Australia’s Carnegie Wave Energy on Monday signed an “historic” power purchase agreement (PPA) with the Australian Department of Defence for its 2MW demonstration plant that is being built off Garden Island near Fremantle in Western Australia.
The PPA means that the HMAS Stirling naval based on Garden Island will buy all the energy from the installation, which will be Australia’s first commercial-scale grid connected wave energy facility.
“It is significant, in light of current efforts by international navies to increase their renewable energy mix such as the US Navy, for the Australian Department of Defence and Royal Australian Navy to be supporting the development of emerging clean technologies like Carnegie’s CETO through the purchase of electricity,” Carnegie Wave Energy CEO Dr Michael Ottaviano said.
Carnegie Wave Energy says it expects to deliver the first power from the project by the end of 2013. Two other Australian wave energy technologies have received funding from the federal government in recent weeks, while US-based OPT last week announced it had teamed up with Lockheed Martin for the development of its delayed 19MW project in Victoria. All technologies expect to have costs down to around $100/MW by the end of the decade.
The PPA was signed just days after a green venture fund led by Mike Fitzpatrick has snapped up a 6 per cent stake in Carnegie Wave Energy at a bargain basement price after picking up the bulk of shares being offered by UK-based Renewable Energy Holdings. REH had its 21 per cent stake up for sale after deciding to wind up its affairs.
A total of 12.6 per cent was sold at just 1c a share to a group of Australian investors, including Fitzpatrick’s 88 Green Ventures, which lifts its stake from around 1 per cent to 6.2 per cent. Fitzpatrick, the former Carlton footballer, is founder of Hastings Funds Management and is a director of Ri0 Tinto. His green venture fund has investments in electric vehicles, fuel cells, silicon production, and sustainable agriculture, as well as wave energy.
The other buyers are an un-named WA family and several smaller funds managers. They picked up their stake at a considerable discount to the prevailing market price, which was 3.5c. The remaining shares in Carnegie held by REH are to be distributed to its own shareholders, which include UBS, Henderson Global Investors and EdF, the French energy giant which is funding its European and Indian Ocean projects.
Ottaviano said the agreement removed a large active seller of Carnegie Wave Energy shares from the market place, and the downward price pressure. “It replaces REH with a small consortium of supportive investors with a long term focus, led by an existing shareholder with an outstanding track record in power and infrastructure investment,” he said.