Oct 05 - Daily Journal of Commerce (Portland, OR)

A new federal hydropower licensing process will either anchor the wave energy industry or be the weight that sinks the ship, Northwest energy developers and agencies told federal energy regulators Tuesday.

Members of the Federal Energy Regulatory Commission this week met in Portland, the heart of hydro country, seeking feedback on the agency's new process for licensing pilot wave energy projects.

FERC's proposed licensing process, released in July, intends to fast-track technology that uses the motion of oceans and rivers to generate electricity. But it may have unintended environmental risks or stymie venture capital investors, Northwest developers said.

And FERC tossed aside the normal public involvement process when it developed the new licensing rules, which could open the agency to lawsuits and delay wave energy projects down the line, said Daryl Williams, enviornmental liaison for Tualip Tribes in Washington. FERC has not yet established a firm licensing process specific to wave energy projects. States have so far cobbled together project permits based on energy regulations intended for building large dams.

The process is time-consuming and inappropriate for a new hydropower technology, developers say.

"It's critical that a license is established to move forward with any large-scale commercial array," Craig Collar, a senior manager for energy resource development with the Snohomish County Public Utility District in Washington, said.

No large-scale wave energy projects exist off American shores, but the potential for development is huge, according to FERC. Electricity generated from oceans and rivers, the agency says, could meet as much as 20 percent of the nation's energy needs.

FERC, accustomed to behemoth hydropower projects that require dam construction and demolition, has had to craft new rules for emerging wave energy technologies that have different and unknown environmental effects on oceans and rivers.

FERC studies typical hydropower projects for three years before they grant a license. Once a project is approved, the license may be valid for up to 50 years.

Under the new program, wave energy pilot projects can receive a license in as few as six months. And the pilot license is then valid for five years.

A shorter licensing process for pilot projects encourages developers to experiment with the technology and project placement, according to FERC. And the limited duration of the permits limits potential environmental damages.

A five-year license, however, only discourages investors uncertain about a project's long-term prospects, Dan Irvin, president of Free Flow Power Corp., said.

"Five years is simply not long enough for anybody to get a return on their investment," Irvin said.

Many states, including Oregon and Washington, have recently set deadlines for utilities to produce a certain percentage of electricity from renewable resources. And so the faster wave energy technology can be developed, the bigger role it will play in helping states achieve their renewable energy standards, Irvin said.

Originally published by Libby Tucker.

(c) 2007 Daily Journal of Commerce (Portland, OR). Provided by ProQuest Information and Learning. All rights Reserved.