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Wave Power Attracts Investors by Vaughan Scully Business Week, August 27, 2007

Energy from the ocean-more predictable than wind or solar power
is being tested in various ways on an international drawing board

Anyone who has ever been swimming in the ocean knows the awesome power of waves: They can toss large boats about like bathtub toys even during mild weather, or crush buildings to bits during storms. As oil prices rise and concerns over the environmental consequences of burning fossil fuels keep growing, more companies are becoming interested in capturing the energy contained in those massive walls of water to help meet the ever-rising demand for electric power.

Although there are companies currently working on devices to capture the power of waves, their technologies are not nearly as refined as those for wind and solar power. They are beginning to attract the interest of large electric utilities and industrial equipment manufacturers hoping to cash in if wave power becomes commercially viable.

The utility Pacific Gas & Electric (PCG) announced plans in February to test the commercial feasibility of wave power at two sites on the northern coast of California. PG&E said it would assess the offerings of at least three prominent wave power vendors-Princeton (N.J.)-based Ocean Power Technologies, Vancouver-based Finavera Renewables, and Ocean Power Delivery of Edinburgh, Scotland. Two other companies, Sydney-based Oceanlinx and Wavegen of Inverness, Scotland, are also actively involved in wave power projects.

Making Waves

Wave power is much more predictable than either wind or solar energy: Wave patterns can be accurately forecast three days in advance. Also, because the energy in waves is highly concentrated, large, landscape-marring facilities are not needed. The downside to wave power is that it is unknown whether these devices can withstand the harsh environments where wave power is strongest.

Ocean Power Technologies (OPTT) has invented a device it calls the PowerBuoy, a floating buoy anchored to the sea, which moves up and down with the waves to drive a shaft connected to a generator. Iberdrola hired the company to build and operate a small wave power station off Santona, Spain, and is talking with French oil major Total (TOT) about another wave energy project off the French coast. It is also working on projects in England, Scotland, Hawaii, and Oregon.

Ocean Power Delivery is privately held, but has several deep-pocketed backers, including General Electric (GE) and Norwegian oil giant Norsk Hydro (NHY). It offers the Pelamis, a long, snake-like structure of floating steel tubes linked by hinged joints. Waves that move along the device cause the joints to move and drive hydraulic fluid that turns a generator. The company's flagship project is a wave farm off Agu�adoura, Portugal, in partnership with a unit of Spanish utility Endesa (ELE) that it plans to develop into a full commercial-scale power supplier by the end of 2007. The Pelamis is also being studied for use by Chevron (CVX), which has applied to build a wave power facility off the coast of Northern California.

Beachfronts and Buoys

Wavegen is a unit of Voith Siemens Hydro Power Generation, a joint venture between Voith and Siemens. Wavegen's device is known as an oscillating water column, which is normally sited at the shoreline rather than in open water. An enclosure is built with a roof on which a fan is mounted. Waves entering the enclosure force air upwards through the fan, which turns the generator. A small facility is already connected to the Scottish power grid, and the company is working on another project in Northern Spain.

Finavera Renewables has projects in Oregon and Washington states, Portugal, Canada, and South Africa using a buoy technology. Passing waves create an up-and-down motion for the buoy, which is used to create pressurized seawater that drives a generator. Its shares are listed on the Toronto Stock Exchange's Venture Exchange.

Australia's Oceanlinx offers an oscillating wave column design and counts Germany's largest power generator RWE as an investor. It has multiple projects in Australia and the U.S., as well as South Africa, Mexico, and Britain.