Ocean Thermal Energy Corp (OTC: CPWR)

Ocean Thermal Energy Corporation develops designs for renewable energy systems primarily focused on Ocean Thermal Energy Conversion Seawater Air Conditioning and Lake Source Cooling. The company seeks to harness the temperature difference between warm surface seawater and cold deep seawater located at depths around three thousand feet to generate electricity produce desalinated water and provide cooling for tropical and subtropical regions. In addition to power and water the firm pursues ancillary opportunities such as aquaculture and agriculture that can benefit from the nutrient rich deep ocean water drawn through its systems. Ocean Thermal Energy Corporation holds proprietary technology created by its own oceanographers engineers and marine scientists and intends to apply this technology to projects worldwide. The firm’s core technology relies on a closed loop thermodynamic cycle using ammonia as a working fluid to convert heat from warm surface water into mechanical energy that drives a turbine and generator. By utilizing the natural temperature gradient of the ocean Ocean Thermal Energy Corporation aims to deliver clean baseload power without consuming fossil fuels or emitting greenhouse gases.

Ocean Thermal Energy Corporation plans to generate revenue through several streams once its projects reach financial close. It expects to receive a lump sum development fee equal to approximately three percent of project costs at the time of financing closing. The company also aims to retain a majority equity stake in each project typically fifty one percent or more to participate in operating cash flows. Revenue from operations is anticipated to come from long term power purchase agreements for electricity or energy service agreements for chilled water as well as from sales of desalinated water and from aquaculture and agriculture production linked to the plants. The firm may also earn fees from licensing its proprietary designs and technical data to third parties that wish to develop similar systems under agreement. Additionally Ocean Thermal Energy Corporation could receive income from the sale of carbon credits or environmental attributes associated with its zero emission power generation. At present Ocean Thermal Energy Corporation has not completed any projects and therefore has not recorded operating revenue.

Ocean Thermal Energy Corporation positions itself as a pioneer in the commercialization of Ocean Thermal Energy Conversion technology aiming to be the first company to design and build a utility scale OTEC plant. The firm emphasizes that its technology provides base load electricity that is available continuously unlike intermittent solar or wind resources which helps stabilize small island grids that lack large transmission infrastructure. Compared with fossil fuel based generation OTEC offers near zero operating emissions no fuel price volatility and the added benefit of producing potable water and supporting aquaculture. The company notes that capital costs for OTEC have declined due to advances in large diameter piping materials improved pumping technology and better deep water installation techniques making it increasingly competitive with diesel generators in remote island markets. While it faces competition from established solar photovoltaic providers diesel generators and emerging ocean energy concepts Ocean Thermal Energy Corporation believes its combination of water power and cooling services creates a unique value proposition that is difficult for single technology rivals to replicate. The firm’s intellectual property includes proprietary know how technical databases and trade secrets covering concept designs plant layouts and economic models that are intended to protect its competitive edge. Ocean Thermal Energy Corporation also points to its long standing relationships with research institutions and government agencies as a source of technical expertise and credibility in the renewable energy sector.

The company targets governmental entities utilities large resorts hospitals educational institutions and municipalities that require reliable power cooling and fresh water in tropical and subtropical regions. Specific discussions mentioned in the filing include projects with the U. S. Department of Defense the Ministry of Earth Sciences of the Government of India and an engineering company based in France. Ocean Thermal Energy Corporation also cites existing seawater air conditioning and lake source cooling installations as proof of concept referencing the Bora Bora Intercontinental Hotel the Google data center in Finland Cornell University in Ithaca New York the City of Toronto Canada and Stockholm Sweden as facilities that successfully use similar technology. In addition the firm has engaged with utility companies in the Caribbean and Pacific islands that are seeking to reduce dependence on imported diesel fuel for power generation. Educational and research organizations are another important customer group as they often require both cooling for data centers and high quality water for marine studies. By focusing on these institutional customers the firm expects to negotiate long term contracts that provide predictable revenue streams while supporting broader economic development goals in island and coastal communities.