Lockheed Martin has been getting its feet wet in the renewable energy game for some time. In the 1970s it helped build the world’s first successful floating Ocean Thermal Energy Conversion (OTEC) system that generated net power, and in 2009 it was awarded a contract to develop an OTEC pilot plant in Hawaii. That project has apparently been canceled but the company has now shifted its OTEC sights westward by teaming up with Hong Kong-based Reignwood Group to co-develop a pilot plant that will be built off the coast of southern China.

OTEC uses the natural difference in temperatures between the cool deep water and warm surface water to produce electricity. There are different cycle types of OTEC systems, but the prototype plant is likely to be a closed-cycle system. This sees warm surface seawater pumped through a heat exchanger to vaporize a fluid with a low boiling point, such as ammonia. This expanding vapor is used to drive a turbine to generate electricity with cold seawater then used to condense the vapor so it can be recycled through the system.

Tropical regions are considered the only viable locations for OTEC plants due to the greater temperature differential between the shallow and deep water. Unlike wind and solar power, OTEC can produce electricity around the clock, 365 days a year to supply base load power. OTEC plants also produce cold water as a by-product that can be used for air conditioning and refrigeration at locations near the plant.

Despite such advantages, and even though demonstration plants were constructed as far back as the 1880s, there are still no large-scale commercial OTEC plants in operation. This is largely due to the costs associated with locating and maintaining the facility off shore and drawing the cold water from the ocean depths. But the time may finally be right.

With the shelving of the Hawaii OTEC pilot plant, the 10 MW prototype offshore plant will be the largest planned OTEC project to date. Like the Hawaii project, which was also to be a 10 MW facility, the China OTEC plant is designed to pave the way for higher capacity plants ranging from 10 to 100 MW.

The plant is to be built off the coast of southern China to supply 100 percent of the power needed for a large-scale green resort community being developed by Reignwood Group. The new resort is planned as Reignwood’s first net-zero community, with the company also currently developing two large-scale low-carbon resorts and others planned for key locations in China.

Lockheed Martin and Reignwood will begin concept design of the sea-based prototype plant this year with construction due to begin next year. Once it is up and running, the two companies plan to use the knowledge and experience gained over the course of the project to improve the design of additional commercial-scale plants.

The companies claim each 100 MW OTEC facility could produce the same amount of energy in a year as 1.3 million barrels of oil and decrease carbon emissions by half a million tons. Assuming oil trading at near US$100 a barrel, they estimate fuel savings from one plant could exceed $130 million a year.

The video below from Lockheed Martin describes the OTEC process.

Update: We heard back from Makai Ocean Engineering, which was involved in the 10 MW pilot plant project planned for Hawaii. While the company believes a 100 MW plant would still be viable for Hawaii and would provide power at a lower rate than is currently available from existing sources, a 5 to 10 MW pilot plant would be a necessary stepping stone to validate the main OTEC systems and give a better idea of the cost projections for a larger-scale commercial plant. Unfortunately, current cost estimates suggested that a 5 to 10 MW plant wouldn't be cost effective at the time so the U.S. Navy was unwilling to invest the money required to finance the project.

Sources: Lockheed Martin, Reignwood Group, Makai Ocean Engineering