Atlantis Resources Corp., a Morgan Stanley-backed maker of tidal turbines, raised about 50 million pounds ($83 million) to start building the world’s largest tidal-stream power plant in Scottish waters.
The money was raised from the U.K.’s Department of Energy and Climate Change, Scottish Enterprise, Highlands and Islands Enterprise, The Crown Estate and by Atlantis, the Singapore-based turbine maker said in an e-mailed statement.
The funds will be used to finance the installation of four 1.5-megawatt turbines in the Pentland Firth.
“MeyGen will be the biggest tidal stream array in the world, providing enough electricity for 175,000 homes and 100 green jobs when created,” U.K. Energy Secretary Ed Davey said in the statement. “Wave and tidal power have the potential to provide more than 20 percent of the U.K.’s electricity needs.”
The installation forms a portion of the first 86-megawatt phase of MeyGen that may eventually reach a capacity of as much as 398 megawatts. Construction should start this year and the first power is expected to be delivered to the grid by 2016, according to the statement.
The project may become the first commercial-scale tidal stream power facility operating in the world. Most developers of wave and tidal technologies are still testing prototypes in anticipation of scaling them up to bring to market. Atlantis in February raised 12 million pounds through an initial share sale on London’s Alternative Investment Market.
“There is clearly huge political support for the MeyGen project, as seen by the dominant role that public sector money is playing in this financing,” Angus McCrone, senior analyst at Bloomberg New Energy Finance, said today by e-mail.
Total installations of tidal-stream facilities around the world are seen reaching about 148 megawatts by 2020, according to BNEF. The researcher on Aug. 14 revised down its original 167-megawatt forecast by 11 percent saying marine power projects were taking longer and costing more than expected.
Atlantis will supply one of the four turbines and Andritz Hydro Hammerfest, owned by Andritz Hydro GmbH, the remaining three. MeyGen has “hedged its bets” by choosing two different turbines, McCrone said.
“How those machines perform on-site will help determine who gets the later orders, and also how quickly (or slowly) later stages of the project can be rolled out,” he said.
The U.K. government and The Crown Estate provided 10 million pounds each toward the project, they said in separate statements. HSBC Holdings Plc is acting as “security trustee and account bank” for the project. While it isn’t currently lending to the project, the bank is in talks with Atlantis about future financing for the facility.