OCEAN ENERGY AFLOAT

Marine Energy Market in Europe Still Weathering Economic Storm; Frost & Sullivan: Government Support and New Investments are now Vital
November 17, 2009 (PR Newswire)

"The nascent European marine energy industry is still weathering storms unleashed by the global economic crisis. This market was particularly hard hit by the recession because it relied so heavily on venture capital and private equity investment. But now, it looks as though the UK government and the EU will extend long-awaited lifelines…Government support and new investments are key factors to boost the market.

"Frost & Sullivan estimates that if ocean energy technologies continue to be supported and achieve their predicted potential, approximately 3 gigawatts (GW) of installed capacity could be available in the EU by 2020."

Anybody who's been to the beach understands the potential. (click to enlarge)

"The recession has effectively bottlenecked investment, temporarily slowing down development. In response, the UK government recently announced a raft of rescue measures. The UK Carbon Trust granted 250,000 GBP and 150,000 GBP to Pelamis and MCT respectively to focus on installation and maintenance, while the Marine Renewables Deployment Fund has offered a 22 million GBP grant to wave and tidal developers. A part of a 20 million GBP of venture capital from the budget for low carbon technologies has been earmarked for marine energy technology developers.

"The EU is also supporting the sector. A consortium led by the Finnish wave energy company AW Energy, signed a 3 million EUR contract with the EU in October 2009…The project will focus on deploying a 300kW device, known as the WaveRoller, in Portugal for a one year testing period…"

A few of the competing technologies. (click to enlarge)

"…However, [government support] alone will not be enough to boost the market and push it in the right direction. Investment from venture capital and private equity players would be ideal at this stage, but is unlikely to be extended at sufficient levels until the economy starts to recover…[Companies must therefore] weather the current economic climate. To do so, major players should strive to differentiate the merits of their technology in order to showcase the future potential of the device and solicit enough capital to be able to reach commercialisation. With investors getting pickier these days, the overall environment is becoming much more difficult and competitive.

"The Copenhagen summit in December may pose further challenges as there is growing concern that it will not be able to produce a successor to the Kyoto Protocol, thereby undermining the carbon markets…"