Hydrokinetic Potential Reduction in Cost of Energy

At this time there is minimal if any third party testing and verification of devices. Cost information is based largely on claims from manufacturers, who typically underestimate project expenses in the early stages of development. In fact, the turbine deployed by the Yukon River Inter-Tribal Watershed Council at Ruby in 2008 was the first hydrokinetic device to be connected to a grid anywhere in the United States in a river location. The first tidal current devices, six 34kW turbines, were installed in the East River of New York City in late 2006. There is more cost data available for tidal hydrokinetic applications installed in the northeastern United States, but to date these have all been demonstration projects and not permanent installations.

In order to assess performance and economics of hydrokinetic devices in river locations, the Electric Power Research Institute (EPRI) has established a baseline design for a hydrokinetic device consisting of a horizontal axis turbine mounted on a pontoon platform. Based on that design, a performance, cost, and economic model using a simple payback period (SPP) was developed. This model can be extrapolated to various sites of interest around the state. As is true with many technologies, the commercial scale economics are limited for rural Alaska, and small projects will yield higher costs per installed kilowatt. Nonetheless, EPRI calculated a simple payback period of 3 to 5 years for the isolated grid communities of Iguigig and Eagle. This is based on a system-level preliminary design of a plant anchored to the river floor (see Case Study), with two sets of two counter-rotating, 4.5 ft diameter rotors and a generator mounted on the rotor axis. The installed cost per kW of generation capacity is estimated at $7,500 for the 40 kW-rated plant at Iguigig and $5,800 for the 60 kW-rated plant at Eagle. The single 5 kW Encurrent project at Ruby was installed for $16,000 per installed kW.

While installation costs are high even in comparison to other renewable energy systems, they are not unexpected given the current level of development. In addition to capital costs, the economics of a project are also tied to other project costs including operation and maintenance (O&M), insurance costs, and permitting, design, and environmental monitoring costs. These could be substantial, especially for early generation installations. EPRI also states that initial project costs used in their analysis contain a margin of error of up to 30%, and operating and maintenance costs have a margin of error as high as 80%. This could dramatically impact the simple payback period and likely will vary from site to site.

Nonetheless, the results are compelling and indicate that, if barriers to development of the technology are overcome, hydrokinetic devices could result in a real reduction in electrical generation costs in remote Alaskan communities with an appropriate resource.

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