GULF
STREAM TURBINES LLC
EXECUTIVE
SUMMARY
PRODUCING
CONTINUOUS LOW-COST ELECTRICITY
FROM OCEAN CURRENTS
The constantly flowing
To
tap into that immense source of renewable energy will require a submersible
power plant that can operate for very long periods – possibly for years –
without requiring servicing or repair.
The Gulf Stream Turbines can do this because
of the patented failure-proof design that depends
on the laws of physics – not on moving parts that can fail. As long as there is a force of gravity, it
will work.
Advantages of the
- Powered by a steady ocean current that is
produced by the earth’s rotation
- Capacity factors of about 85%, comparable to
those of many fossil-fuel plants
- Unlike wind, tidal, and solar, can generate 24-7
to fill base-load requirements
- Cost should be between $2,000 and $2,500 per kilowatt
of generating capacity
- Financed over 20 years, electricity costs will
be between 5 and 7 cents per kWh
- Designed to have very low operation and
maintenance (O&M) costs
- Silent and invisible
- Reduces CO2 emissions by replacing
electricity produced by fossil-fuel plants
- Slow turning rotors will not harm marine life
- Constructed of non-corroding materials
- The structure has no moving parts to wear or
break
- Extremely simple mechanically and easily
mass-produced
- Easy to install in groups and easy to recover
- Depths can be accurately controlled and changed
by remote control
- Great inherent stability – will not tip, yaw, or
pitch
- High capacity factor produce low-cost power
during amortization period
- Additional income from carbon offsets
- Profits assured by high capacity factors and
production tax credits
- Can produce more than double the power of the
best wind turbines
Designed to Produce Steady Electricity at Low Cost
The
invention is based on uses the relative locations of centers of buoyancy and
weight to obtain its great inherent stability and on a unique method of using
leverage to balance the hydrodynamic lifting forces to the changing downward
vector forces to accurately control depth.
Because these machines will be constructed of light carbon-fiber and
fiberglass, they will not corrode.
Because of their mechanical simplicity, they can generate electricity
for long periods – even years – without requiring any servicing. The actual conversion of the water’s kinetic
energy into electricity utilizes the same technologies that are used by the
wind-turbine industry. However, unlike
the wind turbines, the Gulf Stream Turbines will have extremely low O&M
costs and will be able to produce usable power 24-7.
A
Every
kilowatt-hour of electricity that can be generated with water or wind can
replace the same amount of electricity that is generated with fossil
fuels. According
to the EIA, the gas-fired power plants produce approximately 1.321 lb of carbon
dioxide for every kWh of electricity they produce. If the electricity generated with a 1.2-MW
Low Fixed Costs
Because there will be no fuel costs and very low O&M costs,
the costs of producing the electricity will virtually be the amortization
costs, divided by the kWh of electricity generated during the amortization
period. The following table gives the
amortization costs per kWh for Gulf Stream Turbines that have a capital cost of
$2,000 per kW, a capacity factor of 85%, and with the amortization periods and
interest rates shown. At the end of that
amortization period, the costs of the electricity would drop to virtually zero.
The
Unlike the winds that can vary from zero to hurricane velocities,
the Gulf Stream’s velocities remain relatively constant, making it possible for
the Gulf Stream Turbines to produce electricity continuously without needing to
be disconnected from the grid. Following
are a few reasons why the O&M costs for the Gulf Stream Turbines should be substantially
less than those of the wind turbines:
·
The brakes should not need servicing
because they will seldom be used and then only briefly
·
Using stall-controlled rotors blades will
eliminate those mechanical problems with pitch-control
·
·
The relative steadiness of the current
should prevent breakage due to excessive current velocities
·
There will be no buildup of dust inside
the nacelles that will need to be removed
Revenues from Electricity and the Production Tax Credits
The wholesale prices of electricity tend to follow the wholesale natural
gas prices. This is because the price of
the electricity includes the cost of the fuel that is consumed to produce
it. Because the operating costs are the
highest for the gas-fired power plants, it is that normally that electricity produced
with the gas that is sold on the wholesale market.
It is only in the last few years that horizontal drilling
and hydraulic fracturing technologies have made the production of that natural
gas in shale economically feasible.
However, because the costs of developing these unconventional wells are
much higher than those for conventional wells, the incentives to produce this
gas are sensitive to the gas price.
Where a conventional well might cost $1 million, an unconventional
horizontal well that has been developed in the same formation can easily cost
$10 million. As long as the gas producers know where
the shale gas is located and can increase production by simply drilling more
wells into the easier to develop formations when the gas prices are
sufficiently high to make the new wells profitable, the gas prices will probably
fluctuate between roughly $6 and $12 per million Btu, though they could spike
much higher.
The Henry Hub spot price for gas on January 8, 2010 had recovered to $6.48
per million Btu. The wholesale price of
the electricity that would be generated from that gas would at that price; the
price of the electricity that would be generated from that gas would be roughly
8.5 cents per kWh. A Gulf Stream Turbine
equipped with two 600 kW generators and operating at an 85% capacity factor
would generate 8,941,300 kWh per year. If
the electricity price averaged 8.5 cents per kWh, the annual revenues from the
sale of the electricity would come to $760,010 and the 2.1 cent production tax
credit would add an additional $187,767, totaling $947,777 for one year. If the
machine’s capital cost would be $2,000 per kW of capacity, those revenues would
produce a return on the investment of 39.5% on the investment.
The following graph shows how the returns on the investment in a Gulf
Stream Turbine would vary with the wholesale prices of the electricity. Because the capacity factors will be at about
85%, those machines that have a capital cost of $2,000 per kW of capacity would
produce an annual return of 7.82% just from
just the 2.1 cent per kWh production tax credit. The table on the right gives the percentages
of returns on investments from the sale of the electricity at prices from zero
to 21 cents per kWh and from the PTC for Gulf Stream Turbines that have capital
costs of $2,000 and $2,500 per kW of capacity.
Income from Carbon Permits Sales Can
be Huge
It
is impossible to accurately predict the additional incomes that might result
from the sale of the carbon permits because their prices of those permits will be
determined by auction and their supply will be controlled by those government
officials that are administering the program.
A number of economists have estimated that the carbon prices will
probably range between $20 and $40 per ton.
Under the present European carbon offset commodity futures price for
January 2011 of US $30 at ton, the owners of a 1.2-MW Gulf Stream Turbine could
potentially receive an additional $390,000 per year (based on the 13,000 tons
of CO2 that would be emitted by coal-fired plants that produced the same amount
of electricity as a 1.2-MW Gulf Stream Turbine). With the wholesale electricity price of 10
cents per kWh, the revenues from the electricity and PTC subsidy would be
$1,081,897. Adding the $390,000 from the
sale of the carbon permits at a $30-per-ton price, would increase the total
revenues from the three sources to $1,471,897 – which would be a return of
61.3% on an investment of $2.4 million.
With a carbon price of $40 per ton, those total revenues would be
$1,601,897 and the return on the investment would be 66.7%.
Determined to
We want to get this technology to market as soon as possible. Though we will consider joint ventures and
other business arrangements, our first choice is to license the patents to a
well-established manufacturing company that has sufficiently deep pockets and
engineering talents to successfully develop and sell thousands of these
machines. The company that licenses the
patents would also get a third patent that will extend their patent coverage on
a major improvement. Because this new
patent is totally dependent on the first two patents, no one else can patent
this improvement.
We would also be interested in working with a university that
would apply for federal grants to fund the engineering, the building and
testing of a prototype. Another option
is for Gulf Stream Turbines LLC to continue to apply for federal grants and
contact companies that have previously worked with the DOE and DOD.
We might also find a visionary effectual individual, corporation or
venture capital company willing to fund the development of the prototype in
return for a percentage of future profits or royalties. We have received an estimate that an initial
investment of $750,000 to $1 million will be required for the finalization of
the Gulf Stream Turbine’s R&D costs, tooling and design. The cost to build and test a full-size
prototype has been estimated at between $8 and $10 million.
John H. Robson
Inventor/Chairman
847 566 6947
Rowen Negrin
President
954 907 2254