Renewables firm on crest of a wave as dreams turn into reality

Pelamis, which has so far built two prototype wave machines, announced it would be seeking fresh investment to help it scale up manufacturing to commercial levels.

It said that the “pieces of the jigsaw” were now in place to move to the creation of commercial wave farms, with “significant” customer orders on the books.

The moves will help bolster claims of a coming explosion in wind and wave technology in Scotland.

Pelamis, established in 1998, has pioneered huge 180-metre long machines which rock with the motion of the sea, absorbing its energy, and converting that into electricity.

A prototype off the coast of Orkney was connected to the National Grid last year, while a second model, ordered by ScottishPower Renewables, is currently being built in Leith docks and is set for completion soon.

The firm announced yesterday that it was beginning a strategic review to explore options for growing into a fully commercial venture. The aim is to raise cash from either a key new strategic investment, from current shareholders, or from a combination of the two.

It said that three energy suppliers – EON, ScottishPower Renewables and Vattenfall – were now “actively” developing plans for marine farms using the Pelamis machine, and had already lodged enquiries about major orders as a result.

Gina Domanig, chairwoman of Pelamis, said: “Pelamis is on the cusp of making commercial wave energy a reality in the UK. The growth of our business is driven by customer demand and our financial projections are based on real commercial interest. We have the most commercially advanced technology in marine energy and a mature business model that has attracted several significant customer orders, which is unique in the sector – the pieces of the jigsaw are in place.”

She added: “Wave energy is a commercial reality for us and we are looking at how best to evolve so that the step from pre-commercial testing to fully fledged commercial wave farms is as seamless as possible.”

The firm said yesterday it was not yet in a position to say how many machines could be built, if extra financing was achieved.

The announcement comes only a few weeks after Pelamis announced it would be laying off 20 of its 70 highly skilled staff, on the grounds that the firm was now moving from manufacturing to operations.

But the plan to gain more investment for the machines will now boost hopes that the boom in renewable energy could help boost manufacturing in Scotland.

First Minister Alex Salmond has previously hailed the Pelamis as a “significant” element of Scotland’s bid to become the energy “powerhouse” of Europe. At the Scottish elections, he pledged that, by 2020, Scotland would produce the equivalent of 100 per cent of its electricity needs in renewable energy.

However, there remains scepticism about whether the technology can become commercially viable in time.

A report by the Carbon Trust earlier this summer said that the key challenge remained reducing the cost of tidal power energy. It said innovation would ensure competitive prices by the mid 2020s.

Earlier this week, one expert warned that too much hope was being placed on renewable sources such as tidal power, saying the subsidies available were “not justified” given the return.

Analyst Tony MacKay warned: “The renewables targets are completely unrealistic – they just cannot be achieved. They are also putting a lot of money into subsidies, particularly for offshore wind farms and offshore marine tidal and wave energy which are just not justified.”