March 21 (Bloomberg) -- Pelamis Wave Power Ltd., the wave power device maker that’s working with EON AG and Iberdrola SA, said it’s seeking “teens of millions of pounds” of investments to increase production.
The money, needed to expand Pelamis’s factory in Leith Docks, Edinburgh, is the type of injection that would be required from an industrial partner, Chief Executive Officer Per Hornung Pedersen said in a phone interview. Pelamis expects to reach an agreement with such a partner this year, he said.
“We’re talking probably in the teens of millions, over a period from now until 2020 in terms of what you will need to invest in order to equip the facility and surroundings,” Pedersen said yesterday from New York. That would help the plant build about 200 devices by 2020, assuming the current plans of Pelamis customers are realized, he said.
Energy from the waves and tides has the potential to meet as much as a fifth of the U.K.’s current electricity demand. Yet the technology remains expensive -- almost twice as much the cost per megawatt-hour of power generated from offshore wind turbines and seven times as much as electricity from burning gas, according to Bloomberg New Energy Finance data.
“We are using offshore wind as the target: That’s what we think we need to be competitive with,” Pedersen said. “Where offshore wind is in 2020, we expect to be competitive with.”
Pedersen said the search for an industrial partner is “progressing well.” He declined to elaborate, saying “we cannot be specific as to who’s in and when.” An investment in the “teens” of 13 million to 19 million pounds is the equivalent of $21 million to $30 million.
Eon Tests Device
Pelamis has one device that’s being tested by Germany’s EON at the European Marine Energy Center in Orkney, Scotland. A second generator, to be tested by Iberdrola’s Scottish Power unit, should be installed in the next two weeks, according to Pelamis founder and director Richard Yemm.
“The mooring is in and we’re in the final stages of completing the connection to the cable at the EMEC site before the machine can be deployed,” Yemm said by phone.
Vattenfall AB on March 15 said it was planning to test a third Pelamis machine at EMEC, with trials beginning in 2014. EON, which has been testing Pelamis since October 2010, and Scottish Power are coordinating their tests, a “unique” situation among utilities, according to Pedersen and Yemm.
“What it means is that Scottish Power is party to the EON data,” Yemm said. “We made a number of targeted improvements with the Scottish Power machine. We took just over 12.5 percent out of the cost of the machine and introduced a few new bits of technology to test so EON can benefit from the knowledge of that.”
Yemm said Pelamis is now trying to advance the tests with the three utilities in order to deliver three 10-megawatt projects in 3-4 years. That would involve about 40 Pelamis devices. That will give the company a chance to hone a technology that’s still “immature,” he said.
“We’ve got a whole load of fundamental performance and scale-up benefits to come,” Yemm said. “If we can get on the hip of offshore wind by 2020 and still have those up our sleeves, we’re in a pretty strong position.”
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