Making Marine Renewable Energy Mainstream - Martin McAdam

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TBLI CONFERENCE™ EUROPE 2011- London - United Kingdom

TBLI CONFERENCE™ is the prime annual global networking and learning event on Environment, Social, Governance (ESG) and Impact Investing.

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Making Marine Renewable Energy Mainstream - Martin McAdam

  1. 1. Is nuclear energy as sustainable as solar and wind energy - or geothermal and wave energy for that matter?OYSTER 800 – GREEN ENERGY OUT OF THE BLUEMartin McAdam, CEO
  2. 2. Nuclear Production • There are now over 440 commercial nuclear power reactors operating in 30 countries, with 350 GW of capacity. • They provide about 13% of the worlds electricity. 2
  3. 3. WAVE ENERGY 3
  4. 4. Aquamarine Power is a technology company thathas developed a product called Oyster whichproduces electricity from ocean wave energy. We are now seeking project joint venture partners and a financial partner to commercialise Oyster. 4
  5. 5. WAVE ENERGY ADVANTAGES • Exploitable wave resource o Estimated at 80,000TWh/year (electricity world consumption x5) • Size of the market for Oyster o £192bn - global Oyster market o 64GW - global Oyster resource o 14GW - European Oyster resource • Enhanced national energy security • Diversified/enhanced renewable portfolio o Reduces variability o Enhances system stability o Lowers balancing costs 5
  6. 6. WAVE ENERGY AND THE UK• Carbon Trust analysis has shown that the UK could capture just under a quarter of the global marine energy market.• Equivalent to up to £76bn to the UK economy by 2050, this growing sector could also generate over 68,000 UK jobs. 6
  7. 7. Does anyone care? 7
  8. 8. SHAREHOLDERS • Global power and automation group • Operations in over 100 countries - 117,000 staff • UK’s leading generator of renewable electricity • Over 3,500MW of renewable energy capacity • Investment arm of Scottish Government 8
  9. 9. MANAGEMENT TEAMMARTIN MCADAM MATTHIAS HAAG RICHARD ROUND DR. SIAN GEORGECHIEF EXECUTIVE OFFICER CHIEF OPERATING OFFICER CHIEF FINANCE OFFICER HEAD OF COMMERCIAL DEVELOPMENT• Track record in building • Track record in oil, gas and • 30yrs financial/operational • Track record in start-up successful large-scale wind industry experience in renewables, oil, business development and renewable businesses gas, coal and mining sectors raising public finance • Former general manager• Founder of Airtricity’s for Shell wind energy • Proven track record of raising • Proven experience of North American projects on a global basis finance and operating in securing marine consents operations, sold to E.On developing global markets in 2007 for £0.75bn • Project managed North Sea • Leading role in EU, UK and Dutch Offshore Windpark • Formerly of Novera Energy Scottish government marine• Proven leadership skills Plc, one of UK’s leading energy industry advisory renewable energy generators groups 9
  10. 10. INDUSTRY EXPERTISEPROF. TREVOR WHITTAKER PROF. STEPHEN SALTER ALLAN THOMSON DR PADDY O’KANERESEARCH ADVISOR TO BOARD SPECIALIST TECHNICAL ADVISOR COMPANY FOUNDER CHIEF TECHNICAL OFFICER• Professor of Coastal Engineering • Professor of Engineering Design, • Leading developer of wave • Former Head of Engineering & and Head of Wave Power University of Edinburgh power technology in UK Wind Resource Assessment at Research Group, Queen’s SSE Renewables University, Belfast • Pioneer of wave energy since • Founded first ever wave 1970s energy company • Track record of overseeing• Experience of five wave power technical design/specification sea-trials to date including Islay of £2Bn renewable projects 75kW plant • Developed Salter Duck, ground- • Developed Limpet, breaking wave energy device, in commercial-scale 500kW 1970s device in 1999 • PhD in electrical engineering• Pioneered wave powered from Queen’s University, navigation buoys in 1984 10 Belfast
  11. 11. OYSTER TECHNOLOGY 11
  12. 12. • Shore-based electricity generation• Simple• Survivable 12
  13. 13. 13
  14. 14. 14
  15. 15. OYSTER 1 Oyster 1: • 315kW demonstration device • Installed at EMEC 2009 Oyster 1 delivered: Oyster 1 in operation off coast of Orkney Scotland, 2010 • > 6000 operating hours • Up to 100kW generation, consistent with design predictions • Peak power close to 300kW • Approaching 24hr continuous generation • Survival through two winter seasons – meeting its two year design life requirement 15 Oyster 1 in operation off coast of Orkney Scotland, 2010
  16. 16. OYSTER 800 Oyster 800: • 800kW demonstration device • Manufactured in Scotland 2011 • Installed at EMEC – September 2011 • Due to be grid-connected later this year • Two further devices to be installed in 2012 and 2013 – Installation of Oyster 800 device – September 2011 connected to one 2.4MW onshore power plant Oyster 800 offers: • significantly improved power generation • reduced cost of power • simplified marine installation process • easier routine maintenance 16 Oyster 800 project onshore power plant
  17. 17. OYSTER 801 and OYSTER 802 • Simpler to install – monopile rather than two piles • More cost effective – cylinder concept reduces steel requirement • More efficient– improved hydro-dynamic shape • More economic – lighter and cheaper than Oyster 800 • Route to value - fabrication from FRP materials to take advantage of weight saving properties 17
  18. 18. REDUCING THE COST OF POWER 40,000,000 35,000,000 Offshore Installation 30,000,000 Onshore PTO 25,000,000 Pipelines 20,000,000 WEC complex parts 15,000,000 WEC Metal & Metal work 10,000,000 Design & R&D Project Management cost 5,000,000 - Oyster 1 Oyster 2a Oyster 2b Oyster 2c Oyster 3 Oyster 4 18
  19. 19. Why do we need wave power?• In 2004 DECC predicted oil prices to be at $23/bbl in 2011• In 2011 (today) Brent Crude is trading at $123/bbl• Energy prices this year have increased by 20% in the UK• The key driver of this price increase is the underlying fossil fuel price 19
  20. 20. IMPACT OF RENEWABLES ON CONSUMER BILLSBreakdown of average annual bill for UK electricity-only customers, September 2011 Renewables Obligation 4% Social spend obligation Wholesale energy 1% Gross margin 15% costs 46% Total = £621 VAT and other costs 34% 20 Source: Energy Supply Margins: Update September 2011, NERA Economic Consulting
  21. 21. IMPACT OF RENEWABLES ON CONSUMER BILLS Estimated impact of Renewables Obligation and Feed-in Tariffs on average UK domestic retail electricity prices (£/MWh) 160 140 16% 9% 120 4% 100 Addition due to Renewables Obligation and £/MWh 80 Feed-in Tariffs 60 Baseline retail price projections 40 20 Source: Estimated impacts of 0 energy and climate change policies on energy prices and bills 2010 2015 2020 DECC, July 2010 • Cost of doing renewables is tiny compared with the 21 underlying price volatility in the fossil fuel prices.
  22. 22. Gas price forecast DECC UK wholesale gas price projections October 2011 22
  23. 23. DECC GRANT SUPPORT FOR ENERGY SOURCES DECC direct expenditure by energy technology, 2011-12 2500 2000 1500 Departmental expenditure (£ million) 1000 500 0 Nuclear Renewables Oil and Gas Carbon Other Low Historical Capture and Carbon Energy Storage Liabilities (Nuclear and Source: http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110620/text/110620w0005.htm Coal) 23
  24. 24. PUBLIC SUBSIDY FOR NUCLEAR Nuclear Decommissioning Authority – > £2 billion per annum Future deep geological disposal – forecast £14 - £20 billion Insurance liability – to be capped at £1 billion – (Tokyo Electric Power Co. requesting $9.1 billion state aid (first tranche)) 24
  25. 25. Conclusion Wave energy offers a huge opportunity for electricity generation. There are challenges but they are significantly fewer than the challenges of managing the legacy of nuclear power. When compared with nuclear power and counting the vast nuclear subsidies wave power offers a real alternative to powering our world Wave power offers an excellent ethical TBL investment opportunity 25
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  27. 27. MARTIN MCADAMCHIEF EXECUTIVE OFFICERAQUAMARINE POWERELDER HOUSE, 24 ELDER STREETEDINBURGHEH1 3DXUNITED KINGDOMTel: +44 131 524 1421Fax: +44 131 524 1444Mobile: +44 7590 350100Email: martin.mcadam@aquamarinepower.comWeb: www.aquamarinepower.com 27

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