---
title: Ocean Thermal Energy Conversion (OTEC) | History, Types, & Benefits
description: Learn about Ocean Thermal Energy Conversion (OTEC), its history, types, and benefits. Some environmental concerns are also discussed.
image: https://www.carboncollectiveinvesting.com/hubfs/Ocean_Thermal_Energy_Conversion_(OTEC)_-_FI.png
---

[![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo-white.4f6047d4.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/)

- About
- Employers 
    - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k)
    - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool)
- Individuals 
    - [FAQ](https://www.carboncollective.co/en/knowledge/faqs)
- [ETF](https://www.carboncollectivefunds.com/)
- Learn 
    - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing)
    - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics)
    - [Blog](https://blog.carboncollective.co/)
    - [Tools](https://tools.carboncollective.co/calculator/)
- Log in 
    - [Carbon Collective](https://app.carboncollective.co)
    - [Altruist](https://app.altruist.com)

[Talk to a human](https://ask.carboncollective.co/f4o5dylkg)

[Sign up](https://app.carboncollective.co/sign-up)

[Log In](http://app.carboncollective.co/)

[![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo.53b28bee.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/)

- About
- Employers 
    - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k)
    - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool)
- Individuals 
    - [FAQ](https://www.carboncollective.co/en/knowledge/faqs)
- [ETF](https://www.carboncollectivefunds.com/)
- Learn 
    - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing)
    - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics)
    - [Blog](https://blog.carboncollective.co/)
    - [Tools](https://tools.carboncollective.co/calculator/)
- Log in 
    - [Carbon Collective](https://app.carboncollective.co)
    - [Altruist](https://app.altruist.com)

[Talk to a human](https://ask.carboncollective.co/f4o5dylkg)

[Sign up](https://app.carboncollective.co/sign-up)

[Log In](http://app.carboncollective.co/)

**[Home](https://www.carboncollectiveinvesting.com/) > [Sustainable Investing](https://www.carboncollectiveinvesting.com/sustainable-investing) >** Ocean Thermal Energy Conversion (OTEC)

# Ocean Thermal Energy Conversion (OTEC)

![](https://www.carboncollectiveinvesting.com/hubfs/zach-stein.jpeg)

 Written by Zach Stein  |  Reviewed by [Subject Matter Experts](https://www.carboncollectiveinvesting.com/subject-matter-experts)

Updated on October 1, 2024

 Fact Checked

 Why Trust Carbon Collective?

### Table of Contents

## **OTEC Defined**

Ocean Thermal Energy Conversion (OTEC) is a game-changing technique that uses temperature variations in the ocean to create endless energy without using [fossil fuels](https://www.carboncollectiveinvesting.com/sustainable-investing/fossil-fuels).

In terms of accessibility, dependability, price, and emissions, it has a competitive edge over alternative methods of energy generation.

## **History of OTEC**

The idea of using the ocean’s thermal energy was first proposed in 1881 by French physicist Jacques Arsene d’Arsonval.

His concept called for a [closed-cycle system](https://tethys-engineering.pnnl.gov/technology/closed-cycle), which most modern OTEC pilot plants have since adopted. A secondary working fluid (a refrigerant) such as ammonia is used in such a system.

During the 1970s and 1980s, the U.S., Japan, and several other nations began experimenting with OTEC systems to establish a sustainable [renewable energy source](https://www.carboncollectiveinvesting.com/sustainable-investing/renewable-energy-sources).

American researchers put the first OTEC plant capable of generating reasonable amounts of electric power—roughly 15 kilowatts of net power—into operation in 1979. Mini-OTEC was a closed-cycle system placed on a U.S. seacraft several kilometers off the coast of Hawaii.

Japanese businesses tried another experimental closed-cycle OTEC plant in 1981–82. This plant, located on the Pacific island nation of Nauru, generated 35 kilowatts of net electricity.

Since then, researchers have worked on improving heat exchangers and devising techniques to reduce saltwater corrosion of system components.

In 1999 the [Natural Energy Laboratory of Hawaii Authority (NELHA)](https://nelha.hawaii.gov/) was established as the first test site in the United States for OTEC [research and development](https://www.carboncollectiveinvesting.com/sustainable-investing/research-development-rd).

## **How It Works**

OTEC relies on the ocean’s thermal gradient—the difference in temperature between the warm surface water and the colder deep water.

This temperature difference can be as high as 20°C (68°F) in tropical waters, but it is usually about 6-12°C (11-22°F).

The basic idea is to use the warm water to vaporize a working fluid, which is then run through a turbine to generate electricity. The vapor is then condensed into a liquid using cold water, and the cycle begins anew.

## **Power Cycle Types**

There are three primary OTEC power cycles: closed-cycle, open-cycle, and hybrid.

### **Closed-Cycle**

The working fluid (such as ammonia) is vaporized using warm water in a closed-cycle system. The resulting vapor runs through a turbine, which powers a [generator](https://www.carboncollectiveinvesting.com/sustainable-investing/generator) to produce electricity. The vapor is then condensed into a liquid using cold water, and the cycle begins anew.

The main advantage of this type of system is that it can be used in various environments, including land-based, shelf-based, and floating OTEC plants.

### **Open-Cycle**

Steam is generated directly from the warm surface water in an open-cycle system. The steam then runs through a turbine to power a generator and produce electricity. The steam is then cooled by contact with the cold water, condensing back into a liquid.

The main advantage of this type of system is that it is relatively simple and does not require a working fluid.

However, it can only be used in ocean environments with a significant temperature difference between the surface and deep water—such as in the tropics.

### **Hybrid Cycle**

A hybrid system combines the best features of both the closed-cycle and open-cycle systems.

In a hybrid system, warm water vaporizes a working fluid (such as ammonia). The resulting vapor runs through a turbine to power a generator and produces electricity.

The steam is then condensed back into a liquid using cold water. Some condensed steam vaporizes the working fluid, and the rest generates additional electricity through a second turbine.

The main advantage of this type of system is that it is more efficient than either the closed-cycle or open-cycle systems.

![OTEC_Power_Cycle_Types](https://www.carboncollectiveinvesting.com/hs-fs/hubfs/OTEC_Power_Cycle_Types.png?width=1920&height=869&name=OTEC_Power_Cycle_Types.png)

## **OTEC Sites**

There are three main types of OTEC sites: land-based, shelf-based, and floating.

### **Land Based**

Land-based OTEC plants are typically located near a deep water source in coastal areas.

### **Shelf Based**

Shelf-based OTEC plants are typically located on the continental shelf—the shallow underwater platform that extends from the coastline to the continental slope.

### **Floating**

Floating OTEC plants are typically located in open ocean environments, such as in the tropics.

![OTEC_Sites](https://www.carboncollectiveinvesting.com/hs-fs/hubfs/OTEC_Sites.png?width=1920&height=869&name=OTEC_Sites.png)

## **Benefits of OTEC**

OTEC has several potential benefits, including:

- **Zero emissions**: OTEC plants do not produce [greenhouse gases](https://www.carboncollectiveinvesting.com/sustainable-investing/greenhouse-gases) or other pollutants.
- **Abundant energy source**: The ocean is a vast and virtually limitless thermal energy source.
- **Scalable**: OTEC plants can be scaled to meet the needs of any size community, from a small island village to a large city.
- **Versatile**: OTEC plants can be used to produce a variety of products, including electricity, freshwater, and greenhouse gases.
- **Stable**: The ocean’s thermal gradient is relatively stable and predictable, making OTEC a reliable energy source.

## **Environmental Concerns**

There are also several environmental concerns associated with OTEC, including:

- **Impacts on marine life**: The intake of warm water from the ocean can impact marine life, particularly in shallow waters.
- **Potential for oil spills**: OTEC plants that use oil as a working fluid could release oil into the environment in the event of a spill.
- **Disruption of the ocean’s thermal gradient**: The release of cold water from deep ocean depths can disrupt the ocean’s thermal gradient, potentially impacting global climate patterns.
- OTEC plants are also large and expensive, requiring a significant amount of land or ocean area.

 

![Benefits_and_Environmental__Concerns_of_OTEC](https://www.carboncollectiveinvesting.com/hs-fs/hubfs/Benefits_and_Environmental__Concerns_of_OTEC.png?width=1920&height=1080&name=Benefits_and_Environmental__Concerns_of_OTEC.png)

## **Final Thoughts**

OTEC is the process of using the ocean’s thermal energy to produce electricity.

OTEC plants can be either land-based, shelf-based, or floating, and they come in three main types: closed-cycle, open-cycle, and hybrid.

OTEC has several potential benefits, including zero emissions, and is a scalable, versatile, and stable energy source.

However, OTEC also has several environmental concerns, including the potential for oil spills and the ocean’s thermal gradient disruption.

## **FAQs**

### 1. What is OTEC?

OTEC is the process of using the ocean’s thermal energy to produce electricity.

### 2. What are the three main types of OTEC plants?

The three main OTEC plants are closed-cycle, open-cycle, and hybrid.

### 3. What are the benefits of OTEC?

Some potential benefits of OTEC include zero emissions and a scalable, versatile, and stable energy source.

### 4. What are the environmental concerns associated with OTEC?

Some environmental concerns associated with OTEC include the potential for oil spills and the ocean’s thermal gradient disruption.

### 5. Is OTEC a renewable energy source?

Yes, OTEC is a renewable energy source.

### Related Topics

- [Sustainable Investing](https://www.carboncollective.co/sustainable-investing/)
- [Carbon Footprint](https://www.carboncollective.co/sustainable-investing/carbon-footprint)
- [Energy Efficiency](https://www.carboncollective.co/sustainable-investing/energy-efficiency)
- [Greenhouse Gases](https://www.carboncollective.co/sustainable-investing/greenhouse-gases)
- [Net Zero](https://www.carboncollective.co/sustainable-investing/net-zero)
- [Renewable Energy Sources](https://www.carboncollective.co/sustainable-investing/renewable-energy-sources)
- [Sustainable Development Goals (SDGs)](https://www.carboncollective.co/sustainable-investing/sustainable-development-goals-sdgs)

![Attend Our Next Webinar](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-webinar.12af7b6e.svg)

### Attend Our Next Webinar

Join our next Sustainable Investing 101 webinar, get our favorite DIY options, and walk through how we build our portfolios.

[Watch Now](https://www.carboncollective.co/sustainable-investing-webinar-green-retirement-month)

![Get Our Newsletter](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-demo.6ed28722.svg)

### Get Our Newsletter

Go a level deeper with us and investigate the potential impacts of climate change on investments like your retirement account.

Join Newsletter

![close-typeform](data:image/gif;base64,R0lGODlhEQARAIAAAODn7P///yH5BAEHAAEALAAAAAARABEAAAIqBIKpab3v3EMyVHWtWZluf0za0XFNKDJfCq5i5JpomdUxqKLQVmInqyoAADs=)

![Talk To A Human](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-chat.49d48c5b.svg)

### Talk To A Human

Joining a new investment service can be intimidating. We’re here for you. Click below to email us a question or book a quick call.

[Ask a Question](https://ask.carboncollective.co/f70pooobq)

Topics

## Sustainable Investing Topics

View our list of some topics below.

 See More

- Portfolios 
    - [Performance](https://www.carboncollectiveinvesting.com/returns)
- About 
    - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k)
- Learn 
    - [FAQ](https://www.carboncollective.co/en/knowledge/faqs)
    - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing)
    - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics)
- Contact 
    - [Contact us](mailto:hello@carboncollective.co)
    - [Legal](https://www.carboncollective.co/legal)
    - [Privacy Policy](https://www.carboncollectiveinvesting.com/hubfs/2022-11%20Carbon%20Collective%20Privacy%20Policy.pdf)
- [Back to top](https://www.carboncollectiveinvesting.com/sustainable-investing/ocean-thermal-energy-conversion-otec#top-of-page)

DISCLAIMERS:

Advisory services provided by Carbon Collective Investment LLC (“Carbon Collective"), an SEC-registered investment adviser. A copy of Carbon Collective's current written disclosure statement discussing Carbon Collective’s business operations, services, and fees is available at the SEC’s investment adviser public information website – [www.adviserinfo.sec.gov](https://adviserinfo.sec.gov/firm/summary/310129) or [our legal documents here](https://blog.carboncollective.co/legal-documents/).

The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. Carbon Collective does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Carbon Collective’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Investments in securities: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Before investing, consider your investment objectives and Carbon Collective's charges and expenses. Carbon Collective's internet-based advisory services are designed to assist clients in achieving discrete financial goals. They are not intended to provide comprehensive tax advice or financial planning with respect to every aspect of a client's financial situation and do not incorporate specific investments that clients hold elsewhere. For more details, see our Form CRS, Form ADV Part 2 and other disclosures. Past performance does not guarantee future results, and the likelihood of investment outcomes are hypothetical in nature. Not an offer, solicitation of an offer, or advice to buy or sell securities in jurisdictions where Carbon Collective is not registered.

© 2026 Carbon Collective Corporation. All rights reserved.

×

#### Fact Checked

Carbon Collective partners with financial and climate experts to ensure the accuracy of our content.

Our team of reviewers are established professionals with years of experience in areas of personal finance and climate.

They have contributed to top tier financial publications, such as Reuters, Axios, Ag Funder News, Bloomberg, Marketwatch, Yahoo! Finance, and many others.

This team of experts helps Carbon Collective maintain the highest level of accuracy and professionalism possible.

×

#### Why Trust Carbon Collective

 Carbon Collective is the first online investment advisor 100% focused on solving climate change. We believe that sustainable investing is not just an important climate solution, but a smart way to invest.

 We follow ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources. Much of our research comes from leading organizations in the climate space, such as Project Drawdown and the International Energy Agency (IEA).

 Our goal is to deliver the most understandable and comprehensive explanations of climate and finance topics.

 Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including MarketWatch, Bloomberg, Axios, TechCrunch, Forbes, NerdWallet, GreenBiz, Reuters, and many others.

 We strive to empower readers with the most factual and reliable climate finance information possible to help them make informed decisions. 

 }

```json
{
  "@context" : "https://schema.org",
  "@type" : "Organization",
  "alternateName" : "Carbon Collective",
  "contactPoint" : {
    "@type" : "ContactPoint",
    "areaServed" : "US",
    "availableLanguage" : "en",
    "contactType" : "customer service",
    "telephone" : "(650) 868-2697"
  },
  "logo" : "https://www.carboncollective.co/hubfs/CarbonCollectiveLogo.png",
  "name" : "Carbon Collective Investing LLC",
  "sameAs" : [ "https://www.facebook.com/carboncollectiveinvesting/", "https://twitter.com/carbncollective", "https://www.instagram.com/carbon.collective/", "https://www.youtube.com/channel/UC769Y-F-L_B37kyQfdpvyXA", "https://www.linkedin.com/company/carbon-collective/", "https://www.crunchbase.com/organization/carbon-collective", "https://adviserinfo.sec.gov/firm/summary/310129", "https://www.wikidata.org/wiki/Q110243690" ],
  "url" : "https://www.carboncollective.co/"
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "BlogPosting",
    "mainEntityOfPage": {
      "@type": "WebPage",
      "@id": "https://www.carboncollectiveinvesting.com/sustainable-investing/ocean-thermal-energy-conversion-otec"
    },
    "headline": "Ocean Thermal Energy Conversion (OTEC) | History, Types, & Benefits",
    "description": "Learn about Ocean Thermal Energy Conversion (OTEC), its history, types, and benefits. Some environmental concerns are also discussed.
",
    "image": "https://20345524.fs1.hubspotusercontent-na1.net/hubfs/20345524/Ocean_Thermal_Energy_Conversion_%28OTEC%29_-_FI.png",  
    "author": {
      "@type": "Person",
      "name": "https://f.hubspotusercontent20.net/hubfs/20345524/zach-stein.jpeg",
      "url": "https://www.carboncollectiveinvesting.com/sustainable-investing/author/zach-stein"
    },  
    "publisher": {
      "@type": "Organization",
      "name": "Carbon Collective",
      "logo": {
        "@type": "ImageObject",
        "url": "https://www.carboncollective.co/hubfs/CarbonCollectiveLogo.png"
      }
    },
    "datePublished": "2022-12-13",
    "dateModified": "2024-10-01"
  }
```