A Study on the Development Direction of OTEC in Taiwan

Published at Sci-Tech Policy Review International Journal, December, 2008

A Study on the Development Direction of OTEC in Taiwan

Cheng I Lai / Researcher

Science & Technology Policy Research and Information Center

National Applied Research Laboratories

1. New trends of global OTEC development

The initial concept in terms of the exploitation and application of Ocean Thermal Energy Conversion (OTEC) was derived from J. D’Arsonval, a French physicist, who came up with power generation by thermal difference between surface ocean and deep ocean in 1881. Though there are multiple applications for OTEC, power generation has been regarded as the key one for a long time. After the occurrences of oil crises in 1970s, the research activities relating to OTEC commenced to boom. A number of countries such as the USA, Japan, France, UK and India made efforts one by one on the researches of OTEC power generation, completed many representative research programs, and established several experimental power plants (Sinoteck Engineering Consultants, Ltd., 2002a). Especially, the USA under President Carter’s leadership invested considerable expenditures and the State of Hawaii seemed to become the global center of conceptual evolution and application associated with OTEC power generation. However, lots of research projects with respect to OTEC power generation were terminated worldwide due to the fall of oil price, the high technical risk of constructing as well as maintaining OTEC power plants, and the inferior economic competition of OTEC power generation in short-medium term, (Industrial Technology Research Institute [ITRI], 2006). In recent years, the main development direction of OTEC in the USA and Japan has been switched towards Deep Ocean Water Application (DOWA) in many aspects.

In Taiwan, the early development of OTEC also focused on power generation. According to the input analysis associated with domestic R&D projects of OTEC power generation (Lai, 2008) it can be concluded that, in view of project number and invested R&D expenditure by taking 5 years as an interval, the 1980s is the growth stage of OTEC R&D in Taiwan, the early 1990s is the prosperity stage, the late 1990s the decline stage, the early 2000s the dormancy stage, and the late 2000s the restoration stage. As to the R&D of OTEC power generation, Taiwan also encounters above-mentioned technique and economic dilemma. Owing to the significant success of multi-purpose DOWA in the USA and Japan, the development and utilization of OTEC is gradually redirected to DOWA as well in Taiwan. In April 2005, the Executive Yuan approved “the guidelines on the resourced utilization of deep ocean water and the development policy of industry”. The industry of deep ocean water (DOW) becomes the core emerging industry which is actively promoted by the government. The Council for Economic Planning and Development of Executive Yuan then quickly organized a cross-ministerial group to coordinate and integrate the relevant agencies to dynamically implement various crucial actions (Lin and Tsai, 2007). OTEC power generation then turns out to be the secondary. The 2007 Strategic Review Board (SRB) Meeting on Science and Technology industry held in November 2007 has a more critical influence on the national development direction of OTEC. This meeting highlighted “Energy technology” and proposed three topics including energy saving technology, renewable energy technology, and advanced energy technology. The sub-topic of “Ocean energy technology” was involved in the topic of advanced energy technology. The briefing material presented by domestic agency indicated that OTEC power plant “is difficult to be large-scale and the cost of power generation is against benefit so that it cannot go on developing. On the contrary, DOW industry has been continuously growing fast in recent years. As a result, the main development of OTEC power generation should integrate the multi-purpose DOWA.” The second discussion guide of the meeting was “the efficiency of OTEC power generation is still low and any large-scale power plant would face technical problems as well, leading to the lack of induced benefits. The technique of pumping DOW by means of a small diameter pipe has been mature and drinking water industry has also been formed. For incubating and assisting the development of multi-purpose DOWA industry with high added values, it should keep on conducting the R&D as well as the innovation of multi-purpose DOWA techniques by 2015.” In addition, foreign advisors proposed that the development of OTEC power generation was “unpromising, fundamentally low efficiency”, nearly negating the feasibility of OTEC power generation.

2. Analysis on the domestic development direction of OTEC

Due to the limitation of R&D resources, Taiwan’s sci-tech development is always inferior to the advanced countries in Europe, the USA and Japan. Consequently, sci-tech development direction in Taiwan also often follows these countries. With USA and Japan regarding DOWA as the main type of OTEC development, therefore, the national competent authorities of energy affairs in Taiwan take a wait-and-see, even doubt attitude towards OTEC power generation. Because of a different national situation, however, whether Taiwan has to follow the steps of the USA and Japan, or has better search her own direction is actually worthy of studying more. In view of energy security, environmental protection, industrial economics and engineering technique, accordingly, this paper intends to analyze the advantages and disadvantages of developing either OTEC power generation or DOWA in Taiwan. It is expected to clarify a national development direction and to be a viable reference for domestic various fields.

2.1 Energy security

Energy is the driving force for evolution. In light of the oil crises in 1970s and the international oil price rising sharply in recent years, it can be realized that human life and social development are affected strongly by energy. Taiwan’s indigenous energy is used to be indigent and the percentage of imported energy is beyond 98%, leading to a rather low energy supply security. Recently, prosperous economic growth in China and India which have huge population causes the globally great increase of energy demand. Moreover, fossil fuels such as petroleum and coal have nearly been depleting. Thus, every country is eager to master energy resources so that Taiwan’s national safety suffers an awful threat. Accordingly, the energy security problem is not merely civil and economic problems, but also a national safety problem. Then it can be understood that exploiting indigenous energy to reinforce energy security is one of urgent affairs in Taiwan. For Taiwan without abundant fossil energy and nuclear energy, the exploitation of renewable energy is an optimal option to establish an indigenous and independent energy system. The top requirement for developing OTEC power generation is that the temperature difference between surface ocean water and deep ocean water should be 20 ℃ or higher. The temperature of ocean water at the depth of 1,000 meters is in the range of 0 ℃ to5 ℃, therefore, the progress of OTEC power generation is more suitable for the regions with 20~25 ℃ of surface ocean water. In general, the temperature of surface ocean water at southern and eastern waters of Taiwan is above 27 ℃ in summer and above 20 ℃ in winter, having sizable potential to exploit OTEC power generation. Especially, eastern Taiwan where Kuroshio Current flows by and the waters topography is steep is a much better location for OTEC power generation. The favorable geological environment makes Taiwan to have superiority to European countries and Japan, which emphasize the exploitation of renewable energy, to actively tap such an indigenous energy.

Apart from the excellences of geographic environment, a few domestic researches indicate that Taiwan also possesses enormous possibility for developing OTEC power generation. According to Table1, it can be found that OTEC power generation, beside wind power generation, is the best in the respect of both theoretical reserve and estimated exploitable amount. The theoretical reserve amount of OTEC power generation can reach up to 30,000 MW and, based on the technique at that time, the estimated exploitable amount is 3,000 MW. Considering 45,000 MW of total electricity installation capacity in 2006 in Taiwan (The Bureau of Energy, 2007), OTEC is able to be a domestic core type of power generation. In addition, the temperature variation of surface ocean at the tropics as well as the subtropics is quite minute in the whole year and almost equivalent all day long. As compared to some power generation types such as solar energy, wind power and wave energy, OTEC power generation is much more stable and has more annual operating hours, leading to a reliable electricity supply. In case Taiwan is capable of building a grazing OTEC power generation ship in the future, the promising power plant sites will further locate on the whole tropical and subtropical waters. It is estimated that, under no detrimental to environment, more than 10,000,000 MW electricity can be generated from the whole tropical along with subtropical waters where the depth is beyond 1,000 meters and the monthly average temperature difference is above 22℃. The electricity can be used to produce hydrogen, ammonia and methanol which may be transported to Taiwan for self-utilization or globally sold to other communities, playing a great positive contribution to human energy problem. By contrast, the development of DOWA has no benefit to national energy security. In case of applying DOW to air conditioning and refrigeration, only the profit of energy saving can be obtained but the profit is not significant because of little amount use of ocean water.

Table1 The power generation potential of renewable energy in Taiwan

Condition Type	Natural condition	Theoretical reserve (MW)	Estimated exploitable amount (MW)
Solar	Regions with annual 1,500 hrs sunshine duration or more	30,000	300
Wind	Annual average wind speed 4m/s or more	21,100	3,000
Geothermal	26 geothermal hot spring areas island-wide	1,000	200
Wave	1,448 km coast island-wide	10,000	100
Tide	Coast of western Taiwan	1,000	10
OTEC	Coast of eastern Taiwan	30,000	3,000
Current	Kuroshio Current area of eastern Taiwan	3,000	300

source：energy planning office，2006。

2.2 Environmental protection

Since the Industrial Revolution, various human activities have been increasing rapidly and substantial amounts of resources and energies have been consumed, resulting in exceeding greenhouse gases (GHG) to cause global warming and to damage human life cycle. In order to develop sustainably and to create an excellent living environment, environmental protection has become a global pursued goal and concerned issue. After the Kyoto Protocol took effect on 16^th February 2005, in particular, each country takes into account her own situation to adopt adequate alternative to cope with the requirement of reducing carbon dioxide emission. Taiwan is not a member of Kyoto Protocol but will undergo the impact of emission reduction in the coming years. It is necessary to plan out a domestic strategy and measures relating to GHG emission reduction. Taiwan emits 1% of global carbon dioxide amount and most of the carbon dioxide is from power generation. Provided that fossil fuel power generation is replaced by OTEC power generation, GHG can be lessened drastically because OTEC power generation is a kind of low-pollution renewable energy and is fuel-free. According to a foreign literature (Daniel, 2008), a large-scale exploitation of OTEC has a bit of influence on environment. The reasons include: OTEC is non-exothermic; Engineering techniques can prevent the carbon dioxide dissolved in deep and surface ocean water from releasing to atmosphere; As compared to the system of fossil fuel power generation, OTEC power generation only produces little amount of GHG. Another reference (Ocean Engineering and Energy Systems International [OCEES], 2008) also indicates that OTEC merely consumes thermal energy stored in the surface of tropical oceans and even ocean thermal energy used extensively by human beings is still very tiny (less than 0.1%). As a result, OTEC power generation will not change the variation of global energy; instead, will significantly reduce the emissions of carbon dioxide, carbon monoxide, particle carbon, nitrogen oxides and sulfur oxides. It not only alleviates global warming, but also diminishes smog as well as acid rain. Additionally, the replacement of fossil fuel by OTEC power generation is certainly able to lower the emission of carbon dioxide. Taking the exploitable 3,000 MW of Taiwan’s adjacent waters as an example, the annual electricity is estimated to be 18 TWh if the capacity factor of OTEC power plant is 0.7. In accordance with 0.62 kg/KWh of CO₂ emission factor resulting from the 2005 data of domestic electricity, 18 TWh means the reduction of 11 million tons carbon dioxide. It provides a great benefit for the reduction of carbon dioxide.

On the other hand, the exploitation of renewable energy requires vast spaces. Taiwan has a dense population and small area; therefore, the large scale exploitation of renewable energy on land often results in negative impacts on human inhabitation environment and severe conflicts with human life circle. Since the large scale OTEC power generation which does not occupy land space can eliminate the contact opportunity with human environment and may reduce the development obstacles from the general public, it is suitable for Taiwan where lands are of treasure. If DOWA is regarded as a main development target, by contrast, its process of pumping and discharging water is similar with that of OTEC power generation, leading to the same influences on environment. However, environmental disputes are easy to occur because the relevant facilities have to be mounted on land. The literature（Daniel, 2008）addresses that air conditioning is one of the application approaches with preferred economic benefits. The chilly seawater can cool down fresh water in a heat exchanger or directly flows into an adequate chilled water loop, efficiently replacing the chiller which may consume over 90% energy in the traditional air conditioning system. Such systems have been applied to Natural Energy Laboratory of Hawaii Authority (NELHA) for several years and then save $US 4,000 electricity costs each month. Furthermore, it can also be applied to a number of industries, such as condenser cooling for distillation processes, removal of moist and carbon dioxide during drying of algal products, and refrigeration and freezing systems. However, the adequate plant sites are so limited in Taiwan that the benefit of energy saving is restricted and the derived environmental benefit is much inferior to OTEC power generation.

2.3 Industrial economics

The economic factor is one of the main considerations for various countries to undertake the exploitation of renewable energy. All of the previous global studies show that the cost of OTEC power generation is higher than that of conventional energy so as to lose economic competition. Whether OTEC energy can be successively tapped is dependent on if it can be commercialized or not. The core factors affecting commercialization include other energy price, environmental protection pressure, technical improvement, natural condition, power plant scale, market demand, and so on. The international oil price has been raised from 10.37 US$/barrel to 64.67 US$/barrel in the periods of January 1999 and June 2006, further above 100 US$/barrel in January 2008 and approaching 150 US$/barrel in July 2008. Such is beneficial to the exploitation of OTEC power generation. The effectiveness of the Kyoto Protocol results in more and more pressure of environmental protection onto various countries. The implementation of reducing carbon dioxide emission will significantly increase the external cost of power generation by fossil fuel and then further diminish the cost gap between the power generation from fossil fuel and OTEC. In light of techniques, the power generation cost will also be reduced with the improvement and advancement relating to the equipments as well as the techniques of OTEC power generation. As to natural conditions, Taiwan is very close to the “Warming Pool” where ocean water has the global highest temperature. In addition, waters topography at eastern Taiwan is steep and ocean depth can be 1,000 meters only away from coast 3 to 6 kilometers. This may shorten the required length of cold water pipe and then lower the exploitation cost. Taking into account power plant scale, prior experimental power plants generally are so tiny that the cost of power generation is too expensive. After the commercial operation of large plants in the future, it can drive the development of relevant industries and then decrease its cost. In case of using grazing OTEC ships, power plants can be set up at regions with higher temperature difference to enhance the dynamic thermal efficiency and a number of energies such as hydrogen can be produced and sold globally. In view of market demand, according to the survey of the United Nations Educational Scientific and Cultural Organization (Ho, 2003), the global reserve of ocean energy is 73.6 TW where OTEC is around 40 TW. The estimation of the International Energy Agency is the power generation amount of global OTEC can be 10,000 TWh /y (International Energy Agency [IEA], 2006). In summary, the global OTEC reserve is enormous and it can form a huge industrial market.

Based on the 18 TWh of estimated annual OTEC electricity in Taiwan as mentioned above and the replacement of one KWh by 0.2484 liter oil equivalent, it can save 4-billion expenditure for purchasing oil based on the calculation by 140 US$/barrel of oil price in July 2008. This does not include the profits of carbon trading resulting from reducing carbon dioxide emission and the profits from the relevant OTEC industries. In respect of domestic DOW development, western Taiwan has no development conditions due to insufficient ocean depth and serious human pollution. Because of the pass of Kuroshio Current and the location at the origin of upwelling, eastern Taiwan oceans has excellent development conditions and DOW can be obtained at a very short distance away from the coast. It is estimated by the Water Resources Agency of the Ministry of Economic Affairs that DOWA production values will be increased annually from NT$ 2 billions and will be more than NT$ 18 billions in the future. If the industry keeps on growing and extends to biotechnology, cosmetic, temperature-controlled exquisite agriculture, and recreation as well as tourism, production values can even achieve NT$ 80 billions or more (Lo，2008). However, the required techniques for DOWA are not advanced and it has to compete with many countries such as the the USA, Japan and Korea, different from OTEC power generation which Taiwan possesses geological and technical advantages.

2.4 Engineering technology

Although OTEC power generation has been developed for a long time, there is no commercial operation power plant in the world. The further improvement for engineering technique is one of the main reasons. Foreign researches address that the toughest problem is the fabrication as well as deployment of cold water pipes. With reference to the research results conducted by Taiwan power company and the Bureau of Energy in the past years, the technical problems that have to be overcome in the development of OTEC power generation include the manufacture, construction as well as maintenance techniques of large cold water pipes, and the impact on the power plants safety resulting from typhoons along with earthquakes. In 2001 Sinoteck Engineering Consultants, Ltd. executed a project associated with the utilization of OTEC power generation which was sponsored by the Bureau of Energy. Some key technical data of OTEC power generation were collected, evaluated and confirmed. Then the sites of prospective power plants were surveyed on the basis of their relevant characteristics. After determining the optimal sites along with the specific key techniques, researchers made the planning as well as conceptualization design in terms of pilot experimental plants, and then executed the study on the economic feasibility, engineering feasibility, risk evaluation and environmental impact. The project reports are one of the art-of-the-state and more replete reports in Taiwan. The research conclusions are (Sinoteck Engineering Consultants, Ltd., 2002b): domestic industrial companies and academic institutes are able to implement the survey of ocean environment; domestic shipbuilding industrial companies may import the design and fabrication technologies of floating platform by cooperating with foreign countries; domestic industrial companies have sufficient competences to individually perform the marine construction of power plants; domestic industrial companies are able to provide the apparatus and system elements of what the power generation needs; domestic companies could produce the undersea pipelines materials used commonly; and domestic excavation techniques for land-based power plants were fully mature. The conclusion of ITRI (2006) based on the analysis of preliminary feasibility study and development priority for exploiting various ocean energies in Taiwan was: among all of the power generation techniques for ocean energies, OTEC is the most suitable one in Taiwan. One of the reasons was that the relevant technologies were well-established in the world and Taiwan had technical competences to carry on such technologies. Moreover, the Energy Program Office of the Science & Technology Policy Research and Information Center, National Applied Research Laboratories performed the staff work of the Energy Policy and Technology Development Steering Group of Executive Yuan by contracting with National Science Council in 2006. The office organized several seminars to invite domestic experts from the industry, government and academia to discuss the feasibility for developing OTEC power generation in Taiwan, and the encountered problems together with their countermeasures. For example, the discussed problems are related to the fabrication, construction as well as maintenance of deep ocean intake pipe and so on. The main conclusions of these seminars were that Taiwan has already possessed the relevant R&D competence as well as industry infrastructure, and other immature technologies could be reinforced by the global technology collaboration as well as by in search of global funding support (Energy Program Office, 2007).

The foreign information (OCEES, 2008) shows that the equipments and techniques of OTEC power generation have been improved in recent years. For instance, the development of the Kalina Cycle clearly exhibits superior efficiency to the previous closed cycle system and the Kalina Cycle used by traditional power plants and steel plants has an excellent availability and reliability. Moreover, heat exchangers with higher efficiency and heat exchangers with better inhibition to bio-fouling and corrosion are produced. The design and deployment method for cold water pipe with advanced reliability in terms of open cycle OTEC turbine is also established. In addition, the drilling platform for exploring petroleum at the water depth of more than 3,000 feet can be adopted for the design of floating OTEC power plant in the future. In Taiwan, ITRI commenced the study of first domestic OTEC power generation experimental system with small scale as well as low temperature in 2006 and has successfully produced electricity. As compared to OTEC power generation, DOWA consumes much less cold water, uses smaller cold water pipes, and pumps more shallow seawater. Therefore, the needed engineering techniques for DOWA, currently having been commercialized, are simpler and maturer than these of OTEC power generation.

3. Summary and Suggestions

In summary, the development benefits of OTEC power generation in Taiwan are much superior to DOWA in terms of energy security and environmental protection. In respect of industrial economy, DOWA has higher production values in a short-term period but, for a long-term period, the commercial operation of large-scale OTEC power plant will result in better direct and indirect production values. Regarding engineering techniques, they are far more complicated and difficult for OTEC power generation than DOWA. Although they have been improved with respect to power systems, heat exchangers, cold water pipes, and the design as well as construction of operation platforms, invested R&D resources are still needed to solve technical problems and to enhance economic competition.

On July 7, 2008 the G8 Summit was held in Hokkaido, Japan and global warming and high oil price became the most concerned issues for the member representatives. Under the new situations of energy, environment and economy, Taiwan should hold a different concept in terms of energy policy to emphasize the balance progress of 3E. They are expected that the ratio of national independent energy is effectively increased to enhance energy security; national GHG emission is substantially reduced to cope with the Kyoto Protocol, and national trillion energy industry is actively established to develop green economy. Literature (Hsu and Yen, 2007) demonstrates that the termination of OTEC research or construction programs for most countries is subject to financial insufficiency as well as poor economic benefits, and technical problems are not unsolvable difficulties. Since the status quo of energy, environment and economy is quite different from that of 1990s, it is necessary to reconsider the feasibility and integrated benefits of OTEC power generation. Until now there is no commercial OTEC power plant in the whole world and the industrial market has not yet been monopolized by some advanced countries. Provided that Taiwan can make an arrangement effort in advance to master some key technologies, it will be easy to establish such a niche industry and to occupy a leading and important seat in the global OTEC-related industry in the future. Based on Taiwan’s natural conditions and her demand to indigenous energy, it is proposed that Taiwan should implement OTEC R&D which majors in power generation. It has better set a development goal first and then invest R&D resources, organize research teams, execute integrated programs and offset Taiwan’s technical insufficiency by international cooperation. Once having strong technical confidence and economic competition, Taiwan can build commercial OTEC power plants.

References

ITRI. (2006). Development of Numerical Techniques for Estimating Ocean Energy Distribution and Assessment of Exploitation. (in Chinese). HsinChu: ITRI.

Sinoteck Engineering Consultants, Ltd.. (2002a). The Evaluation Report on the Feasibility of Key Technology as well as Conceptualization Design and the Suggestion of Optimal Adoption in Taiwan related to OTEC Power Generation . (in Chinese). Taipei: Sinoteck Engineering Consultants, Ltd..

Sinoteck Engineering Consultants, Ltd.. (2002a). The Evaluation Report on the Supply Ability of Industrial Systematic Elements in Taiwan related to OTEC Power Generation in 2002. (in Chinese). Taipei: Sinoteck Engineering Consultants, Ltd..

Ho, C.L.. (2003). The Introduction of Tide Power Generation. Energy Monthly. April, 2003. (in Chinese).

Lin, J.R. and H.P. Tsai (1989). The system development technique of low temperature and small scale Rankine cycle. (in Chinese). Science monthly, 0237.

Hsu, B.H. and C.W. Yen (1989). Introduction to the development prospect of ocean energy in Taiwan. (in Chinese). Science monthly, 0237.

EPO. (2006). 2006 National Energy Technology Development Project. (in Chinese). Unpublished. Taipei: STPI.

EPO. (2007). The Report of Energy Program Office Expansion Project. (in Chinese). Unpublished. Taipei: STPI.

Kuo, C.R., B.H. Hsu, A.K. Tseng, and Y.C. Lee. (1989). The system development technique of low temperature and small scale Rankine cycle. (in Chinese). Science monthly, 0237.

Liang, N.G. (1989). The history, status quo and prospect of OTEC power generation. (in Chinese). Science monthly, 0237.

BOE. (2007). The Energy Situation in Taiwan, Republic of China (in Chinese). Retrieved September, 2007, from http://www.moeaboe.gov.tw/

Lai, C.I. (2008). The Input Analysis of Ocean Thermal Energy Conversion R&D Projects in Taiwan (in Chinese). Sei-Tech Policy Review, 3. 99-103.

Lo, A.Y. (2008). The Blue Gold of 21 Century - Deep Ocean Water Industry (in Chinese). Sei-Tech Policy Review, 2，106-109.

Daniel, T. H. (2008). Ocean thermal energy conversion: An extensive, environmentally benign source of energy for the future. Retrieved June, 30, 2008 from http://www.sustdev.org/energy/articles/energy/edition3/SDI3-10.pdf

IEA. (2006). Review and analysis of ocean energy systems development and supporting policies. Retrieved September, 2007, from http://www.iea-oceans.org/_fich/6/Review_Policies_on_OES_2.pdf

OCEES International, Inc. (2008). Ocean engineering and energy systems. Retrieved June, 30, 2008 from http://www.ocees.com/mainpages/otec.html