Ocean Thermal Energy Conversion (OTEC)

Exploits the temperature difference between warm tropical surface seawater and cold deep seawater to drive a heat engine for electricity generation.

Fundamental Principle

Solar Energy Stored in Thermal Gradients

This thermal gradient represents stored solar energy of staggering scale. On an average day, tropical seas absorb solar radiation equivalent in heat content to approximately 250 billion barrels of oil. The global theoretical potential for OTEC has been estimated at 8-30 TW, with practical potential around 3-5 TW when accounting for geographic constraints and environmental limits. This exceeds current global electricity consumption (~3 TW average) and dwarfs other ocean energy sources (wave: ~0.5 TW practical, tidal: ~0.1 TW practical).

Geographic Distribution

Thermodynamic Constraint

equation carnot_otec $$\eta_{Carnot} = \frac{T_H - T_C}{T_H} = \frac{\Delta T}{T_H}$$ :::

For typical OTEC conditions (T_H = 28°C = 301 K, T_C = 4°C = 277 K, ΔT = 24 K):

$$\eta_{Carnot} = \frac{24}{301} = 7.97%$$

This is the theoretical maximum. No OTEC system can exceed ~8% thermal efficiency regardless of engineering improvements. :::

Compare this to:

Coal/gas plants: Carnot limit ~60-65% (ΔT ~500-600°C)
Geothermal: Carnot limit 15-25% (ΔT 100-200°C)
Concentrated solar thermal: Carnot limit 50-60% (ΔT 400-500°C)

The low efficiency is not a flaw but an inherent consequence of the small temperature difference. However, the "fuel" (ocean thermal energy) is free, abundant, and renewable.

Conversion Mechanism

System Types

Process:

Warm surface seawater (~26-28°C) heats a working fluid with low boiling point
Working fluid vaporizes in the evaporator
Expanding vapor drives a turbine-generator
Cold deep seawater (~4-6°C) condenses the vapor in the condenser
Liquid working fluid returns to evaporator, repeating the cycle

Working fluids:

Ammonia (NH₃): Most common, boils at -33°C at 1 atm, good heat transfer properties
R-134a and other refrigerants: Lower toxicity, different pressure characteristics
Propane, isobutane: Alternative options

Advantages: Higher pressure operation allows smaller turbines; proven Rankine cycle technology Disadvantages: Requires large heat exchangers; working fluid handling

2. Open-Cycle OTEC

Proposed by Georges Claude in the 1920s; he built the first working plant in Cuba (1930).

Process:

Warm surface seawater enters a vacuum chamber (pressure ~2-3 kPa)
At this low pressure, seawater boils at ~22-26°C, producing steam
Low-pressure steam drives a turbine-generator
Cold deep seawater condenses the steam
Condensate is pure fresh water (desalinated)

Advantages: Produces desalinated water as byproduct; no working fluid needed Disadvantages: Very large, low-pressure turbines required; lower power density

The 1993 NELHA open-cycle plant achieved 97% seawater-to-steam conversion efficiency and produced 7,000 gallons of fresh water per day alongside 80 kW net power.

3. Hybrid Cycle

Combines elements of both:

Closed-cycle power generation for efficiency
Open-cycle desalination stage for fresh water production
Can optimize for local needs (power vs. water priority)

Key Components

Heat Exchangers

The critical cost driver, representing 25-50% of total plant capital cost. Requirements:

Very large surface area (temperature differences are small)
Corrosion resistance (continuous seawater contact)
Biofouling resistance
High thermal conductivity

Materials: Titanium (excellent corrosion resistance, expensive), aluminum alloys (lower cost, shorter life), advanced composites.

A 100 MW plant would require approximately 200 heat exchanger units, each larger than a 20-foot shipping container.

Cold Water Pipe (CWP)

The engineering challenge that has historically limited OTEC development:

Must reach 800-1000m depth for adequate cold water
Diameter: 4-10m for large plants (enormous by offshore standards)
Materials: High-density polyethylene (HDPE), fiber-reinforced composites, steel
Must withstand currents, waves, marine growth, and fatigue loading

A 100 MW plant requires cold water flow of ~200-400 m³/s, necessitating massive pipes.

Recent advances: HDPE pipes now available up to 3m diameter; bundled pipe configurations for larger flows; improved deployment techniques from offshore oil/gas industry.

Seawater Pumps

Pumping represents the largest parasitic load:

A 100 MW plant pumps ~12 million gallons/minute combined warm and cold water
Pump power consumption: 20-40% of gross generation
Net output = Gross generation - Pump power - Other auxiliaries

One Lockheed Martin design: 49.8 MW net from a system consuming 19.55 MW for pumping alone.

Turbine-Generator

Closed cycle: Conventional turbomachinery adapted for ammonia or refrigerants
Open cycle: Very large, low-pressure steam turbines (challenging to manufacture)
Typical turbine efficiency: 85-90%
Generator efficiency: 95-98%

Efficiency Chain

Starting from Carnot maximum (~8%):

Stage	Efficiency Factor	Running Total
Carnot limit (ΔT = 24°C)	8.0%	8.0%
Heat exchanger irreversibilities	×0.7-0.8	5.6-6.4%
Turbine efficiency	×0.85-0.90	4.8-5.8%
Generator efficiency	×0.95-0.98	4.6-5.7%
Pump parasitic load	×0.6-0.8	2.8-4.5%
Other auxiliaries	×0.9-0.95	2.5-4.3%

Net thermal efficiency: 2.5-4.5% typical, up to 5.4% in optimized designs

Early OTEC systems achieved only 1-3% efficiency. Modern designs approach 3-5%.

Theoretical Limits

Fundamental Carnot Constraint

The Carnot efficiency sets an absolute ceiling that no engineering can overcome:

$$\eta_{max} = \frac{T_H - T_C}{T_H}$$

For OTEC with ΔT = 20-25°C and T_H ≈ 300 K:

Temperature Difference	Carnot Efficiency
18°C	6.0%
20°C	6.7%
22°C	7.3%
24°C	8.0%
26°C	8.6%

Increasing the temperature difference offers the only path to higher theoretical efficiency. Approaches include:

Solar pre-heating of surface water
Using warm industrial effluent (e.g., power plant cooling water discharge)
Selecting optimal sites with maximum natural ΔT

Hybrid solar-OTEC systems can theoretically achieve higher efficiencies by boosting T_H.

Practical Efficiency Limits

Real systems face additional constraints:

Finite heat transfer rates: Heat exchangers cannot achieve infinite heat transfer; some temperature difference is "lost" across exchanger surfaces.

Pumping requirements: Large seawater volumes must be pumped, consuming 20-40% of gross output.

Irreversibilities: Friction, turbulence, non-ideal expansion all reduce efficiency below Carnot.

Best demonstrated net efficiency: ~3% (various pilot plants) Theoretical optimized designs: ~5-5.4% (not yet demonstrated at scale) Ultimate practical ceiling: ~6% (half of Carnot, if all components optimized)

Resource Extraction Limits

Even with unlimited OTEC deployment, there are environmental limits:

Extracting thermal energy cools surface waters and warms deep waters
Large-scale deployment would reduce the thermal gradient
Studies suggest ~30 TW extraction would noticeably affect ocean thermal structure
Practical sustainable limit: perhaps 3-10 TW globally

A University of Hawaii study estimated 15,000 plants of 1 GW each, spaced 30 km apart within 100 km of land, could sustainably generate >2 TW without large-scale disruption.

Practical Limitations

Engineering Challenges

Cold water pipe: The single greatest technical barrier. Deploying and maintaining a 1000m pipe in open ocean conditions remains difficult and expensive. Pipe failures have ended several early projects.

Heat exchanger size and cost: Low ΔT requires enormous heat transfer surface area. Heat exchangers represent 25-50% of plant cost.

Biofouling: Marine organisms colonize heat exchanger surfaces, degrading performance. Continuous cleaning systems required.

Corrosion: Seawater is highly corrosive. Titanium resists corrosion but costs 5-10× more than steel.

Scale: Small pilot plants (<1 MW) cannot demonstrate economic viability. Commercial plants need to be 10-100 MW, but no one has built at this scale.

Economic Barriers

Capital cost: Current estimates range widely:

Small demonstration plants: $15,000-40,000/kW
First commercial plants (10 MW): $8,000-15,000/kW
Projected mature technology (100 MW): $4,000-8,000/kW

Compare to: Solar PV ~ $700-1,000/kW, onshore wind ~$ 1,000-1,500/kW, offshore wind ~$2,500-4,000/kW.

LCOE (Levelized Cost of Energy):

Current demonstration plants: $0.30-1.00/kWh
First commercial plants: $0.15-0.30/kWh projected
Mature technology at scale: $0.05-0.15/kWh projected (optimistic)

For comparison: Onshore wind $0.03-0.05/kWh, solar PV$ 0.03-0.06/kWh, diesel generation on islands $0.20-0.40/kWh.

Financing: High capital cost, unproven technology at scale, and long payback periods deter commercial lenders. Most projects require government or development bank support.

Operational Challenges

Maintenance: Offshore or coastal marine environments are hostile. Access for repairs is weather-dependent and expensive.

Reliability: Limited operational experience means reliability is unproven at commercial scale.

Grid integration: On small island grids, a single large OTEC plant could represent a major fraction of total capacity, creating stability challenges if it trips offline.

Scaling Characteristics

Scale Economics

- Capital cost per kW decreases approximately 20% for each doubling of plant size - Operating costs per kWh decrease with size - Minimum economic scale: likely 10-50 MW for islands, 100+ MW for grid-connected

Plant Size	Estimated Capital Cost	LCOE (Concessionary Financing)
1 MW	$15,000-25,000/kW$	$15, 000 - 25, 000/ kW ∣$ 0.40-0.60/kWh
10 MW	$8,000-12,000/kW$	$8, 000 - 12, 000/ kW ∣$ 0.20-0.35/kWh
50 MW	$5,000-8,000/kW$	$5, 000 - 8, 000/ kW ∣$ 0.15-0.25/kWh
100 MW	$4,000-6,000/kW$	$4, 000 - 6, 000/ kW ∣$ 0.09-0.18/kWh

Japanese studies project 30% capital cost reduction for offshore OTEC as structures are optimized, potentially reaching $0.26/kWh LCOE for 50 MW plantships with concessionary loans.

Plant Configurations

Land-based (onshore):

Requires long cold water pipe to reach depth
Easier maintenance access
Limited to sites with steep bathymetry close to shore
Examples: NELHA (Hawaii), NIOT (India)

Shelf-mounted:

Platform on continental shelf
Moderate pipe length
Power transmitted to shore by cable
Higher construction cost

Floating (offshore):

Ship or barge-mounted plant positioned over deep water
Shortest cold water pipe (vertical)
Power transmitted by cable, or used for on-site hydrogen/ammonia production
Most technically challenging (station-keeping, cable routing)
Example: Global OTEC's proposed modular barges

Modular Approaches

Recent development trend: smaller, modular units rather than giant plants.

Global OTEC's "OTEC Power Module": 500 kW per unit, designed for:

Lower initial capital requirement
Factory fabrication and standardization
Gradual capacity addition
Reduced technology risk

This mirrors the successful scaling approach of solar PV and wind: many small units rather than few large ones.

Current Status

Historical Development

1881: Jacques d'Arsonval proposes closed-cycle OTEC concept 1930: Georges Claude demonstrates first working OTEC plant (Cuba), 22 kW 1979: Mini-OTEC (Hawaii) produces first net positive output: 50 kW gross, 10 kW net 1980: OTEC-1 (Hawaii) tests 1 MW heat exchangers on converted tanker 1993-1998: NELHA open-cycle plant operates, 210 kW gross, 80 kW net, produces fresh water 2013: NIOT (India) deploys 200 kW pilot plant (subsequently lost due to pipe failure) 2015: Makai 105 kW closed-cycle plant connected to Hawaii grid (first US grid-connected OTEC)

Operational Plants (2024)

Global installed OTEC capacity: <1 MW total

Makai Ocean Engineering (Hawaii):

105 kW closed-cycle demonstration plant
Grid-connected since 2015
Functions primarily as heat exchanger test facility
Largest operating OTEC plant in the world

Kumejima (Japan):

100 kW demonstration facility
Operated by Okinawa Prefecture and partners
Testing advanced heat exchangers

No commercial-scale (>1 MW) OTEC plants currently operate anywhere in the world.

Projects in Development

Global OTEC (UK):

1.5 MW floating OTEC platform for São Tomé and Príncipe (West Africa)
Received cold water riser installation certification (2023)
Target deployment: 2025-2026
Modular 500 kW units, scalable design

KRISO (South Korea):

1 MW K-OTEC 1000 demonstration
Tested at 338 kW output in South Korea (18.7°C ΔT, designed for 24°C)
Planned relocation to Kiribati

Japan (Okinawa/Kumejima):

Expansion to 1 MW commercial-scale by ~2026
Ministry of Environment funding for large-scale heat exchanger development
Strong government support for OTEC as island energy solution

Xenesys/Japan:

100 kW pilot with advanced Uehara cycle
Partnership with IHI Corporation

Other announced projects (status uncertain):

China: 10 MW offshore plant for Hainan Island resort (Lockheed Martin/Reignwood)
Bahamas: 5 MW facility for Baha Mar resort (on hold)
Diego Garcia: 13 MW for US Navy (stalled)

Technology Readiness

OTEC is rated at Technology Readiness Level (TRL) 6-7:

Components demonstrated in relevant environment
System prototype demonstrated
Not yet demonstrated at commercial scale

Key remaining challenges:

Large-scale cold water pipe deployment and reliability
Cost-effective heat exchanger manufacturing at scale
Financing and risk mitigation for first commercial plants

Co-Products and Applications

OTEC's value proposition improves when co-products are considered:

Desalinated water: Open-cycle and hybrid plants produce fresh water. The 1993 NELHA plant produced 7,000 gallons/day. A 100 MW open-cycle plant could produce millions of gallons daily.

Seawater Air Conditioning (SWAC): Cold deep water can provide building cooling at 10% of the energy cost of conventional air conditioning. Already operational in some locations (e.g., Bora Bora, Honolulu) without OTEC power generation.

Aquaculture: Cold, nutrient-rich deep water supports cold-water species (salmon, lobster) and microalgae cultivation. NELHA hosts aquaculture companies generating ~$40 million annually from deep seawater resources.

Hydrogen/Ammonia production: OTEC electricity could power electrolysis for green hydrogen or ammonia production, particularly attractive for remote ocean locations.

Mineral extraction: Deep seawater contains valuable trace elements including lithium.

These byproducts can significantly improve project economics, potentially reducing effective LCOE by 20-40%.

Costs Summary

Parameter	Current	Projected (Mature)
Capital cost	$8,000-25,000/kW$	$8, 000 - 25, 000/ kW ∣$ 4,000-6,000/kW
LCOE	$0.20-0.50/kWh$	$0.20 - 0.50/ kWh ∣$ 0.09-0.18/kWh
Capacity factor	90-95%	90-95%
Plant lifetime	20-30 years	30-40 years
O&M cost	2-4% of CAPEX/year	1.5-2.5% of CAPEX/year

OTEC's high capacity factor (90-95%) is a significant advantage over intermittent renewables (solar 15-25%, wind 25-45%). This partially compensates for higher capital costs when comparing total energy delivered.

Market Outlook

OTEC is not competitive with solar, wind, or conventional generation in most markets. However, it may find niches:

Most promising markets:

Remote tropical islands with expensive diesel generation ($0.20-0.40/kWh)
Island nations seeking energy independence
Military bases requiring resilient, fuel-independent power
Locations valuing co-products (water, cooling, aquaculture)

Development pathway:

2024-2027: First commercial-scale plants (1-10 MW) in island markets
2027-2035: Scaling to 10-50 MW if early plants succeed
2035+: Potential for 100+ MW plants if costs decline as projected

Key enablers needed:

Successful demonstration of 1+ MW plants operating reliably
Cost reduction through manufacturing scale and learning
Supportive policy (feed-in tariffs, renewable mandates, carbon pricing)
Development bank financing for early projects

Realistic assessment: OTEC will likely remain a niche technology for tropical islands and specialized applications rather than a major contributor to global electricity supply. Its value lies in providing baseload renewable power where alternatives are limited, and in enabling integrated ocean resource utilization (power + water + cooling + aquaculture).

The technology works. The physics is proven. The question is whether costs can decline sufficiently for OTEC to compete economically at meaningful scale, or whether solar + storage will prove a more cost-effective path even for tropical island nations.