Low tide
Without state or federal funding, S.F.'s tidal power project might be dead in the water.

By Matthew Hirsch

IN THE YEAR since city leaders floated a proposal to generate electricity from the waters beneath the Golden Gate Bridge, the idea has garnered tremendous political currency but not a lot of the monetary kind it needs to become a reality.

Eight of the 11 city supervisors cosponsored a resolution by Sup. Matt Gonzalez to develop tidal energy – earning them favorable press coverage from national media outlets like MSNBC – and Gonzalez used the issue to distinguish his campaign for mayor. Since then Mayor Gavin Newsom also has gotten squarely behind the concept.

The first public hearing on the tidal energy project is July 23, when San Francisco Department of the Environment representatives and other project participants report to Gonzalez and the Local Agency Formation Commission. The hearing is expected to draw attendees from several Bay Area cities, as well as Mendocino and Monterey.

Originally developed by France in the mid-1960s, tidal power has developed into a viable energy source primarily in coastal Europe and parts of Asia. Tidal generators operate pollution free, but they've still been problematic because of the destruction they cause to the ocean habitat.

The technology is advancing steadily, with tidal projects now planned for New York City and the Florida Gulfstream and design advances that are less harmful to the aquatic environment. What's missing is a reliable source of government funding. This lack has been the single biggest reason there's been almost no progress on the San Francisco tidal project since the time it was announced.

HydroVenturi, a London-based energy company, agreed to pick up the estimated $4 million tab to build a demonstration unit in the bay. If successful, the San Francisco project could make HydroVenturi a world leader in ocean energy, so the company was willing to assume all the risk. But HydroVenturi has had trouble securing funds from private investors, and it's run into delays over permits and possible questions about intellectual property rights.

It's understandable why HydroVenturi, a five-year-old start-up company with no established connections in the United States, is having trouble generating cash here. Or why cash-starved local governments are having a hard time contributing to scientific research and development.

But what's less understandable is why our state and federal governments – which are ostensibly struggling with air pollution and a dangerous reliance on foreign oil – are doing so little to develop this and other projects that have such strong potential to produce cheap, clean, and abundant power.

Watts from water

Tidal energy uses the natural force of the ocean current as its power source. Submerged properly beneath the Golden Gate Bridge or at other key locations in the bay, experts believe, a tidal generator could produce more than enough electricity to meet all of San Francisco's needs.

Like more advanced solar and wind technologies, tidal energy would eliminate the pollution fossil-fuel power plants emit, and manufacturers say it may already be cost-competitive with traditional gas-fired plants.

It would also overcome the biggest problem with solar and wind power, namely that they're completely dependent on the weather, so cities need to keep the old power plants around for when the fog rolls in and the wind stops blowing. Tidal energy, by contrast, is highly predictable; you can estimate when the tides will surge several years ahead of time.

Best of all, officials in the environment department identified the state-of-the-art HydroVenturi device that captures tidal energy without any moving parts in water. The HydroVenturi model creates suction from water funneled rapidly through underwater tubes and transmits kinetic energy to drive turbines located on land.

This innovation is intended to preserve the equipment and the surrounding ocean environment, including the fish that tend to get chopped up in most existing tidal generators, an environmental problem that has slowed the spread of the technology.

Dreams and reality

Last May when officials in the environment department brought their tidal energy idea to the Board of Supervisors, they proposed building a one-megawatt pilot project (capable of powering 750 homes) by 2006. That goal, like an earlier decision to shut down the Hunters Point power plant by 2005, has proven unrealistic.

"That was a reflection of our very optimistic, rather uneducated understanding at that time," Peter O'Donnell, renewable energy specialist at the environment department, told the Bay Guardian. The July 23 LAFCO hearing has been scheduled to last two hours, which also might be too ambitious.

"Initially, Gonzalez wanted an update on the tidal power project, and that might take 20 minutes because not much is happening," O'Donnell said. "In my conversations with Matt Gonzalez in the last month, he's just glad this project is going forward."

Gonzalez didn't return phone calls for this story.

Instead of going forward with the one-megawatt project, city officials have already agreed to scale it back to 150 kilowatts. They also moved back the demonstration from October to next June, to coincide with the United Nations World Environment Day.

"If we had stuck to the October schedule and things had slipped – and they would have slipped – it would have set us back to November or December, and it wouldn't have been as attractive a time to do this," O'Donnell said, citing the difficulties of completing the project once winter approaches.

In the past two years that O'Donnell has been shopping his idea for tidal power, only HydroVenturi has been linked to the project. One reason HydroVenturi has held this advantage is that it's the only company known to be developing a device of this kind – one that won't ravage the fragile San Francisco Bay.

Another is that HydroVenturi agreed to foot the bill for the project, a condition the city had placed on two other tidal system manufacturers that decided against testing in the San Francisco bay.

"Nobody else has offered to spend that kind of money here," O'Donnell said.

The trouble is that HydroVenturi has slowed its efforts on the pilot project since last May to focus on finding a new CEO and new funding sources. An ICC financial analysis report filed April 19 showed that HydroVenturi has total assets of just 411,000 British pounds, or less than $770,000, and less than $2,000 in total sales.

Dave Olson, managing director of MCC energy advisors, a Malibu-based consulting firm handling financial services and project-development assistance for HydroVenturi, told us the company's assets and sales have risen since the April ICC report. In fact, he said the fundraising effort for the San Francisco pilot project has done especially well since January, when CEO Joseph Neil told California Energy Markets, in an interview, the company had no money.

"Is every last nickel put in place for the pilot project? Maybe yes, maybe no. But we've identified several investors ready to invest in the pilot project and the corporation," Olson said.

Part of the fundraising campaign includes an agreement with the Carbon Trust, a nonprofit based in the U.K. that helps emerging energy companies connect with government and private-sector funding.

According to the Carbon Trust Web site, the organization granted HydroVenturi a contract to complete a tidal energy project for up to $375,000.

The availability of this kind of funding has been the most significant difference between the success of ocean energy technology in Europe and the United States. Russell Pullan, head of venture capital and investment funds for the Carbon Trust, told us the group might even do a venture capital investment in tidal power within a year or two.

Who's paying?

Despite the fact that the Bay Area has the highest concentration of venture capitalists in the world, Olson told us it's been difficult convincing investors to buy into renewable-energy technology.

"All the V.C.s from Sand Hill Road [in Menlo Park] want to invest in dot-coms or start-up companies," he said. "They don't necessarily want to invest in energy companies."

Even so, Olson said HydroVenturi has acquired backing from institutional investors and wealthy individuals, but the company has had less success with government agencies. One of the federal power authorities is investing in HydroVenturi, and so is a Canadian government-owned electric utility, but no U.S. state government has chipped in.

The short supply of U.S. government funding dates back to the 1970s, when the feds poured money into a technology that combined cold water from the ocean depths with warm, surface water to produce steam. Ocean thermal energy conversion was then considered the best way to cull electricity from the sea, but after blowing too much money on a single project in Hawaii using the "cost plus fixed fee" financing method – the same pricey method the Defense Department is using for contractors like Halliburton in Iraq – the feds gave up on ocean energy.

While the U.S. Department of Energy still has no tidal energy program, it began accepting grant proposals for ocean energy two years ago, according to Ann Marie Harmony, executive director of San Diego-based nonprofit Practical Ocean Energy Management Systems.

Harmony would like to see ocean energy compete with solar and wind energy for federal funds but said that's a long way from happening, especially since the National Renewable Energy Laboratory in Golden, Colo., doesn't do ocean energy research. She detected the same anti-ocean energy bias in the state government too, as the technology was initially left out of the 2002 California law establishing guidelines for renewable-energy standards.

Roger Bedard of the Palo Alto-based Electric Power Research Institute will be at the July 23 public hearing to pitch a tidal energy research proposal to northern California city officials.

Bedard is asking local governments to participate in the study, because the California state government, after initially agreeing to cover the $40,000 cost, never came through with the funds. Had the state paid for this tidal study, local governments would have had access to the information for free.

"We're lucky enough that we have enough paying customers that we don't have to worry about free-riders," Bedard told us. But it's unheard of for an energy technology to be developed without government support, he said, and tidal energy won't be the first.

The Local Agency Formation Commission hosts a public hearing on the San Francisco tidal energy pilot project Fri/23, 2-4 p.m., City Hall, Room 250, 1 Dr. Carlton B. Goodlett Place, S.F. For more information go to www.sfgov.org/lafco or contact Monica Fish at (415) 554-7702.

E-mail Matthew Hirsch at matthew@sfbg.com.