Wave and tidal power plant developer Aquamarine Power has landed what could be the largest ocean power deal to date – a joint venture with Scottish and Southern Energy's renewable energy division Airtricity to develop 1 gigawatt of wave and tidal power by 2020.
In the deal announced Monday, Airtricity will put up the capital for the project and Edinburgh, Scotland-based Aquamarine will provide its wave and tidal power devices, as well as software to find the best sites to deploy them.
The companies did not say how much it would cost to develop such a large-scale set of ocean power projects. Nor did they say which sites they were investigating, though Aquamarine did say work on the first two sites is now underway.
Aquamarine, founded in 2005, is a rare marine power company in that it is exploring both wave and tidal energy.
The company plans to plant two different prototypes – the Neptune tidal power device and the Oyster wave power device – at the European Marine Energy Centre (EMEC) in Stromness, Scotland. The labs are actually live, grid-connected areas in the water where companies can test their devices for up to five years. The EMEC also validates the performance of devices it tests.
The ocean power business now makes up a tiny portion of the renewable energy market, with less than 10 megawatts of installed capacity, according to an October report from Greentech Media and the Prometheus Institute (see Trawling for $500M in Ocean Power).
But that could grow to 1 gigawatt of power in the next six years, if investment continues to grow. The industry's 35 most active companies have received just over $500 million in investments since 2001, but in the next six years could see $2 billion invested to build commercial ocean wave power farms and another $2 billion spent on research and development, the report said.
Scottish and Southern Energy already has a stake in Aquamarine – in October 2007 it invested £6.3 million ($9 million) through its Renewable Technology Ventures Ltd. subsidiary, and another £1.5 million ($2.1 million) from subsidiary Sigma Capital Group.
By 2020, Scotland wants to get half of its power from renewable sources, including large hydroelectric dams, wind, tidal and wave (see Tide Turning for Ocean Power?). Edwina Cook, business development officer at EMEC, estimates the United Kingdom could get 35 terawatts of power - about one-tenth of its 2004 energy consumption – from wave and tidal energy by 2020.
But the rocky Scottish coast isn't the only shoreline that wave and tidal power developers have set their sights on. In the United States, the Electric Power Research Institute has estimated wave and tidal power could provide up to 10 gigawatts of power by 2025, said Roger Bedard, the utility research group's ocean power leader.
Bedard cited Ocean Power Technologies Inc. (NSDQ: OPTT) and Pelamis Wave Power as two leaders in deploying wave power projects.
Edinburgh, Scotland-based Pelamis has deployed three of its 750-kilowatt "sea snake" devices off the coast of Portugal, and could grow that to a total of 30 megawatts of capacity if trials turn out well, he said. The company raised £5 million ($7.5 million) from investors in November and this month announced a deal to supply its devices to utility E.ON
And Ocean Power Technologies, which raised about $100 million initial public offering in April 2007, last month announced a collaboration with Lockheed Martin to develop utility-scale wave power projects.
Ocean Power already has project underway with utilities in Spain, Australia and the United States. They include a deal with utility Pacific Northwest Generating Cooperative for two projects off the Oregon coast that could grow to 50 megawatts, and an agreement with a subsidiary of Australian energy developer Griffin Energy Pty Ltd., to develop a wave power station off the cost of western Australia that could grow to 100 megawatts.
Aquamarine's Oyster wave power device – set to be tested at EMEC this summer - appears to differ from those of Pelamis and Ocean Power, in that it is meant to be deployed at depths of about 10 meters, rather than the more typical 60 meters to 100 meters.
And while the devices of Ocean Power and Pelamis harness wave power on the ocean's surface, Aquamarine's devices appear to operate underwater, according to images on the company's Web site.
Because waves tend to lose energy at shallower depths, devices operating at 10 meters may see about half the wave energy of those placed in deeper water, Bedard said – and that means "they better be less expensive than offshore buoys."
"Maybe they're cheaper because they're closer to shore," he said, since that would decrease the length of power transmission cables from device to shore.
As for tidal power, Aquamarine says its Neptune device will generate 2.4 megawatts at depths of 30 meters and is set to be tested at EMEC in 2010.
Other tidal power players include U.K.-based Lunar Power, which is working with Korean Midland Power Co. to provide 300 megawatts of energy by 2015, and Marine Current Turbines, which is developing a $20 million tidal power project off the coast of Northern Ireland called SeaGen now generating 1.2 megawatts.
New York City-based tidal power company Verdant Power has a $2.2 million deal with the government of Ontario for a 15-megawatt project in the St. Lawrence River, as well as a project in the East River in New York which is now generating power after two previous attempts failed (see Time magazine article).