<p>Ocean Thermal Energy Conversion (OTEC) is widely expected to be highly practical technology, largely for the reasons of using inexhaustible renewable energy and continuous electricity generation under any weather conditions. One point to be considered in OTEC is the cost of electricity generation, of which a large portion is found to be accounted for the cost of water intake facilities by the analyses of the report for demonstration plant at Kumejima. In this paper, we examined the cost in various settings, including water intake facilities optimization. Against the power generation cost 120.5 yen/kWh at 1,250 kW scale of Kumejima demonstration plant (the intake facilities in business, without the grant), is reduced to 50.5 yen/kWh by optimization of individual components including water intake facilities, and is further reduced to 43.4 yen/kWh by integrating water intake pipes to one pipe. The present findings indicate that an optimized OTEC system will be sufficiently cost competitive against a small scale diesel generator in a small island. Though it is required to further reduce the cost of power generation for the full-scale dissemination of OTEC, there is a limit in the current state of the water intake and power generation technologies under the constraint of the surface water temperature. There is a need to consider economies of scale and the form and effect of the high-temperature side heat source auxiliary equipment.</p>