Aquamarine Power secures £7 million new funding and ongoing commitment from shareholders

Wave energy company Aquamarine Power took another major step towards the commercialisation of its Oyster technology with the announcement today [27 September 2011] of £7 million of new funding and a commitment of further investment in the company from its existing shareholders over the next two years.

The company has closed a funding round of £7 million comprising £3 million each from major shareholders SSE Venture Capital, the ventures unit of SSE (Scottish and Southern Energy), and ABB, the multinational power and automation company, together with a further £1 million from Scottish Enterprise, the Scottish Government’s enterprise agency, via the Scottish Investment Bank.

In addition, Aquamarine Power’s existing major shareholders (SSE, ABB and Scottish Enterprise) are working together to develop a further funding package of £18 million to take the company to commercialisation in 2014.

Today’s announcement was made by Scotland’s First Minister Alex Salmond MSP during his opening address at the Scottish Low Carbon Investment Conference, held in Edinburgh.

The First Minister said:

“In Scotland we have shown that where the public sector provides the right conditions and works strategically with industry, that investment and jobs follow. This has been evident in several sectors, including in marine energy, which will make an important contribution to us achieving our 2020 target to generate the equivalent of 100% of electricity demand from renewables. That is why I am delighted to announce that Aquamarine Power, one of Scotland’s great green energy success stories, is today celebrating a further investment of £7 million to help it take another step towards the commercialisation of its Oyster wave energy technology. This is great news for Scotland’s world-leading wave power industry and a clear signal to the wider energy and investment community that marine technologies can be compelling investment propositions.”

The news follows the announcement earlier this month of a £3.4 million loan from Barclays to Aquamarine Power to part-finance the completion of a 2.4MW Oyster array, located at the European Marine Energy Centre (EMEC), Orkney – the first deal of its kind in the sector.

This latest funding round sends a strong signal to the market to encourage investment in the growing marine energy sector. Recent analysis by the Carbon Trust predicts that a thriving marine energy sector could generate up to £76 billion to the UK economy by 2050, supporting over 68,000 UK jobs. Their report ‘Accelerating marine energy[i]’ determines the UK’s best marine energy sites could generate electricity at costs comparable with nuclear and onshore wind by 2025.

Aquamarine Power CEO Martin McAdam said:

“This new investment and further financial commitment from our existing shareholders is another tremendous vote of confidence in Aquamarine Power’s Oyster technology, our team, and the global market potential of nearshore wave energy.

“We are still seeking new shareholders who can bring additional finance and technical expertise to our business by investing alongside our existing shareholders in future rounds. However this level of commitment frees us up to concentrate fully on the challenge of deploying Oyster technology to produce cost effective, reliable, clean energy from the sea. Our goal is to start delivering the first pre-commercial marine energy array in Scotland in 2014.

“I would like to say thank you to SSE, ABB, Scottish Enterprise and our other investors who all remain exceptionally supportive of our business strategy.”

Derrick Allan, Head of Ventures at SSE, said:

“With its Oyster technology, Aquamarine Power has a proven marine technology and a clear programme for develping it into a commercial product. The consistent delivery of key milestones by the Aquamarine Power management team, is what has given us the confidence to make a further investment in Aquamarine Power and ensure it is able to move forward to full commercialisation over the next few years.”

Gary Steel, Member of the ABB Group Executive Committee and Non-Executive Director of Aquamarine Power, said:

"This investment underscores our belief in the strategic importance of the marine sector as part of ABB’s overall focus on renewable energies. We see the progress that Aquamarine Power is making in deploying its next generation Oyster as further confirmation of the strength of Aquamarine Power’s technology and its management team.”

Lena Wilson, Chief Executive of Scottish Enterprise, said:

"Aquamarine Power is a driving force in Scotland's world-leading marine energy sector. The sector boasts significant economic potential and investment in commercialisation of marine technologies is crucial if we are to maximise our competitive advantage. Having worked closely with the company in recent years we recognise the economic and environmental potential of its Oyster technology and this latest round of funding underlines the steadfast support for the company and its technology, both from the private and public sectors."