An economic analysis indicates that, over the next 5 to 10 years, ocean thermal energy conversion (OTEC) plants may be competitive in four markets. The first market is the small island nations in the South Pacific and the island of Molokai in Hawaii. In these islands, the relatively high cost of diesel-generated electricity and desalinated water may make a small [1 megawatt (electric) (MWe)], land-based, open-cycle OTEC plant coupled with a second-stage desalinated water production system cost effective. A second market can be found in American territories such as Guam and American Samoa, where land-based, open-cycle OTEC plants rated at 10 MWe with a second-stage water production system would be cost effective. A third market is Hawaii, where a larger, land-based, closed-cycle OTEC plant could produce electricity with a second-stage desalinated water production system. OTEC should quickly become cost effective in this market, when the cost of diesel fuel doubles, for plants rated at 50 MWe or larger. The fourth market is for floating, closed-cycle plants rated at 40 MWe or larger that house a factory or transmit electricity to shore via a submarine power cable. These plants could be built in Puerto Rico, the Gulf of Mexico, and the Pacific, Atlantic, and Indian Oceans. Military and security uses of large floating plantships with major life-support systems (power, desalinated water, cooling, and aquatic food) should be included in this last category.
OTEC's greatest potential is to supply a significant fraction of the fuel the world needs by using large, grazing plantships to produce hydrogen, ammonia, and methanol. Of the three worldwide markets studied for small OTEC installations—U.S. Gulf Coast and Caribbean regions, Africa and Asia, and the Pacific Islands—the Pacific Islands are expected to be the initial market for open-cycle OTEC plants. This prediction is based on the cost of oil-fired power, the demand for desalinated water, and the social benefits of this clean energy technology. U.S. OTEC technology is focused on U.S. Coastal areas, including the Gulf of Mexico, Florida, and islands such as Hawaii, Puerto Rico, and the Virgin Islands.