Turquoise Seeks Buyer for U.K. Marine Developer Oceanflow

Turquoise International Ltd., a London-based investor and adviser to the clean energy industry, said it’s looking for a suitor for Oceanflow Energy Ltd., a U.K. developer of tidal power technology.

Turquoise is helping Oceanflow to find a buyer for the business or its technology, Frederik Mowinckel, a director at the investor, said in an interview in London. It’s aiming to complete a sale by year-end unless it can raise money for Oceanflow to further develop its technology, he said.

“The problem is that the more money you invest, the higher is the price needed at exit,” Mowinckel said. “At the moment, not much money has gone in, so we can sell the company for a moderate sum” of about one million pounds ($1.5 million) to 2 million pounds, he said. Potential buyers include industrial companies that want to move into the marine energy industry, or an existing company in Europe or Asia, he said.

Oceanflow’s financial needs are “best addressed by an engineering major,” said Managing Director Graeme Mackie. “An awful lot of capital” is needed to move the technology to the next stage, he said.

Energy from the waves and tides has the potential to meet as much as 20 percent of the U.K.’s electricity demand, according to the government. Oceanflow has developed a floating tidal energy generation system, specifically targeted to operate in exposed deep water sites. It differs from the majority of marine power technologies that are mounted to the seabed.

Funding Gap

Wave and tidal energy companies face an “enormous” funding gap as they scale up their technologies and require larger sums of money, the director said. To survive, small businesses could focus on one part of their device that can be integrated into existing infrastructure. “We know that the big players are looking at some of the small companies to see if they could pick up bits and pieces,” Mowinckel said.

Marine energy businesses are increasingly being picked up by large industrial companies with balance sheets large enough to support the commercialization of their systems. Siemens AG, Europe’s largest engineering company, owns Marine Current Turbines Ltd., Alstom bought Tidal Generation Ltd. from Rolls-Royce Holdings Plc last year and ABB Ltd., owns a stake in Aquamarine Power Ltd.

The U.K. government needs to do more to encourage domestic industrial companies to invest in marine energy developers through tax incentives or other mechanisms, the director said. There are currently no U.K. industrial investors involved in the industry, he said, and it costs 30 million to 50 million pounds to build a device and develop it to a commercial utility-scale product.

Before it's here, it's on the Bloomberg Terminal.