The Company develops projects for renewable power generation, desalinated water
production, and air conditioning using proprietary intellectual property designed
and developed by its own experienced oceanographers, engineers, and marine scientists.
Plants using its technologies are designed to extract energy from the temperature
difference between warm surface ocean water and cold deep seawater at a depth
of approximately 3,000 feet. We believe these technologies provide practical
solutions to mankind’s fundamental needs for sustainable, affordable energy;
desalinated water for domestic, agricultural, and aquaculture uses; and cooling,
all without the use of fossil fuels.
Ocean Thermal Electrical Conversion, known in the industry as “OTEC”,
power plants are designed to produce electricity. In addition, some of the seawater
running through an OTEC plant can be desalinated efficiently, producing fresh
water for agriculture and human consumption.
Seawater Air Conditioning, known in its industry as SWAC, plants are designed
to use cold water from ocean depths to provide air conditioning for large commercial
buildings or other facilities. This same technology can also use deep cold water
from lakes, known as Lake Water Air Conditioning or LWAC.
Both OTEC and SWAC systems can be engineered to produce desalinated water for
potable, agricultural, and fish farming/aquaculture.
Many applications of technologies based on ocean temperature differences between
surface and deep seawater have been developed at the Natural Energy Laboratory
of Hawaii Authority, or NELHA, test facility (http://nelha.hawaii.gov), including
applications for desalinated seawater, fish-farming, and agriculture. We believe
our proprietary advances to existing technologies developed by others in the
industry enhance their commercialization for the plants we proposed to develop.
The Company has recruited a scientific and engineering team that includes oceanographers,
engineers, and marine scientists who have worked for a variety of organizations
since the 1970s on several systems based on extracting the energy from the temperature
differences between surface and deep seawater, including projects by NELHA,
the Argonne National Laboratory (http://www.anl.gov), and others. Note: All
URL addresses in this Information Statement are inactive textual references
only. Our executive team members have complementary experience in leading engineering
and technical companies and projects from start-up to commercialization.
In addition, we expect to use OTE’s technology in the development of OTEC
EcoVillage, which should add significant value to our existing line of business.
We will facilitate the development of sustainable living communities by creating
ecologically sustainable “OTEC EcoVillage” powered by 100% fossil-fuel
free electricity. In the development, buildings will be cooled by energy efficient
and chemical free systems, and water will be produced for drinking, aquaculture,
and agriculture onsite. The OTEC EcoVillage project consists, in part, of an
OTEC plant which will provide all power and water to about 400 residences, a
hotel, and shopping center, as well as models of sustainable agriculture, food
production, and other economic developments. Each sale of luxury EcoVillage
residences will support the development of environmentally responsible affordable
communities in tropical and subtropical regions of the world (Affordable Communities),
currently in development. OTEC EcoVillage will be the first development in the
world offering a net-zero carbon footprint. This will be OTE’s pilot project,
launched to prove the viability of OTEC technology to provide affordable renewable
energy for entire communities. The Company believes this $700 million project
could be highly profitable and generate significant value for its shareholders.
The U.S. Virgin Islands’ Public Service Commission has granted OTE regulatory
approval for an OTEC plant, and OTE has identified the specific plots of land
for the site. The first draft of the Master Plan for the entire development
has been completed.
Our vision is to bring these technologies to tropical and subtropical regions
of the world where about 3 billion people live. Our market includes 68 countries,
29 territories with suitable sea depth, shore configuration, and market need,
we plan to be the first company in the world to design and build a commercial
scale OTEC plant and, to that end, has several projects in the planning stages.
Our initial markets and potential projects include several U.S. Department of
Defense bases situated in the Asia Pacific and other regions where energy independence
is crucial. Currently, we have projects in various planning and development
stages in the Caribbean, the South Pacific, Asia, Zanzibar, Guam and other island
locations.
Our Technology
OTEC is a self-sustaining energy source, with no supplemental power required
to generate continuous (24/7) electricity. It works by converting heat from
the sun, which has warmed ocean surface water, into electric power, and then
completing the process by cooling the plant with cold water from deep in the
ocean. The cold water can also be used for very efficient air conditioning and
desalinated to produce fresh water. OTEC has worked in test settings where there
exists a natural temperature gradient of 20 degrees Celsius or greater in the
ocean. We believe OTEC can deliver sustainable electricity in tropical and subtropical
regions of the world at rates approximately 20-40% lower than typical costs
for electricity produced by fossil fuels in those markets.
Further, we believe that a small, commercial OTEC plant could offer competitive
returns even in a market where the cost of electricity is as low as $0.30 per
kilowatt-hour, or kWh. For example, the Inter-American Development Bank, an
international bank providing development financing in Latin America and the
Caribbean, reports that energy prices for hydrocarbon-generated power during
2010-2012 for 15 Caribbean countries averaged $0.33 per kWh, with a high of
$0.43 per kWh in Antigua and Barbados. For the U.S. Virgin Islands, Water and
Power Authority of the Virgin Islands reported that as of February 1, 2017 the
average price for electricity for commercial customers was nearly $0.40 per
kWh. We believe that we have an opportunity to offer base-load energy (the amount
of energy required to meet minimum requirements) pricing that is better than
our customer’s next best alternative in the markets where electricity
costs are $0.30 or more per kWh.
Technology advancements have significantly brought the capital costs of OTEC
down to make it competitive compared to traditional energy sources in the OTEC
markets. Technology improvements including larger diameter seawater pipes manufactured
with improved materials, increased pumping capabilities from OTEC depths, better
understanding of material requirements in deep ocean environment, more experience
in deep water pipeline and cable installation techniques, and more accurate
sea bottom mapping technology which is required for platform positioning and
pipe installation. The cold-water pipes at a demonstration site in Hawaii have
been in continuous operation for more than 20 years and the technology has improved
significantly since the Hawaiian installation.
We estimate that a small OTEC plant that delivers 13 million watts (megawatts
or MW) per hour for 30 years would currently cost approximately $350 million.
This is the plant size that we typically propose for our initial target markets
to meet 20% or more of their current demand for electricity and a large portion
of their need for fresh drinking water and agricultural water. OTEC has been
proven in test settings at NELHA, where a Department of Energy-sponsored OTEC
plant operated successfully throughout the 1990s to produce continuous, affordable
electricity from the sea without the use of fossil fuels. Spin-off technologies
of desalination and seawater cooling, developed from the OTEC plant at NELHA,
have also become economically and technical feasible.
Finally, we believe the decreasing supply and increasing cost of fossil-fuel-based
energy has intensified the search for renewable alternatives. We further believe
that renewable energy sources, although traditionally more expensive than comparable
fossil-fuel plants, have many advantages, including increased national energy
security, decreased carbon emissions, and compliance with renewable energy mandates
and air quality regulations. We believe these market forces will continue and
potentially increase. In remote islands where shipping costs and limited economies
of scale substantially increase fossil-fuel-based energy, renewable energy sources
may be attractive. Many islands contain strategic military bases with high-energy
demands that we believe would greatly benefit from a less expensive, reliable
source of energy that is produced locally, such as OTEC.
OTEC uses the natural temperature difference between cooler deep ocean water
at a depth of approximately 3,000 feet and warmer shallow or surface water to
create energy. An OTEC plant project involves installing about 6.0 feet diameter,
deep-ocean intake pipes (which can readily be purchased), together with surface
water pipes, to bring seawater onshore. OTEC uses a heat pump cycle to generate
power. In this application, an array of heat exchangers transfer the energy
from the warm ocean surface water as an energy source to vaporize a liquid in
a closed loop, driving a turbine, which in turn drives a generator to produce
electricity. The cold deep ocean water provides the required temperature to
condense vapor back into a liquid, thus completing the thermodynamic cycle,
which is constantly and continuously repeated. The working fluid is typically
ammonia, as it has a low boiling point. Its high hydrogen density makes ammonia
a very promising green energy storage and distribution media. Among practical
fuels, ammonia has the highest hydrogen density, including hydrogen itself,
in either its low temperature, or cryogenic, and compressed forms. Moreover,
since the ammonia molecule is free of carbon atoms (unlike many other practical
fuels), combustion of ammonia does not result in any carbon dioxide emissions.
The fact that ammonia is already a widely produced and used commodity with well-established
distribution and handling procedures allows for its use as an alternative fuel.
This same general principle is used in steam turbines, internal combustion engines,
and, in reverse, refrigerators. Rather than using heat energy from the burning
of fossil fuels, OTEC power draws on temperature differences of the ocean caused
by the sun’s warming of the ocean’s surface, providing an unlimited
and free source of energy.
OTEC and SWAC infrastructure offers a modular design that facilitates adding
components to satisfy customer requirements and access to a sufficient supply
of cold water. These components include reverse-osmosis desalination plants
to produce drinkable water, bottling plants to commercialize the drinkable water,
and off-take solutions for aquaculture uses (such as fish farms), which benefit
from the enhanced nutrient content of deep ocean water. A further advantage
of a modular design is that, depending on the patterns of electricity demand
and output of the OTEC plant, a desalination plant can be run using the excess
electricity capacity.
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