Wave energy forms from wind. The amount of energy is dependent on the speed of the wind. According to the EIA, the annual energy potential of waves off the coasts of the U.S. is estimated to be 2.64 Kilowatt-hours, which could produce 66% of energy generation. There are several ways to channel wind power: Wave energy can be harnessed into a narrow channel to increase their size and power which can spin turbines that generate electricity. It also can be channeled into a catch basin or reservoir where the water flows into a turbine. This is similar to the way a hydropower dam operates.

According to the New York Times, in Western, Australia they have buoys that generate waves into electricity for a nearby military base. The buoys started supplying 240 kilowatts each to the electricity grid for this base, roughly about 5% of its electricity. This is proving to be a successful experiment and source of renewable energy because it does not use any fossil fuels.

The biggest challenge facing wave energy is the cost. If you want to test an idea, it costs millions. Additionally, once generated it is at a cost of 40 cents per kilowatt-hour. While it is expensive, improvements are being made in order to improve the equipment and ensure it is not destroyed by storms. In order to make this a more consistent form of energy used, the government will need to assist in the funding of these projects.