UK tech behind Portuguese wave farm

Technology developed by a UK company is at the heart of a pioneering wave power farm project in Portugal which went live this week.

Located three miles off the Portuguese coast, the Aguçadoura project sees three so-called wave energy converters from Edinburgh-based Pelamis Wave Power combine to create what the backers claim is the world's first commercial wave power project.

In a joint venture between Pelamis, Australian-listed investment specialist Babcock and Brown, and local Portuguese companies including the energy incumbent Energias de Portugal and Efacec, the total investment is believe to be around €9m but has also been supported by a grant of €1.25m by the Portuguese government.

According to the backers, once the project is complete it should provide enough energy for about 15,000 Portuguese households and potentially displace about 60,000 tonnes of C02 per year, which would have otherwise been consumed from conventional energy sources.

The backers of the Aguçadoura project claim that it is the world's first commercial wave power farm. However, this may be disputed by the developers of the Limpet 500 scheme on the island of Islay in Scotland, which went into production in November 2000.

Described by some observers as "wave snakes", the Pelamis wave convertors consist of a series of semi-submerged hinged cylindrical sections. A further 25 devices are planned for the second phase of the project, which should bring the installed capacity to around 21MW, according to the project's backers.

Portugal has invested heavily in renewable technologies and gets about 40.7 per cent of its energy from renewable sources including a large amount of hydro-electric power. Conversely, according to Friends of the Earth, the UK currently sources only two per cent of its energy from renewable sources but has some of the the best wind, wave and tidal resource in Europe.

Anthony Kennaway, European communications manager at Babcock and Brown, said that the Portuguese government had been very proactive at encouraging investment in alternative energy in the region – something the UK government could learn from.

"The Portuguese government has created an environment that is conducive to investment," he said. "If you are an investment business as we are then the one thing you need is certainty of revenue over a longer period of time."

The current system in the UK is based on renewable obligations which Kennaway claims do not provide the certainty that investors require. However, the Portuguese government's system of feed-in tariffs provides "certainty" for 10 to 15 years, which has given the backers of the scheme the imputes to invest money in an emerging technology with a greater safety margin, added Kennaway.

"This is the first of its type in the world," he said. "No one has really tested the technology, let it run in the sea for two, three, four years and so on, so we are really at a very early stage here."

When asked whether the UK government would really be justified in providing subsidies and investment in renewable energy given the current economic conditions, Kennaway said that it was the threat posed by climate change that would have a longer and deeper impact on markets than the current downturn.

"This is a short-term financial situation," he said. "The issues about our environment are long term and the impact on the economies from climate change will grossly outweigh the impact of the credit crunch and the amounts of money we are talking about are not [£400bn]."

Babcock and Brown wholly owned the Portuguese Energy company Enersis in 2005. The project was originally a 75/25 joint venture with Pelamis but recently Babcock and Brown brought some local companies into the project, including the local incumbent power company Energias de Portugal which Kennaway said helped push the deal through.

Babcock and Brown are listed on the Australian Stock Exchange (ASX) and has what it describes as a "funds management platform business".

The company has interests in ports and power distribution as well as a specific wind power fund, which is the third largest operator of wind farms world wide.

"What we do is put investors in touch with assets that they might like to buy either through funds and joint venture partners or more recently private pension funds and so on," said Kennaway.

According to government and industry figures, wave and tidal power combined could meet 12.5 per cent of the UK's electricity demand by 2025.