Offshore Marine Energy

A week after Obama's offshore drilling announcement, debate is running at full steam — even if new exploration and production haven't started.

One positive result of the back-and-forth on offshore energy activity is that wave and tidal power may draw increased attention in the United States.

As it stands, though, the Department of Energy doesn't give these ocean-based energy resources much more attention than a kids' energy education page on the Energy Information Administration's website.

If you want to see where the real action is, you've got to look across the pond to see what the British are doing with marine energy.

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Scotland: Leading in Ocean Energy

In 2010, the wind-whipped Orkney Islands north of Great Britain will become a key global testing ground for marine energy.

Ocean-based power systems are already being tested there in Scotland's northern reaches, at the European Marine Energy Center (EMEC) testing facility. Ireland's OpenHydro and the UK's Tidal Generation, Ltd. both have tidal energy conversion tests in the works. But Atlantis Resources Corp. hopes to take the lead in advancing tidal power to commercial scale.

Atlantis Resources, founded in Australia but based in London, is installing its 1-megawatt AK-1000 model turbine underwater at EMEC with a $25 million commitment to see the project through and show it to potential large customers.

With 18-meter rotors, Ak-1000 is as big across as a 5-story building is tall. Yet that doesn't mean Atlantis will treat it with extra care.

CEO Tim Cornelius says that up at Orkney, the AK-1000 will be tested in "one of the harshest environments in the world." That could be a boon to Atlantis and to marine energy in general.

You see, as with wind power and even solar energy, conditions that are intolerable for most humans generally point to abundant natural resources that can be used for large-scale energy production.

Due to a decades-long process of devolution — which means granting more and more administrative powers to the capitals of Wales, Scotland, and Northern Ireland — Scotland's national clean energy targets are separate from London's UK-wide guidelines.

The headline difference is a goal of generating a full quarter of its household energy from renewable sources by 2020, instead of London's 20% target.

With marine energy alone, the Edinburgh-based Scottish Executive hopes to power half a million homes a decade from now. Test projects like Atlantis Resources' AK-1000 in the unforgiving Orkney offshore waves could drive Britain to a far greater share of green energy than was previously thought possible.

But the pounds have barely begun to flow into marine energy...

Gunning for 50 GW of Marine Power per Year

In March, the Scottish Government fired the starter's pistol in the race for what it says is the largest government-administered innovation prize in the world. 

Engineers and business types from all around the globe will compete for a 10 million pound award called the Saltire Prize. Their task: to develop a commercially viable wave or tidal energy solution that will turn Scotland into an offshore hydro powerhouse.

As in the U.S., the UK government holds rights to its own offshore areas; this means the Crown Estate that administers rich ocean energy resources has to green-light research regions.

In a reprise of processes I've already witnessed in Brazil and Peru, this summer the Crown Estate will hold its first leasing round for marine energy R&D. If you feel like I do, you'd much rather see national governments opening up land for groundbreaking renewable energy research than watch offshore oil drilling get a hand-up.

Between 2012 and 2017, participants in the Saltire Prize contest will test their technology off the coast of Britain, primarily in Scotland's turbulent waters. Whoever takes the 10 million GBP prize home — or, more likely, reinvests it in the successful technology — will have proven that it is possible to generate 100 gigawatts over two years with marine energy.

Another Step in the North Sea's Energy Transition

The North Sea oil rigs within sight of the Scottish coast are seen as remnants of a dwindling fossil fuel industry.

When I visited a wind turbine manufacturing facility in Fife (about an hour outside of Edinburgh) back in 2006, I learned how thousands of jobs had been saved by Scottish investment in a transitional energy economy. Companies like Denmark's Vestas Wind Energy swept into places like Argyll and made use of facilities and local know-how to bring utility-scale clean energy to market.

From wind to waves, we're seeing Scotland's plan develop over the course of several years.

Now ask yourself, with only three years of U.S. oil supply estimated to come out of new offshore leases in U.S. waters, what will the Saltire Prize competitors have done in that time to increase the UK's energy independence, not to mention global competitiveness?

And how much of an opportunity is Washington missing?

I'll be back in the UK later this month as part of a trek from North Africa up to northern Europe, logging the various green energy attitudes and developments I see every step of the way.

I'd like you to get the first multimedia and stock recommendation reports every time I file them. To stay up to date, check out Alternative Energy Speculator today and learn why superior returns in international clean energy companies have become the norm for AES subscribers.

Regards,

Sam Hopkins