If you ask the people of Yakutat, Alaska, the best part about living in this small, remote town is the breathtaking natural beauty. The worst part is the price of electricity.

Yakutat's 1.5-megawatt electrical system is completely reliant on diesel fuel, which is delivered four times per year at a price of $4.50 per gallon. In recent years, the community's electricity prices have been consistently between 50 and 60 cents per kilowatt-hour. In February, according to the Department of Energy, the average residential user in the United States paid less than 12 cents per kWh.

High energy costs are threatening the very existence of the community, said Scott Newlun, general manager of Yakutat's municipally owned power plant. People have been living in Yakutat for thousands of years. But in the last two decades the population has dropped by half -- from 1,200 to 600 -- as residents have been forced to move somewhere with more job opportunities and a lower cost of living.

To try to reverse this trend, Newlun started looking for alternative ways to power his town. Having worked for years as a commercial fisherman, Newlun decided to look to the ocean for a solution and started to explore the possibility of powering Yakutat with wave and tidal power, known collectively as marine hydrokinetic (MHK) energy.

Yakutat is now in line to become home to one of the first remote marine energy projects in the United States, in partnership with Resolute Marine Energy. According to Bill Staby, founder and CEO of the Boston-based company, Resolute's novel wave energy converters are expected to cut Yakutat’s electricity costs in half.

Technologies being born

The MHK industry as a whole is still in the development stages, with companies eagerly looking to get their technologies in the water in places where they're economically viable. In the United States, companies have been struggling to deploy projects in the face of funding shortages and an arduous regulatory process (ClimateWire, May 8).

One of the first places wave and tidal projects are likely to take off in the United States is Alaska, where high energy costs help make the economic case for capital-intensive renewable power.

"There are dozens of communities in Alaska that are cut off from any kind of regional or interstate grid, and they all have extremely high electricity costs, which has quite a profound social impact on the people that live there," Staby said.

According to the Alaska Energy Authority, there are nearly 200 communities in the state without access to the main power grid. Last year, these towns received $39.7 million in public subsidies to keep their lights on and businesses operating.

Before deploying a wave energy converter in Yakutat, Resolute has to complete another six to nine months of site research, including environmental and engineering studies, in order to comply with a patchwork of U.S. regulations. The company plans to deploy a demonstration project next fall and will seek to get it commercially licensed by the Federal Energy Regulatory Commission.

The Portland, Maine-based tidal company Ocean Renewable Power Co. (ORPC) is also looking to tap into the Alaska market. In 2012, the company built one of North America's first grid-connected tidal generator projects in the waters off Eastport, Maine, and plans to deploy a scaled-down version of that technology to serve remote, off-grid communities.

ORPC currently has a FERC permit to test an ocean project in Cook Inlet and two-month permit to test a generator this summer in the Kvichak River that will power the town of Igiugig in southwest Alaska. The 25-kilowatt project is expected to meet half of the 70-person community's electricity needs.

"All around the world there are literally hundreds of millions of people who live in these communities who either have no electricity or are paying very high costs because of the price of diesel," said Chris Sauer, president and CEO of ORPC.

In Igiugig, diesel costs nearly $8 per gallon, which translates to about 80 cents per kWh. Towns in countries across Africa and in Latin America lack electricity altogether. According to Sean O'Neill, president of the U.S. trade group Ocean Renewable Energy Coalition, developing communities outside the United States represent the MHK industry's largest commercial opportunity.

Export market beckons, but U.S. lags

"Quite frankly, one of the best things the U.S. could be doing is exporting clean, sustainable energy and making certain that underdeveloped countries, when they start getting into energy, they start getting into sustainable energy systems," O'Neill said.

For Newlun, the potential to help pioneer a new American industry is another important driver behind Yakutat's wave project.

"We're not just doing it for us; we're doing it for the whole nation, or the world if you want, and we're excited about it. We want that to happen, we want to be innovators, and it makes me a little bit angry that the U.S. government isn't funding this fully to become the leaders in this technology," Newlun said.

Newlun has been trying to bring an MHK project to Yakutat for the last 15 years. In previous attempts, he was stymied by high costs and FERC's complex permitting process.

"We have all of the university power, all of the development companies, we have all the resources available in this country, but we're not the leaders in this technology right now. You see more European projects funded and put into commercial use," Newlun added.

In recent weeks, the Department of Energy has taken steps to address some of the MHK industry's concerns. Last month, DOE announced a $10 million funding opportunity for MHK demonstration projects at the Navy's Wave Energy Test Site off the coast of Oahu, Hawaii.

DOE also announced a $4 million funding opportunity to support one university consortium over three years on the advancement of wave and tidal energy technologies and is developing a new data repository to manage the scientific and technical data generated by DOE-funded projects.

MHK has also seen a small but steady increase in federal funding with $32 million awarded in fiscal 2012 to just over $41 million awarded in the omnibus budget for fiscal 2014. To attract private financing, the industry is now creating a set of international standards to measure product quality.

Wave and tidal power companies might also get a boost from Congress. Sens. Ron Wyden (D-Ore.) and Lisa Murkowski (R-Ala.) introduced a bill (S. 1419) last year to remove regulatory obstacles and encourage research and development for the next generation of hydropower.

The Energy and Natural Resources Subcommittee on Water and Power held a hearing on the legislation in February and is awaiting further action. And as Yakutat awaits further government approval, Newlun will focus on keeping the diesel generator running.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500