Off the coast of Hawaii, a tall buoy bobs and sways in the water, using the rise and fall of the waves to generate electricity.

The current travels through an undersea cable for a mile to a military base, where it feeds into Oahu’s power grid – the first wave-produced electricity to go online in the U.S.

By some estimates, the ocean’s endless motion packs enough power to meet a quarter of America’s energy needs and dramatically reduce the nation’s reliance on oil, gas and coal. But wave energy technology lags well behind wind and solar power, with important technical hurdles still to be overcome.

To that end, the Navy has established a test site in Hawaii, with hopes the technology can someday be used to produce clean, renewable power for offshore fueling stations for the fleet and provide electricity to coastal communities in fuel-starved places around the world.

“More power from more places translates to a more agile, more flexible, more capable force,” Joseph Bryan, deputy assistant secretary of the Navy, said during an event at the site. “So we’re always looking for new ways to power the mission.”

Hawaii would seem a natural site for such technology. As any surfer can tell you, it is blessed with powerful waves. The island state also has the nation’s highest electricity costs – largely because of its heavy reliance on oil delivered by sea – and has a legislative mandate to get 100 percent of its energy from renewables by 2045.

Still, it could be five to 10 years before wave energy technology can provide an affordable alternative to fossil fuels, experts say.

For one thing, developers are still working to come up with the best design. Some buoys capture the up-and-down motion of the waves, while others exploit the side-to-side movement. Industry experts say a machine that uses all the ocean’s movements is most likely to succeed.

Also, the machinery has to be able to withstand powerful storms, the constant pounding of the seas and the corrosive effects of saltwater.

“You’ve got to design something that can stay in the water for a long time but be able to survive,” said Patrick Cross, specialist at the Hawaii Natural Energy Institute at the University of Hawaii at Manoa, which helps run the test site.

The U.S. has set a goal of reducing carbon emissions by one-third from 2005 levels by 2030, and many states are seeking to develop more renewable energy in the coming decades.

Jose Zayas, a director of the Wind and Water Power Technologies Office at the U.S. Energy Department, which helps fund the Hawaii site, said the United States could get 20 to 28 percent of its energy needs from waves without encroaching on sensitive waters such as marine preserves.

“When you think about all of the states that have water along their coasts … there’s quite a bit of wave energy potential,” he said.

Wave energy technology is at about the same stage as the solar and wind industries were in the 1980s. Both received substantial government investment and tax credits that helped them become energy sources cheap enough to compete with fossil fuels.

But while the U.S. government and military have put about $334 million into marine energy research over the past decade, Britain and the rest of Europe have invested more than $1 billion, according to the Marine Energy Council, a trade group.

“We’re about, I’d say, a decade behind the Europeans,” said Alexandra De Visser, the Navy’s Hawaii test site project manager.

The European Marine Energy Centre in Scotland, for example, has 14 grid-connected berths that have housed dozens of wave and tidal energy devices from around the world over the past 13 years, and Wave Hub in England has several such berths. China, too, has been building and testing dozens of units at sea.

Though small in scale, the test project near Kaneohe Bay represents the vanguard of U.S. wave energy development. It consists of two buoys anchored a half-mile to a mile offshore.

One of them, the Azura, which extends 12 feet above the surface and 50 feet below, converts the waves’ vertical and horizontal movements into up to 18 kilowatts of electricity, enough for about a dozen homes. The company working with the Navy, Northwest Energy Innovations of Portland, Oregon, plans a version that can generate at least 500 kilowatts, or enough to power hundreds of homes.

Home buyers across the European Union (EU) could be offered better borrowing rates on mortgages in return for purchasing more energy efficient homes or committing to implement energy saving work within properties, under a ground-breaking project being pioneered by a unique partnership of banks, property valuers, energy efficiency businesses and utility providers.

The European Energy Efficiency Mortgage initiative, launched a week ago by a consortium led by the European Mortgage Federation – European Covered Bond Council (EMF-ECBC), aims to create a standardised “energy efficient mortgage” based on preferential interest rates for energy efficient homes and/or additional funds for retrofitting homes at the time of purchase.

The project represents the first time a group of major banks and mortgage lenders, as well as businesses and organisations from the building and energy industries, have come together to address the concept of energy efficient mortgages. The project partners are the Ca’Foscari University of Venice, RICS, European Regional Network of Green Building Councils, E.ON, and SAFE Goethe University Frankfurt.

Creating a private bank financing mechanism to encourage the energy efficient improvement of households is a key means of helping the EU to meet its energy saving target of 20% by 2020, and to deliver on the ambition of the historic climate change deal, known as the Paris Agreement, which was reached at COP21 last December.

It is also said to be particularly timely given the growing global institutional and investor interest in climate finance and private sector investment required to fund low carbon initiatives, which will be the main focus of COP22, the next major climate change conference which takes place in Marrakech, Morocco in November.

The European Energy Efficiency Mortgage initiative is significant in that it will explore the link between energy efficiency and borrower’s reduced probability of default and the increase in value of energy efficient properties. For banks and investors, this could lead to loans which represent a lower risk on the balance sheet and could therefore qualify for a better capital treatment. It could also ensure that banks are able to recognise “energy efficient” assets in their risk profiling, which would begin to help the market to price-in the added value of energy efficient real estate.

The initiative was launched at the World Green Building Council’s BUILD UPON Leaders’ Summit in Madrid, where 200 renovation leaders gathered to discuss how to tackle energy efficiency in Europe’s existing buildings.

Luca Bertalot, EMF-ECBC Secretary General, said: “We have the responsibility to design a sustainable environment for future generations by developing a pan-European mortgage financing mechanism, according to which energy efficiency investments are made more accessible and affordable for consumers and institutional investors, and the subsequent energy efficiency improvements reduce risk for banks, creating a win-win for all involved.”

James Drinkwater, Europe Regional Director, World Green Building Council, said: “The Paris Agreement has set a course to keeping global warming to within 2 degrees, but we will need to develop innovative ways of financing energy efficiency in Europe’s homes if we are to stand any chance of meeting that goal. Mortgages which reward consumers and investors by recognising energy efficiency represent one such way, and will undoubtedly play a key role in helping to achieve our ambitious climate change targets.”

Emmanuel Normant, Vice-President for Sustainable Development at Saint-Gobain, which is on the project’s Energy Efficiency Committee and is a Partner of the European Regional Network of Green Building Councils, said: “As we need to speed up progress to meet our climate ambition, Saint-Gobain welcomes this timely initiative which has the potential to accelerate the uptake of renovation in Europe. Forging a common understanding of the value of energy efficiency between all players and private banks is an essential step to unlock investment in energy efficiency.”

Ministers and Heads of Delegation from the Least Developed Countries (LDC) Group have welcomed a new initiative designed to scale up renewable energy and energy efficiency for the world’s poorest and least developed countries.

The new initiative, called the “LDC Renewable Energy and Energy Efficiency Initiative (REEEI) for Sustainable Development”, is to be launched at the next UN climate change conference to be held in Marrakech this November.

“This Initiative is a bold, collaborative effort by the LDCs to drive the global charge towards clean, renewable energy future. It will enable LDCs to leapfrog fossil fuel based energy by providing modern, clean, resilient energy systems that will generate prosperity and safeguard our futures,” said the Chair of the LDC Group, Tosi Mpanu-Mpanu.

Mr. Mpanu-Mpanu presented the Initiative to LDC Ministers and Heads of Delegation, which was met by broad support. “The adoption of the Paris Agreement and Sustainable Development Goals are propelling the world towards a phase of global action and implementation. The LDC REEEI is an important part of this process, providing concrete action to address climate change while empowering the world’s most vulnerable communities” said Mr. Mpanu-Mpanu.

“Most of the world’s 1.3 billion energy-starved people live in LDCs. The LDC REEEI will ensure no LDC is left behind by strengthening the capacity of African LDCs to take advantage of the Africa Renewable Energy Initiative, while providing similar support structures for Asian and other LDCs.”

The Ministerial meeting was one of a number of discussions held during the gathering of LDC negotiators in Kinshasa, Democratic Republic of Congo, in preparation for COP22. The meeting provided an important opportunity for the LDCs to share knowledge and expertise and to further elaborate their common needs and interests in the lead up to the negotiations.

The endorsement of LDC Ministers and Heads of Delegation builds on international support for the Initiative during the May UNFCCC negotiations in Bonn, Germany, where leaders of key negotiating blocs called for global action on renewable energy and energy efficiency. Mr. Mpanu-Mpanu also presented the Initiative at a High-Level event at the UN Headquarters in New York City on 21 September.

“As we head towards COP22 in Marrakech, the LDC REEEI is an opportunity for our developed country partners to fulfil their support responsibilities under the Paris Agreement and is a key example of the actions that can and must be taken to achieve the important goals we all set in Paris.”

At the meeting, LDC Ministers also noted the tremendous amount of work to be done to agree upon a comprehensive rulebook for the implementation of the Paris Agreement in preparation for the entry into force and operationalisation of the Agreement, and recognised the need to capitalise on mounting political will amongst all countries to take ambitious action on climate change.