#130 Stuart Davies, CEO of the ORPC
On episode 130 of the Bigger Than Us pocast, ORPC CEO Stuart Davies takes us on a deep dive through the current state of river and tidal power, the ORPC’s marine renewable energy technology and project development solutions. He explains why the industry is poised to scale, filling gaps that wind and solar can’t.
What is the ORPC?
(5:41) The ocean renewable power company or ORPC uses power from free-flowing rivers and tides to provide sustainable energy solutions. We’re headquartered in Portland, Maine. We have 28 employees in Portland, Montreal, Dublin, anchorage, and Seattle. Our mission is to provide 100% renewable energy solutions to off-grid communities.
What areas benefit most from river and tidal power?
(6:02) Our first target markets are mostly indigenous communities and eco-tourism facilities in Alaska, northern Canada, and Patagonia, Chile. This is about a $15 billion market, and globally, about a billion people live either without electricity or use noisy polluting diesel generators to produce electricity, which creates not only a high level of CO2 per kilowatt-hour but also numerous carcinogens.
(6:59) Our first commercial power system is in the remote village of Igiugig, Alaska. Our RivGen system has been sending energy to its community grid for about 14 months, which is longer than any other hydrokinetic device in North America. We’re displacing diesel fuel which the village has to actually fly in at an exorbitant price, which risks the health of the river they’re on, which is called the Kvichak River. It was in the news recently about the Pebble Mine, but it’s known for its largest sockeye salmon migration in the world.
If you look at the global carbon emission picture through 2100, the biggest increase in emissions will come from developing economies.
What are the benefits of river and tidal power for off-grid communities?
Environmental
(6:28) If you look at the global carbon emission picture through 2100, the biggest increase in emissions will come from developing economies. So the most urgent priority is to reach these markets, first with sustainable local renewable energy options and provide them with economic incentives to adopt these solutions now, and ORPC has invented some of the lowest emission producing renewable energy systems around. If we can get our products to these markets, it will be the equivalent of taking 350 million cars off the road.
(7:41) Next summer, we’re going to install our second RivGen device, a battery storage system, and a smart microgrid control system [in Igiugig, Alaska]. That’s going to enable the village to move off their diesel generators or move them to backup power roll. Our renewable energy solution will result in a 90% reduction in diesel use and CO2 emissions. We’re hoping to take that as a model project and take that around the world.
(9:19) It does not impede the river in any way. Our turban is just not rotating that quickly. My analogy is, it’s kind of like watching an eight-year-old ride a bicycle up a steep hill, it’s just not moving that fast. We’ve done 12 different deployments in our history, and we’ve documented over a million fish interactions and we’ve had no recorded fish injuries or fish mortality.
We feel like these markets are, on the one hand very challenging to operate in, but we have designed a device that works there.
Affordability
(8:11) There are subsidies in place, but if you work through unsubsidized, it’s about 92 cents a kilowatt-hour, and your average American pays about 13 cents. If you look at the communities that we’re targeting in Canada, Alaska, and Chile, they pay between 40 cents a kilowatt-hour, and we’ve seen as high as $1.40 per kilowatt-hour.
(19:23) These off-grid communities have the highest power costs in the world. And if you think about Patagonia, as well, as northern Alaska and northern Canada, solar has a tough challenge competing with us, because four months out of the year, they’re getting less than six hours of daylight a day.
During the winter, we had temperatures that got below negative 40 degrees and so that’s a really challenging environment historically for smaller wind and installations. With icing, it’s 30 degrees and snowing and then you get ice buildup on the device, and you have cracking and things of that nature. We feel like these markets are, on the one hand very challenging to operate in, but we have designed a device that works there.
Job Creation
(13:49) We’re not anticipating a lot of maintenance, but for these first 10 or 20 units, there’ll be annual inspections where we’ll work with the communities to bring that up and have their local residents trained to do that work. When we’re deploying it, over half of the people involved with the project and we would anticipate that going forward to even have a higher percentage of that, where we’re working with the local community to assemble the device and push it out into the water and set the anchor and then set it down. So there’s a lot of local job creation that we can do there as well
What’s the current state of river and tidal (hydrokinetic) energy?
(15:58) We’re where wind and solar were about 10 years ago. So there are probably six or seven companies now that have had a device that’s been installed and operated for six months or longer. I think we’re the longest in North America at 14 consecutive months.
But if you think about where wind and solar were 10 years ago, they’ve proven out that they could operate for a long period of time, they had proven they could generate power. The design was in place, and there’s been further refinement to the design. Then it’s been a real kind of virtuous cycle over the last 10 years of building more and installing more devices, which has driven the cost down at the same time. And it’s also gotten a lot of manufacturers interested in participating in that supply chain, which is then accelerated redesigns and further cost reductions.
If you look at wind 10 years ago, versus today, I believe costs have come down about 70%. For solar, it’s come down about 90%. So I really think our industry is at a position where we have a design, we feel like it works, we actually have kind of a near term plan where, again, we think we’re going to drive output on a given device up 40% or 50%, here in the next 12 or 18 months, just with the modeling we’ve been doing around software and what we’ve learned on drag and from this first deployment.
(19:01) If you think about our initial target markets, these are off-grid communities. ORPC is not looking to compete with wind and solar. We’re too expensive. If you want to be on the grid today, you’re going to need to be five or seven cents a kilowatt hour. It’s going to take us a few years to get down that curve.
You testified in front of Congress about the opportunities in the river and tidal industries. What are some of those opportunities?
(18:16) The nice thing about our technology, when you look at it is most of the pieces on there look like auto parts or agriculture equipment parts. So, really the conversation that I had with the Senate, and what we wanted to get out there for congressional leaders to understand is, where the state of the industry is, and that what the industry needs support in is really putting devices in the water here over the next two to three years so we can start that same virtuous cycle that wind and solar saw over the last 10 years.
What lies ahead for the ORPC?
(26:37) I’m not worried about how quickly will deploy units 50 to 500. It’s really getting people to adopt those first 50 because the market is actually enormous. When you think about those billion people who either don’t have power, they’re using diesel generators, a lot of them live near tidal and river locations. If we just took a small slice, if you said 1% of that population would meet our criteria, that’s like a $400 billion market.
(28:27) One of the reasons I was attracted to ORPC is I feel like we need a third leg of the stool or the platform. In addition to wind and solar, river and tidal are different in that they are highly predictable. So they can be the baseload resource to fully replace coal and natural gas. I’m going to use river and tidal for a third of my power needs, and that’s the baseload, and then I’m going to use wind, solar, and battery storage for that other two thirds and we have a grid, we can absolutely manage the intermittency to be handled with battery storage.
I think the discussion around what’s the true cost, and what’s the measure of it, I believe really needs to change.
Changing the conversation from cost to climate.
(33:41) What’s been surprising to me is how the conversation is so focused on the monetary cost per megawatt-hour for electricity, as opposed to all the negative externalities that are out there. I get in these meetings, and I scratch my head where on the one hand, everyone in the meeting says, I believe in the client climate science and the climate science says we have eight to 12 years to reduce our carbon emissions, and we’re going to have irreversible changes. So to me, if the goal is to eliminate CO2 emissions, shouldn’t we be adopting energy solutions that have the lowest lifecycle CO2 emissions of anything out there? It’s amazing to me how the utility industry and the fossil fuel industry just dominates that conversation and controls the narrative.
(36:17) I think the discussion around what’s the true cost, and what’s the measure of it, I believe really needs to change.
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