Ocean Power Technologies has indicated it hopes to bring financial close for the first stages of its $230 million wave energy project in Victoria within the next six months.
CEO Charles Dunleavy told RenewEconomy on Monday that the company’s initial discussions with financial advisors and potential investors had been positive, and the company was aiming to secure finance in early 2013.
It aims to install the first three of its OPT Power Buoys by the end of 2013, and will complete the 28-buoy array with larger versions of its modules by 2017. In all, it is searching for up to $164 million.
Dunleavy and the company’s Australian founder George Taylor, along with Tim Fuhr, the head of ocean energy at Lockheed Martin, have been visiting Australia meeting local authorities about permitting, siting and planning issues, and conducting community consultation, as well as investor presentations.
The project was awarded a $66 million grant by the Federal Government in 2009, initially with the involvement of Australian construction firm Leighton Holdings. However, Leighton has been replaced by Lockheed, the US defence giant, to help with project development and manufacturing refinements.
OPT currently has small pilot projects in place in Oregon, Hawaii and Scotland, and is pursuing a partnership with engineering and ship building company Mitsui in Japan, but says Portland is its flagship project.
Dunleavy said the key test for ocean technologies will be “survivability” in the water. i.e. its ability to resist storms and large waves – and to compete with other technologies, including fossil fuels, without subsidies.
“Anyone can some steel wet,” he said. “The question is can it survive, can it produce power, and can it survive and produce power at an economically feasible rate. But it starts with survivability, and we’ve strongly proven that.”
Like other ocean technology developers, Dunleavy estimates the current cost of generation for its wave energy systems would be around $150/MWh if it was in full production mode. But like others, it says this should fall to $100/MWh or less, where it can compete with fossil fuels, without subsidies. If this occurs, he expects it to be a multi-billion dollar market.
Dunleavy said the systems would have a “capacity factor” similar to win – of around 30 per cent to 45 per cent – but would produce energy at 90 per cent of the time, and would be very predictable several days ahead of production. He says the peak generation capacity when the Portland plant is built will be 62.5MW. He says the project could be scaleable to more than 100MW.
Fuhr said Lockheed Martin is focusing on ocean technologies as an extension of its $6 billion naval defence portfolio, and as part of its transition from being a defence company to a “global security company.” He said energy security is one of the key factors.
Lockheed Martin is also involved with Atlantis Resources, a Singapore-based tidal energy developer that also has its roots in Australia, and for the past three decades has been involved with new Ocean Thermal Energy Conversion technology, which has been tested in Hawaii.
“We believe in the ocean energy market,” he said. “This is a market whose time has come. It is all pre-commercial at this point, but it is treat for us to be involved in transitioning from the pre commercial to the commercial market.”