Ocean Thermal Energy Conversion (OTEC) uses the difference in temperature at different water depths to produce energy, similar to how geothermal works. A green resort in China is going to be powered by the OTEC system and the companies involved in building the power plant are hoping that this will prove the technology works well enough for larger projects.
OTEC uses the natural difference in temperatures between the cool deep water and warm surface water to produce electricity. There are different cycle types of OTEC systems, but the prototype plant is likely to be a closed-cycle system. This sees warm surface seawater pumped through a heat exchanger to vaporize a fluid with a low boiling point, such as ammonia. This expanding vapor is used to drive a turbine to generate electricity with cold seawater then used to condense the vapor so it can be recycled through the system.
The companies claim each 100 MW OTEC facility could produce the same amount of energy in a year as 1.3 million barrels of oil and decrease carbon emissions by half a million tons. Assuming oil trading at near US$100 a barrel, they estimate fuel savings from one plant could exceed $130 million a year.