Historic Day for Tidal Energy in the US  

SustainableBusiness.com reports that the first power purchase agreement for tidal power in the US has been signed in Maine - Historic Day for Tidal Energy in the US.

Maine regulators have directed three utilities to buy 4 megawatts (MW) of tidal electricity from Ocean Renewable Power Company, making it the first state to commercialize ocean energy.

Installation of the first unit began in March and in Cobscook Bay and will be finished by late summer, feeding electricity to the grid by October 1.

In fall 2013, the company will add four more devices with a total capacity of 900 kilowatts, enough to power about 100 homes.

The 4 MW project will suppy electricity for over 1000 homes by 2016.

The Maine Public Utilities Commission (PUC) approved a term sheet for the nation's first power purchase contract for tidal energy, to be in place for 20 years.

The term sheet sets the price to be paid for tidal power at 21.5 cents per kilowatt hour, much higher than typical rates of 11-12 cents. The rate will rise 2% a year and makes the project feasible.

In making the decision, regulators looked at what the cost of fossil fuels would be over 20 years and decided they would likely be even higher. In fact, they see tidal energy being cost-competitive in as little as five years.

The International Energy Agency's International Vision for Ocean Energy sets a goal for the technology to be cost-competitive by 2020.