Ocean Power Technologies, Inc. (“OPT” or “the Company”), today announced that Victorian Wave Partners Pty Ltd (“VWP”), its project-specific operating entity wholly-owned by Ocean Power Technologies, Australasia (OPTA), has signed an agreement with the Australian Renewable Energy Agency (“ARENA”).
This agreement is a Deed of Variation to the original Funding Deed through which a A$66.5 million grant was previously awarded by the Commonwealth. The grant will be used towards the cost of building and deploying a 62.5MW peak-rated wave power station off the coast of Portland, Victoria.
Among the important changes included in the new agreement are the incorporation of milestones for each of the three stages of the project, acceleration of reimbursement of eligible expenses for stages one and two, and an increase in the number of milestones to better support project cash flow requirements. This agreement also recognizes the role of Lockheed Martin as the lead for systems integration of the PowerBuoys and overall program management.
Charles F. Dunleavy, Chief Executive Officer of OPT, said, “We are very grateful for the support of the Australian Government and ARENA during this process to make positive changes to the original Funding Deed. This new agreement significantly improves our ability to attract investors during the early stages of the project. We are also pleased to offer the prospect of manufacturing, engineering and maritime jobs in Victoria based on OPT’s unique and game-changing technology, at a time when more traditional manufacturing jobs are experiencing enhanced competitive pressures. We have been impressed with the commercial and results-oriented way in which ARENA has worked with us after assuming responsibility for a wide range of projects and programs last year.”
Ivor Frischknecht, Chief Executive Officer of ARENA, added, “We are pleased to support development of the VWP demonstration project. It aligns with our vision of a society increasingly powered by competitive renewable energy as well as our commitment to sharing knowledge and information about our projects with the industry.”
VWP was awarded the grant by the Commonwealth of Australia through a competitive process undertaken as part of the Renewable Energy Demonstration Program, which is administered by ARENA. The funding deed for the project sets out the terms of the grant including the requirement to obtain significant additional funding.
The planned Portland wave power station has a total project value of AU $232 million, and at completion would be the largest of its kind in the world. With twenty-eight PowerBuoys connected to the grid by an underwater substation and a submarine cable the plant would be capable of providing power for up to 10,000 homes. The project is being developed by VWP, a wholly owned subsidiary of Ocean Power Technologies Australasia Pty Ltd (“OPTA”), an Australian company owned by OPT (88%) and Woodside Energy Ltd (12%), Australia’s largest independent oil and gas company. Since the original announcement of the grant, VWP has completed engineering milestones and conducted surveys and studies to meet the requirements for licenses and approvals. In addition, the Company is currently assessing power purchase agreements with local industry and utilities.
Mr. Dan Tehan, Federal Member for Wannon in Victoria, stated that “Wave energy has enormous potential and it is fantastic that Portland has been chosen as the site for this renewable energy project.”
Press Release, January 14, 2014; Image: opt