The company behind a tidal energy scheme that could power a city the size of Aberdeen has signed a multi-million pound deal to sell electricity generated by the Scottish project.
Atlantis Resources has chosen independent energy firm Smartest- Energy to market the electricity from its MeyGen tidal stream project in the Pentland Firth, between Orkney and the Scottish mainland.
The ten-year agreement could be worth more than £50 million over its lifetime and comes just weeks after Atlantis announced it had secured a major funding package to take the development forward.
MeyGen chief executive Dan Pearson said: “This is an important step forward for MeyGen and its backers. The agreement with SmartestEnergy will secure the long-term revenues which will demonstrate the commercial viability of the project and also highlight the wider potential of tidal stream generation to become a significant industry.”
He said SmartestEnergy was “a key player in the independent generation sector in Scotland”.
Last week the project was put on a more solid footing when Atlantis signed a 25-year seabed lease – the largest marine energy lease to be awarded by the Crown Estate and the first in the region.
Atlantis plans to start installing devices in the Inner Sound of the firth over the next two years. Under the first phase of the project, four 1.5 megawatt turbines will be installed.
By 2020, 61 of the 269 turbines proposed could be in place. The installation is eventually expected to power 175,000 homes.
Atlantis has secured more than £51m in funding for the first phase of the project, including £17.2m from the Scottish Government.
The finance package, agreed last month, is coming from backers including the Scottish Government, Highlands and Islands Enterprise, the UK government, and the Crown Estate.
A £7.5m contract with Energy Technologies Institute, signed shortly after, will see Atlantis build a further two turbines for the institute – a public-private partnership between global energy and engineering companies and the UK government – to test a new turbine foundation structure and associated technologies.
MeyGen has now signed a ten-year power purchase agreement (PPA) with SmartestEnergy that will provide revenues for the power generated and exported to the grid under the first phase of the project through to 2025.
The agreement also covers additional benefits paid to renewable generators under the renewable obligation certificates system.
SmartestEnergy’s Glasgow-based generation sales manager, Iain Robertson, said it was a landmark deal for the marine renewables sector in Scotland and underlined the commercial potential of the industry.
“Given the innovative nature of the MeyGen project and the involvement of many different public and private sector funders, structuring the agreement was quite complex and time-consuming but everyone involved worked hard to secure a positive outcome,” he added.
Construction on MeyGen is expected to commence towards the end of this year, with first power to the grid and revenues being earned in early 2016.
SmartestEnergy already buys electricity from more than 150 renewable energy projects in Scotland, including the European Marine Energy Centre on Orkney, where a number of generation devices are on trial.
It works with independent generators and currently involved with more than 600 projects.