Promise of Rhody wave project fades

It was billed as a major milestone in Rhode Island’s efforts to get energy from renewable sources: Gov. Donald L. Carcieri, seated in front of a group of reporters and photographers, signed an agreement with a private developer to build a major electricity-generation project off Rhode Island’s coast, and the company said it would locate its headquarters here.
But this was not the pact the governor signed last September with Hoboken, N.J.-based Deepwater Wind to build two offshore wind farms. (READ MORE)

The previous December, the governor had announced another agreement – that one with Oceanlinx Ltd., an Australian company – to build two wave-energy units capable of generating up to 21.5 megawatts of electricity.
The memorandum of understanding called for the state to borrow $45 million on behalf of Oceanlinx to develop the project, with the money to be paid back from sales of electricity generated by the wave-energy turbines. At the time, the governor’s chief energy adviser, Andrew C. “Andy” Dzykewicz, predicted that the smaller of the two projects would be completed within 12 months.
In a recent interview, however, Dzykewicz acknowledged that the wave-energy project is now “dormant,” though he said it still could come to fruition if the General Assembly changes related state energy policies. “I don’t think this has disappeared off the radar screen,” he said.
Dzykewicz blamed the project’s lack of progress on lawmakers’ failure to pass legislation creating a state power authority, which would have floated the bonds to finance the project and marketed its electricity. Despite support from Carcieri and some legislative leaders, the bid to establish the agency died in 2007 and again in 2008.
The 2007 agreement also called for Oceanlinx to work with the University of Rhode Island to research the state’s wave energy potential. But “the last time we saw anybody from Oceanlinx was at the day of the [governor’s] signing ceremony,” said consultant Malcolm L. Spaulding, a professor of ocean engineering at URI who conducted research for Oceanlinx’s predecessor company, Energetech. He added: “As far as I understand it, they have abandoned their Rhode Island project.”
Asked if she had heard anything about the project in the past year, New Shoreham Town Manager Nancy Dodge replied, “Not a thing.” In fact, she said, there were rumors on Block Island that Oceanlinx was defunct. In an e-mail, Tom Denniss, Oceanlinx’s co-founder and chief technology officer, said his company has been busy elsewhere and is still waiting for Rhode Island to find a source of financing for the project, as called for in the agreement. “We have not heard back since” the governor’s state power-authority proposal failed, he said.
State Sen. Joshua Miller, D-Cranston, said the stalled Oceanlinx project demonstrates why it is a mistake for the Carcieri administration to “pick winners” by designating companies like Oceanlinx and Deepwater as the state’s favored developers of offshore energy projects.
“Any legislation that helps promote or enable these kinds of projects has to be industry-specific, rather than company-specific or project-specific,” said Miller, who chairs the Senate Corporations Committee and is active on energy issues.
“I think there’s a danger in committing to one specific project over another one,” he said. “If you’re talking about wave and wind [energy], there are enough feasible sites out there to just encourage the industry, rather than encouraging the project.”
Miller added that the same could be said for other projects the administration has supported, such as Pacifica Ventures’ proposal last year to develop a film studio in Hopkinton. The state’s approach should be “specific to the industry, rather than specific to the developer,” Miller said.
But Dzykewicz argued that comparisons between the Pacific Ventures plan and the Oceanlinx and Deepwater projects are faulty. “The big difference is, you’re talking about a largely evolving technology compared to a mature one,” he said. “The wind project is, certainly, based on a much more mature technology, and people know how to do that. And people frankly don’t know how to do wave yet, not around here.”
Deepwater is proceeding with plans to build a 20-megawatt wind farm to serve Block Island and a 1.3 million-megawatt project that would feed into the regional grid. “One [is] a small experimental project, and the other’s a large-scale community utility-scale project,” Dzykewicz said.
The Oceanlinx project is also complicated by the question of how viable it would be to generate wave energy off Rhode Island. Spaulding and other experts have questioned whether the waves are strong enough to support significant electricity generation. “My view all along is that this was not a good site for wave energy,” Spaulding said. “We were absolutely surprised” when Oceanlinx and the state decided to pursue the project, he added.
Despite that, Oceanlinx’s Denniss said wave energy could work here. “The wave energy potential off Rhode Island is not among the best in the world, but lesser wave climates can still be viable with good technologies,” he said.
In the meantime, Oceanlinx has been busy with other projects. Although the company dropped a proposed development off Oregon, it is proceeding with a 2.7-megawatt project in partnership with Hawaiian Electric Industries Inc. The company also recently received a $2 million grant from the Australian government and a major cash infusion from a group of European venture capital investors.
Oceanlinx would still consider the Rhode Island development if the state finances it, Denniss said, because “we’re always interested in any project where the funding is provided by others.”
Although the power authority proposal appears dead, Dzykewicz said the Oceanlinx project could be aided by a bill the General Assembly is considering that would allow utility companies and energy generators to enter into long-term purchasing contracts, which would guarantee a steady stream of revenue for renewable energy projects.
House and Senate committees held hearings earlier this winter on a version of the long-term contracting bill that is identical to one vetoed by Carcieri last summer. Dzykewicz said the administration is studying the legislation.
Miller, the bill’s lead sponsor, said he thinks Carcieri may sign the law this time around because one of the governor’s rationales for vetoing it last year – that the R.I. Public Utilities Commission (PUC) already had authority to approve long-term contracts – has proven to be incorrect.
“The legislation, as it stands without any changes, philosophically does what I’ve been talking about,” Miller said. “It’s designed to encourage all comers, as far as anybody that’s interested in doing renewables in Rhode Island.” •