OTEC is a mainly theoretical method of power generation that is very different from most hydro-power generation methods.  Instead of taking energy from the mechanical energy of waves, the process takes advantage of the temperature difference between surface ocean water and the colder water that is deeper.  The process uses the temperature difference to make a heat engine of sorts.  Unfortunately, this is very inefficient due to the fact that even in regions where this temperature difference is greatest it is usually no more than around 25 degrees Celsius. Due to this, the carnot efficiency of this engine is only six to seven percent.  However, in real life, it is impossible to reach the carnot efficiency, and the actual efficiency of the engine is even lower.

Despite this, there is an enormous amount of energy possibly available from this process due to the sheer amount of ocean water and the renewability of the source although it has greatest potential in the tropics where the difference is the largest.  To make up for the low efficiency of the process, large amounts of water must be provided to the engine in order to produce large amounts of energy.