Hawaii has been the testing ground for ocean thermal energy conversion, or OTEC, since the late 1970s and remains the only place in the United States where a grid-connected OTEC demonstration plant has operated. The technology generates electricity from the temperature difference between warm tropical surface water and cold water pumped up from the deep ocean, and Hawaii’s geography puts both resources within reach of shore. Despite decades of successful demonstrations, no commercial-scale OTEC plant exists anywhere in the world, and the gap between proof-of-concept and affordable electricity production has proven stubbornly difficult to close.
How OTEC Uses the Ocean’s Temperature Gradient
The basic idea behind OTEC is straightforward. In tropical waters, the surface can sit around 25–28 °C (roughly 77–82 °F), while water at depths of about 1,000 meters hovers near 4–5 °C. That temperature difference, modest as it sounds, can drive a heat engine. In a closed-cycle system, warm surface water heats a working fluid with a low boiling point, such as ammonia, turning it into vapor that spins a turbine. Cold deep water then condenses the vapor back into liquid, and the cycle repeats. In an open-cycle system, the warm seawater itself is flash-evaporated under a vacuum, and the resulting low-pressure steam drives the turbine before being condensed by the cold water.
The efficiency of any heat engine depends on the temperature difference between its hot and cold sources, and OTEC’s roughly 20 °C spread is small compared to, say, a coal plant’s furnace-to-condenser gap. That means OTEC systems need to move enormous volumes of water to produce relatively modest amounts of power. It also means every engineering choice matters: a fraction of a degree lost in a heat exchanger eats directly into net output.
Mini-OTEC and the Birth of a Proving Ground
In 1979, the United States developed and built the world’s first closed-cycle OTEC power-production plant, called Mini-OTEC, off the coast of Hawaii.1Journal of Ocean Engineering and Science. Review of enhancement for ocean thermal energy conversion system Mounted on a converted Navy barge anchored off Keahole Point on the Big Island, the system was tiny by power-plant standards, generating about 50 kilowatts gross. After subtracting the energy needed to pump water and run onboard systems, Mini-OTEC produced a net output of roughly 15 kilowatts. That was enough to power a handful of light bulbs, but the point was never commercial electricity. Mini-OTEC proved that the thermodynamic cycle actually worked in open ocean conditions, validating a concept first proposed in the 1880s by the French physicist Jacques-Arsène d’Arsonval.
Hawaii was chosen for reasons that still apply today. The islands sit in the tropics, so surface water stays warm year-round. And the volcanic seafloor drops off steeply just offshore, meaning cold deep water lies within a few kilometers of the coast rather than far out on a continental shelf. That steep bathymetry keeps the cold-water pipe shorter and the pumping costs lower, both critical factors for a technology that already operates on thin margins.
Makai’s Grid-Connected Demonstration
After Mini-OTEC, various research efforts continued at the Natural Energy Laboratory of Hawaii Authority (NELHA) facility at Keahole Point, including open-cycle experiments in the 1990s. The next milestone came in 2015, when Makai Ocean Engineering began operating the first U.S. grid-connected OTEC demonstration plant, rated at roughly 105 kilowatts, at Kailua-Kona.2Renewable Energy. A modeling study of ocean thermal energy conversion resource and potential environmental effects around Kailua-Kona, Hawaii Unlike Mini-OTEC, which ran in isolation, the Makai plant actually fed power into Hawaii’s electrical grid. It served as a proof-of-concept for practical deployment in a region that imports most of its energy as petroleum and pays some of the highest electricity rates in the United States.
The Makai facility also served as a testbed for heat-exchanger design and materials. Corrosion from warm, biologically active surface seawater is a persistent headache in OTEC engineering, and optimizing the plates or tubes that transfer heat between the seawater and the working fluid has an outsized effect on system performance. The Kailua-Kona plant gave engineers real-world operating hours to study fouling, corrosion rates, and maintenance cycles, data that paper studies and laboratory tanks cannot fully replicate.
The Cold Water Pipe Problem
If there is a single engineering challenge that defines OTEC, it is the cold water pipe. Getting water from depths of 800 to 1,000 meters up to the surface requires a pipe that can be several hundred meters to nearly a kilometer long, withstand ocean currents and wave-induced motion, resist corrosion, and be light enough to deploy from a vessel or platform. Early design work explored a segmented, prestressed lightweight concrete pipe roughly 30 feet in inside diameter and up to 3,000 feet long, analyzing the pipe’s response to random sea states using hydrodynamic modeling.3Offshore Technology Conference. Design Of A Concrete Cold Water Pipe For Ocean Thermal Energy Conversion (OTEC) Systems The pipe has to survive not only normal operating conditions but also storms and the fatigue of constant flexing over years of service.
Modern designs have explored alternatives to concrete, including high-density polyethylene and fiber-reinforced composites. Regardless of material, the pipe must be fabricated in sections and assembled at sea, a process that is expensive and logistically complex. For a shore-based plant, the pipe runs along the seafloor from a land facility out to the drop-off, which in Hawaii can be relatively close to shore. For a floating platform, the pipe hangs vertically beneath the hull, adding dynamic loads as the platform pitches and heaves. Pipe breakage or detachment would be catastrophic for plant operation and potentially for the surrounding environment, so structural reliability is not optional.
Anchoring Near Volcanic Islands
Hawaii’s steep underwater slopes are an advantage for reaching cold water, but they make anchoring and mooring a floating OTEC platform far more complicated than, say, mooring an oil rig on a flat continental shelf. The volcanic seafloor around the islands features irregular bathymetry, uncertain sediment thicknesses, and slopes that can shift abruptly.4IEEE OCEANS. Anchoring and mooring considerations for an OTEC pilot plant Mooring lines anchored to a steep, rocky slope behave differently than those on a sandy plain, and designers have to account for lateral forces from currents and wind alongside the vertical pull of a suspended cold water pipe. Extreme weather events, including tropical storms and large swells generated by distant storms, add further design loads that the mooring system must withstand over a plant’s intended service life of 20 to 30 years.
These geotechnical challenges are one reason shore-based OTEC designs have attracted more attention in Hawaii. A plant built on land avoids the mooring problem entirely, though it substitutes the challenge of running a very long, large-diameter pipe across the seafloor. The NELHA site at Keahole Point already has deep-water intake pipes installed for aquaculture and research tenants, which has made it a natural home for OTEC experimentation.
Environmental Considerations
Any OTEC plant moves massive quantities of seawater, and the ecological effects of that redistribution have been a focus of Hawaii-based research. Warm surface water drawn into the intake carries plankton, fish larvae, and other small organisms, raising concerns about impingement (organisms getting pinned against intake screens) and entrainment (organisms getting pulled through the system). A field sampling program funded by the U.S. Department of Energy spent nine months characterizing fish larvae and plankton near a potential OTEC site off Kauai to estimate the impact a warm-water intake could have on those populations.5Marine Technology Society Journal. A Field Program for Developing a Baseline Characterization of Ichthyoplankton Near a Potential OTEC Facility Understanding what lives in the water column at the intake depth, in what densities, and during which seasons is a prerequisite for estimating how many organisms a plant would remove.
On the discharge side, the cold, nutrient-rich deep water pumped to the surface and then released creates its own concerns. Deep ocean water carries higher concentrations of nitrate, phosphate, and silicate than surface water. If that nutrient load is dumped back near the surface, it could fertilize algal blooms or shift the local plankton community. A modeling study of OTEC operations in Kaneohe Bay found that changes to nutrients and plankton stayed well within natural variability on average.6University of Hawaiʻi ScholarSpace. Modeling the Impacts of an Ocean Thermal Energy Conversion Plant on Plankton Populations in Kaneohe Bay That result is encouraging but comes with caveats: the outcome depends heavily on plant size, discharge depth, local currents, and whether the discharge plume stays submerged or mixes into the surface layer. A small demonstration plant and a full-scale commercial facility would have very different footprints.
The temperature of the discharge also matters. Returning water that is warmer or cooler than the ambient water at the discharge depth can alter stratification. Most proposed designs aim to discharge blended effluent at a depth where its temperature and density roughly match the surroundings, minimizing disruption. In practice, getting that right at commercial scale, around the clock and across seasons, remains an open engineering and environmental question.
Desalination and Multi-Use Platforms
One of the more compelling aspects of OTEC in a place like Hawaii is the potential to produce more than just electricity. Open-cycle OTEC inherently produces desalinated water as a byproduct because the flash-evaporated seawater condenses as fresh water. The volume is modest relative to the water flowing through the system, roughly half a percent to six-tenths of a percent of the warm surface seawater intake, but for island communities with limited freshwater resources it could be meaningful.7Renewable Energy. Dual-use open cycle ocean thermal energy conversion (OC-OTEC) using multiple condensers for adjustable power generation and seawater desalination Research into dual-use open-cycle systems with multiple condensers has shown that operators could adjust the split between electricity generation and desalinated water production based on demand.
Beyond desalination, the cold, nutrient-rich deep-ocean water itself has commercial value. At NELHA, tenants have used it for decades to support aquaculture, growing species that prefer cooler water in the warm Hawaiian climate. Cold deep water is also used in air conditioning: the water chills a closed freshwater loop that cools buildings, a system already operating at NELHA. A Pacific Northwest National Laboratory feasibility study noted the promise of pairing OTEC with seawater desalination and other co-products to improve the overall economics of a plant.8Pacific Northwest National Laboratory. Feasibility of Multi-Use Ocean Thermal Energy Conversion Platforms The idea is that if electricity alone cannot pay for the infrastructure, stacking revenue streams from fresh water, aquaculture, and cooling might close the gap.
Why Commercial OTEC Still Does Not Exist
The theoretical global resource for OTEC has been estimated at up to 30 terawatts, an enormous figure that dwarfs current worldwide electricity demand.9Renewable and Sustainable Energy Reviews. Recent progress in the economics of ocean thermal energy conversion: Critical review and research agenda Yet the technology remains stuck in the demonstration phase. A critical review of OTEC economics identified six factors that dominate the cost picture: capital cost, operational cost, plant lifetime, the interest rate on financing, real net power output, and achievable cost reductions over time. Of these, capital cost is the biggest obstacle. OTEC plants require expensive heat exchangers, large-diameter deep-water pipes, mooring systems, and specialized marine construction, all for a system whose thermodynamic efficiency is inherently low. No commercial plant operates anywhere, so lenders and investors have no track record to underwrite.
The cost per kilowatt-hour from OTEC remains several times higher than solar or wind in most analyses, and both of those technologies have been plummeting in price for over a decade. For Hawaii, though, the comparison is more nuanced. The state’s electricity prices are among the highest in the nation because so much generation still depends on imported petroleum. Solar adoption has surged, but solar alone cannot provide the round-the-clock baseload power that OTEC could. An OTEC plant runs 24 hours a day, regardless of weather or time of day, because the ocean’s thermal gradient barely fluctuates. That baseload characteristic has value in a grid with high renewable penetration and growing battery storage needs.
Still, no private developer has been willing to commit the hundreds of millions of dollars needed for even a modest commercial plant without either large government subsidies or a guaranteed power purchase agreement at above-market rates. Several projects have been proposed for Hawaii and other Pacific island locations over the years, but financing has remained the stumbling block. The Makai demonstration proved the physics works; the remaining barrier is economic, not technical.
Hawaii’s Unique Position in the OTEC Landscape
Several characteristics make Hawaii arguably the most favorable OTEC location in U.S. territory. The warm surface temperatures are available year-round, the deep cold water is close to shore, existing infrastructure at NELHA provides intake pipes and research support, and the state has both a policy commitment to 100 percent renewable energy and electricity costs high enough to narrow the gap with OTEC’s projected generation costs. The regulatory environment is also more developed than elsewhere, with environmental baseline studies already completed or underway at multiple potential sites, including the Kauai ichthyoplankton survey and Kaneohe Bay modeling work mentioned above.
Other tropical locations, including Pacific island nations and parts of the Caribbean, face similar energy insecurity and could benefit from OTEC. But Hawaii has the institutional infrastructure, the research history, and the connection to U.S. federal funding that give it a head start. If a commercial OTEC plant is ever built in the United States, it is overwhelmingly likely to be built in Hawaii. Whether that happens in the next decade or remains perpetually ten years away depends largely on whether the economic case improves through engineering breakthroughs, co-product revenue, or policy support that values baseload renewable generation differently than intermittent sources.
Deep Seawater Industries Beyond Electricity
Even without a full-scale OTEC power plant, Hawaii already has a thriving industry built around deep ocean water. NELHA’s pipelines, originally installed for OTEC research, supply cold deep water to tenants who bottle it as drinking water, grow high-value marine organisms like abalone and microalgae, and cool greenhouses for temperate crops. The deep water’s low pathogen load and consistent mineral content have made it attractive for premium bottled water brands sold primarily in Japan and South Korea. Annual revenues from these deep-seawater enterprises run into the tens of millions of dollars, a quiet commercial success that grew directly out of the OTEC research pipeline.
The air-conditioning application, known as seawater air conditioning or SWAC, has also moved beyond the experimental stage. A SWAC system pumps cold deep water through a heat exchanger that chills a freshwater loop, which then circulates through buildings. The energy savings compared to conventional electric chillers can be substantial in a warm climate, and the environmental footprint is smaller because no refrigerants are involved. Honolulu explored a district SWAC system for downtown buildings, and NELHA’s campus already uses the technology. These spinoffs demonstrate that even if OTEC itself has not reached commercial power production, the deep-water infrastructure it spawned has generated real economic activity in Hawaii for decades.