Power Buoys or Expensive Anchors?
Commercial wave power soon may be coming to the Oregon coast. Last month, a New Jersey-based company, Ocean Power Technologies Inc., received the first federal permit to develop a 30-acre wave energy park near Reedsport. If successful, the facility would generate 1.5 megawatts of electricity from 10 buoys, enough to power 1,000 average homes.
While this sounds like a breakthrough for green energy, in fact it is just another example of Crony Capitalism. Ocean Power Technologies already has received grants of $4.4 million from the federal government and $420,000 from the Pacific NW Generating Cooperative, a $900,000 tax credit from the state of Oregon, and more than $430,000 from the Oregon Wave Energy Trust. Thus, each of the 1,000 homes receiving “wave power” will be subsidized by roughly $6,150.
That scenario assumes that the project ever produces electricity at all. The same company previously built the nation’s first wave energy generator off Hawaii, and it was decommissioned by the Navy after only two years of operation. Thus, there is a good chance that the Oregon project will never become commercially viable, and the taxpayer money will disappear.
This is the problem when politicians try to pick winners and losers in the economy. Nobody can predict the future, so most of the time they are wrong.
Wave energy yet may prove to be a great source of renewable energy, but choosing the right technology should be left to the private sector, where investors voluntarily bear all the risks as well as the rewards.