Coal, Tidal and Wind in 2010 Time Period

1. Coal, Tidal and Wind in 2010 Time Period Levelized Cost of Electricity, $/kWh, 2005$, w/o Incentives 11 10 Tidal@1.5 kW/m2 – Tacoma Narrows WA 9 8 Wind after 50 GW@29% CF Tidal@3 kW/m2 - Golden Gate CA Coal 7 6 Wind after 50 GW@42% CF 5 Tidal@ 4.5 kW/m2 – Minas Passage NS 4 0 10 20 30 40 50 Cost of CO2, $/metric ton

2. North America Wave and Tidal Projects Environmental and Regulatory Issues

3. North America Wave Energy Projects From EPRI Feasibility Study Not yet a project Northern CA

4. North America Tidal Energy Projects From EPRI Feasibility Study

5. Frequently Asked Questions Will these devices affect the environment? The Environmental Issues • Withdrawal of wave and tidal flow energy on the ecology • Interactions with marine life (fish and mammals) • Atmospheric and oceanic emissions • Visual appearances • Conflicts with other uses of sea space (fishing, boating, shipping, clamming, crabbing, etc) • Installation and decommissioning Wave Energy Environmental Impact Statements (EIS) • Belt Collins EIS for Navy Hawaii WEC Project - FONSI • Devine Tarbell EIS for AquaEnergy Makah bay WA Project • Many European EISs

6. Frequently Asked Questions • Will the regulatory authorities grant a permit for this offshore wave power and tidal power plants • Will these devices survive storms and the hostile marine environment?

7. Regulatory and Environmental Summary Tidal Energy • Federal Jurisdiction • Com’l Plant < 3 miles = FERC • State Jurisdiction – • CA Dept of State Lands • Env Issues • Fish endangerment • Ecological effects Wave Energy • Federal Jurisdiction • Plant > 3 miles = MMS/FERC • Plant < 3 miles = FERC • Plant > 3 miles in marine sanctuary = FERC/NOAA • State Jurisdiction • CA Dept of State Lands • Env Issues • Reduced wave height • Interactions with marine life • Conflicts of sea space

8. Proposed New Feasibility Studies: River In Stream Hybrid Offshore Wind - Wave

9. Hydrokinetic River Energy Conversion Present State • Present day run of river hydro plants are low-head, no-storage plants • They involve diverting a portion of the river thru hydroelectric turbines Desired State • No dams • No diversionary flows • No aesthetic concerns • Environmentally benign RiverTidal Stream Flow Unidirectional Bi Water Fresh Salt Variability Yearly Diurnal Cycle Cycle Threshold* ? 2.5 kw/m2 * Min required average yearly power density for economic feasibility

10. Hybrid Offshore Wind-Wave Energy Conversion Present State • Present day European offshore wind plants are in shallow water close to shore • Deeper water further offshore wind plants are less visually intrusive • Cost of near shore wind systems is greater than onshore and cost of far offshore wind system is greater than near shore wind • Offshore wave is an emerging technology with 1st commercial sale (25 MW plant) in 2005 in Portugal announced by Ocean Power Delivery of the UK • Hybridization of the two technologies produces lowest cost of electricity (COE) then either system alone, however, advancements needed in floating platforms and operation and maintenance technologies. Desired State • Avoid “Cape Wind” Aethestic Issues • Leverage the synergies for reduced CoE and reduced resource variability HOW-WEC

11. More Advanced Hybrid Wind – Wave Design Concepts

12. EPRI Perspective • Wave and In Stream Tidal Energy and Other Ocean Energy Sources are potentially important energy sources and should be evaluated for adding to our energy supply portfolios • Indigenous– keep the wealth at home and increase energy security • A balanced and diversified portfolio of energy supply options is the foundation of a reliable and robust electrical system • Clean, no greenhouse gases and no aesthetic issues • Economics appear to be close to other options A small investment today might stimulate a worldwide industry which may employ thousands of people and generate billions of dollars of economic output while using an abundant and clean natural resource. It is worth taking a serious look at whether this technology should be added to our portfolio of energy supply options.

13. Economics and Local Job Creation – San Francisco Wave Plant - 106 MW Rating • Engineering and Construction – EPRI analysis shows about 300 jobs during construction period • Direct • Indirect • Induced • Operation and Maintenance - EPRI analysis shows that • A crew of 6 people are required to operate the needed vessels • a crew of 18 people are required to operate and maintain a 180 unit Pelamis Wave Plant (about 100 MW rating)

14. The primary barriers to wave and tidal energy technology are not technical but political: No U.S. Government RD&D Funding Support No U.S. Government production subsidies U.S. Government regulatory uncertainty. The Government says “We are here to help you”

15. How Could the Government Help? • Provide leadership and funding of an ocean energy RD&D program • Provide funding for national ocean energy test center • Develop design and testing standards for ocean energy devices • Join the International Energy Agency Ocean Energy Systems Implementing Agreement to collaborate RD&D activities, and appropriate ocean energy policies with other governments and organizations • Study provision of production tax credits, renewable energy credits, and other incentives to spur private investment in ocean energy technologies and projects, and implementing appropriate incentives to accelerate ocean wave energy deployment • Lead activities to streamline the process for licensing, leasing, and permitting renewable energy facilities in U.S. waters • Ensure that the public receives a fair return from the use of ocean energy resources • Ensure that development rights are allocated through a transparent process that takes into account state, local, and public concerns.

16. Example of Government help In 2004 the Portuguese Government offered a dedicated marine energy tariff The UK has a long history of support for the Marine Energy Industry • Established the “European Marine Energy Centre” in Orkney, Scotland. • Launched the “Carbon Trust, Marine Energy Challenge” • Department of Trade and Industry (DTI) has awarded over £25 M to support the ongoing development of marine energy devices • Launched a £50M support fund which earmarks £8M direct funding for EMEC and the Wave Hub initiative with the remaining £42M available to support demonstration projects • Wave Hub, will offer a “plug in” facility with all the necessary permits etc to allow “next generation” multi device demonstration projects to negate the cost of grid connection.

17. Summary EPRI Ocean Energy Program is for the Public Benefit All Technical Work Totally Transparent and Available: www.epri.com/oceanenergy/ Wave Energy Tidal Energy (1) EPRI WP-001-US, WEC Device Performance Estimation Methodology (2) EPRI WP-002-US, WEC Economic Assessment Methodology (3) EPRI WP-003-HI, Hawaii Site Survey (4) EPRI WP-003-ME, Maine Site Survey (5) EPRI WP-003-OR, Oregon Site Survey (6) EPRI WP-003-WA, Washington Site Survey (7) EPRI WP-004-NA, TISEC Device Survey and Characterization (8) EPRI WP-005-US, System Design Methodology (9) EPRI WP-006-HI, Hawaii System Level Design Study (10) EPRI WP-006-ME, Maine System Level Design Study (11) EPRI WP-006-MA, Massachusetts System Level Design Study (12) EPRI WP-006-SFA, SF California System Level Design Study - Pelamis (13) EPRI WP-006-SFB, SF California System Level Design Study - Energetech (14) EPRI WP-007-US, Environmental Issues Study (15) EPRI WP-008-USA, Regulatory Issues Study (16) EPRI WP-009-US, Final Summary Report (1) EPRI TP-001-NA, TISEC Resource/Device Performance Estimation Methodology (2) EPRI TP-002-NA, TISEC Economic Assessment Methodology (3) EPRI TP-003-MA, Massachusetts Site Survey (4) EPRI TP-003-ME, Maine Site Survey (5) EPRI TP-003-NB, New Brunswick Site Survey (6) EPRI TP-003-MA, Nova Scotia Site Survey (7) EPRI TP-004-NA, TISEC Device Survey and Characterization (8) EPRI TP-005-NA, System Design Methodology (9) EPRI TP-006-AK, Alaska System Level Design Study (10) EPRI TP-006-WA, Washington System Level Design Study (11) EPRI TP-006-CA, California System Level Design Study (12) EPRI TP-006-MA, Massachusetts System Level Design Study (13) EPRI TP-006-ME, Maine System Level Design Study (14) EPRI TP-006-NB, New Brunswick System Level Design Study (15) EPRI TP-006-NS, Nova Scotia System Level Design Study (16) EPRI TP-007-NA, North America Environmental and Regulatory Issues (17) EPRI TP-008-NA, Final Summary Report

18. A Sustainable Electricity Generation Energy Supply Portfolio and How We Transition to It

19. Decision Making in a Highly Uncertain World • Investment decisions are being made today about the next generation of electricity supply are complicated by at least four major uncertainties: • Future cost of CO2 • Future price of natural gas • Storage of spent nuclear fuel • The capture and storage of CO2 • Prudent investment decisions will assume that carbon constraints are coming • R&D can make a big difference

20. Comparative Cost of 2010 Generating Options

21. Comparative Generation Cost in 2020

22. Conclusions • By opening up the possibility of CO2 capture and sequestration, the entire portfolio becomes relatively insensitive to the future costs of carbon constraints • The U.S. has an opportunity to put a low carbon portfolio in place by 2020 • Without advances in technology, the cost of electricity rise steeply for carbon based technologies • Electricity generation costs for all options can be improved substantially over the next 10 years, putting the entire portfolio in the “affordable” range –below 7 cents/kWh – regardless of CO2 costs

23. Importance of Technology Policy • Advanced technology is a prerequisite for meeting our energy and environmental needs of the future because, economic efficiency – that is, achieving our environmental goals at least cost – is critically important • Technology advances are central to controlling the cost of climate change • Even a policy that with stringent near term limits or one that leads to an economically efficient price on carbon emissions is unlikely, by itself, to produce the needed technology breakthroughs – may only discourage development of better existing technologies • R&D must be increased substantially now to • ensure widespread deployment of advanced emission reduction technologies • stabilize atmospheric concentrations of greenhouse gases