George Taylor stands before a map of the world in the conference room of Ocean Power Technologies. He points to some of the world’s great oceans as he explains his company’s move to convert the energy of waves into electricity. “North of the Tropic of Cancer and south of the Tropic of Capricorn are the best places for wave energy,” Taylor says of the latitudes that border the world’s tropical regions. “As you get closer to the equator, the wave energy isn’t as high.” For Taylor, the CEO of Ocean Power Technologies in Pennington, high waves mean more than great surfing. They represent a chance to trap abundant energy and turn it into electricity for houses, factories and military bases. Last month, New Jersey awarded nearly $500,000 to Ocean Power Technologies to help it commercialize its product. The money was part of $2.7 million in state grants to 10 renewable-energy companies. In 1999, Ocean Power received a $250,000 loan from the state. “Ocean Power Technologies exemplifies the potential of energy companies in the U.S.,” says Jeanne Fox, president of the New Jersey Board of Public Utilities (BPU) in Newark. “We will continue to fund progressive companies who are creating alternatives to traditional energy resources.” New Jersey recently doubled to 4% the amount of energy utilities will be required to derive from clean sources in 2008. The BPU currently offers rebates to businesses and residences that install renewable, clean-energy generation systems powered by the sun, fuel cells and biomass. Ocean Power’s system consists of a buoy tethered to the ocean floor by a flexible pole. As waves pass, the buoy moves up and down, creating a flow of hydraulic fluid that powers an electrical generator housed in an underwater canister. Current from the generator then flows through a cable to an onshore transformer. Taylor says generating systems powered by waves have advantages over solar panels and wind-powered systems because they are quiet and nearly invisible to the public eye. He says his underwater stations should last 30 years. How much energy the ocean system harvests depends on various factors including wind speed and the distance the waves travel. Taylor says the best power-generating waves are found in California, Hawaii, Australia, Japan and Great Britain. This fall, Ocean Power and the U.S. Navy will install a buoy station off the island of Oahu in Hawaii to power a Marine Corps base in Kaneohe Bay. “We plan to gather operational data for a two- to five-year period in order to validate the technology,” says Don Rochon, a spokesperson for the Naval Facilities Engineering Command in Pearl Harbor on Oahu. Each buoy-about 15 feet in diameter and 40 feet long- generates up to 50 kilowatts of electricity, enough to light some 50 homes. The completed project will generate one megawatt of energy, enough to meet the electrical needs of a small town. Wave energy currently costs 7¢ to 10¢ per kilowatt hour (kWh). That’s comparable to the cost of nuclear power but substantially higher than the 3¢- to-5¢ cost for electricity generated by plants that use fossil fuels. Charles Dunleavy, CFO of Ocean Power, expects the cost to drop 3¢ to 4¢ per kWh with larger buoys and increased generation volumes. Ocean Power has partnered with the Navy before. The closely held company developed a method for recharging batteries on submarines without removing them from the water. Ocean power now plans to conduct a site survey for buoys to power Navy bases on the islands of San Clemente and San Nicolas in Southern California. Taylor traces his interest in the power of the sea to his childhood. “As a kid growing up in Australia, I used to surf,” says Taylor, 69, who has lived in Princeton since 1962. “You could feel the energy in the waves, especially if they threw you.” Taylor launched Ocean Power with Joseph Burns, a colleague at Sarnoff in West Windsor, where the two men had worked on integrated circuit and semiconductor technologies. They cofounded Princeton Research Associates, a technology consulting company, in 1979 and formed Ocean Power Technologies in 1984. Burns died in 2001. “Joe was a great friend and business partner who added not only the dimensions of great technical expertise but also the balance of strong business judgment and a great sense of humor,” says Dunleavy. “While we all miss him very much, his contribution will help the company grow.” Taylor and Burns waited a decade for the technology that would make their electrical generating scheme practical. By 1994, offshore oil and gas rigs were using advanced sensors and other devices that Taylor found useful. Instead of fighting the waves, Ocean Power built its system around poles that bend during severe storms and hurricanes. The equipment is manufactured in Alabama, Hawaii and Australia and assembled and tested in Pennington. Ocean Power has received $11 million in government funding over the years, including grants from the Navy Small Business Innovative Research program. In addition, more than 150 shareholders have pumped what Taylor calls “millions” into the company, which has 13 employees. Not everyone sees a high-voltage future for power that comes from the sea. “You need to be near an ocean with high waves and, obviously, you can’t find that in places such as the middle of America,” says Chris Kwan, who follows alternative-energy stocks for TD Newcrest in New York. Taylor responds that some 70% of the world’s population lives within 50 miles of a coastline. Taylor calls Japan, Portugal and Great Britain prime candidates for ocean-based power generation. These countries all have large coastlines and face high electricity costs along with strict governmental requirements for clean energy. To Taylor, this combination creates an unprecedented opportunity. “The world spends $100 billion to $200 billion annually on new power-generation equipment,” Taylor says. “This is the market we’re going after. It’s huge. Even if we only get a little bit of it, it will be very large.” | email [email protected]