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July 23, 2004

MINUTES

Special Meeting

Friday, July 23, 2004, 2:00 p.m.

City Hall, Legislative Chamber, Room 250

Chairperson: Commissioner Gonzalez; Vice Chairperson: Commissioner McGoldrick

Members: Commissioners Ammiano, Hall and Schmeltzer

Alternates: Commissioners Peskin and Fellman

Clerk: Monica Fish

 

SPECIAL AGENDA

(There will be public comment on each item)

  1. Call to Order and Roll Call

Chairperson Commissioner Gonzalez called the meeting to order at 2:23 p.m.

Members Present: Chairperson Commissioner Gonzalez, Commissioner Ammiano, and Commissioner Schmeltzer.

Members Absent: Vice-Chairperson Commissioner McGoldrick and Commissioner Hall.

Gloria L. Young, Executive Officer and Nancy Miller, Legal Counsel, present.

  1. Approval of Minutes for the Commission Public Hearing of May 28, 2004. (Discussion and Action Item).

No public comment.

Commissioner Schmeltzer moved to approve the May 28, 2004 meeting minutes; Commissioner Ammiano seconded. The meeting minutes were unanimously approved with no objection.

  1. The Department of the Environment, San Francisco’s Public Utilities Commission, and partner organizations deliver a progress report on a planned tidal power pilot project scheduled for demonstration in October of this year (Discussion Item).

    Jared Blumenfeld, Director of the Department of the Environment discussed the topics for the meeting’s agenda that would include a discussion on the status of tidal power in San Francisco and exploring the potential of off-shore wave generation. Speakers were introduced.

    Commissioner Ammiano stated that he had read a newspaper article that indicated state funding for tidal power projects may be endangered.

    Speakers

    Dave Olsen, Project Manager for HydroVenturi presented an overview of a tidal- power project discussing funding potential and how HydroVenturi is moving forward on installing a pilot project for San Francisco Bay by early Summer of 2005.

    Ed Euber, Director, Golden Gate National Recreational Area (GGNRA) stated that the National Park Service and GGNRA would be helping to investigate tidal power and wind power’s environmental aspects. Tidal power seems to have safe renewable energy with little or no environmental degradation. They are looking forward to the pilot project to have three to five years to evaluate its consequences.

    Dr. Tony Jones, Ph.D., Executive Director of Ocean Consulting, presented a review of tidal technologies that exist today, their future, and approaches. A report was given from the Renewable Ocean Energy Conference in Florida where a presentation was made on San Francisco tidal power projects. An editorial written by Dr. Jones on "Offshore Renewable Energy Development" is available at the Clerk of the Board’s Office, Room 244, City Hall.

    Roger Bedard, Project Manager, Energy Policy and Research Institute (EPRI) gave a presentation on an off-shore wave research power generation project that is being done in combination with Maine, Washington, Oregon, and Hawaii Coastal Counties. A discussion was held on the potential of wave energy for California and San Francisco and a proposal for Bay Area wave and tidal energy project definition studies. The EPRI is the research and development arm of the domestic electric utility industry since 1973. A new subsidiary was formed called the Electricity Innovation Institute that is trying to take advantage of the new business model of the private public partnership type work to develop these new emerging technologies.

    Peter O’Donnell, Renewables Group, Department of the Environment and Mr. Bedard reviewed site suitability criteria for Ocean Beach in San Francisco. Mr. Bedard extended an invitation to the Bay Area Cities to join a wave and tidal consortium on a project cost-share basis.

    A copy of Mr. Bedard’s presentation is available at the Clerk of the Board’s Office in Room 244, City Hall.

    Bill Peden, Director of Resource Planning for the San Francisco Public Utilities Commission (SFPUC) discussed how tidal and wave power can fit in San Francisco’s renewable energy mix. Topics included the hindrance of state and federal funding and that most tidal and wave companies are offshore technologies.

    Questions and Answers LAFCo Commissioners

    (Session Transcript)

    Commissioner Schmeltzer asked if there were existing tidal wind mill projects.

    Dr. Jones stated that there are current projects, mostly at a prototype level. The existing tidal power projects are the barrage systems that block estuaries. The underwater windmills have been installed in Norway, the United Kingdom and Portugal. Most of those have been more of a prototype. Several are hoping to expand. The Norwegian group put in one and they are hoping to expend about twenty underwater turbines.

    Commissioner Schmeltzer asked if there was any data from the existing projects on what the effect on marine mammals and other fish having the moving turbines in the tidal stream would be.

    Mr. Euber stated that he does not know of any data.

    Dr. Jones stated that the situation with the Italian operation off of the Sicilian coast is that the blades have a high gear ratio so they rotate very slowly, about five rotations per minute. So there is really no issue with impacting the fish. Most fish will avoid that. They have a pitched blade that moves around as it interacts with the water. There are some other systems that are proposed off of Boston University that have a higher rotation. They assured them that the fish would avoid it. They have seen a video of them installing it in Korea and the revolutions were quite fast. It is an easy thing to test, but he does not think that anyone has looked at that issue.

    Chairperson Commissioner Gonzalez asked what the cost benefits are as it relates to a larger system versus a smaller one. It seems one of the advantages of going in this direction is that you could build out of a small system and there are not many duplicative costs of adding on to a system and expanding it.

    Dr. Jones stated that was correct. For most of the off-shore wave and off-shore tidal systems, once the first one is installed, any incremental installation basically already adds on to the cost. You do not need to rerun cables or extra moorings. There are cost benefits for that. That’s why most of the proposals have been to have basically farms or multiple units similar to wind farms in California. You don’t just see one windmill; you see a farm of them. It would be the same approach for not only the offshore wave, but also for a lot of the tidal regime. The HydroVenturi system is set up as a module so that you can keep adding modules. Some of the other systems that are available that the EPRI speakers will be talking about including these oscillating water columns that have about three years of operating experience can be modular, and they are actually going into mass manufacturing of their turbines to drop the cost.

    Chairperson Commissioner Gonzalez asked what challenges are associated with building out a system or testing a system offshore versus building one at a closer location or under the Golden Gate Bridge. Is there any sense among the experts in the field that testing something offshore is going to give you reliable data on what a unit like this would operate like closer or in a different location?

    Dr. Jones stated that there is a test center being set up in the United Kingdom for the European Union. They are going to have several different platforms offshore in the water that are connected with cables to specifically test and certify not only wave but tidal systems. It is in a fairly rugged environment. If it can pass the test there, then it should be certified and be able to be available anywhere in the world. The basic physics of most of the systems as long as there is an incoming wave or tidal regime, then it shouldn’t matter if it is near shore or offshore. It ends up that as you go offshore there is greater resource generally for waves so you will more than likely advance from the near shore to the offshore because as the near shore systems are commercial today, they will continue to be available. We will continue to progress offshore same as we have done with the offshore wind as we’ve gone from the onshore to shallow water, and now we are going onto quite deeper water on the projects on the East Coast of the United States.

    Chairperson Commissioner Gonzalez stated that Mr. Olsen mentioned that venture capitalists are getting interested in renewable energy as an area of investment. He asked if there are certain technologies or certain renewable energy sources that are fairing better than others.

    Mr. Olsen stated yes, that primarily what they have seen today is in the areas of fuel cells and to a lesser degree some of the bio-gas technologies. The venture capitalist firms and large angel investors who are investing in technology companies in the alternative energy space right now tend to be kind of niche players, closed end funds. Some of them are very utility centric so they make investments in technologies that the utilities seem very interested in. The same kind of thing for the fuel cells. A lot of the money is coming from automotive industries and other sorts of institutional investors who want to invest in those sort of sectors. We’re really not seeing a lot of investments yet. Photo-voltaic is kind of there and clean tech which is kind of an NGO sort of industry consortium who tracks these sort of things does have some studies or reports that breaks down who is doing deals and who is making investments in what areas and when. Solar has been hot and cold but really most recently it has been fuel cells and bio-gas technologies. Very little has been in the way of wind technology and tidal. Again it is because there is not a lot of mainstream venture capital funds that really understand the energy technology business. They are so centric on biotech or telecom and they still want to stay in those markets. They are just starting to see that there may be some potential in the energy sectors.

    Chairperson Commissioner Gonzalez asked if there is a standard of return on investment-certain number of years cycle that is standard in the industry.

    Mr. Olsen stated that he thinks there is. A traditional venture capitalist likes to see an exit of their investment in somewhere from three to five years. They like to see a three to five times return on their investment, either in the form of an initial public offering or an acquisition by a larger company. The problem is with these sort of technologies and these sort of projects that go with the technologies, they tend to be two to three year type of developmental efforts before there is any sort of revenue coming in the door, let alone to have a commercialized product. How do you do an IPO if the product is still a year or two years away from market? That is one of the big issues the VC’s have. They tend to not look at things with a five to ten year exit strategy and maybe a lower return than an energy project or an energy technology company may afford.

    Mr. Blumenfeld stated that a lot of what Mr. Olsen is talking about is about innovative programs coming from Europe. California is the fifth largest economy in the world. We have the California Energy Community, the California Public Utilities Commission. Why aren’t these kinds of projects moving faster in California, specifically in San Francisco than in Europe? What can be done to change the atmosphere so these kinds of testing phases can be sponsored by the government?

    Mr. Olsen stated that there are two pieces to that. The first piece is going back to the capital markets. You’re seeing projects and technologies funded in the form of grants and public money much easier and much quicker as well as the commercial sector. European investors are investing in alternative energy technologies with those sort of risk profiles much more readily than United States based investors. A lot of the investments that we are seeing coming over to the California market is European. It’s French money, it’s German money, and it’s Dutch money. But then they come to California, and they are not comfortable with California or U. S. government regulations on putting these projects on the water. One of them said with a straight face that they are afraid to come to the United States because somebody might sue us. But also, some of the genesis of the programs in Europe has been that there is a Dutch-government sponsored program with respect to carbon credits. There is a carbon trust out of the United Kingdom and those have a strong capitalization. Now when you shift over to the regulatory side in California, getting back to the public funding sector, whether it is the state through the California Energy Commission and the peer program, their budgets have been slashed veraciously with California’s budget problem. But also, the federal government programs through the National Renewable Energy Lab, Pacific Northwest Labs were running programs for the Office of Energy Efficiency and Renewable Technology.

    Their budgets have been slashed almost to the point where their offices are shut down. So there is no public money, seed money and as a result, the capital markets are saying there is a longer risk profile. That’s the government side. Also from a regulatory standpoint, there has not been an active wave and tidal power trade association that has an effective lobbying effort for either regulatory policy or funding programs. There is a large wind energy association. There are some other renewable associations that are lobbying on behalf of wave and tidal energy projects companies. But it is not a real strong lobby so it is not a real strong voice let alone a receptive ear. There is some public policy issues that have been a constraint. If we can break down those barriers, and even if we could self-fund these projects, we could do tidal projects.

    Commissioner Ammiano asked about San Francisco’s proneness to earthquakes.

    Mr. Bedard stated that an earthquake would cause a tsunami wave. The key thing about devices that are being developed today—the first generation being the 1970’s and early 1980’s. They did have lots of failures. The devices that we are seeing today are developed principally with a key design goal of being survivable. This Polaris device has a very small profile that looks into the wave. The energy is hidden. The frontal energy, the force. It is a pencil that is oriented in the same direction as the wave. Its basic inherent nature is highly survivable. A picture was shown of the over-topping device, the wave dragon device. The picture was what the company uses to show that their device is inherently survivable because large waves go over the basin. These designs are designed to be (1) survivable (2) other factors. That has to be the key criteria in any system that is put out there. Another idea that he had made a year ago that nobody has picked up on yet is since these devices have slackly moored, why don’t you have a winch at the bottom of the ocean and winch them down? Because you have a lot of notice that a tsunami wave is coming so you could winch them down.

    Mr. Euber stated there is one known environmental concern. When you put cables in the water or anchors, you do have migrations of gray whales close to the coast so that would be a concern. We also know that humpbacks come in within two nautical miles of shore in that area so that would also be a concern.

    Commissioner Schmeltzer asked how environmental and social issues are being defined.

    Mr. Bedard stated that at this point at its very largest context. A social issue for example is the fishing issue. Another social issue is the aesthetics of a device. Lots of people do not want to have wind turbines on their hills or even off the shore of their coast because of the aesthetics of it. Being a mechanical engineer, he stated that he is not an environmental expert and thanked Mr. Euber for his comments. He thinks that the panel would agree that wave, tidal flow or ocean current energy would be amongst the most environmentally benign of any of the electricity technologies that we know of today.

    Mr. Euber stated it depends on where they are put and what they do. The fishing industries’ use of that area is predominantly outside of three nautical miles and the out-fall actually goes out three nautical miles so the fisheries conflict for commercial and recreational fishing would generally not be where the proposed project is.

    Questions and Answers from Consortium Partners

    (Session Transcript)

    Cassin Trenor, Graduate Student, resident of Monterey County stated that Monterey County is similar to the Bay Area in that there is a great amount of tidal and wave energy potential. Four months ago he and his colleagues were delving into whether or not tidal energy was a good idea and could solve the power problems in Monterey and globally. Research was done from the ground up. Interviews were held in Monterey and San Francisco with those that they identified as knowledgeable and interested stakeholders. They took a camera everywhere they went and came up with a 25-minute documentary entitled "The Next Wave Tidal Energy in San Francisco." It is focused primarily on the HydroVenturi project and technology. Before the project was started, they were skeptical because they did not know a lot and heard that tidal power and energy would damage the environment. While earlier they were skeptical and shaky, they are now persuaded and convinced. Their research has led them to believe that not only is tidal power a good investment from an environmental aspect; it’s also a very wise investment financially. They would like to make this documentary available to anyone who would like to see it. If anyone is interested in seeing the documentary to let them know.

    Ron Ford, Administrative Aide to Supervisor Susan Adams, County of Marin stated that they represent San Rafael north up to the Novato border including the coastal region along San Pablo Bay to the San Rafael estuary. They have been looking into and investigated numerous power sources over the past few years, including wind turbines, photo-voltaic, methane, tidal and wave. Some scenarios would seem environmentally unfriendly. They’ve seen a demonstration on a floating platform which tipped over when the demonstration came so they weren’t too impressed with that. They did get Dr. Hassard from HydroVenturi to speak to them and they were impressed with this project. They come here today to ask that the people of the City of San Francisco support the HydroVenturi project.

    Andrew Thompson, former Mayor and Council-member of Tiburon and currently a candidate for the Board of Supervisors in Marin County. He is glad to see that Marin County is represented here officially and congratulates everyone on their work. When he talks about this he often gets snickers because they are looking so far ahead and it’s not something immediately applicable tomorrow, but that’s what we have to do because we can’t be dependent on these unrenewables forever and their destructive environmental effects. Whatever we are looking at is going to have some environmental impacts. Some that is not going to be pleasant. But, we have to look at that it’s a matter of tradeoffs. What we might be facing might not be perfect, but it is much less of an impact than what we are dealing with with fossil fuels, etc. That is what far too often the public is not paying attention to. Good job.

    Public Comment

    George Keborian, President of San Francisco Tesla Society stated that almost a year and a half ago a hearing was held on this topic on tidal energy. The City has graciously allowed them the video of that hearing on their web-site so that anybody that wants additional information on the details on the tidal project can go to www.sftesla.org and watch the video. He would like to put what they are doing here in a bit of context. This project is incredibly important amongst the many things that San Francisco has done. We have an incredibly diverse population that works together and has for many years.

    In the time of World War I, the Pan American Pacific exposition showed the value of peace. In the 1920’s television was invented here by Philo Taylor Farnsworth on Green Street in his lab and was privately funded. In the 1930’s and in the midst of the Great Depression, we built the spectacular Golden Gate Bridge. In the 1940’s and in the time of war we again showed the way to peace with the creation of the United Nations here at the Civic Auditorium. In the 70’s we were part of the BART project, the world’s first computer-controlled subway. In the 80’s the West Coast computer fair was a PC mecca for Bill Gates and Steve Jobs. In the 90’s we showed how to make the Internet practical. In this decade, it is obvious in the world if you look at what is going on in Iraq, if you look at what is going on with global warming, the issue of making and leading the way and showing how to make renewable and sustainable energy practical, here we are again leading the way. What is the viability of helping to fund the tidal and wave project through a bond measure?

    Chairperson Commissioner Gonzalez stated that the voters did approve a measure. Commissioner Ammiano was the chief sponsor of Proposition H which gave to the Board of Supervisors the power to issue revenue bonds in the area of renewable energy by vote of the Board and not require a ballot measure before the voters. We are interested in pursuing that and something that would be worked on.

    Linda Arakalian, organizer with a clean energy campaign at Green Peace. She was interested if anybody knew of other environmental organizations that are involved in promoting or advocating for tidal and wave energy. As an organizer, how can we start advocating for tidal power and how can we build more coalitions with solar and wind associations? They are working more together now. It is the tidal and wave there is not an association—if they have possibly started working with those other associations?

    Mr. Blumenfeld stated that what Greenpeace could do is to build on the work that they are doing with campuses--to work with U. C. Berkeley and the other universities to provide research. Not only do they have students, they have great minds in those students that can think about how to implement those programs. Secondly, how to work with the administrations that Greenpeace is already doing to make sure that the campuses buy renewable power.

    Commissioner Schmeltzer stated that the University did just adopt a clean energy policy and is looking into mirroring the renewable portfolio requirement that the State has and that is part of the policy.

    Mr. Olsen stated that the other organizations to respond are entities like the NRDC that is a strong supporter of these sort of activities. Also, there are a number of foundations like the Ford and Hewlett Foundations that are strong supporters of these activities either in a direct funding or public support basis.

    Kristen Stuch, H2 Onsite, a company that is trying to commercialize a technology to generate hydrogen. They are running across a lot of the problems mentioned in the presentation about raising venture capital money and falling in the void. She is just moving back from Europe. Her impression is that the reason why the Europeans seem to be moving forward and being innovative in these areas is because they have the right legislative structure in place, which we don’t seem to have in the United States. There is some discussion about renewable portfolio standards in California and doesn’t know what sort of economic incentives might provide the right framework to create innovation and funding. If anyone had comments on the CalSters and CalPers funding stream? If they knew where some of that investment money is going to go and whether that might be a source for this project in particular?

    Mr. Olsen stated, addressing the European market—absolutely there has been a number of United States based energy technology companies that have not been able to raise capital here in the United States and they have gone to places like a London aim market as opposed to NASDAQ. Again, the Europeans are much more receptive to the risk profiles. Also, the European governments have a variety of mechanisms in place to foster that sort of investment activity. In terms of U.S. projects and entities, it does boil back to the rating and those sort of agencies in the sense that if I am doing a renewable energy project and I am selling all of my off-take to the City and County of San Francisco on a long-term contract, who is the best credit rated entity in the world. The rating agencies still go back to macro environment type of things and say we’ll only give you 40 or 50 percent project debt and still allow you to have a rated finance structure. There is some broad macro impacts on a local project in terms of capital markets. Responding to CalPers and CalSters, Phil Angelides is really driving CalPers in particular. I think CalSters is coming along as well because of that pressure. He has really gotten some people involved at CalPers to start making investments in alternative energy technology companies. There are about three people at CalPers who are working on this sort of thing. They have not made any direct investments yet, but they are out there kicking the tires.

    Bill Holmes stated that he is very much enjoying this meeting and seeing this much interest in this field. He is a registered engineer and has developed has a U. S. patent on one device that generates electricity from ocean waves. He is rather sold on the idea. Some of these points that are being made and the feedback are absolute music. He is hoping that this type of meeting will occur again in the near future. He understands there is a meeting on September 15 or 17. Nobody is talking as much about wave devices. He did a search down at Sunnyvale prior to patenting his device and the devices that he saw that were capturing wave energy versus tidal energy looked rather like toys. He was impressed that he did not see anything that would extract energy from the waves on a very effective basis in terms of wave energy. His feeling is that there is a great deal more wave energy. Tidal, wind, and solar are great things, but they are much more intermittent than wave power. There is a great more energy to be taken from the surface of the water and it should deserve more attention that it is getting.

    Mr. Peden stated that may be true but the one thing they like about tidal power is you can count on it. You know exactly where it is and for a utility that needs to get it on a grid and be able to work it within its other resources, it is there twice a day every day.

    Mr. Holmes stated that was an excellent point that it is dependable; however, its magnitude is quite a bit less than surface wave-power.

    Don Roberts, Chair of the Sierra Club Local Energy Committee. He attended a meeting 18 months ago when Dr. Jones, HydroVenturi and the Department of the Environment first told us about this exciting resource, which was flowing under the Golden Gate Bridge, which we didn’t know too much about. It was so exciting that when we first wrote something about this technology in our local newsletter, an editor had to tell me to use the word "exciting" too many times, and they had to edit it. Regardless, there’s a question of what the potential is and how it is realized. As we got into this, we did find that there were some questions about HydroVenturi, their technologies proprietary and questions we would still like answers to before this gets too far the path.

    The issue is best brought out by paralleling what is happening in the Altamont Pass with wind turbines. The turbines kill .2 birds per year per turbine, which is not such a big deal if there’s one turbine, but there are 5,000 turbines there and they are killing 1,000 birds a year. So, as they are looking at the environmental impact of this technology, we have to keep in mind the scaling issue that we might be starting with a small couple of kilowatt modules sitting off of an oil rig in Hercules. But when we start putting tens or hundreds of megawatts under the Golden Gate Bridge, we really have to look at what’s in the water there because the issue with the Altamont is the fact that it is a high concentration of in particular raptors and golden gate eagles. We are excited about the potential and look forward to it being cited properly and all of the details followed up before something goes into the water. Most importantly, the Altamont has become a black eye for the wind turbine industry, and we don’t want to see the same thing happen with this brand new technology in San Francisco.

    Mr. O’Donnell stated that in summary to keep in mind that tidal and off-shore wave are the kinds of things that seeing is believing and hope to have a demonstration in conjunction with U. N. Environment Day June 1 – 5 of 2005. The test and barge should be in place. The demonstration should be done and we should be able to go out and visit this to see what the water does and how it makes power. Then we think that would trigger the kind of permitting and environmental reports. It is more prudent for HydroVenturi to do this with the Department of Environment starting March/April of 2005 for the U. N. World Environment showcase.

    Chairperson Commission Gonzalez and Commissioner Ammiano thanked the speakers and the Department of Environment.

  2. Future Agenda Items.

    Future agenda items were not discussed due to a lack of quorum.

  3. Public Comment on Items not on the Agenda.

    No public comment on items not on the agenda.

  4. Adjournment.

The meeting of the Local

Last updated: 8/18/2009 1:54:53 PM