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November 8, 2010

Wave power project moves forward

Ocean Power Technologies, Inc. (Nasdaq: OPTT) has signed a new contract with Japan's Mitsui Engineering & Shipbuilding covering development of OPT's PowerBuoy technology for application in Japanese sea conditions.

OPT's PowerBuoy wave generation system uses a "smart," ocean-going buoy to capture and convert wave energy into low-cost, clean electricity. The rising and falling of the waves offshore causes the buoy to move freely up and down and the resultant mechanical stroking is converted via a power take-off to drive an electrical generator. The generated power is transmitted ashore via an underwater power cable.

A 10 MW OPT power station would occupy only approximately 30 acres (0.125 square kilometers) of ocean space.

Under this new contract, the two companies will work together to develop a new mooring system for OPT's PowerBuoy, customized for wave power stations off the coast of Japan. The new system will undergo testing at MES's wave tank facilities to verify the results of extensive computer modeling. OPT expects to receive 18 million yen (approximately $220,000) for its development efforts. Work under this agreement is expected to be performed over the next six months.

In October 2009, OPT and a consortium of MES, Idemitsu Kosan Co., and Japan Wind Development Co. signed a Memorandum of Understanding for the development of wave energy in Japan. OPT and members of the consortium have since worked with the Japanese government to increase recognition of wave power in Japanese energy policy.

The Japanese government has pledged to target a 25 percent cut in greenhouse gas emissions from 1990 levels by 2020 as part of its intentions to boost renewable energy sources to about 10 percent of primary energy supply by 2020. The Japanese government has specifically targeted wave energy as a component of this strategy.

Now OPT and MES intend to complete work on the mooring system and find a project site for an in-ocean trial of the PowerBuoy system.

OPT's CEO, Charles F. Dunleavy, said: "We are very pleased to continue to build on our relationship with MES. This new agreement is consistent with OPT's global strategy to form alliances with strategic partners in key markets. We believe working with MES will facilitate the realization of the great potential of wave power as a concentrated and predictable source of renewable energy for Japan."

Ryoichi Jinkawa, Managing Director of the Business Development and Innovation Headquarters of MES, said: "We continue to be impressed with OPT's technical strength and in-ocean experience. MES is very excited by the great business opportunity resulting from our relationship with OPT. We look forward to continuing to work with OPT in making our common vision of increasing the use of renewable energy a reality.


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