Guidelines Help Manage Risks and Encourage the Development of Marine and Hydrokinetic Technologies
February 25, 2015
Marine and hydrokinetic (MHK) technologies convert the kinetic energy from ocean waves, tides, currents, and ocean thermal resources into electricity. The development and evolution of these technologies towards commercial and economic operation has proven to be a slow and expensive process. To help reduce the risks of industry failures and advance the development of current and new technologies at a lower cost and faster pace, the U.S. Department of Energy (DOE) and National Renewable Energy Laboratory (NREL) created a framework that provides a risk management methodology to identify and reduce risks during all stages of technology development and particularly prior to demonstration activities.
According to the Marine and Hydrokinetic (MHK) Technology Development Risk Management Framework report (forthcoming), the purpose of the framework is to increase the likelihood of successful development of an MHK technology by addressing negative and positive uncertainties. It is designed to be applicable to all MHK projects of any technical readiness level or technical performance level and all risk types (e.g., technological risk, regulatory risk, and commercial risk) over the entire scope of the development project. Topics covered by the framework include:
- A description of the development cycle for MHK technology
- Tools and guidelines for assessing the MHK technology readiness and performance levels
- A risk management process with activities to be completed at each technology development cycle
- A risk registry template to be maintained through the technology development project
- A process for collecting and utilizing lessons learned from development.
Not only is this framework useful for the MHK technology community, but, according to an article published by HydroWorld in December 2014, the DOE/NREL framework may also stimulate the climate and green bond market by enabling investors to better assess the risks and returns potentially associated with their investments.
On December 16, 2014, NREL presented a webinar on the framework, with the intention of obtaining industry input on the report’s content before it is published. Attended by 76 participants from throughout the water power industry, including developers, investors, government laboratories, certifying bodies, due diligence service providers, and academia, the webinar is an important step forward to better understanding and managing the risks and opportunities involved in developing MHK technologies. The peer-reviewed framework is projected to be completed by summer 2015.