The California Public Utilities Commission plans to reject funding for the first-ever wave energy contract in the United States — a test project off Eureka proposed by PG&E and the Canadian Corporation Finavera .
The CPUC has circulated its plan to reject the contract ahead of its Friday meeting, with PG&E and Finavera circulating protests in response.
“The rejection of this contract would certainly set back the wave energy industry in North America,” said Jason Bak, CEO of Finavera.
“As this contract is the seminal power purchase on the continent, it is viewed by the global wave energy community as a proxy to determine the American appetite to support the commercialization of new energy technologies and particularly wave energy. It can be foreseen that if this contract is rejected, the industry will simply turn to Europe, where price supports are more robust,” said Bak.
The Finavera deal on the block with PG&E is for a 2-megawatt (MW) wave project off Eureka. It is entirely separate from WaveConnect, the study project with dual locations off Eureka and Fort Bragg. WaveConnect has not yet chosen a developer or technology, much less entered into a power generation contract.
PG&E asked for CPUC funding for a contract that would create a demonstration project using Finavera”s hydraulic pump buoy system. That project would deliver slightly less than 4 gigawatt hours (GWh) annually with a Dec. 1, 2012, online date.
Much of the process is surrounded by secrecy, as the two companies involved remain determined not to share advances with competitors or the general public.
“The Commission finds that the project is not viable,” the CPUC ruled in a resolution proposed to be published on Oct. 16. “Finavera”s bid does not compare favorably to other bids in PG&E”s 2006 solicitation, and the contract price is not reasonable.”
The CPUC said they rejected the contract because it was too expensive and because wave energy is not yet a viable technology. However, most of the information about wave energy viability and all details of the contract were redacted in the CPUC filing that the public received, making providing this comment challenging.
“This resolution finds that certain material filed under seal … should be kept confidential to ensure that market sensitive data does not influence the behavior of bidders in [renewable technology],” the CPUC wrote.
Some advocates of green energy technology have called for the end to such secrecy as part of a society-wide effort to push alternative energy beyond the “free market.”
In its rejection, the CPUC refers to the sinking of Finavera”s first buoy.
Finavera said that sinking provided “invaluable experience on regulatory and engineering aspects of removal of failed devices.”
The company contends that rate-payers aren”t being put at risk because payment doesn”t happen until power is generated. Thus if the whole idea fails, PG&E shareholders and Finavera will bear the loss.
Finavera has spent $4.5 million in Oregon and says the area off Eureka is ideal for a badly-needed California test.
PG&E cites a study that found 23 percent of California”s current electricity consumption could be generated by wave energy, pointing out the considerable limitations to that power.
“If the Commission rejects this first commercial wave energy generation project, PG&E is concerned that privately-funded wave technology development will likely be focused in other jurisdictions, and California may be deprived of the future benefits of this renewable energy resource,” PG&E told the CPUC.
On the other hand, PG&E says it will remain committed to wave energy in Northern California no matter what happens.
“If CPUC rejects this power purchase agreement, then PG&E will have no further obligation towards Finavera about this project,” said PG&E in comments provided to the newspaper.
“Finavera believes that it will not be able to raise financing for this project if the power purchase agreement is rejected, and therefore, it will not happen. Finavera may choose to bid this project concept later in a solicitation for renewable power that PG&E holds from time to time.
“The PG&E WaveConnect projects offshore of Mendocino and Humboldt Counties are unaffected by this proposed CPUC action rejecting the Finavera PPA. We are readying a permitting and environmental studies plan for stakeholder comment in the near future.”
