Facilitating Hydrokinetic Energy Development through Regulatory Innovation

Article excerpt

Synopsis:

The development and integration into the electric grid of new clean and domestic renewable energy resources is one of the highest priorities for the United States, in light of the dual imperatives of blunting the climatic effects of greenhouse gases and stemming the flow of trillions of dollars overseas for oil imports. Hydrokinetic energy - which includes ocean wave, current, tidal, and in-stream current energy resources - is one promising, though not yet commercially proven, renewable resource. In addition to the further development of hydrokinetic technologies, a key factor in determining whether the country will capture the full potential of this energy source is the regulatory framework in which hydrokinetic systems will operate. The Federal Power Act (FPA) assigns the Federal Energy Regulatory Commission (FERC) a leading role with respect to hydrokinetic energy, and the FERC in recent years has initiated regulatory innovations to facilitate development of this energy source. This article discusses how the FERC has begun moving down that path. This article also identifies issues that the FERC is likely to confront in this area in the future, including the need for appropriate relationships with other federal and states agencies that will play roles in regulating the development of hydrokinetic energy.

I. INTRODUCTION

Global carbon dioxide levels today exceed 380 parts per million, much higher than the 200-300 parts per million experienced in the last 800,000 years.1 Crude oil has sold above 100 dollars per barrel for much of this year, and the United States economy has become increasingly dependent on oil imports.2 If we hope to blunt the climatic effects of greenhouse gases and stem the flow of trillions of dollars overseas, we need to develop energy alternatives to carbonproducing fuels. These dual imperatives make the rapid deployment and integration into the electric grid of new clean and domestic renewable energy resources one of our nation's highest priorities.

Some renewable resources that are well-recognized and commercially viable, such as wind, solar, and geothermal resources, are moving to large-scale deployment within the limits of capital, resource availability, equipment manufacturing, and transmission access.3 Other promising renewable technologies, however, have yet to be proven commercially viable. Hydrokinetic energy - which includes ocean wave, current, tidal, and in-stream current energy resources - is one such promising resource.4

Hydrokinetic energy is a promising candidate for augmenting the nation's needed supply of carbon-free energy sources. It could provide a new supply of clean, domestic, renewable energy, much of which would be located close to the load centers of our major cities on the coasts and inland waterways. It has taken over 100 years to develop the 97,000 megawatts (MW) of hydropower capacity in the United States, which constitutes ten percent of the country's electricity supply.5 According to some estimates, hydrokinetic technologies have the potential, if fully developed, to double the amount of hydropower production to twenty percent of the national supply.6

One of the key factors in determining whether the potential of hydrokinetic energy will be achieved is the regulatory framework in which hydrokinetic systems will operate. Long regulatory timeframes can result in a lack of investment for these capital-intensive projects. The FPA assigns the FERC a leading role with respect to hydrokinetic energy. Given the importance of developing new renewable energy resources, the FERC, as a matter of policy in recent years, has initiated regulatory innovations to facilitate hydrokinetic energy development. This article discusses how the FERC has begun moving down that path, and identifies several issues that the FERC is likely to confront in this area in the future. One particularly important emerging regulatory issue is the need for appropriate relationships between the FERC and other federal and state agencies that also will play roles in regulating the development of hydrokinetic projects. …

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