications beyond utility scale power generation.