Client News-AWS Prototype deployed in Loch Ness

BACK TO THE FUTURE WITH NEW WAVE ENERGY DEVICE FROM AWS
Prototype being tested in Loch Ness

Scottish marine energy technology developer, AWS Ocean Energy, has started testing its new wave energy device in Loch Ness in the Scottish Highlands.

The Inverness based company has deployed a 1/9th scale of its AWS-III device, a ring-shaped multi-cell surface-floating wave power system, the result of almost two years of intensive research and development work. AWS Ocean Energy is aiming to deploy a full-system prototype AWS-III during 2012 and a pre-commercial demonstrator plant during 2013.

Simon Grey, Chief Executive of AWS Ocean Energy said: “In developing the design of the AWS-III, we believe we have addressed the fundamental barriers to delivering practical wave energy. We have eliminated moving mechanical parts in contact with sea-water by using a novel system of flexible diaphragms arranged around a steel hull and incorporating air turbines.”

A single utility-scale AWS-III, measuring around 60 metres in diameter, will be capable of generating up to 2.5 Megawatts (MW) of continuous power, providing customers with an affordable solution to generating bulk power from the ocean waves.

To support the development of the AWS-III, the company earlier this year secured a £2.3 million investment from Scottish Enterprise’s Scottish Co-investment Fund and the Shell Technology Ventures Fund 1 B.V and the company has since applied for and is hopeful of securing further financial support for the development of the AWS-III device from the Scottish Government’s WATERS programme that will support marine energy R&D in Scotland.

A key stage now for AWS Ocean is its testing of the AWS-III device on Loch Ness over the next four months. No electricity will be generated by the 1/9th scale device but it will provide valuable design data and confirm the AWS-III’s revenue generation potential. The company will then build and deploy a full-scale single cell in order to prove the durability of the diaphragms prior to launching a 12-cell, 2.5MW pre-commercial demonstrator in 2012. Subject to financing and planning consents, the company plans to have a 10MW pre-commercial demonstration farm operating in 2014.

Technology Research & Development/Technology Convergence
The design and deployment of the AWS-III is the culmination of eight years research and development by the company’s engineering team. AWS Ocean Energy deployed its first Archimedes Waveswing test device in 2004 (off Portugal) and designed a second generation device in 2008. Whilst the Waveswing concept was regarded as highly efficient, and competitive with other leading wave energy technologies, the company decided that further work was required to develop a third-generation system which could provide utility-scale levels of power and be competitive with other forms of renewables, in particular offshore wind generation.

During the development of the AWS-III, the in-house engineering team identified similarities to another wave device, the “Coventry Clam”, developed by Coventry University’s engineering department in the 1970s.

Simon Grey, Chief Executive of AWS Ocean Energy said: “We started with the highly efficient Waveswing concept and looked at different ways to achieve the change in sub-sea volume essential to efficient wave energy conversion. This led us to looking at flexible materials and in turn to the Coventry Clam, a device which had shown significant promise. The AWS-III however has important differences which solve some problems inherent in the clam design and improve power conversion.

“It is reassuring that two teams working some 30 years apart have come up with such similar concepts. The development routes were remarkably similar – the Coventry team started with the Salter Duck, a leading concept of its time whilst we started with Waveswing. Both concepts were highly efficient but too expensive and a natural evolution process led us both to the same point. The experience in Coventry, combined with our own has produced a cracking team and we believe a winning technology.”

Testing the AWS-III/Moving towards commercialisation
The company’s path towards commercial deployment is being supported by a Technical Advisory Committee (TAC) which includes some of the most respected figures in the offshore engineering and renewable energy industries. The TAC is chaired by Dr Bruce Storm, formerly of Halliburton and now Chief Technology Officer of Kenda Capital who said: “The progressive and pragmatic approach that AWS Ocean is taking is welcomed. The company has refused to be rushed in their approach and this gives investors and potential industrial partners confidence.”

In parallel with the development of the AWS-III, the company is developing associated, patented technologies such as remote mooring systems and believes there is significant potential for manufacturing key components in Scotland.

Simon Grey added: ““This is a really exciting time for us. We are talking to several major industrial groups who can see that our progressive approach will have dealt with technology risk by early 2011. If marine energy is to reach its full potential, the sector must offer low-risk, competitive energy solutions. By doing this, major industrial players will invest further, provide the necessary capital to fund large-scale roll-out and thereby help to strengthen the UK’s clean-tech economy – new jobs, low-carbon generation and significant export potential.

“We consider the knowledge that we have gained over the past few years, and the technical advances that we are making with the AWS-III, will ensure that AWS Ocean Energy will play an important part in the long-term development of the UK’s marine renewables industry.”

Picture caption: the AWS-III wave energy test device deployed in Scotland’s Loch Ness.

Notes to Editors:
1. AWS Ocean Energy (www.awsocean.com) is based in Inverness and is chaired by John Anderson, the Chief Executive Officer of Entrepreneurial Exchange.

2. The company’s board and executive management team are advised by a Technical Advisory Committee comprising:
Dr Bruce Storm (formerly of Halliburton and a R&D physicist)
Professor Antonio Sarmento (IST Lisbon, Head of Portugal’s Wave Energy Centre)
Dr Tom Thorpe (wave energy specialist)
Andrew Mill (Chief Executive, NaREC and former Managing Director of EMEC)
Terry Rhodes (Head of Offshore Structures, Shell UK)

3. Kenda Capital B.V. (www.kendacapital.com) is the independently owned manager of STVF1 which made its first investment in AWS Ocean Energy in February 2008. Kenda Capital B.V. and STVF1 maintain a unique technology relationship with Shell. Major investors in STVF1 are Shell, Coller Capital and the Abu Dhabi Investment Authority. STVF1 also has proprietary access to oil and gas field operations and wells in order to test, prove and demonstrate combinations of new technologies. STVF1 is a unique, large scale investment fund focused at reducing the cost of energy by accelerating the development and deployment of new technologies. Kenda and STVF1 possess a solid energy sector expertise, fostered through its technology relationship with the Shell Group.

4. The Scottish Co-investment Fund is a £72 million equity investment fund established by Scottish Enterprise, and partly funded by the European Regional Development Fund, to invest from £100,000 to £1 million in company finance deals of up to £2 million.

For further information
AWS Ocean Energy (www.awsocean.com)
Paul Taylor of Taylor Keogh Communications: +44 (0) 20 3170 8466 / paul@taylorkeogh.com

Client News-NEW INVESTMENT FOR AWS OCEAN ENERGY

NEW INVESTMENT FOR AWS OCEAN ENERGY

AWS outlines timetable for technology deployment

Scottish wave energy company, AWS Ocean Energy, has secured a £2 million investment from Scottish Enterprise’s Scottish Co-investment Fund and the Shell Technology Ventures Fund 1 B.V. (“STVF1”), an affiliate of Royal Dutch Shell.

This is the first-ever investment in AWS Ocean Energy made by Scottish Enterprise whilst it is AWS Ocean’s second tranche of investment from the STVF1, which is managed by Kenda Capital B.V..

The new investment enables AWS Ocean to take forward its plans to develop and deploy its wave power technology as well as help the company in its work to design associated technologies, such as mooring systems, for wider use in the wave and tidal energy sectors.

The new investment follows a review of the company’s technology which has resulted in significant improvements to the system now known as the AWS-III. The design builds on extensive research including offshore testing and detailed modelling of the AWS technology. The improved system will have a generating capacity of between 2.4 and 4MW.

Simon Grey, Chief Executive of AWS Ocean Energy said: “We are delighted to announce this investment by STVF1 and Scottish Enterprise’s Scottish Co-investment Fund as they vindicate our thorough and measured approach to development. STVF1/Kenda are very hands-on and we have benefited enormously from their experience in technology investment on challenging projects. Not only did they challenge our engineering approach but they also required the AWS-III to demonstrate the potential to compete cost-effectively with offshore wind before agreeing to invest further. It is not sufficient to produce a machine that works - we need to produce a machine that can generate electricity at a competitive cost.”

Aruna Subramanian, Investment Principal at Kenda Capital B.V. said: “Drawing on our understanding of offshore engineering and new technology challenges, we are excited by the latest development of AWS Ocean’s wave energy system. We are confident that the team at AWS Ocean, aided by their Technical Advisory Committee, who all have extensive and relevant experience in this sector and in technology development, will successfully address the major challenges faced in harnessing energy from the waves at a commercially viable cost.”

Andrew Sloane, senior investment manager at Scottish Enterprise, said: “This is an exciting investment for Scottish Enterprise, not only because the company is at the vanguard of wave power technology, but also because it marks our first venture with new investment partner Kenda Capital. Going forward, we hope our partnership with Kenda Capital will provide other companies in the already strong Scottish renewables sector with the risk capital required to grow and take advantage of new markets.”

Commenting on the cost of wave power, AWS Ocean’s Simon Grey said: “One of the key drivers behind our review was the cost of energy and the ability to contribute to the Government’s 2020 renewable energy targets. Making sure our customers can make adequate returns from AWS wave power on current tariffs is essential. Also essential is the ability to achieve rapid roll-out and the large scale of AWS-III contributes to both of these.

“Delivering the complete solution will take time. We are already in discussions with partners to ensure that AWS-III is available as a demonstrated commercial product by 2014. Industrial multinationals will be prepared to fund ‘big ticket’ demonstration projects providing that the technology is proven first and so our focus is to do just that: delivering proven technology that actually works.”

AWS Ocean Energy is presently undertaking component and sub-system testing and qualification and is aiming to deploy a full-system prototype AWS-III during 2011. The company is confident that this will lead to deployment of a pre-commercial demonstrator plant during 2013. Throughout this process, the AWS Ocean team will draw on the advice and support of the company’s Technical Advisory Committee (TAC) which was established following STVF1’s first investment in 2008 (see Notes to Editors).

Notes to Editors

1. AWS Ocean Energy (www.awsocean.com) was established in 2004. The company is chaired by John Anderson, the Chief Executive Officer of Entrepreneurial Exchange.



2. The company’s board and executive management team are advised by a Technical Advisory Committee comprising:

Dr Bruce Storm (formerly of Halliburton and a R&D physicist)

Professor Antonio Sarmento (IST Lisbon, Head of Portugal’s Wave Energy Centre)

Dr Tom Thorpe (wave energy specialist)

Andrew Mill (Chief Executive, NaREC and former Managing Director of EMEC)

Captain Peter Hodgetts (Managing Director of SeaRoc, marine engineering specialists)



3. Kenda Capital B.V. (www.kendacapital.com) is the independently owned manager of STVF1 which made its first investment in AWS Ocean Energy in February 2008. Kenda Capital B.V. and STVF1 maintain a unique technology relationship with Shell. Major investors in STVF1 are Shell, Coller Capital and the Abu Dhabi Investment Authority. STVF1 also has proprietary access to oil and gas field operations and wells in order to test, prove and demonstrate combinations of new technologies. STVF1 is a unique, large scale investment fund focused at reducing the cost of energy by accelerating the development and deployment of new technologies. Kenda and STVF1 possess a solid energy sector expertise, fostered through its technology relationship with the Shell Group.



4. The Scottish Co-investment Fund is a £72 million equity investment fund established by Scottish Enterprise, and partly funded by the European Regional Development Fund, to invest from £100,000 to £1 million in company finance deals of up to £2 million.



For further information

AWS Ocean Energy (www.awsocean.com)

Paul Taylor/James Court of Taylor Keogh Communications: +44 (0) 20 3170 8465 / paul@taylorkeogh.com / james@taylorkeogh.com



Scottish Enterprise

Andrew Sloane: +44 (0) 141 228 2787 / andrew.sloane@scotent.co.uk



Kenda Capital B.V.

Aruna Subramanian: +31 (0)70 413 4040 / info@kendacapital.com

Industry News-London brokers turn attention to green finance

Bonds providing a hedge against the risk of governments missing their climate commitments could give investors the necessary confidence to invest in low-carbon projects, Professor Michael Mainelli from Z/Yen, a City of London-based risk management firm, told EurActiv in an interview.

The biggest obstacle to investment in green projects is a general lack of confidence in government policy being enacted, Mainelli argued. He pointed out that when the EU's emissions trading scheme was inaugurated, politicians agreed that carbon prices need to stand at about €25-€30/tonne, but in reality, the market crashed in 2007 when too many permits were issued and the price is still nowhere near that.

High carbon prices are crucial to the profitability of renewable energy projects, the financial expert argued. "And they depend on government policy," he said, adding that policies such as feed-in tariff rates are equally important.

Mainelli presented the idea of index-linked bonds as a way for governments to guarantee investors that they will get a return on their low-carbon investments, regardless of whether the government keeps its climate pledges.

"The basic idea here is that governments would pay interest on their own debt, and they would pay more interest if they failed to meet their carbon targets," he said.

The targets of the bonds could vary, Mainelli said. He cited as examples carbon prices, where the government pays interest if carbon is below a set price, and feed-in tariffs, where the government pays if it does not maintain a set rate or fails to reach the country's emissions reduction target.

To illuminate the issue, Mainelli offered a scenario whereby a large pension fund puts €500 million euros into a wind farm that produces at €90/MWh, when the current price of electricity stands at €85/MWh. At the same time, it buys government bonds priced at a feed-in tariff of €110/MWh.

In case in reality the tariff turns out to be only €100, the investor's profit from the wind farm is only €10/MWh, instead of the expected €20, but it is making €10 on the French government.

The idea differs from many other bonds proposals in that it is simple and does not involve forfeiting returns out of concern for the climate, Mainelli stressed.

"What makes us really subversive - one of the things I find interesting as we've been chatting to governments - is that they begin to realise that they've got to put their money where their mouth is," Mainelli said. He argued that index-linked carbon bonds are analogous to inflation-linked bonds that governments had to start issuing in the beginning of the 1980s, when people lost confidence in their government's ability to control inflation.

"But of course the uncomfortable truth is that they just don't like it because if they fail to make their targets, then they'll have to pay a lot of interest," he added.

Nevertheless, as OECD governments prepare to issue $9 trillion in debt in the next three years due to the financial crisis, compared to only €18 trillion in the past 40 years, they are now seriously considering the idea, Mainelli said.

"So it's like any supply and demand situation: supply is going through the roof but demand is dropping. And the suppliers, the governments, are going to have to come up with interesting ways of selling their debt. And this is one of them," Mainelli concluded.

For the full article please click here

Political News-DECC appoint David Mackay as Chief Scientific Advisor

David MacKay, Professor in the Department of Physics at Cambridge University and author of the influential book ‘Sustainable Energy -without the hot air' has been appointed Chief Scientific Advisor to the Department of Energy and Climate Change.

The Chief Scientific Advisor’s role is to ensure that the Department’s policies and operations, and its contributions to wider Government issues, are underpinned by the best science and engineering advice available.

Professor MacKay said:

“Climate change and secure energy are two of the most urgent issues facing the UK and the global community. The solutions must be rooted firmly in the science and I look forward to advising the Government on how it can help deliver these important goals.”

Secretary of State Ed Miliband said:

“David MacKay is known for making science accessible and helping to explain clearly the urgency and the challenges of moving to a low carbon economy. I want him to bring all of these qualities to the job of advising DECC on how we can meet Britain’s carbon targets and energy security needs.”

Click Here to read ‘Sustainable Energy -without the hot air' by David Mackay

Client News - AWS contributes to Marine Energy Report calling for more marine energy in Scotland.

More than 12,000 jobs in marine renewables could contribute £2.5 billion to Scotland's economy by 2020, according to a report published today.

The industry-led Marine Energy Group study charts a course for wave and tidal power around Scotland, and highlights actions to build further success in the sector. Its recommendations, for Government and its partners, include:

A call for the Scottish Government to repeat its Wave and Tidal Energy Support scheme A review of grid infrastructure required to support growth A fresh look at the levels of support available under the renewables obligation Calls for the Treasury to do more to help the sector, including the release of the Fossil Fuel Levy surplus funds to help promote renewables in Scotland Cabinet Secretary for Finance and Sustainable Growth John Swinney is in Orkney today where he will visit Stromness based marine energy company Aquatera.

Mr Swinney said: "With unrivalled marine resources and a range of wave, tidal and offshore wind development already underway, Scotland leads the way in generating energy from the sea.

The £10 million Saltire Prize continues to attract global interest in the marine energy potential around our coast. We also have publicly funded world leading testing facilities here in Orkney which are hosting wave and tidal devices built with Scottish Government support.

"Marine energy will be key to Scotland's future energy mix and that's why we changed our support mechanisms to give greater assistance to wave and tidal energy in Scotland than anywhere else in the UK.

"The report, put together by industry, highlights the actions it believes we need to deliver a commercial scale industry. It confirms there could be 12,500 Scottish jobs in marine renewables by 2020, a huge boost for the economy and a long term platform for sustainable growth.

"Industry recognises, as this Government has always believed, that the Treasury should unlock Scotland's share of the Fossil Fuel Levy - currently over £150 million - to allow us to give additional support to our renewables industry, the economy and environment.

"This report is an excellent example of collaboration in the public and private sectors. The recommendations are very much industry driven and we will consider their views very carefully as we continue to build a world leading renewables sector."

The Marine Energy Group is part of Forum for Renewable Energy Development in Scotland and works to accelerate delivery of a world leading marine energy industry to provide a contribution to the sustainable economy and environment of Scotland.

Its members are:

Sian McGrath, Aquamarine Power (co-chair) Lynne Vallance, Scottish Government (co-chair)

Mike Barlow, Scottish & Southern Energy

Graham Bibby, AWS Ocean Energy

Alistair Birnie, Subsea UK

Duncan Burt, National Grid

Robin Burnett, Airtricity [from June 2009] Morna Cannon, Scottish Renewables/Scottish Government Gareth Davies, Aquatera Karen Fraser, Scottish Government Phil Gilmour, Scottish Government Neil Kermode, EMEC Audrey MacIver/Elain Cameron, Highlands & Islands Enterprise Tom Mallows, The Crown Estate Robin McGregor, Lunar Energy/Christie Griffith Alan Mortimer, ScottishPower Renewables Paul Neilson, Scottish & Southern Energy Brian Nixon, Scottish Enterprise Paul O'Brien, Scottish Development International Matthew Seed, Wavegen Robin Wallace,