Aquamarine makes a splash raising £10 million for wave energy device

Published Date: 21 September 2009
By Scott Reid
AQUAMARINE Power, the Edinburgh-based renewables company, has raised £10 million as it embarks on a two-year test programme for its wave energy converter.
The funding has been described as "just the start of the journey", with a further £40m needed to take the Oyster device to full commercialisation.Work is under way to connect a full-scale demonstrator system to sub-sea pipelines which will deliver high-pressure water to an onshore turbine.The firm aims to have the first commercial wave farm up and running within five years. An array of 20 devices could provide green energy for a town of 9,000 homes.Aquamarine chief executive Martin McAdam said there was "considerable investor appetite" for renewable energy companies. He told The Scotsman: "Our goal is to raise sufficient equity to get to the point where we have a commercial product offering in the marketplace."We want to raise a total of £50m, and the first £10m takes us a significant step along that way, but it is just the start of the journey for us."Raising substantial funds in these exceptionally difficult market conditions is an incredible achievement."McAdam, who spent eight years working in the wind industry, founded renewable energy provider Airtricity's US operations, which were sold to German utility giant E.ON for $1.2 billion (£740m) in 2007.Aquamarine, whose Oyster device consists of a hinged flap connected to the seabed at about ten metres, already has an agreement in place with Airtricity – part of Scottish & Southern Energy (SSE) – to develop up to 1,000 megawatts of marine energy by 2020.It is estimated that as much as 21.5 gigawatts of wave and tidal energy could be generated from Scottish waters – enough to meet about half of the nation's energy demands.McAdam added: "The key for us is to have a product in the next three years that is attractive for utility companies or independent power producers from the perspective of adding additional renewable energy to their generation portfolio."The first-round funding has brought in "a number of high net-worth individuals" as well as Scottish Enterprise as an equity investor.Aquamarine's shareholder base also includes Edinburgh-based Sigma Capital and SSE, which is the single largest investor with a stake of about 44 per cent.The wave energy group, which was founded in 2005, is also eyeing grant funding to help achieve its goals.McAdam admitted the firm faced "very significant prototype costs", but argued that wave energy was a "vast untapped resource" with better reliability than solar or wind power.He said: "At this early stage, we would not be that cost effective. However, the goal in three years' time – through lower engineering and fabrication costs – is to be competitive with offshore wind."