Pelamis Wave Energy Device Testing Again

NAO NAKANISHI, Reuters, October 5, 2009

A first attempt fell victim to the crisis: now in the docks of Scotland’s ancient capital, a second-generation scarlet Sea Snake is being prepared to harness the waves of Britain’s northern islands to generate electricity.

Dwarfed by 180 metres of tubing, scores of engineers clamber over the device, which is designed to dip and ride the swelling sea with each move being converted into power to be channelled through subsea cables.

Due to be installed next spring at the European Marine Energy Centre (EMEC) in Orkney, northern Scotland, the wave power generator was ordered by German power company E.ON, reflecting serious interest in an emerging technology which is much more expensive than offshore wind.

Interest from the utility companies is driven by regulatory requirements to cut carbon emissions from electricity generation, and it helps in a capital-intensive sector.

Venture capitalists interested in clean tech projects typically have shorter horizons for required returns than the 10-20 years such projects can take, so the utilities’ deeper pockets and solid capital base are useful.

“Our view … is this is a 2020 market place,” said Amaan Lafayette, E.ON’s marine development manager. “We would like to see a small-scale plant of our own in water in 2015-2017, built on what we are doing here. It’s a kind of generation we haven’t done before.”

The World Energy Council has estimated the market potential for wave energy at more than 2,000 terawatt hours a year — or about 10% of world electricity consumption — representing capital expenditure of more than 500 billion pounds ($790 billion).

Island nation Britain has a leading role in developing the technology for marine power, which government advisor the Carbon Trust says could in future account for 20% of the country’s electricity. The government is stepping up support as part of a 405 million pound investment in renewable energy to help its ambition of cutting carbon emissions by 80% by 2050 from 1990 levels, while securing energy supply. (The challenge is more about getting to a place where we are comparable with other renewable technologies… We want to get somewhere around offshore wind,” said Lafayette.)

Britain’s Crown Estate, which owns the seabed within 12 nautical miles of the coast, is also holding a competition for a commercial marine energy project in Pentland Firth in northern Scotland.

Besides wave power, Britain is testing systems to extract the energy from tides: private company Marine Current Turbines Ltd (MCT) last year opened the world’s first large-scale tidal turbine SeaGen in Northern Ireland.

DEVELOPING LIKE WIND

“We are often compared to the wind industry 20 years ago,” said Andrew Scott, project development manager at Pelamis Wave Power Ltd, which is developing the Sea Snake system, known as P2. Standing beside the train-sized serpent, Pelamis’ Scott said wave power projects are taking a variety of forms, which he said was similar to the development of the wind turbine. “You had vertical axis, horizontal axis and every kind of shapes before the industry consolidated on what you know as acceptable average modern day turbines.”

The Edinburgh Snake follows a pioneering commercial wave power project the company set up in Portugal last September, out of action since the collapse of Australian-based infrastructure group Babcock & Brown which held a majority share. “It’s easy to develop your prototypes and models in the lab, but as soon as you put them in water, it swallows capital,” said John Liljelund, CEO of Finnish wave energy firm AW-Energy, which just received $4.4 million from the European Union to develop its WaveRoller concept in Portugal.

At present, industry executives say marine power costs about double that from offshore wind farms, which require investment of around 2-3 million euros per megawatt. Solar panels cost about 3-4 million per megawatt, and solar thermal mirror power about 5 million.

UTILITY ACTION

Other utility companies involved in wave power trials include Spain’s Iberdrola, which has a small experimental wave farm using floating buoys called “Power Take- offs” off the coast of northern Spain. It is examining sites for a subsea tidal turbine project made by Norwegian company Hammerfest Strom.

Countries developing the technology besides Britain include Portugal, Ireland, Spain, South Korea and the United States: about 100 companies are vying for a share of the market, but only a handful have tested their work in the ocean.

Privately owned Pelamis has focussed on wave energy since 1998, has its own full-scale factory in Leith dock and sees more orders for the second generation in prospect.

Lafayette said E.ON examined more than 100 devices since 2001 before picking Sea Snake for its first ocean project, a three-year test: “They have a demonstrable track record … and commercial focus and business focus.”

A single Sea Snake has capacity of 750 kilowatts: by around 2015, Pelamis hopes each unit will have capacity of 20 megawatts, or enough to power about 30,000 homes.

Neither Pelamis nor E.ON would elaborate on the cost of the Sea Snake, but they said the goal is to bring it down to the level of offshore wind farms.

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Lockheed, OPT Going for Wave Energy in the West

MendoCoastCurrent, January 31, 2009

On January 26, 2009, Lockheed Martin and Ocean Power Technologies agreed to work together to develop a commercial-scale wave energy project off the coasts of Oregon or California.

OPT is providing their expertise in project and site development as they build the plant’s power take-off and control systems with their PowerBuoy for electricity generation.  Lockheed will build, integrate and deploy the plant as well as provide operating and maintenance services. Lockheed and OPT have already worked together on maritime projects for the U.S. government.

Spanish utility Iberdrola is using OPT’s PowerBuoy on the Spainish coast in Santoña for first phase deployment, hoping to become the first commercial-scale wave energy device in the world.  In the Spainish project, Lockheed and Ocean Power are working toward an increased cost-performance of a power-purchasing agreement from which this U.S. wave energy project may benefit.

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OPT Gaining Traction in Wave Energy Projects

MendoCoastCurrent, December 15, 2008

Ocean Power Technologies (OPT) recently reported quarterly financials and also recent developments:

– Deployed and tested a PowerBuoy off the coast of Spain under the wave power contract with Iberdrola

– Awarded $2.0 million from the US Department of Energy in support of OPT’s wave power project in Reedsport, Oregon

– Deployed and tested a PowerBuoy for the US Navy at a site off Marine Corps Base Hawaii, on the island of Oahu

– Ocean-tested 70 miles off the coast of New Jersey an autonomous PowerBuoy developed specifically for the US Navy’s ocean data gathering program

– Awarded $3.0 million contract from the US Navy for the second phase of their ocean data gathering program

– US Congress passes bill which provides for wave power to qualify for the US production tax credit

Dr. George Taylor, OPT’s CEO, said, “We have maintained the positive momentum with which we began the 2009 fiscal year, and have made significant progress under a number of contracts during the quarter, most notably with the US Navy and Iberdrola. In September, we deployed a PB40-rated PowerBuoy in Spain under our contract with Iberdrola, one of the world’s largest renewable energy companies. OPT also tested one of its autonomous PowerBuoy systems off the coast of New Jersey in October, under contract from the US Navy in connection with the Navy’s Deep Water Active Detection System (“DWADS”) initiative. We ended the second quarter with a PowerBuoy deployment for the US Navy in Hawaii. We have also furthered our relationship with this significant partner and announced a $3.0 million contract for participation in the second phase of the US Navy’s DWADS program.”

“We expect that the US Government’s recent expansion of the production tax credit to now include wave energy will help better position OPT competitively in the alternative energy arena. We are also gratified by signs that the Obama administration in the United States is keen on leveraging renewable energy sources as commercial sources of energy for the country. The $2.0 million award we received this quarter from the Department of Energy, in support of our work in Reedsport, Oregon, is reflective of the US Government’s support for wave energy,” Dr. Taylor concluded.

More about OPT

OPT has seen strong demand for wave energy systems as evidenced by record levels of contract order backlog, currently at $8.0 million. OPT continues to make steady progress on development of the 150 kW-rated PowerBuoy (PB150), which comprises a significant portion of our current backlog. The design of the PB150 structure is on track to be completed by the end of calendar year 2008, and is expected to be ready for complete system testing in 2009. OPT continues to work actively with an independent engineering group to attain certification of the 150 kW PowerBuoy structure design.

OPT’s patent portfolio continues to grow as one new US patent was issued during the second quarter of fiscal year 2009. The Company’s technology base now includes a total of 39 issued US patents.

During the second quarter of fiscal 2009, the Company announced that it expects to benefit from the energy production tax credit provision of the Energy Improvement and Extension Act of 2008. Production tax credit provisions which were already in place served only to benefit other renewable energy sources such as wind and solar. The Act will, for the first time, enable owners of wave power projects in the US to receive federal production tax credits, thereby improving the comparative economics of wave power as a renewable energy source.

OPT is involved in wave energy projects worldwide:

REEDSPORT, OREGON, US – OPT received a $2.0 million award from the US Department of Energy (DoE), in support of OPT’s wave power project in Reedsport, Oregon. The DoE grant will be used to help fund the fabrication, assembly and factory testing of the first PowerBuoy to be installed at the Reedsport site. This system will be a 150 kW-rated PB150 PowerBuoy, major portions of which will be fabricated and integrated in Oregon. OPT is working closely with interested stakeholder groups at local, county and state agency levels while also making steady progress on the overall permitting and licensing process.

SPAIN – OPT deployed and tested its first commercial PowerBuoy under contract with Iberdrola S.A., one of the world’s largest renewable energy companies, and its partners, at a site approximately three miles off the coast of Santona, Spain. The enhanced PB40 PowerBuoy, which incorporates OPT’s patented wave power technology, is the first step of what is expected to be a utility-grade OPT wave power station to be built-out in a later phase of the project.

ORKNEY ISLANDS, UK – OPT is working under a contract with the Scottish Government at the European Marine Energy Centre (“EMEC”) in the Orkney Islands, Scotland to deploy a 150 kW PowerBuoy. OPT is currently working on building the power conversion and power take-off sub-assemblies. The Company is also reviewing prospective suppliers for manufacturing of the PowerBuoy, which is on track to be ready for deployment by the end of calendar year 2009. As part of its agreement with EMEC, OPT has the right to sell power to the grid up to the 2MW berth capacity limit, at favorable marine energy prices.

CORNWALL, UK –The “Wave Hub” project developer, South West of England Regional Development Agency (“SWRDA”), recently appointed an engineering contractor to manage the construction of the “Wave Hub” marine energy test site. SWRDA has forecasted that the Wave Hub connections, cabling and grid connection infrastructure will be completed by the end of the 2010 calendar year. OPT continues to work with SWRDA and is monitoring its progress in developing the project site.

HAWAII, US – OPT deployed its PowerBuoy systems near Kaneohe Bay on the island of Oahu. The PowerBuoy was launched under OPT’s on-going program with the US Navy at a site off Marine Corps Base Hawaii and will be connected to the Oahu power grid.

US NAVY DEEP OCEAN APPLICATION – OPT tested one of its autonomous PowerBuoy systems 70 miles off the coast of New Jersey. The PowerBuoy was constructed under contract from the US Navy in connection with the Navy’s DWADS initiative, a unique program for deep ocean data gathering. The Company received a $3.0 million contract award for the second phase of the program, which is for the ocean testing of an advanced version of the autonomous PowerBuoy.

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Northern California Catching the Wind at Shiloh

TODD WOODY @ Fortune Magazine, November 12, 2008

About 60 miles north of San Francisco, the strip malls of Solano County give way to gently rolling hills where, as far as the eye can see, wind turbines sprout from the golden bluffs overlooking the Sacramento delta. Construction on Solano’s newest turbine farm, Shiloh II, began this summer, part of a wind rush that has transformed the U.S. into the world’s biggest wind market.

An estimated 8,000 megawatts of new capacity will be installed in the U.S. in 2008. That’s enough electricity for nearly three million homes, and it represents a jump of 50% on the heels of last year’s 45% increase. Among the forces driving growth: Congress’s extension last month of a key tax credit and state mandates requiring utilities to tap renewable energy. “Utilities are going to take wind and run with it,” Jeff Immelt, CEO of General Electric, the nation’s biggest turbine maker, said recently. Global growth remains strong as well, with generation capacity continuing to increase at a 30% annual clip, although the credit crunch could slow expansion in the near future.

And it is a truly global business. Take a closer look, for instance, at Shiloh II.

The 150-megawatt project is being developed by enXco, the U.S. subsidiary of French energy giant EDF. The turbines that lie scattered around the construction site like giant Tinkertoys were made by Germany’s REpower, itself acquired last year by Suzlon, an Indian wind-machine manufacturer that has relocated its global headquarters – to Denmark. “If you want to invest in wind, you’re generally looking at overseas stock markets,” says Ethan Zindler, head of North American research for New Energy Finance, a London-based research firm.

Moreover, while wind power has attracted some big names like GE and FPL Group, the business plays only a minor role in their portfolios. Most pure wind outfits are far smaller and can be very volatile – and they tend to sport high price/earnings ratios, despite recent stock drops. With that caution in mind, and after talking to industry insiders and poring over financial reports, we came up with the four intriguing wind stocks discussed below. They are speculative bets, so intrepid investors should check them out carefully before putting any money at risk.

Four ways to bet on wind power

Wind stocks generally come in two varieties: equipment makers, which produce turbines and other hardware, and developers, which build power plants. Among developers, Iberdrola Renewables (IBR.MC), traded on the Madrid stock exchange, is the name to know. Spun out from the big Spanish power company Iberdrola last year, it is the world’s largest wind-power developer, with sales of $1.4 billion in 2007, expected to rise to $2.8 billion this year.

The U.S. is Iberdrola’s largest market outside Spain and will drive its expansion. Terry Hudgens, CEO of Iberdrola Renewables’ North American operations, says the company plans to install 1,000 megawatts of new wind capacity a year in the U.S. “We secured this pipeline years ago, before these other companies decided to get into the U.S.,” he says. The company is growing fast: In its most recent quarter Iberdrola saw sales of $698 million, up nearly 200% from the same quarter a year ago, while pretax profit rose nearly 600%, to $153 million. And the stock has a highfliers’ P/E of nearly 40.

Iberdrola buys turbines from Suzlon, Mitsubishi, Siemens, Vestas, and GE. But its biggest supplier is Spanish company Gamesa (GAM.MC). In fact, Iberdrola just placed the largest turbine order on record with Gamesa, which is now the No. 2 turbine maker in the world. Gamesa’s P/E of 18 is double the industry average, but its profits are expected to grow 30% this year.

The No. 1 windmill maker, with 23% of the world market, is Vestas (VWS.CO), traded on the Copenhagen exchange. It saw revenues grow 26% in 2007, to $7.2 billion, and it has a market cap of nearly $11 billion. The appeal of the stock for wind investors, says London-based Citigroup analyst Mark Fielding, is that “its market-leading positions make it a proxy for the overall strength of the market.”

Finally, an upstart to watch is Clipper Windpower (CWP), which is based in California but trades in London. Customers for its 2.5-megawatt Liberty turbine include FPL, BP – which is developing the world’s largest wind farm with the company – and Queen Elizabeth II, who bought the prototype of a ten-megawatt offshore windmill. Its shares dropped 78% this year over quality issues, but those glitches have been fixed, says CEO Doug Pertz. Clipper lost money in 2007 and will do so again in 2008. Still, analysts and industry insiders say that its innovative technology and the strong demand for turbines could make it a winner in the long run.

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OPT Floats First PowerBuoy in Spanish Wave Farm with Iberdrola

MendoCoastCurrent, September 23, 2008

Ocean Power Technologies, Inc., a New Jersey publicly-traded company deployed its first PowerBuoy with Iberdrola S.A, a Spanish renewable energy company, and its partners, at a site approximately three miles off the coast of Santoña, Spain.

As noted by Iberdrola, the deployment of OPT’s PB40 PowerBuoy is the latest milestone toward the building of the world’s first commercial utility-scale wave power generation venture to supply approximately 1.39 MW of electricity into Spain’s electricity grid. The PB40, incorporating OPT’s patented wave power technology, is the first of what is expected to be a 10-PowerBuoy wave power station to be built out in a later phase of the project, and generating enough electricity to supply up to 2,500 homes annually.

Mark R. Draper, Chief Operating Officer of OPT, said: “This deployment is of great significance to OPT and the wave power industry, demonstrating the commercial potential of our leading technology after a decade of in-ocean experience. We now look forward to the first supplies of electricity to the grid and the expansion of the wave power station.”

The project began with OPT’s development of the Santoña site, followed by OPT’s receipt of the Engineering, Procurement and Construction (EPC) contract under which it would build and install the first PB40 PowerBuoy system, subsea power transmission cable and underwater substation and grid connection. In a subsequent agreement, OPT was also contracted for operations and maintenance (O&M) of the wave power station for up to 10 years. A special purpose company with Iberdrola as its major shareholder and OPT as a 10% shareholder has also been established for the purchase of the wave power station and the O&M services from OPT.

PowerBuoys provide a minimal visual profile due to most of their structure being submerged. They have a design life of 30 years with standard maintenance recommended every three to four years. The grid connection system for the PowerBuoys has been certified by an independent engineering firm.

The PB40 steelwork was fabricated by a local supplier in Santander, Spain, and the power take-off and control system was built at OPT’s facility in New Jersey, USA. The final integration and testing of the complete PowerBuoy was also conducted in Spain. The PowerBuoy is seven meters in diameter at the sea surface, 20 meters in length and weighs approximately 60 tonnes.

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New York Agency Approves Iberdrola Energy East Plan

Associated Press, September 4, 2008

Albany — New York utility regulators have given the global energy company Iberdrola the go-ahead to buy Energy East.

The 4-0 vote by New York’s Public Service Commission yesterday clears the way for the $4.6 billion deal, which includes Energy East subsidiaries Rochester Gas and Electric Corp. and New York State Electric and Gas.

Energy East also owns power companies in Maine, Connecticut, and Massachusetts, where regulators have already approved the takeover. But New York’s approval comes with a series of conditions that Iberdrola hasn’t yet accepted.

The commissioners, who have had Iberdrola’s proposal before them for more than a year, characterized their decision as a compromise that protects Energy East’s customers while not imposing conditions so onerous they’d cause Iberdrola — which is based in Spain — to nix the buyout.

“This isn’t a perfect deal, and it might not be a great deal,” commissioner Maureen Harris said before casting her vote. “In my opinion, it’s a good deal, and I’m not willing to risk having the company walk away from it.”

Iberdrola had no immediate comment except to say that it looks forward to reviewing the order to determine what steps it will take next.

Staff analysts at the PSC had argued for months against the deal because of concerns about whether it would best serve the public in terms of cost and competitiveness. They laid out a series of conditions they said the agency’s decision-making panel should impose before the deal could go through.

Yesterday’s approval addressed most of the issues staff analysts raised, though the conditions were significantly scaled back from their original recommendations.

For example, the commissioners required Iberdrola to put aside $275 million to offset future rate increases. That’s compares with the $646 million PSC staff analysts initially proposed as a condition of the sale.

PSC staff analysts also initially said Iberdrola should be required to sell its interest in wind and hydropower generating plants as a condition of the deal. That was in keeping with a state policy that power companies shouldn’t own both transmission lines and generating plants, which might give them too much control over setting prices.

Iberdrola — which has wind projects from the Pacific Northwest to Europe — strongly objected to that demand and sought help from state and federal officials, including Senator Schumer, who said he lobbied the PSC chairman, Garry Brown, to find a compromise.

The commission said yesterday that Iberdrola must sell the fossil fuel generating plants but may keep the wind energy plants as long as it commits to spending up to $200 million on wind energy development in the state. The company has publicly said it will spend $2 billion on wind energy in New York, but it hasn’t made a firm commitment.

Under the terms the PSC laid out, Iberdrola would also be required to make any future investments in wind energy using money from a non-Energy East subsidiary.

“We have argued long and hard for Iberdrola’s ability to develop wind power, and we very much urge them to accept this ruling,” Mr. Schumer said in a prepared statement after the PSC’s decision.

It’s not clear, however, if the company will go along with the conditions. A spokesman for the PSC said the agency expects to issue a written order spelling them out within a few days, and it’s up to Iberdrola to accept or reject the offer.

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Iberdrola Soon Marketing Natural Gas in Portugal

EnergyBusinessReview.com, August 12, 2008

Spanish utility Iberdrola Renewables S.A. has been awarded the license to market natural gas in Portugal’s liberalized energy market by the country’s Directorate General of Energy and Geology, with support from the Portuguese Ministry of Economy and Innovation.

Pursuant to the terms of this authorization, Iberdrola will be able to import, export and market natural gas and liquefied natural gas (LNG), as well as buy and sell natural gas wholesale and sell it to the Portuguese retail clients.

Iberdrola hopes to become one of the operators of reference in Portugal’s gas market with the chance to take advantage of the market’s incipient liberalization, which began in July 2007.

The Spanish utility, which is already present in the areas of generation and marketing of electricity and renewable energies in Portugal, is also taking a further step in order to strengthen its presence in the country’s energy market. Iberdrola is also promoting the construction of an 850MW combined cycle power plant in the locality of Figueira da Foz and hopes to obtain the definitive award to carry out work for the 1,134MW Alto Tamega hydroelectric complex.

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Iberdrola & NY Public Service Commission Meeting on Energy East

Democrat & Chronicle, August 9, 2008

New York’s Public Service Commission (PSC) will hold two sessions related to Iberdrola’s disputed acquisition of Energy East this month in Albany.

The proposed $4.5 billion takeover of Energy East Corp. by Iberdrola SA of Spain will come before the NY PSC on August 20 and 27, 2008, the PSC announced Friday.

Energy East is the parent of Rochester Gas and Electric Corp. and New York State Electric and Gas Corp., both headquartered in Rochester.

Iberdrola, a big international utility that specializes in wind energy development, proposed the acquisition of Energy East in June 2007. The deal has been approved by the federal government and by other states where Energy East does business.

New York’s consideration of the deal has been drawn out for months by disagreements between the PSC staff and Iberdrola. Foremost among the issues: Iberdrola’s ownership of wind farms in Energy East’s service territory, which the PSC staff opposes because control of both power generation and distribution might stifle competition and how much rate relief Iberdrola should give to RG&E and NYSEG customers.

Because of continuing disagreement, the PSC staff has recommended against approving the acquisition.

The August 20, 2008 PSC session is a regular meeting of the five-member board, while the August 27, 2008 session is a special meeting. Both will be at PSC offices in Albany.

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Gamesa Sees First-half Net Profits Soar

AFP, July 29, 2008

MADRID (AFP) — Spanish wind turbine maker Gamesa Energia, a sector leader, said on Tuesday its net profits soared during the first-half at a time when record high oil prices are fueling interest in alternative energy sources.

The company posted a comparable net profit of 93 million euros ($146 million US) during the first six months, a 69% increase on a directly comparable basis to the same time last year while pro-form first-half core earnings rose 43% to 235 million euros.

The results do not take into account the activity of Gamesa’s solar energy unit Solar which it sold to US private equity firm First Reserve in February for 261 million euros and the gains made with this operation.

When extraordinary gains from this operation are taken into account, net profit hit 198 million euros, a 314 percent increase over the same time last year, it said in a statement.

Sales rose in the first-half 34% to 1.88 billion euros.

In June the company signed a 6.3-billion-euro ($9.7 billion US) contract with a subsidiary of Spanish electricity generator Iberdrola Renewables to provide turbines for the company’s wind parks in Europe, Mexico and the United States.

Gamesa employs about 3,700 people across Europe, the United States, China and the Dominican Republic.

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NY Regulators: Make Iberdrola Commit to Wind Energy Development

JIM STINSON, Gannett News Service, July 2, 2008

The staff of the state Public Service Commission has again advised its five-member board to disapprove the $4.5 billion sale of Energy East Corp. to Iberdrola SA, but staffers have added a big “however” on wind farms.

In a brief filed in the long-running case, the PSC staff has offered alternatives if the five public service commissioners approve the sale, according to James Denn, PSC spokesman.

Iberdrola, the European utility giant and global leader in wind turbine farms, would be allowed to own and operate wind farms within Energy East territory, but with public benefits attached to the agreement.

The staff recommended that Iberdrola’s $2 billion proposal to invest in New York be tied to possible ratepayer rebates. The PSC staff said that to ensure the promise to build more wind farms in New York, the state could set aside $200 million of Iberdrola cash to be returned to ratepayers if the investment never happens.

The alternative proposal, known as Exception 6 in the PSC reply brief, comes after months of criticism and speculation regarding PSC’s opposition to letting Iberdrola buy Energy East.

Energy East owns Rochester Gas and Electric and New York State Electric & Gas. Iberdrola’s plans to keep and build wind farms in the service area have brought controversy but also support from public officials and environmentalists.

The PSC has disallowed distributors of electricity from owning sources of electricity.

In a June 16 ruling by Administrative Law Judge Rafael Epstein, the five-member board of the PSC was encouraged to disapprove the deal, a decision which backed up PSC staff but brought howls from such leaders as Sen. Charles Schumer, D-N.Y.

“Done correctly, this merger can reduce costs and make New York a leader in providing clean, cheap wind power,” Schumer said. “The acquisition can reduce rates for customers and help to create jobs and billions of dollars of investment in upstate New York. I am glad the PSC staff has recognized this win-win-win, and hope the PSC Commissioners will quickly follow suit.”

Energy East made the offer in May 2007.

Iberdrola officials said the Madrid-based company would walk away from the bid if New York enforced the rule.

The sale of Energy East has already been approved by the federal government and every other state Energy East operates in.

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Iberdrola & Tecnalia to Develop Basque Wave Energy

Datamonitor, June 16, 2008

Spanish utility major Iberdrola and diversified technology group Tecnalia Corporacion Tecnologica have announced an agreement to develop the Oceantec wave energy project in the Basque Country of Spain, with the goal of putting into operation a high-performance wave energy device at a competitive cost.

This initiative, which is expected to stimulate industrial development in the Basque Country, will involve a joint investment of around E4.5 million with expectations that the device will be built and pass testing in 2009.

Iberdrola will participate in Oceantec through Perseo, its equity investment company. With an annual budget of E6 million, its principal objective is to support high technology projects in renewable energy and the environment.

Perseo will analyze initiatives and companies that are planning new ways of exploiting renewable energy, and of maximizing performance and cost. It will focus among other things on marine energy, where Iberdrola is already active in developing wave energy projects in Santona, Spain, and the Orkneys, Scotland.

Perseo will seek also to identify investment opportunities for Iberdrola in biotechnology that can provide solutions in the context of new fuel sources and CO2 capture. The launch of Perseo seeks to intensify Iberdrola’s role in new technology, with the new strategic plan for 2008-10 assigning E225 million to research and innovation.

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Iberdrola Warns of Reconsideration on Energy East

KELLY HARRINGTON, SNL Interactive, June 18, 2008

Spanish utility Iberdrola SA will reconsider its proposed acquisition of Energy East Corp. should New York regulators “impose unacceptable” conditions on the deal, the company said.

The company’s statement comes a day after Administrative Law Judge Rafael Epstein recommended that the Public Service Commission not approve the deal. The proposal, he wrote, “does not satisfy the ‘public interest’ requirement of Public Service Law.” However, if the PSC decides to approve the deal, Epstein said it should do so with several conditions, including one for Iberdrola and its affiliates to exit the generation business in New York.

An Iberdrola spokesman June 17 said the administrative law judge has issued a recommendation and not a ruling and that the company hopes there will be a positive outcome when the full commission makes its decision.

“We hope that will be next month at the July session,” he said.

Iberdrola’s main areas of concern with the recommended decision are the provisions pertaining to the recommended level of “positive benefit adjustments,” and one that would preclude Iberdrola from owning, operating or developing renewable energy that would be interconnected with Energy East’s New York subsidies New York State Electric & Gas Corp. and Rochester Gas and Electric Corp.

Iberdrola has outlined a business plan to invest $2 billion in wind energy development in New York, some of which would be connected to those utilities’ systems, he said.

“As Iberdrola Chairman Ignacio Sánchez Galán has said, Iberdrola will reconsider this transaction and seek other options in the United States if the final PSC ruling imposes unacceptable conditions on the transaction in these two key areas,” he said.

In his recommendation, Epstein said that NYSEG and RG&E customers should be credited with positive benefit adjustments of $646.4 million, including $201.6 million initially upon completion of the merger transaction. This would result in NYSEG and RG&E delivery rate reductions of $54.8 million, or 4.4%, initially, according to the recommendation.

Iberdrola in June 2007 said it would acquire Energy East, including its operations in New York, Maine, Connecticut, New Hampshire and Massachusetts, for about $4.5 billion. Including the assumption of debt, the transaction is valued at about $8.5 billion.

FERC and regulators from Connecticut, Maine and New Hampshire have already approved the deal. New York regulators have yet to rule on the proposal. During the review process Department of Public Service staff have outlined concerns about the deal.

New York Gov. David Paterson also weighed in on the recommendation. In a June 17 statement, Paterson said the PSC is not bound to the recommended decision. The governor said he trusts that the commission will keep in mind “significant statewide and ratepayer benefits” from the deal, including Iberdrola’s plan to invest $2 billion in wind energy and its pledge to offer $200 million in ratepayer benefits.

“Although this amount is less than suggested by the administrative law judge, I hope the commission will not let the perfect be the enemy of the good when it comes to ratepayer benefits,” Paterson said. “I look forward to a discussion of benefits in a broader context to capture the full range of future opportunities this acquisition can bring about. Creative solutions to address the issues surrounding utility ownership of limited wind resources can be found and defining ratepayer benefits more broadly to encompass capital investments in clean energy are among the things the commission should look at in deciding to let this important acquisition move ahead.”

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Iberdrola’s Bid for New York Utility Hits a Hurdle

NICHOLAS CONFESSORE, International Herald Tribune, June 17, 2008

ALBANY: An administrative law judge advised state regulators on Monday to block a Spanish energy conglomerate’s bid to buy Energy East, a Maine-based utility with operations in four states, including New York, citing anticompetitive concerns.

The recommendation by the judge, Rafael Epstein, largely sided with an earlier recommendation by staff members of the Public Service Commission, which must approve the acquisition of Energy East by the conglomerate, Iberdrola. The commission’s five-member board will have the final say.

Iberdrola’s bid has the enthusiastic support of key members of the state Legislature and U.S. Senator Charles Schumer, Democrat of New York, who point to the company’s plan to invest at least $2 billion in building wind power facilities in New York if it is permitted to acquire Energy East, which is the parent company of two other utilities in upstate New York and already owns wind turbine facilities. Governor David Paterson also says he supports the deal as long as Energy East’s customers are protected from unfair pricing.

But regulators say that the merger would give Iberdrola a virtual monopoly on wind power generation in the state while also providing the company with transmission and distribution lines, running afoul of state laws that prevent the generation, transmission and distribution of power by a single company.

In his decision, Epstein noted that “Iberdrola’s wind generation ownership also has engendered an unusual amount of commentary by editorial boards and public officials, uniformly opposing ownership restrictions as contrary to the state’s interests and even ‘stone-headed.”‘

But he appeared unpersuaded by Iberdrola’s promise of investment, writing that “the economic benefits of competition are no less real than an immediate infrastructure investment.”

Epstein also recommended that the board impose numerous conditions on Iberdrola, should it ultimately approve the sale. They include limits on the company’s ownership of electric generating plants in New York and rebates worth hundreds of millions of dollars to customers of the companies being acquired.

A spokesman for Iberdrola said the company was reviewing the judge’s recommendation.

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Iberdrola’s Stalled Sale Seeks Power From Wind

NICOLAS CONFESSORE, The New York Times, June 4, 2008

ALBANY — One of the world’s largest energy companies proposed on June 3rd to build hundreds of wind turbines in New York, significantly raising the stakes in a nine-month battle with state regulators over its intended purchase of a power company.

Executives of the company, Iberdrola S.A., of Spain, said it would invest $2 billion in wind turbines upstate if the state’s Public Service Commission, which regulates utilities in New York, approves its purchase of Energy East, which has three million customers in five states, including New York. The new turbines would more than double state energy production from wind and make New York one of the larger producers of wind power in the country.

“Iberdrola has helped many countries meet their renewable energy goals and benefit from our high-tech investments and ‘green-collar’ jobs that result from this kind of investment,” said Xabier Viteri, the chief executive of Iberdrola’s renewable energy division.

The purchase of Energy East has been approved by federal regulators and officials in other states. But in New York, where Energy East owns two utilities, Rochester Gas & Electric and New York State Electric & Gas, Iberdrola has run afoul of state rules meant to discourage what is known as vertical market power, when a single company owns power-generating plants as well as transmission and distribution lines.

In negotiations over the last several months, the commission staff has extracted several concessions out of Iberdrola, including a promise of $201 million in rate subsidies to existing Energy East customers to ensure that they do not pay more for electricity as a result of the sale.

But the commission staff is also insisting that Iberdrola agree to sell off Energy East’s existing wind turbine facilities, arguing that owning them would violate the vertical power rules.

An administrative law judge is expected to issue a recommendation on the deal within weeks, though neither the judge’s recommendations nor those of the commission staff are binding on the five-member commission itself.

James Denn, a spokesman for the commission, said the added investment would not allay the commission’s concern, adding, “On this deal, they would be able to produce, transmit, and distribute power within their region.” . Mr. Denn also noted that Iberdrola had not formally submitted the new proposal to the commission; the current plan has the company making only a binding commitment of $100 million worth of investment in the state.

The commission staff also wants Iberdrola to increase the subsidies, known as ratepayer benefits, to $644 million, as well as to agree to provisions in the merger that would insulate any New York facilities from potential financial problems at Iberdrola.

Iberdrola is one of several foreign-owned energy companies that have entered the United States market, where rising gas prices and a spate of state laws requiring more energy from renewable sources have made wind, solar and hydroelectric power increasingly attractive.

The company’s acquisition of Energy East — and the promise of clean power in an era of high demand — has drawn support from leading business and environmental groups, as well as lawmakers of both parties, though the state power producers association has filed a brief supporting the commission staff.

In a statement on Tuesday, Senator Charles E. Schumer urged the commission to allow Iberdrola to acquire Energy East without divesting its wind power holdings, while keeping careful watch on whether rates increased as a result. Mr. Schumer and some other critics believe that the rules against simultaneous production, transmission and distribution, which date back to efforts in the 1990s to break up the state’s energy market, have failed to help lower energy costs.

“The Public Service Commission ought to get out of the way when it comes to investing in renewable power, and instead concentrate on making sure consumers don’t get burned by rate hikes as a result of this merger,” Mr. Schumer said in a statement.

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Iberdrola, Gamesa Creating Strategic Company and Largest Turbine Supply Deal

MendoCoastCurrent, June 13, 2008

Iberdrola Renewables and Gamesa Energia have signed the largest turbine supply contract ever in the wind power industry representing a total capacity of 4,500 megawatts (MW), for delivery between 2010 and 2012. The investment for wind power projects to which the turbines will be assigned is approximately €6.3 billion, a figure that includes the turbines and other costs such as transport, civil works and interconnections, both those at the wind farms themselves and to the grid.

Under the terms of the agreement, Iberdola will assign the turbines to its wind power projects in Spain, the rest of Europe, the United States and Mexico. The contract covers installation and startup of the turbines, as well as operational services and maintenance during the life of the guarantee.

As a result of this important agreement, Iberdola will be able to meet its turbine supply needs during the coming years for its wind power project portfolio, which currently stands at 43,280 MW, not including projects to be incorporated from Gamesa, and thereby avoid one of the major uncertainties in this business by assuring the installation of a significant portion of its projects for the medium term. More than 70% of its requirements will thus be met up to 2012.

The dimensión of this contract, the largest turbine supply agreement ever signed, has enabled the Company to achieve optimum pricing and conditions. It follows another signed with the same company in 2006 for 2,700 MW in capacity, and those signed recently by Iberdrola with General Electric (300 MW), Mitsubishi (300 MW), Suzlon Wind Energy Corporation (700 MW) and Ecotècnia (310 MW).

Strategic Agreement to Develop Wind Farms

Iberdrola Renewables and Gamesa Energía have also signed a strategic agreement to pool their businesses in promotion, development and exploitation of wind farms in Spain and continental Europe, which will increase its potential for future development and growth. For this purpose, they are creating two joint companies, one in Spain and the other abroad, to which they will assign the businesses of promotion, development and exploitation in those territories from the closing of the agreement.

In Spain, Iberdrola will hold 77% of the new company operating there and Gamesa 23%, while in the other international company the shareholdings will be 76% and 24%, respectively.

The strategic agreement, subject to the corresponding approvals from the competition authorities, establishes that Gamesa can increase its shareholding in the Spanish company up to 32% in relation to the number of additional megawatts that correspond to new wind farms adjudicated to it after the agreement takes effect.

Iberdrola and Gamesa have agreed to not sell their stakes before 31 December 2010, and from 1 January 2011, through a mechanism of matching options, Iberdrola will have the option to buy from Gamesa Energía its shareholding in the joint companies envisaged under the agreement and Gamesa Energía can sell its stake in these companies Iberdrola.

In the event that Iberdrola decides to sell its total shareholding in any of the companies from 1 January 2011, the Company has granted Gamesa Energía a joint transmission right to third parties (tag along) and a first option right, subject to certain conditions.

At the same time, the Company will within one month buy Gamesa’s wind power projects in the United Kingdom, Mexico and the Dominican Republic, with a total capacity of 900 MW, for approximately €65 million.

This agreement reflects the two companies’ interest in jointly developing wind power projects, given their experience and know-how in the sector and the advantages of pooling their respective businesses. The complementary nature of their businesses will favour greater creation of value for shareholders of the two companies.

The goal of this agreement is to bring together the two world leaders in wind farm development and consolidate their positioning in existing markets and in those identified in the strategic alliance. Iberdrola will be able to enter new markets where established businesses exist, minimizing the risks relating to geographical diversification, maximizing value creation and achieving economies of scale.

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The Coming Wave

The Economist, June 5, 2008

You only have to look at waves pounding a beach, inexorably wearing cliffs into rubble and pounding stones into sand, to appreciate the power of the ocean. As soaring oil prices and concern over climate change give added urgency to the search for new, renewable sources of energy, the sea is an obvious place to look. In theory the world’s electricity needs could be met with just a tiny fraction of the energy sloshing around in the oceans.

Alas, harnessing it has proved to be unexpectedly difficult. In recent years wind farms have sprouted on plains and hilltops, and solar panels have been sprinkled across rooftops and deserts. But where the technology of wind and solar power is established and steadily improving, that of wave power is still in its infancy. The world had to wait until October 2007 for the first commercial wave farm, consisting of three snakelike tubes undulating with the Atlantic swell off the coast of Portugal.

In December Pacific Gas & Electric, an American utility, signed an agreement to buy electricity from a wave farm that is to be built off the coast of California and is due to open in 2012. Across the world many other wave-power schemes are on the drawing board. The story of wave power, however, has been one of trials and tests followed by disappointment and delays. Of the many devices developed to capture wave energy, none has ever been deployed on a large scale. Given wave power’s potential, why has it been so hard to get the technology to work—and may things now be about to change?

The first patents for wave-power devices were issued in the 18th century. But nothing much happened until the mid-1970s, when the oil crisis inspired Stephen Salter, an engineer at the University of Edinburgh, in Scotland, to develop a wave generator known as Salter’s Duck. His design contained curved, floating canisters, each the size of a house, that would be strung together and then tethered to the ocean floor. As the canisters, known as Ducks, were tossed about by the waves, each one would rock back and forth. Hydraulics would convert the rocking motion to rotational motion, which would in turn drive a generator. A single Duck was calculated to be capable of generating 6 megawatts (MW) of electricity—enough to power around 4,000 homes. The plan was to install them in groups of several dozen.

Initial estimates put the cost of generating electricity in this way at nearly $1 per kilowatt hour (kWh), far more than nuclear power, the most expensive electricity at the time. But as Dr Salter and his team improved their design, they managed to bring the cost-per-kWh down to the cost of nuclear power. Even so, the research programme was shut down by the British government in 1982. The reasons for this were not made public, but it is widely believed to have happened after lobbying by the nuclear industry. In testimony to a House of Lords committee in 1988, Dr Salter said that an accurate evaluation of the potential of new energy sources would be possible only when “the control of renewable energy projects is completely removed from nuclear influences.”

Salter’s Duck never took to the seas, but it sparked interest in the idea of wave power and eventually helped to inspire other designs. One example is the Pelamis device, designed by some of Dr Salter’s former students, who now work at Pelamis Wave Power, a firm based in Scotland. Three such devices, each capable of generating up to 750kW, have been deployed off the coast of Portugal, and dozens more are due to be installed by 2009. There are also plans for installations off Orkney in Scotland and Cornwall in England.

As waves travel along the 140-metre length of the snakelike Pelamis, its hinged joints bend both up and down, and from side to side. This causes hydraulic rams at the joints to pump hydraulic fluid through turbines, turning generators to produce electricity. Pelamis generators present only a small cross-section to incoming waves, and absorb less and less energy as the waves get bigger. This might seem odd, but most of the time the devices will not be operating in stormy seas—and when a storm does occur, their survival is more important than their power output.

Oh Buoy

The Aquabuoy, designed by Finavera Renewables of Vancouver, takes a different approach. (This is the device that Pacific Gas & Electric hopes to deploy off the California coast.) Each Aquabuoy is a tube, 25-metres long, that floats vertically in the water and is tethered to the sea floor. Its up-and-down bobbing motion is used to pressurise water stored in the tube below the surface. Once the pressure reaches a certain level, the water is released, spinning a turbine and generating electricity.

The design is deliberately simple, with few moving parts. In theory, at least, there is very little to go wrong. But a prototype device failed last year when it sprang a leak and its bilge-pump malfunctioned, causing it to sink just as it was due to be collected at the end of a trial. Finavera has not released the results of the trial, which was intended to measure the Aquabuoy’s power output, among other things. The company has said, however, that Aquabuoy will be profitable only if each device can generate at least 250kW, and that it has yet to reach this threshold.

Similar bobbing buoys are also being worked on by AWS Ocean Energy, based in Scotland, and Ocean Power Technologies, based in Pennington, New Jersey, among others. The AWS design is unusual because the buoys are entirely submerged; the Ocean Power device, called the PowerBuoy, is being tested off the coast of Spain by Iberdrola, a Spanish utility.

The Oyster, a wave-power device from Aquamarine Power, another Scottish firm, works in an entirely different way. It is an oscillating metal flap, 12 metres tall and 18 metres wide, installed close to shore. As the waves roll over it, the flap flexes backwards and forwards. This motion drives pistons that pump seawater at high pressure through a pipe to a hydroelectric generator. The generator is onshore, and can be connected to lots of Oyster devices, each of which is expected to generate up to 600kW. The idea is to make the parts that go in the sea simple and robust, and to keep the complicated and delicate bits out of the water. Testing of a prototype off the Orkney coast is due to start this summer.

The logical conclusion of this is to put everything onshore—and that is the idea behind the Limpet. It is the work of Wavegen, a Scottish firm which is a subsidiary of Voith Siemens Hydro, a German hydropower firm. A prototype has been in action on the island of Islay, off the Scottish coast, since 2000. The Limpet is a chamber that sits on the shoreline. The bottom of the chamber is open to the sea, and on top is a turbine that always spins in the same direction, regardless of the direction of the airflow through it.

As waves slam into the shore, water is pushed into the chamber and this in turn displaces the air, driving it through the turbine. As the water recedes, air is sucked back into the chamber, driving the same turbine again. The Limpet on Islay has three chambers which generate an average of 100kW between them, but larger devices could potentially generate three times this amount, according to Wavegen. Limpets may be built into harbour breakwaters in Scotland and Spain.

Dozens of wave-energy technologies are being developed around the world: ideas, in other words, are not what has held the field back. So what has? Tom Thorpe of Oxford Oceanics, a consultancy, blames several overlapping causes. For a start, wave energy has lagged behind wind and solar, because the technology is much younger and still faces some big technical obstacles. “This is a completely new energy technology, whereas wind and photovoltaics have been around for a long time—so they have been developed, rather than invented,” says Mr Thorpe.

The British government’s decision to shut its wave-energy research programme, which had been the world’s biggest during the 1970s, set the field back nearly two decades. Since Britain is particularly well placed to exploit wave energy (which is why so many wave-energy companies come from there), its decision not to pursue the technology affected wave-energy research everywhere, says Mr Thorpe. “If we couldn’t do it, who could?” he says.

Once interest in wave power revived earlier this decade, practical problems arose. A recurring problem, ironically enough, is that new devices underestimate the power of the sea, and are unable to withstand its assault. Installing wave-energy devices is also expensive; special vessels are needed to tow equipment out to sea, and it can be difficult to get hold of them. “Vessels that could potentially do the job are all booked up by companies collecting offshore oil,” says Trevor Whittaker, an engineer at Queen’s University in Belfast who has been part of both the Limpet and Oyster projects. “Wave-generator installation is forced to compete with the high prices the oil industry can pay.”

Another practical problem is the lack of infrastructure to connect wave-energy generators to the power grid. The cost of establishing this infrastructure makes small-scale wave-energy generation and testing unfeasible; but large-scale projects are hugely expensive. One way around this is to build a “Wave Hub”, like the one due to be installed off the coast of Cornwall in 2010 that will provide infrastructure to connect up wave-energy arrays for testing.

Expect Flotations

But at last there are signs of change. Big utilities are taking the technology seriously, and are teaming up with wave-energy companies. Venture-capitalists are piling in too, as they look for new opportunities. Several wave-energy companies are thought to be planning stockmarket flotations in the coming months. Indeed, such is investors’ enthusiasm that Mr Thorpe worries that things might have gone too far. A big failure could tarnish the whole field, just as its prospects look more promising than ever.

Whether one wave-energy device will dominate, or different devices will suit different conditions, remains to be seen. But wave energy’s fortunes have changed. “We have to be prepared for some spectacular failures,” says Mr Thorpe, “but equally some spectacular successes.”

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Iberdrola to Invest $8B in U.S. Renewable Energy

CRAIG RUBENS, earth2tech/GigaOM, May 19, 2008

Iberdrola Renewables, one of the largest owners and operators of renewable energy facilities in the world, announced yesterday its plans to invest $8 billion in American renewable energy by 2010. A large part of the money will go to expanding Iberdrola’s wind energy capacity, but the company also said it intends to invest elsewhere in American clean energy.

The company says it already operates 2,400 megawatts of wind turbines in the United States with plans to boost that to 3,600 megawatts by the end of the year. The company says it aims to control a 15% share of the American wind industry by 2010, and is already the world leader in installed wind capacity with over 7 gigawatts of installed capacity. Iberdrola jumped ahead of the former leader, Florida-based FPL Energy, last year with the help of an extra 1.45 gigawatts it acquired when it bought ScottishPower’s wind assets.

Iberdrola’s big move into U.S. wind is part of a growing trend of foreign firms buying into the U.S. wind boom. According to Clean Edge, Iberdrola’s North American headquarters in Randor, Penn., has plans for 22,000 megawatts of new wind power in the U.S.

With Iberdrola’s new investment, perhaps America can achieve the potential for wind to power 20% of the U.S. by 2030, an ambitious scenario proposed by the Department of Energy’s recent report.

But beyond wind, what are Iberdrola’s other clean energy intentions? The company is no stranger to solar thermal installations, with projects in Spain and Egypt, and it could become yet another big power player moving into the American southwest. The company has also started to dabble in wave energy with PowerBuoys from Ocean Power Technologies. Meanwhile, Iberdrola’s acquisition of ScottishPower gave it more hydroelectric assets, further diversifying its portfolio.

While Iberdrola says it will invest the bulk of the money in wind, it’s clear the company could make a big play in a variety of other sectors as well. Iberdrola Chairman Ignacio Sanchez Galan said he sees the United States as Iberdrola’s most exciting market. And we’re sure many of the cleantech startups will be eagerly looking to form partnerships.

Thank you earth2tech for this article!

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Iberdrola Renewables Begins Testing Wave Energy in Spain

Green Car Congress, March 10, 2008

Iberdrola Renewables has begun the testing of a wave energy pilot plant in Santoña, Cantabria, Spain which will become the first of this kind to be installed in Europe.

The company has begun on-shore testing of the operation of the internal components of the first PowerBuoys from Ocean Power Technologies (OPT). OPT’s PowerBuoy wave generation system uses the rise and fall of waves to move a piston-like structure inside the buoy column to pump hydraulic fluid that drives a generator anchored on the ocean floor. Generated power is transmitted ashore via an underwater power cable.

The tests consist of the inspection of the components, evaluation of the individual functions of each of the systems and a final resistance test, in which the units are inter-connected and the real operating conditions the buoy will have to face in the sea are simulated, at varying surge intensities.

The company will conclude the buoy testing phase this month and then deploy of the buoy out to the sea, depending on weather conditions, with the goal of going operational the first half of this year.

The installation will be located four kilometers from the coast of Santoña and will comprise 10 buoys. In a first phase a 10-meter, 40 kW buoy will be anchored to the seabed some 50 meters down. The remaining nine buoys, planned for a later phase, will have an initial capacity of 125 kW. When all 10 buoys are in operation, the electricity produced will be the approximate equivalent to the domestic consumption of some 2,500 homes.

The joint company that is developing the plant, named Iberdrola Energías Marinas de Cantabria, S.A., is owned by the Iberdrola Renewables (60%), TOTAL (10%), OPT (10%), the IDEA Institute for Energy Diversification and Savings (10%), and the Sodercan Cantabria Development Society (10%). The budget for the first phase, which includes the marine electrical infrastructure, comes to some €3 million (US$4.6 million).

In addition to the Santoña Wave Energy Project, Iberdrola is developing a wave energy plant off the Orkney islands in the north of Scotland, which will become the world’s largest by installed capacity (3 MW). This complex will comprise four floating Pelamis generators with a capacity of 750 kW each.

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Clean Tech Investments Reach New Apex

San Francisco, CA January 17, 2008

$5.18 Billion Over 2007 & Sixth Consecutive Year of Growth; Q407 with 100 Percent Year-Over-Year

The Cleantech Group™, LLC, released today YE2007 and Q407 results for Clean Tech investments indicating the sixth consecutive year of sustained investment growth.

North America (NA) and Europe produced stronger than expected growth in Q407, with total Clean Tech investment across the regions more than doubling year-over-year, from $676 million in Q406 to $1.38 billion in Q407. This brings the level of venture investment in NA and Europe for 2007 to $5.18 billion and historical results for the Clean Tech category as:

2007: $5.18 billion
2006: $3.6 billion
2005: $2.5 billion
2004: $1.8 billion
2003: $1.7 billion
2002: $899 million
2001: $714 million

NA Clean Tech investing in 2007 grew by 38 percent, from $2.87 billion invested in 2006 to $3.95 billion invested in 2007. The number of deals increased by 15 percent, from 233 in 2006 to 268 in 2007. The average deal size increased by 20 percent, from an average of $12.3 million in 2006 to $14.7 million in 2007.

European Clean Tech investing grew by 34 percent, from $915 million in 2006 to $1.23 billion in 2007. The number of deals increased by 56 percent, from 67 in 2006 to 105 deals in 2007. Average deal size in Europe increased by 26 percent from $7.8 million in 2006 to $9.8 million in 2007 (excluding the outliers of the $395 million Airtricity financing in 2006 and the $205 million Isofoton financing in 2007).

North American companies continue to receive the lion’s share of Clean Tech venture investing, with North American-based companies receiving over 3x the investment of European-based companies.

“Despite strong headwinds building in the global economy and tightening credit markets, the medium and long-term value propositions for Clean Tech opportunities sustained the sixth consecutive year with unexpectedly robust growth,” said Nicholas Parker, co-founder and Chairman, Cleantech Group™. “High carbon-based energy prices, global resource competition and increasingly favorable policy frameworks provide stronger than ever fundamental drivers for cleantech investors, and we foresee continued growth over 2008 as the Clean Tech market cycle moves from early adoption to mainstream driver of wealth and job creation.”

2007 Top Five Clean Tech Investment Sectors

The Clean Tech investment category is composed of 11 industry segments. Over 2007, the top five categories by total financings were:

Energy Generation: $2.75 billion; 172 deals
Energy Storage: $471 million; 20 deals
Transportation: $445 million; 20 deals
Energy Efficiency: $356 million; 41 deals
Recycling & Waste: $291 million; 17 deals

Energy Generation remained the forerunner over 2007. Within the NA and European markets, companies based in California received the majority of financing, representing $966 million, a 38 percent increase over 2006 levels.

In Energy Storage, the highest percentage of financings went to companies in the Northeastern United States, receiving $208 million, up from $39 million the year before. In Recycling and Waste, companies based in Western Europe received the largest percentage of total financings at $81 million, up from $17 million in 2006.

Five Largest Clean Tech Rounds in 2007 – Company Country Amount $(mil)

Isofoton SA Spain 205
Brazilian Renewable Energy Co., Ltd. Brazil 200
Project Better Place US 200
Yingli Green Energy Holding Co. Ltd. China 118
HelioVolt Corp US 101

The number of $100 million or larger rounds increased over 2006 levels, indicating increased investor confidence in the category, while 8 of the top ten solar financing rounds since 1999 occurred in 2007. Related in the solar market, a significant drop in the price of materials for silicon PV solar could come in 2008 due to increased refining capacity coming on-line over 2008-2010 timeframe.

China, India, Brazil and Australia

With results for China, India, Brazil and Australia, preliminary results show continued and significant investment growth in 2007. In addition to three successful crystalline silicon IPOs, China attracted investor interest for solar companies, including Yingli Green Energy Holding Co. Ltd., which received $118 million, and Shunda Holdings Co. Ltd., which received $82 million. In India, the top three Clean Tech investments included solar company Moser Baer Photo Voltaic Ltd. with $100 million and wind companies Vestas RRB India Ltd at $55.6 million and Regen Powertech Private Ltd. with $25 million. Interest in the Southern Hemisphere is also increasing, with Brazil securing the largest deal with a $200 million round for sugarcane ethanol-producer, Brazilian Renewable Energy Co.

Public Markets and M&As

The Cleantech Index™ (CTIUS), composed of 47 leading Clean Tech public companies across the full range of sectors within the Clean Tech category (including energy efficiency and renewable energy to advanced materials, air & water purification, water and agriculture), rose 42 percent over 2007. Top IPOs tracked included Iberdrola Renovables in Spain, Cosan Ltd. in Brazil, Polypore Intl Inc. in the U.S., and LDK Solar, Yingli Green Energy Holding Co. and JA Solar Holdings Co., all Chinese crystalline silicon photovoltaics producers. Unlike prior years, the majority of large IPOs shifted from Europe to US exchanges.

Top Clean Tech acquisitions closed in 2007 included targets Horizon Wind Energy LLC (US), SULO GmbH (Germany), Actaris Metering Systems Ltd (Germany), Metal Management Inc. (US), and Airtricity North America (US). The combined value of the M&A transactions was $8.76 billion.

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Ocean Power Technologies & Converteam Sign Agreement

BusinessWire on October 30, 2007

Ocean Power Technologies, Inc (OPT) is pleased to announce that OPT and Converteam Ltd have signed a Cooperation Agreement for the development of High Temperature Superconductor (HTS) Linear Generators for use in OPT’s PowerBuoy(R) wave energy converters. Under the agreement OPT and Converteam will jointly develop the technology on an exclusive basis for at least five years, including investigating commercial opportunities and potential customers for the HTS linear generator PowerBuoys.

OPT is a leading wave energy technology developer with major PowerBuoy projects in Spain, the UK and the US with customers and partners including Iberdrola, TOTAL and the US Navy. In parallel with commercial deployments of current PowerBuoy products, OPT is continually developing enhancements, such as linear generators, that can deliver a lower cost of energy supplied.

Converteam is also a major supplier to the US Navy, renewables, marine and industrial markets, specialising in the development, design and supply of electrical motors and generators, power converters and cryogenic systems. It has established a leading position in the wind power market and intends to build a similar position in the wave energy market. The proposed power take-off for the OPT PowerBuoy will employ Converteam’s innovative and proprietary linear generator system with high temperature superconductors to provide the magnetic field.

The vision of the two companies is the direct conversion of the linear up and down motion of waves into electricity using OPT’s PowerBuoy and Converteam’s HTS linear generator. This system is expected to have the advantage of improved efficiency, reliability and maintainability over traditional power take-off or linear permanent magnet based systems. Life Cost Analysis predicts that the use of high temperature superconductors provides the necessary magnetic field at much lower cost and weight than conventional linear permanent magnet generators. The flexibility and scalability of the PowerBuoy makes it the ideal product for the introduction of linear power take-off solutions. Integrating Converteam’s linear HTS technology into OPT’s conventional PowerBuoy structure will provide a wave energy converter with increased energy capture.

Dr. George W. Taylor, Chief Executive Officer of OPT, said: “In addition to our on-going commercialization of the existing PowerBuoy system, OPT continues to investigate promising technologies. We are delighted to formalise our relationship with Converteam to develop a new ‘state of the art’ power take-off system. A linear HTS generator installed in our PowerBuoys has the potential to deliver significant reductions in the cost of wave generated electricity. OPT is very excited about the prospects for the HTS technology.”

Converteam Ltd’s Technology Director, Derek Grieve said: “HTS offers a linear generator of unprecedented power density and efficiency enabling significantly more energy to be converted to electrical power. Converteam already has ongoing HTS projects in hydro, marine and wind. These are all migrating to second generation HTS wire which has a much higher flux density, lower cost and operates at higher temperatures than first generation wires allowing the use of a cheap coolant medium. HTS is a truly disruptive technology the advantages of which will radically change wave energy capture. Converteam is looking forward to working with OPT on this exciting and challenging new project.”

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