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Cost implications of combined power generation and seawater desalination by Ocean Thermal Energy Conversion (OTEC).

Dominic Michaelis
Jerome Tomasi
www.energyisland.org

In 1881, Jacques Arsene d’Arsonval patented the idea of using the 20°C difference of temperature between the warm oceans’ surface and the cool waters 1000 meters below these to produce energy. A brilliant follower of his, both pupil and friend, Georges Claude, inventor of the neon tube and liquefied air, built the first experimental OTEC system in 1930. Instead of using a working fluid such as ammonia, he introduced the idea of using the surface water itself as the working fluid, evaporating it in a vacuum chamber to create water vapour that would power a generator which produced electricity. The water vapour would then condense on heat exchangers cooled by the cold water drawn from the depths, delivering desalinated water. This became known as the open cycle OTEC.

Since then, some small scale experimental plants have been built, the best known being the 210 kW open cycle plant in Hawaii, designed and operated by the National Energy Laboratories Hawaii (NELHA), where Dr. Luis Vega has written in depth about open cycle OTEC. (1)
A 1 MW barge mounted OTEC pilot plant has been built by a Japanese/Indian consortium, but has had problems with deploying the deep water pipe.

A further 1 MW commercial plant is being built by OCEES in cooperation with NELHA and the state of Hawaii, which will produce electricity and fresh water for the tenants in the NELHA ocean industry park. This plant is expected to be operational in 2008. OCEES also have a contract with the US Department of Defence to build a 13 MW OTEC plant at an undisclosed location. Several large scale OTEC platforms exist on the drawing board, designed to deliver 100 MW or more.

It is important, at this stage, to establish a credible budget for an open cycle OTEC platform, taking into account both the value of electrical energy delivered, and the value of desalinated water, should it be produced by other means, such as reverse osmosis. This would allow OTEC project costings to be carried out and their competitiveness and suitability assessed against a realistic cost yardstick.

The cheapest electrical generation plants are those that burn fossil fuel, some gas generators reaching efficiencies of 50%. But these fossil fuel plants, whether burning coal, petroleum, or gas, inevitably contribute to global warming and to the greenhouse effect and are prey to unpredictable fuel cost variations.

Nuclear electrical power generation is seen as “clean” when one forgets that it also rejects some 50% of its heat into rivers , seas, or the atmosphere, that it carries with it nuclear waste disposal and environmental risks, together with its vast decommissioning “hidden” costs, but seems to be the choice taken by many nations to provide for their ever growing electrical needs.

Nuclear power costs

It therefore seems reasonable to take the cost of nuclear power generation as the comparative base cost of OTEC electricity generation plants, expressed in $/kW installed.
An idea of present day costs of nuclear plants is given by the Olkiluoto 3 power plant in Finland, scheduled to go on line in 2009, which will be the first EPR or European Pressurized Reactor built (2).

The construction will be a joint effort of French Areva and German Siemens AG through their common subsidiary Areva NP. The electrical power output of the plant will be 1600 MW and will cost about €3 billion. This is equivalent to 1875 Euros per kW, which, at today’s rate of exchange of 1 Euro = $1.2713 (1 July 2006 ) gives a figure of $2383/kW. This is definitely the top end of nuclear plant costs.
.
The Westinghouse AP-1000, scaled-up from the AP-600, has now received final design approval from the NRC and is expected to gain full design certification.
Capital costs are projected at $1200/kW. (2005) (3)

A base cost of $1500 / kW, between the two examples given, but much closer to the lower figure, therefore seems a reasonable figure to set as a comparative standard for OTEC power generation systems.

OTEC desalination capability

Open cycle OTEC systems produce large quantities of valuable desalinated water. A ship based design by Sea Solar Power, will produce 100 MW of electricity. Calculations demonstrate that the system will also produce 120 million litres of desalinated water/day. (4)

I MW of open cycle OTEC generated electricity will produce 1,2 million litres of desalinated water/day. That is the figure we will use for our cost comparison, although work carried out by OCEES indicates that this figure can be considerably improved, to give up to 2,8 million litres of desalinated water per MW per day. (4a)

The two principal methods of desalination are Multistage Flash (MSF) desalination, requiring large costly thermal energy inputs, and Reverse Osmosis (RO) which needs an associated power plant to force the sea water through a set of osmotic membranes. Multistage Flash distillation costs about $1 per 1,000 litres, Reverse Osmosis costs about half that amount. (5)

For a variety of reasons, in many cases where fossil fuels are costly, Reverse Osmosis is often selected. A recent RO example has been selected, to gauge its cost so as to give a value to the desalination “by product” of OTEC per MW.

A Reverse Osmosis desalination plant is being built in Perth, Australia, designed to provide 140 million litres of water per day. According to an assessment made in 2002 the cost will be $210 million. Suez Degremont are the contractors who will build the plant. The plant is planned for a 25 year life. The sum, to cover these 25 years of running and maintenance is $160 million, bringing the total contract value to $370 million.

This is an increase in costs of 1,75, compared to the initial cost of $210 million. The given figure excludes the necessary associated power plant, a 24 MW wind farm, and its high capital and yearly maintenance costs. (6)

To back up the capital cost figure given for Perth, figures from the “U.S. Army Corps of Engineers Cost Estimates for RO Desalination Plants in Florida” (date deduced from text for figure revisions 1995) give capital costs in $/cubic meter/day ranging from 1341 to 2379.

If a figure approximately half way between the two, at 1800, is taken, the capital sum for producing 140,000 cubic meter/day is $252 million, higher than the Perth cost.

Operation and Maintenance figures are given as between $1,02 and $1,52 per cubic meter. This works out much higher than the Perth figures. (These figures will be above present day costs because of cost reductions of Reverse Osmosis, partly offset by the lesser value of the dollar over the seven year gap. Nevertheless, they provide a useful yardstick to compare present day costs.) (6a)

A 200 MW OTEC plant, taken as a standard example, will generate 240 million litres of desalinated water per day. This is an equivalent volume to that of a large tanker. Considering the initial contract sum of $210 million for Perth RO producing 140 million litres a day, when upgraded as though it were producing 240 million litres per day, the OTEC 200 MW corresponding value would be $360 million. This figure, divided by 200 000 to reduce from 200 MW to 1 kW, represents a system benefit of $1800/ kW installed, $300 above the nuclear base cost of $1500/ kW installed.

The first conclusion is that an OTEC platform can justify a budget of over twice the base cost of a nuclear power plant, set at $1500/ kW installed, to include 1kW of power installed, and the desalination value of $1800/kW ( Perth figure) associated with that kW, a total figure of $3300/ kW. The budget for a 200 MW OTEC plant would be $660 million. (This is the cost of 5 French rafale fighters or 1 US stealth bomber! Energy independence must be a national priority and could be better achieved by OTEC than by conventional forms of military might.)

If the 25 year maintenance and running costs are taken into consideration, the Perth figure needs to be multiplied by the factor of 1,75 previously referred to, giving a total cost benefit of $3150 /kW, over twice the base nuclear cost.

These costs are relevant because, in open cycle OTEC, the running and maintenance are an integral part of the power generation process, and imply no significant extra cost, all the more so because of its relative simplicity compared to a Reverse Osmosis plant. Figures available for running, maintenance and fuel of nuclear plants are comparatively low, and will be ignored, given the large capital cost variations

The second conclusion is that, if running and maintenance of Reverse Osmosis plants over 25 years are included, the OTEC platform can justify a budget per 1kW at $1500 / kW, plus the derived figure of $3150, a total of $4650 / kW; over three times the base cost of nuclear at $1500 / kW.
The third conclusion is that, if the desalinated water output can be doubled, to 2,4M litres per day / MW, or more, as has been calculated by OCEES International Inc., an OTEC power plant company, then the desalination figure is doubled proportionally, the OTEC platform budget jumping to $1500 / kW, plus $6300 / kW, or $7800 / kW, just over 5 times the base cost of nuclear. Rather than a power generation plant with a desalination capacity, it then becomes a desalination plant with a power generation capacity.

Although over 100 years old, OTEC is in its infancy. OTEC desalination values may increase, as may power output with techniques such as “Mist Lift”. (7) Renewable alternatives for the world’s ever growing needs must be sought, OTEC representing a possible source of clean energy on a nuclear scale. It also represents a stepping stone towards the hydrogen economy. It is our hope that these OTEC platform budget indicators will help those working on OTEC to be able to present a financially credible tool to assess their work, and encourage energy and water firms, funding organisations and governments to look at OTEC more favourably.

(1) OTEC open cycle overview by Dr Luis Vega, NELHA.
http://www.otecnews.org/articles/vega/05_open_cycle.html

(2 ) EPR Finland at $1611/kW
http://en.wikipedia.org/wiki/European_Pressurized_Reactor
http://upload.wikimedia.org/wikipedia/commons/3/33/EPR_FIN1.jpg

( 3 ) Westinghouse AP-1000 Nuclear “ Light Water ” Reactor.
http://www.uic.com.au/nip16.htm

(4) 100 MW OTEC ship planned by Sea Solar Power to give 120 M litres/day.
That is 1,2 M litres/ day/ MW
http://www.seao2.com/otec/index.html

(4a) OTEC open cycle modified to give up to 2,8 million litres of desalinated water per MW per day.
http://www.ocees.com
http://www.ocees.com/mainpages/Freshwater.html

(5) Multistage Flash distillation costs about $1 per 1,000 litres, Reverse Osmosis costs about half that amount
http://www.answers.com/Desalination

(6) PERTH /AUSTRALIA
http://www.water-technology.net/projects/perth/specs.html
http://www.suez.com/upload/up1352.pd
http://www.boursier.com/vals/FR/news.asp?id=134439
http://www.water-technology.net/projects/perth/
http://www.watercorporation.com.au/ water/water_sources_desalination.cfm

The contract, was due to be awarded in April 2005.
The contract sum is transferred from AUS dollars to US dollars.
Australian dollar to US dollar value has been very stable recently, and the one year dollar depreciation till mid 2006 can be ignored, given the wind farm costs omitted in the appraisal

(6a) Table 5 U.S. Army Corps of Engineers Cost Estimates for RO Desalination Plants in Florida
(Date deduced from text.1995 )
http://www.oas.org/dsd/publications/Unit/oea59e/ch20.htm

(7) Mist Lift OTEC
http://library.greenocean.org/oteclibrary/otecdesigns/mistliftotec/

© 2006. Dominic Michaelis and Jerome Tomasi. All rights reserved.
Published on OTEC News with kind permission of the authors.