Whatever Happened to the FERC Pilot Project Licenses?

So what’s up with the FERC Hydrokinetic Pilot Project License Process? Launched with some fanfare in late 2007, the pilot project license process was intended to provide an expedited procedure for small (under 5 MW) early stage commercial projects to get into the water within a year, rather than within the three to five years that an ordinary license might take. In exchange for slightly for fewer studies up front, the pilot project procedures limit the license term to five years (with the option of renewal or relicensing as a full blown project), impose rigorous post-deployment monitoring and provide for project removal if unacceptable adverse impacts result.

Originally – and somewhat surprisingly, it was the marine renewables developers who gave the cold shoulder to the pilot process. Many companies figured that a the cost of attaining a five year pilot license didn’t make sense when they could spend just a little more to secure a 30 year license. Moreover, most investors had not interest in a five year pilot because it would not provide any immediate return on investment.

However, with the DOE Waterpower program revived and increased government funding available for marine renewables, some companies now have access to public money and thus, began to reconsider the pilot process as a way to get early stage projects into the water more quickly. As a result, two companies – Verdant Power and Ocean Renewable Power Company (See Slide 4) have now filed pilot project applications.
But now, just as industry has come around to the concept of the Pilot Process, now some resource agencies are viewing them with disfavor. Recent comments from NIMS to ORPC expressed that the pilot license process might not afford enough time to collect baseline data, and that therefore, another process might be more appropriate. (I’d thought that the pilot process was intended to relax the requirements to collect substantial data upfront by imposing rigorous monitoring at the back end, but apparently, NIMS sees it differently). Meanwhile, comments by NOAA to Verdant suggested that the project might exceed the 5 MW size cap on pilot projects and thus, might not be suitable as a pilot and also took issue with Verdant’s requested ten year duration for the project.

To their credit, the resource agencies have not rejected the pilot license proposals out of hand. At the same time, it is not clear how a pilot process can take place within a year when the parties cannot even agree over the basic question of whether the pilot process is appropriate.

At some point, we’re going to have to take a leap of faith and permit these projects to move forward on a small scale, heavily monitored basis. The window of opportunity for marine renewables is closing quickly and if companies can’t get projects into the water, that window will slam shut on the industry in the United States.