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Renewable Energy from the OceanA Guide to OTEC$
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William H. Avery and Chih Wu

Print publication date: 1994

Print ISBN-13: 9780195071993

Published to Oxford Scholarship Online: November 2020

DOI: 10.1093/oso/9780195071993.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 18 October 2021

OTEC Economics

OTEC Economics

(p.380) 8 OTEC Economics
Renewable Energy from the Ocean

William H. Avery

Chih Wu

Oxford University Press

The economic contribution that OTEC will make to the solution of the nation’s energy problems depends on its perceived merits relative to existing and alternative sources of energy and fuels. The previous chapters have shown that OTEC technology is ready for large-scale demonstrations that will provide a firm basis for commercial development. OTEC can have a large impact on U.S. energy needs by supplying liquid fuels for direct use in transportation, or for electric power production via fuel cells. Its commercial development will depend finally on political and other factors that cannot be assessed quantitatively. The national security and environmental impacts of continuing dependence on oil should receive major emphasis in decisions to implement new processes for fuel production. In this chapter we review the estimated sales prices of fuels and electric power from existing and proposed sources and compare them with OTEC prices. Actual manufacturing costs are generally unavailable and are highly dependent on the financing methods and resources of the individual producer. However, an objective comparison of the sales prices of fuels produced by proposed processes can be made by using the Mossman financial analysis method to estimate the sales price of fuel or electric power that must be charged for profitable operation. This requires only information on the plant investment, input fuel costs, and operation and maintenance costs. The sensitivity of the product costs to changes in the estimates in plant investment can then be displayed in a suitable graph. With this procedure the alternatives can be equitably compared from a uniform point of view. This includes costs of related facilities as well as the plant investment. See the discussion in Section 7.3. These costs vary with time in an unpredictable manner. Past forecasts have been in error by large factors. These costs are a small part of the total, typically a few percent of plant investment for capital-intensive projects. Environmental impact costs have usually been ignored. These items are a few percent of plant investment. State and local property taxes will be zero for sea-based OTEC systems.

Keywords:   coal, financing costs, heliostats, parabolic mirrors, solar-thermal energy systems, vested interests, wind turbines

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