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Wave Energy Stocks

Written By Nick Hodge

Posted May 7, 2008

Take State Route 532 west from Washington’s mainland and you just may find a crucial piece of the future energy puzzle.

On the Puget Sound, about an hour south of British Columbia, a group of three high school students are making electricity from waves.

The trio of 16 year-olds mounted a solar panel on a decades-old canoe to make a ramshackle barge. The solar panel powers a pump that keeps the ‘barge’ from taking on water.

It’s also fitted with a metal mast that contains swinging pendulums. As wind and waves rock the boat, the pendulums turn a generator, creating electricity.

Of course, this is a rudimentary way of deriving power from a resource that has already been the recipient of millions of dollars of research and development.

Nonetheless, the ambitious youngsters are on the right track. And they’re in the right place.

Puget Sound Wave Energy

Since the passage of Washington State’s renewable portfolio standard, requiring 15% renewable energy in the mix by 2020, there has been what some are calling a ‘land rush’ on the Puget’s waters.

From start-ups to established utilities, the race was on to claim prime waters for electricity generation and to file regulatory permits.

The first utility to file with the Federal Energy Regulatory Commission (FERC) for a tidal energy project was Tacoma Power.

Since receiving permission over two years ago, Tacoma power has investigated eight sites for possible installation of tidal generators.

And there are plenty of others itching to get into the wave business in the Pacific Northwest.

In January of this year, Green wave Energy filed an application for the Oregon Coastal wave Energy Project. The proposal includes plans for six wave parks, each containing up to 90 buoys with total generation capacity not to exceed 790 gigawatt-hours.

There are a few other projects that are currently in the pre-permitting stage . So I suspect a slew of wave energy stocks from this area in the future.

You see, the Electric Power Research Institute estimates that waves off the coasts of Washington, Oregon and California could produce anywhere from 250 to 500 terawatt-hours per year.

If we could harvest the upper limits of that range, nearly 13% of the 4,000 terawatt-hours we consume annually as a nation could be produced there.

And that’s just a tiny percentage of the energy the ocean has to offer.

World Wide Wave Power

Globally, it’s estimated that the ocean, in the form of marine energy, can provide twice the amount of electricity than we currently consume.

Of course, it would take massive deployment and investment to reach those levels. But with such massive potential, you can bet there will be more than a handful of winners in this space.

One of the sure (shore?) bets in the business is a technology dubbed CETO.

Unlike other technologies that deploy underwater turbines and transmission lines, CETO uses wave energy to pressurize and pump water.

The pressurized water can then be used to desalinate water (a very hot industry) or to produce electricity for delivery to the grid.

The technology is owned by a renewable energy holdings company, which incidentally is a part of the Green Chip International portfolio.

And CETO has been licensed for use in the Southern Hemisphere to another renewables company that could soon be in the portfolio.

But the opportunities don’t stop there.

The Alternative Energy Speculator also is primed for advancement in water technology.

I’ve chosen to play this angle in that portfolio with a small company that has ties to both the Puget Sound and to the wave-rich UK.

Feel free to check out those services at any time.

This is just the beginning of the opportunities in this nascent sector. We’ll undoubtedly dive continually into these types of ocean energy plays going forward.

Call it like you see it,

nick hodge

Nick