MAKING MARINE RENEWABLE ENERGY MAINSTREAM

DR GARTH BRYANS, SENIOR RESOURCE ANALYST, AQUAMARINE POWER

Introduction

Introduction> Why Renewables?> Why Renewables?> Why Wave Energy?> Where & How Much?> Where & How Much?> History of wave Energy devices> A i P> Aquamarine Power> Oyster I > Oyster II> Wave Power in Ireland

Why Renewable Power GenerationWhy Renewable Power Generation

Securing our Energy Future

The world faces major challenges in securing its energy future....

� Combating climate change - global average temperature set to rise by at least 2°C by 2050

� Addressing instability of energy market – in 12 months, price of oil has risen from $60 a barrel to peak of $147 before falling back to around $40

� Need for security of supply – political instability in the Middle East likely to lead to oil supply disruptions

� Meeting increased energy demand – 50% global increase in electricity consumption predicted between now and 2030

Addressing Climate Change

Addressing Climate Change

The Need For Energy Market Stability

The Need For Energy Market Stability

By 2020By 2020...

• UK could be 80% fuel import dependent (basedimport dependent (basedon current energy demand and production)

Predictions are...

• 70% reduction in UK oil and gas production

• 50% increase in global energy demand

The Need For Energy Market Stability

50% increase in global energydemandpredictedbetween now and 2030and 2030.

Why Generate Power From Waves?Why Generate Power From Waves?

OptionsOptions

Earth's Rotation to 3 7TWEarth s�Rotation�to�lunar�orbit

3.7TWAtmospheric�tides 0.02TW <0.01 kW/mGeo�tides 0.2TW <0.01 kW/mMarginal seas 2 6TW 3 0 4 0 kW/mMarginal�seas 2.6TW 3.0�� 4.0 kW/mDeep�Oceans 0.9TW <0.01 kW/m

Solar�energy 136,563TWH t & Li ht 87 000TW 0 1 0 3 kW/Heat�&�Light 87,000TW 0.1�� 0.3 kW/mHydrologic�cycle 45,000TWWind 3,500TW 0.4�� 0.6 kW/mWave 1000TW 2.0�� 3.0 kW/mBiosphere 63TW <0.01 kW/m

Geothermal 42TW

OptionsOptions

2004 2005 2006 2007(TWh per year)

2004 2005 2006 2007

Hydroelectricity 2,778 2,891 2,998 2,999

Geothermal 53 54 55 57

Wind Electricity 80 100 126 164

4Solar, Wave & tidal 2 3 4 5

Biomass and Waste 204 217 229 247

Totall Renewablee 3,1177 3,2655 3,4122 3,4733 Total Renewable 3,117 3,265 3,412 3,473

Total eletrical generation 16,643 17,335 18,010 18,779

OptionsOptionsWhy Not Wind

> Full potential of onshore wind not fully realized –> Planning regulations & grid connection & infrastructure problems

> High cost of offshore wind – up to €4m/MW

> Renewable portfolio must diversify to meet growing domestic demand and allow greater grid penetration for renewable energy.

IN BRIEFIN BRIEFWHY WAVE POWER?

> Offers diversity to wind.

> Offers access to a very large market.

Wave Power Where & How Much?Wave Power - Where & How Much?

WIND CELLS

WAVE POWER

WAVE ENERGY IN IRELAND

THE OPPORTUNITY FOR IRELAND

Ireland has a huge marine resource:LOCATION OF GLOBAL OYSTER RESOURCE (%)

> Potential to meet 75% of Ireland’s current energy demand (7.8GW installed)

> Target of 500MW by 2020 = around 10% of Ireland’s around 10% of Ireland s renewable portfoliio

WAVE POWER – WHAT IS IT?

Deep Water & Shallow WaterAttenuator Overtopping device

Point absorber Oscillating Wave Surge Converter g g

Submerged pressure differential Oscillating water columnSubmerged pressure differential Oscillating water column

Deep Water & Shallow Water

Waves ShoalingShoaling,animation deep water shallowwater, shallowwater

Deep Water & Shallow Water

Near ShoreNear ShoreAdvantages

> SSurvivability – Maximum wave height is much lower. > WWave direction – uniform wave direction.> Amplified Surge – Most of the energy is contained in the surge component. > FFocusing of wave power – Use of natural features to focus wave energy.> Access – 24/7 on shore access to equipment during early stage development.

History of wave Energy devicesHistory of wave Energy devices

Wave Power - Early Beginnings

The first wave power patent was filed in 1799 by French engineer, Pierre-Simon Girard and his son.

The patent described a gigantic lever, with its fulcrum on the shore and with a 'body’ floating on the sea.shore and with a body floating on the sea.

As the body rose and fell with the waves, the lever would work up and down, producing mechanical power to drive p p g pmachinery.

Though the Girard device was never built, it paved the way for the filing of a further 340 wave power patents between 1855 and 19731973.

A Wave of Enthusiasm in the 1970sThe modern scientific pursuit of wave energygyis widely credited as beginning in the early 1970s with the work of Professor Stephen Salter at the University of Edinburgh.

Salter’s ‘Duck’ was designed to create electricity by bobbing up and down with the

d i l ll l iwaves and in early small-scale testingmanaged to convert 80% of wave energy into electricity.

The 1973 oil crisis prompted governments across Europe to fund further research into cost-effective ways of producing power fromcost effective ways of producing power fromwaves.

The UK’s1974 Wave Energy Programme led to gy gtesting of numerous designs, but all fell short of unrealistic government expectations.

Progress Against the Odds1982 saw dramatic cuts in the UK’s R&D fundinggas wave energy was largely written off as ‘uneconomic’. In 1994, funding was withdrawn altogether.

Falling oil prices further reduced the financial imperative for renewable energies, but a number of committed wave power developers continued their research throughout the 1980s and 1990s.

In 1985, Professor Trevor Whittaker and his research team at Queen's University, Belfast, commenced work on a prototype shoreline wavecommenced work on a prototype shoreline wavepower device on Islay.

The 75kW device was grid-connected in 1991 andThe 75kW device was grid-connected in 1991 andwas in operation for nearly ten years.

Making up for lost time

Th 1990 d i t t iThe 1990s saw a renewed interest in wave energy prompted largely by rising oil prices and the threat of global warming.

In 1992, the first wave energy company, Wavegen, was founded by Professor Alan Wells, inventor of the ‘Wells Turbine’ and Allaninventor of the Wells Turbine , and AllanThomson.

Since then, numerous companies have begun working in partnership with academic research groups to progress the development of wave energy.

Wave Energy – Surging Forward

To date, more than 1000 patents have been filed relating to wave energy and there are an estimated 100 d l ld id100 developers world-wide.

Since 2000, a handful of devices have progressed to commercial scale and grid connectionto commercial-scale and grid-connection.

Current world-installed capacity is estimated to be around 3MW.

A further wave of developers are set to deploy full-scale demonstrators within the next five yearsnext five years.

Aquamarine PowerAquamarine Power

SENIOR MANAGEMENT TEAM

MARTIN MCADAMCHIEF EXECUTIVE OFFICER

MATTHIAS HAAGCHIEF OPERATING OFFICER

RICHARD ROUNDCHIEF FINANCE OFFICER

> 30yrs financial/operational experience in renewables, oil & gas, coal and mining sectors

> Proven track record of raising fi d ti i

> Track record in offshore oil, gas and wind industry

> Former general manager for Shell wind energy projects on a

> Track record in building successful large-scale renewable businesses

> Founder of Airtricity’s North finance and operating in developing international markets

> Formerly of Novera Energy Plc, one of UK’s leading renewable energy generators

global basis> Project managed North Sea

Dutch Offshore Windpark

American operations, sold to E.On in 2007 for $1.2bn

> Proven leadership skills

generators

SENIOR MANAGEMENT TEAM

RONAN DOHERTY PhDCHIEF TECHNICAL OFFICER

SIAN MCGRATH PhDHEAD OF COMMERCIAL DEVELOPMENT

URSULA O’BRIENHEAD OF HUMAN RESOURCES

T k d i& > Experienced HR & Business> Track record in start-up business development and raising public finance

> Proven experience of securing i t

> Former Trading & Investment Risk Manager at Airtricity

> PhD from University College Dublin in Power Systems and R bl E g

> Experienced HR & Business Manager, formerly of IT sector and NHS

> Specialist in employee relations and changemarine consents

> Chair, Scottish Government Marine Energy Group; member, UK Government Marine Action Plan Group

Renewable Energy> Proven track record in

international award-winning research; experienced numerical modeller

relations and change management

> Member of Chartered Institute of Personnel & Development

Plan Groupmodeller

INDUSTRY EXPERTISE

PROF. TREVOR WHITTAKERRESEARCH ADVISOR TO BOARD

PROF. STEPHEN SALTERSPECIALIST TECHNICAL ADVISOR

ALLAN THOMSONCOMPANY FOUNDER & NON-EXECUTIVE DIRECTOR

> Leading developer of wave power technology in UK

> Founded first ever wave energy company

> Professor of Engineering Design, University of Edinburgh

> Pioneer of wave energy since 1970s

> Professor of Coastal Engineering and Head of Wave Power Research Group, Queen’s University, Belfast company

> Developed Limpet, commercial-scale 500kW device in 1999

1970s> Developed Salter Duck,

ground-breaking wave energy device, in 1970s

y> Experience of five wave power

sea-trials to date including Islay 75kW plant

> Pioneered wave poweredPioneered wave powered navigation buoys in 1984

THE TEAM

> HR policies with staff involvement at core

> Sh d i i d l INSPIRESTAFF QUALIFICATIONS (February 2010)

> Shared vision and values – INSPIRE -Integrity, Nurture, Safety, Partnership, Innovation, Respect and Enthusiasm

> Team includes multiple PhDs in all> Team includes multiple PhDs in all relevent disciplines

> Alignment of skills and experience to deliver cost-competitive electricity p yfrom wave energy

OYSTER IOYSTER I

DESIGNED SIMPLICITY

OYSTER TECHNOLOGY

OYSTEROYSTERKEY BENEFITS

> Accessible – generation equipment is onshore – accessible 24/7> RReliable – conventional hydro-electric power station – proven, reliable> Survivability no “survival mode” naturally ducks under extreme waves and keeps> Survivability – no “survival mode”, naturally ducks under extreme waves and keeps

generating> HHigh capture factor – uniform wave direction, amplified surge forces> EEconomies of scale – one generator, multiple flaps & low cost fabrication> LLow weight to power ratio - compared to alternatives, including offshore wind

PEAKK POWERR TOO GRIDD THIRDD PARTYQUBB TANKK TESTING PEAK POWER TO GRID 157kW

THIRD PARTYVERIFICATIONS

QUB -TANK TESTING3 YRS 1/40th and 1/20th

FATIGUE TESING INSTALLED – AUG 09FABRICATION - NIGG

LAUNCH CEILIDH – ALEX SALMOND, 20TH NOVEMBER

LAUNCH CEILIDH – ALEX SALMOND, 20TH NOVEMBER

LESSONS LEARNED – OYSTER 2LESSONS LEARNED OYSTER 2

TBCTBC

EMEC

2011Design

refinementrefinementEMEC

NOW 2009 Design

prototype

Conceptt Concept prototype

>V

S O S TOO EXPENSIVE!

WEATHER DEPENDENT

ARRAY TESTING SINCE 2007

CUT FABRICATION COSTS

THIS WORKS

….SO DOES THIS!

>V

YY ff T kk t tii thh O tt 11 d ii hh d dd thh O tt III hYears of Tank testing the Oyster 1 design has produced the new Oyster II shape

More hydrodynamically efficientEasier to: install, maintain, manufacture, locate, and consent

Cost of Power

THE SCALE OF THE OPPORTUNITY

160

180

) Greenpeacee Windforcee 100 (1999)

120

140

paci

ty (G

W) Greenpeace Windforce 10 (1999)

IEA World Energy Outlook (1998)

80

100

stal

led

Cap IEA World Energy Outlook (2002)

Reality

40

60

Glo

bal I

ns

20

40

0

1980 1990 2000 2010 2020

KEY REQUIREMENTS OF WAVE ENERGY TECHNOLOGY

Wave energy technology must be...

> Easy to buildy> Easy to install> Easy to operate> Easy to maintain> Easy to diagnose

KEY ADVANTAGES OF OYSTER!

Oyster is...

� Easy to build� Easy to install� Easy to operate� Easy to maintain� Easy to diagnose

DESIGNED SIMPLICITY

EMEC: OYSTER 1

Onshore hydraulic power conversion

EMEC grid substationp

Oyster 1 WEC500m

pipelines

OYSTER II

> Moree efficientt – new shape has given a much higher energy output

OYSTER IIIMPROVMENTS

> More efficient – new shape, has given a much higher energy output.> RReliable – Designed for reliability with redundancy. > Installationn – Less weather dependant, faster, cheaper.Installation Less weather dependant, faster, cheaper.> MMore tolerance to seabed – Less seabed preparation required.> MMaintenance – Modular systems for easy maintenance.y y> FFabrication – Designed with our fabricators to reduce construction costs.

Wave Power In IrelandWave Power – In Ireland

MARINE ENERGYMARINE ENERGYPOSITIVE STEPS IN IRELAND

> Significant government support for marine energy in Ireland:

• Commitment to REFIT (€220 per MWh feed in tariff)• Development of Belmullet test centre• Establishment of Ocean Energy Development Unit (OEDU)• Establishment of SEI Prototype Development Fund• Smart Bay Project (Galway)

MARINE ENERGYMARINE ENERGYTHE BENEFITS FOR IRELAND

> Clean energy – significant carbon savings> Security of supply (91% of Ireland’s energy supply was imported in 2006)> Creation of a new industry and highly skilled employment in Ireland> Whilst the €220 per MWh costs the consumer, it is likely to reduce the market price

sufficiently to more than offset this cost as seen with windsufficiently to more than offset this cost, as seen with wind> Potential to create export market for Ireland – power, technology, skills, IP

NOT JUST ABOUT THE COST… ITS ABOUT THE BENEFIT

GERMANYGERMANYREAPING THE BENEFITS

> Creating saving of €6 1bn> Creating saving of €6.1bn> Increase in domestic turnover from installation/operation of renewables systems –

increase from €18.1bn in 2005 to around €22.9bn in 2006> Increase in employment in renewable sector – rose from 160,000 in 2004 to over

230,000 in 2006> Creation of export market – over 70% of wind production technology exported> Reduced carbon emissions - CO2 emissions reduced by 100m tonnes in 2006

WHAT’S NEXT?WHAT S NEXT?THE WAY FORWARD

> Developer support for MRIA (Marine Renewable Industry Association) and OEDU (Ocean Energy Development Unit)

> Wave power must have at least 500MW of grid capacity allocated to it outside of the gate process

> Continued commitment to REFIT scheme> Continued commitment to REFIT scheme> Streamlined approach to licensing and leasing the seabed - clear, consistent

and proactive policies and processesand proactive policies and processes

DR GARTH BRYANSDR GARTH BRYANSSENIOR RESOURCE ANALYST

AQUAMARINE POWER10 ST ANDREW SQUAREEDINBURGHEH2 2AFUNITED KINGDOM

Tel: +44 131 718 6011Fax: +44 131 718 6100Email: garth bryans@aquamarinepower comEmail: garth.bryans@aquamarinepower.comWeb: www.aquamarinepower.com