Lockheed dives into developing wave energy, buoyed by OPT tech

Lockheed Martin and Ocean Power Technologies (OPT) said today they have officially signed a commercial engineering services agreement to develop OPT's wave energy systems to be used in future utility-scale power generation projects.

The announcement builds on a letter of intent signed by the two companies in January to co-develop utility-scale power generation projects in North America, Lockheed spokewoman Kim Martinez told the Cleantech Group today (see Lockheed, OPT partner on utility-scale wave energy).

Financial details of the agreement were not disclosed. However, OPT said some of the first project with Lockheed is being funded by a $2 million contract from the U.S. Department of Energy. 

The news comes on the heels of a significant setback to a 290-megawatt concentrating solar power plant that was expected to include the Bethesda, Md.-based aerospace giant. Lockheed Martin (NYSE:LMT) decided not to move forward with participating in the project due to its size and risk associated with the contract. The plant is still expected to move forward, but on a smaller scale. 

However, Martinez reaffirmed the company’s interest and expertise in helping to progress utility-scale wave generation projects with OPT. As early as the 1970s, Lockheed has been working on ocean thermal energy conversion, she said.

OPT Chairman George Taylor said he isn't concerned Lockheed would back out of utility-scale wave energy projects with his company.

"It has no effect on us at all," he said, citing the fact that what his company is doing is very different technology from solar. 

Marine-power firm OPT’s PowerBuoy system is based on modular ocean buoys that capture and convert wave energy into what the company claims is low-cost, clean electricity, which would be transferred to the shore by underwater power transmission lines (see OPT records $8M backlog for wave-energy devices).

OPT said the technology uses “smart buoys,” based on hydrodynamics, electronics, energy conversion and computer control systems. OPT (Nasdaq:OPTT) is headquartered in Pennington, N.J., with offices in the UK.

See a photograph of a PowerBuoy here »

A 10-megawatt utility power station using OPT’s PowerBuoy technology would take up about 30 acres (0.125 square kilometers) of ocean space, the company said.

However, the first project between OPT and Lockheed slated five miles off the coast of Reedsport, Ore., would start with a 10-buoy array, with each one capable of producing 150 kilowatts. The project would start at 1.5 MW, Taylor said, and expand in phases up to 50 MW.

OPT is already working on its next-generation 500-kW buoy, which would replace the 150-kW version because it's more economical, Taylor said. The Reedsport project would be followed by a 100-MW deployment in Coos Bay, Ore.

Some of the first project would be assembled in New Jersey, while the rest would be built in Oregon. Taylor said OPT is shortly planning to announce the steel fabricator it has picked in Oregon to build the system, out of four companies that bid on the project.

"It meets President Obama's idea of creating a new industry and at the same time creating renewable energy," he said.

About 70 percent of the cost of building the PowerBuoy system is in steel fabrication and maritime instruction, which are depressed industries. Taylor said OPT has estimated that producing 200 MW of wave power a year could create more than 1,000 jobs.   

Lockheed said it plans to provide assistance with systems integration, manufacturing and testing of the technology so it can be optimized at utility scale. These are skills Taylor said OPT doesn't have within the company. 

"We are greedy, and we want to grow quickly," he said, adding that striking up good strategic relationships such as the one with Lockheed, among others it has, is a good way to do that.

Martinez said Lockheed wants to have a similar relationship with OPT as it does through engineering, procurement and construction (EPC) contracts with the solar sector.

“We provide the construction, systems integration and deployment of the plant and the maintenance and operations,” said Martinez, of EPC contracts.

Taylor said OPT would be the prime contractor, with Lockheed acting as the major generator contractor. 

Lockheed has previously said it’s working with Greenwich, Conn.-based Starwood Energy Group Global for utility-scale solar projects in North America (Lockheed Martin, Starwood Energy to pursue utility scale solar). Starwood Energy is the energy investment arm of private equity firm Starwood Capital Group Global.

However, the first project Lockheed and Starwood had planned to tackle to provide power to Arizona Public Service is no longer going to include Lockheed as the EPC contractor, Martinez said.

In May, Starwood and Lockheed announced plans to build what was expected to be the world's largest dispatchable solar energy plant, at 290 MW, capable of providing enough electricity for nearly all 73,000 Arizona Public Service electricity customers (see Starwood, Lockheed team up to provide solar thermal power to Arizona utility). The cost of the project was not disclosed.

Starwood said it is still planning to pursue the project, but on a smaller scale. The Starwood-owned facility, which had been slated for completion in 2013, was expected to be located in Maricopa County, Ariz., 75 miles west of Phoenix.