These Profits Come in Waves

Harness Energy

Written by Brian Hicks
Posted September 14, 2005

According to the Atlantic Oceanographic and Meteorological Laboratory, a fully developed hurricane can release heat energy at a rate of 5 to 20x1013 watts and converts less than 10% of the heat into the mechanical energy of the wind. The heat release is equivalent to a 10-megaton nuclear bomb exploding every 20 minutes!

Can you imagine how quickly we'd be able to solve the world's energy problems if there was a safe, economical and efficient way to harness this energy?

Don't get me wrong. I'm not trying to trivialize the devastation that the good people of Louisiana, Alabama and Mississippi have endured.

In fact, I only recently started to entertain this thought after reading about how many people affected by the hurricane were still without power. And really, I'm sure those people without power right now are more concerned about harnessing electricity than sympathy.

So that being said...

Imagine if we were able to harness all that heat energy produced by Hurricane Katrina and convert it into electricity; if anything, just so that people who are lucky enough to still have homes in that part of the country, could turn on their lights and run their refrigerators.

It would be nothing short of spectacular. (At least to an energy-geek like me, anyway)

Well, despite my good intentions, there's probably not going to be an influx of hurricane thermal energy power conversion systems any time soon.

However, there is currently a less-extreme, but very efficient alternative energy technology called Ocean Thermal Energy Conversion (OTEC), which does allow for the conversion of thermal energy from the ocean to electricity - often while producing desalinated water.

You see, an immense amount of thermal energy (heat) is stored in the world's oceans. Each day, the oceans absorb enough heat from the sun to equal the thermal energy contained in 250 billion barrels of oil.

Harnessing Heat

Currently, there are three OTEC systems that can be used to generate electricity:

Closed-Cycle - whereby a working fluid is circulated in a closed system, heated with warm seawater and flashed into vapor. The vapor is then routed through a turbine and condensed with cold seawater.

Open-Cycle - whereby warm seawater is flashed to steam, at which point the steam is routed through a turbine.

Hybrid - whereby warm seawater is flashed to steam, and that steam is used to vaporize a working fluid in a closed system.

Although OTEC has been around since the 1800's... only in the last twenty years or so have we seen any real attempts at the commercialization of the technology.

And now that the demand for clean, economical alternative energy is at an all-time high, new markets for OTEC development are rapidly being identified by local and state governments, research groups and private and publicly-traded companies.

In fact, some analysts have estimated that because of high oil costs, the demand for desalinated water and the social benefits of clean energy technology, over the next five to ten years, OTEC plants could become highly-competitive in four specific markets:

  • Small island nations in the South Pacific
    1 MWe (megawatt electric), land-based open-cycle OTEC plants coupled with second-stage desalinated water production
  • American territories, Guam and American Samoa
    10 MWe, land-based open-cycle OTEC plants coupled with second-stage desalinated water production.
  • Hawaii
    50 MWe land-based, closed-cycle OTEC plants producing electricity with second-stage desalinated water production.
  • Puerto Rico, the Gulf of Mexico and the Pacific, Atlantic and Indian Oceans
    40 MWe or larger, floating, closed-cycle OTEC plants that house a factory or transmit electricity to shore via a submarine power cable.

While OTEC commercial development is still in its infant stages, the potential for rapid growth in this sector has never looked more promising. Especially in the island states and territories of the South Pacific.

And that's one of the reasons I'm telling you about it today.

The other reason is that OTEC is actually one of three sources of renewable energy that is produced on a massive scale from the world's oceans and rivers.

There's no question that there's real potential, both financially and environmentally, in OTEC.

But these other two renewable energy sectors are providing profitable, publicly-traded companies that are ripe for the picking - right NOW.

They are:

  • Tidal Energy
  • Wave Energy

Tidal Energy

Harnessing tidal energy generally involves erecting a dam across the opening to a tidal basin. The dam includes a sluice (An artificial channel for water, with a gate to regulate the flow) that is opened to allow the tide to flow into the basin. The sluice is then closed, and as the sea level drops, traditional hydropower technologies can be used to generate electricity from the elevated water in the basin.

Back in 1966, the world's first industrial-sized tidal power station went on-line. It produces 240 MW of power; enough to supply 90 percent of the electricity for the French town of Brittany.

Wave Energy

Waves get their energy from the wind. Wind comes from solar energy. Waves gather, store and transmit this energy for thousands of miles with little loss. Essentially, as long as the sun in shining, wave energy will never be depleted. And while it does vary in intensity, it's available 24 hours a day.

Now the total power of waves breaking on the world's coastlines is estimated at 2 to 3 million megawatts. And in some locations, wave energy density can average 65 megawatts per mile of coastline.

Harnessing wave energy generally involves one of three processes:

  • Floats - devices that generate electricity from the bobbing action of a floating object. These objects can be mounted to a floating raft or to a device fixed on the ocean floor.
  • Oscillating Water Columns (OWC) - devices that generate electricity from the wave-driven rise and fall of water in a cylindrical shaft. The rising and falling water column drives air into and out of the top of the shaft, powering an air-driven turbine.
  • Wave Surge Devices - shoreline devices (also known as tapered channel systems) rely on a shore-mounted structure to channel and concentrate the waves, driving them into an elevated reservoir. Water flow of this reservoir is used to generate electricity, using standard hydropower technology.

Tidal and Wave Energy systems have been utilized all over the world for years. But only recently have we seen a demand significant enough to validate any real profit potential for Green Chip investors.

So join me next week when I'll tell you about the two biggest markets for tidal and wave energy - and the companies that are in line for the most lucrative contracts this particular industry has ever seen.

Until then,

Jeff Siegel
Editor, Green Chip Stocks