ORPC expands global reach with consulting services

A solid year's performance from its tidal power generator in Eastport has drawn plenty of acclaim for Ocean Renewable Power Co., but now the nearly 10-year-old company is courting something more than recognition: international markets.

Installed in Cobscook Bay in July 2012, ORPC's proprietary TidGen power system was the first ocean energy project to deliver power to an electric utility grid in the United States, an achievement that sparked stories in the New York Times, Toronto's Globe & Mail and captured eighth place in Fast Company's top 10 most innovative energy companies in the world.

Now the Portland-based ORPC is hoping to capitalize on its growing expertise in developing hydro-kinetic energy projects that use the tidal power of the ocean or the power of a flowing river. Last September it launched a subsidiary business, ORPC Solutions, to provide consulting services for ocean energy projects seeking guidance on everything from supply chain management to the permitting and licensing process. Three months later, it launched a subsidiary in Chile.

The movement into the international arena is not by accident, and it's very much aligned with the company's business plan.

“It's still an emerging industry,” says John Ferland, ORPC's vice president of project development. “There are other companies getting into it. All of us have a realization that commercial scale comes from operating internationally. While you might be a success, say, in Eastport, Maine, you are going to grow your company in another country or continent. That's the shuffle going on globally with the other companies we compete with.”

Chile's vast resource

Ferland says the Chile subsidiary, which goes by the name of ORPC Chile SpA, is actually the company's second international spinoff. But it's already further along the development path than ORPC Nova Scotia Ltd., created in 2011, in part because of the strong interest in tidal power from private sector companies and Chile's government.

ORPC, he says, was first contacted by Chileans who realized after a major earthquake in 2010 that the country's centralized power-generating and grid system was vulnerable to prolonged outages in times of disaster. The country also had been experiencing a long drought that slowed its hydropower generation, prompting energy-saving measures in an electricity grid already prone to blackouts. The Chilean inquiries alerted ORPC to a potential market for its TidGen tidal and OcGen deepwater power generators as decentralized energy sources that might be less vulnerable to disruption by natural disasters.

“So, going back four or five years ago, we've had people from Chile who've contacted us,” he says. “They've all come to Maine and they all have the same reaction when they arrive in Eastport and Lubec: 'Oh, it looks just like Chile.' There've been multiple people, from both the government and the private sector, we've been working with. We've made many friends in Chile.”

Ferland says this spring Chile is putting out an RFP worth $10 million (U.S.) for a tidal energy pilot project. With its long coastline, powerful wave and tidal currents, its government estimates the country has 160 gigawatts in marine energy resources, which is more than 10 times the current installed capacity in the country and enough power for 112 million homes. For ORPC, he says, the country's interest in tapping those marine energy resources represents a golden opportunity, not only for proprietary wave technologies, but also for capitalizing on the expertise it's gained over a decade of navigating marine energy's tricky regulatory and investment waters.

ORPC isn't the only ocean energy company eyeing Chile. Ten wave and tidal energy companies with ties to the United Kingdom are contenders. There's strong interest in developing renewable power from the ocean, as evidenced in a 92-page report published by the British embassy in Chile with the unambiguous title “Marine Energy Development: Taking Steps for Developing the Chilean Resource.”

“We're definitely David going up against some pretty big Goliaths,” says Chris Sauer, ORPC's president and CEO. “For this RFP we're going against some of the biggest [marine energy] companies in the world. We think we have a decent chance [of landing the pilot grant].”

Sauer says creating a subsidiary in Chile conveys OPRC's intention to be there for the long haul, regardless of whether it wins the tidal grant. It's a tactic successfully used in Eastport, he says, of getting to know the local players and building personal relationships.

“Believe it or not, we're somewhat known in Chile,” Sauer says. “In terms of going against some tough competition, we're almost seen as a local underdog.”

A Jan. 15 white paper put out by the Chilean Association for Renewable Energies and two other groups highlights Chile's commitment to developing its marine power resources, including a law that requires 20% of the country's power to be derived from renewable energy by 2025. The report lays out three development strategies. At the low end, the report's authors estimate $191 million (U.S.) being invested in Chilean wave energy projects by 2030 and $169 million in tidal energy projects. The mid-range investment projections show expenditures of $541 million and $308 million for the two forms of marine energy. The accelerated development projections show $1 billion of installed capacity in wave energy and $397 million in tidal energy by 2030.

“Working internationally is incredible exhilarating and inspiring,” Ferland says. “Even though Chile is at the opposite end of the globe, with different time zones and language and cultural differences, it's probably the best place to start. Its banking and financial systems are similar to the U.S. and its currency is strong.”

Other international inquiries

Ferland acknowledges ORPC is “still at the front end of the curve” in positioning itself to compete globally. Besides Chile, he says, ORPC has fielded inquiries from Japan, which is scrambling to find local and renewable energy sources in the wake of the Fukushima nuclear reactor disaster caused by a post-earthquake tsunami in 2011. A group from the Aomori Prefecture in northern Japan has visited Maine, he says, and came away impressed not only by ORPC's technology but also by its partnership with the University of Maine in studying the environmental impacts of its Cobscook Bay project.

Ferland says ORPC is also exploring opportunities in another foreign country, which he declined to name, saying the company hopes to be landing “a contract in the next several months.”

“Their region resembles Washington County,” he says of the latter possibility. “What they see as similarities are that we both have small fishing and commercial marine communities that are losing population. Young people are leaving to find opportunities elsewhere. What they have is a skilled marine work force and strong tidal currents. They see an economic development model in Eastport that puts people to work. That's why they came to us.”

Finally, ORPC Nova Scotia Ltd. continues to explore with Nova Scotia's independent power producer Fundy Tidal Inc. the feasibility of developing a tidal energy project in the Bay of Fundy. The initial project would be installed in Digby Gut at the entrance to the bay and built in phases. The goal is to supply up to 1.95 megawatts of electricity to Nova Scotia (enough power for 1,500 to 2,000 homes). That project would be in far deeper water than the Cobscook Bay tidal generator and would give the company an opportunity to further test and refine its technology.

Ferland says the international spinoff opportunities keep him busy. “I was on three conference calls last week,” he says. “In the first one, I'm practicing my Spanish. In the other, I'm getting a chance to use some of the key Japanese words I've learned. And the third one was in English.”

The common denominator of that interest, he says, is that potential international partners are seeking out ORPC for advice on how to conceptualize a project and take it through the many steps required to eventually connect to an electricity grid.

“So, the first thing they want from us is the road map,” he says. “Then, they want to know who are the key stakeholders, who in the communities we work with have had an interest in our projects? Finally, they ask about the opportunities for developing a local supply chain and the regulatory process. They want to know how you make all of those stakeholders truly part of the project, so there is trust.”

Demonstration projects, design enhancements

At the same time, Ferland says ORPC is focusing its attention on enhancing the designs for its tidal, wave and river turbine units. Similar to the wind-power industry, he says the emerging marine-power industry must bring down its power generation costs in order to capture its fullest market potential. Participating in different projects around the globe, he says, benefits that objective in two ways: It capitalizes on lessons learned already by the successful Cobscook Bay pilot project and it accelerates the company's learning curve by applying its technologies in different marine environments that will help it continue to refine and improve the design of its products.

Last July, as a requirement of the U.S. Department of Energy funding it received, ORPC took its Eastport tidal power turbine out of the water to complete an engineering evaluation after a full year of power generation.

“We've learned multiple lessons having to do with design issues, with the way it was manufactured, with its performance,” Ferland says, adding that the company chose to use that maintenance and evaluation period as an opportunity to advance the technology before it's redeployed. All of the TidGen design changes are keyed to increasing efficiency, lowering production costs and creating greater capacity for generating power under water.

A month after hauling its turbine unit out of the water, ORPC landed two DOE grants totaling $5 million that Ferland says will be used to make improvements to its TidGen turbine unit. “They liked our approach” and ORPC's path to commercialize tidal energy power generation, he says.

The DOE funding will help it build a next-generation power system that would be scalable for volume production and maximum power generation capacity of 5 megawatts, enough power to supply electricity for approximately 2,000 homes. ORPC's plans call for a larger tidal power unit to be installed in Passamaquoddy Bay — in tidal waters 200 feet to 300 feet with irregular terrain — a busy commercial shipping lane known as the Western Passage. Ferland says it will take several years to refine the technology and begin to deliver the full 5 megawatt capacity of power under a 20-year power purchase agreement with Emera that's “signed, sealed and delivered.”

The goal, he says, is to achieve a competitive price for the Maine TidGen generator's electricity by 2020.

ORPC's market development efforts also include several projects in Alaska. The False Pass and Cook Inlet projects involve tidal power, while a pilot project this summer in a remote village 200 miles west of Anchorage will mark the first installation of the company's RivGen technology in Alaska. Ferland says the First Nation village of Igiugig at the mouth of the Kvichak River currently relies on diesel-powered generators for its electricity, at a cost of up to 77 cents per kilowatt hour.

The Kvichak River pilot project, Ferland says, is a critical step in commercializing the RivGen technology for remote, off-grid or micro-grid communities along rivers — a market that in Alaska, alone, he says includes upwards of 80 villages. “We're hoping it catapults us into river hydrokinetic markets,” he says.

Ferland says ORPC's business plan has always envisioned deriving revenues from three basic sources: 1.) sales of power from hydrokinetic energy systems it owns and operates; 2.) selling or licensing its technology to other users; 3.) selling a suite of consulting services to other companies or communities eyeing tidal or river-power projects.

“What has happened is that the services piece has come to the forefront,” Ferland says. “Our clients are looking for someone who's actually done this before. Eastport and Lubec is our home court. The whole world is looking at us to see if we are a good performer or not. The better our performance, the more business opportunities will come our way.”

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