The Povoa do Varzim, Portugal, off-shore electricity generation project based on Pelamis wave power machines has been put on hold following the collapse of one of its main financiers Babcock & Brown.
Opened in September last year amid much fanfare as a world first in producing electricity from wave power, this pioneering installation is, at least for now, dead in the water having functioned for only a few weeks in a stormy process of research and development
The first problems started to surface when the threex0.75 MW units had to be taken out of service almost immediately and dismantled because of technical problems. And now one of the main investors in the project, which had a start-up cost of nine million euros (12.3 million dollars), is bankrupt.
The structure, five km out to sea off off the coast of northern Portugal, was put into service officially in September by Economy Minister Manual Pinho after three years of development.
"The first project in the world for the commercial exploitation of wave energy" said the minister as he launched what was to be the beginning of a much larger venture, a so-called "wave park." A frigate of the Portuguese navy stood by to honour the event.
The project consisted of three units built like articulated sea snakes (“pelamis” means sea-snake) that float semi-submerged and undulate with the movement of the waves to generate current.
The units were taken ashore several times for technical checks but since November they have been lying inert in the northern port of Leixoes.
"There was a recurrent problem with the movements of the hydraulic screws in the three machines, and this is why they have been removed from deep water," said a spokeman for the company at the time. But later the problem was recognised as being more general, although still not specified.
Jorge Cruz, a senior executive in the group that is the main partner in the project, Morais Energias de Portugal, said that the machines had had a hard winter in maritime conditions, and had been brought ashore for repairs.
However what could be the final blow to the scheme has fallen with the collapse of one of its main investors, Australian investment group Babcock & Brown, which owns 35% of the Ondas de Portugal consortium, created to develop the system. EDP owns 45 % of the entity and Portuguese electrical engineering group Efacec 20 %. By September, at the launch of the Povoa project, B&B had already fallen victim to the worldwide credit squeeze as the extent of its indebtedness, and its difficulties in raising finance, led to a crash dive in its share price. Eventually its stock value fell to virtually zero against an indebtedness of A$9.6 billion. By January the the firm was on the verge of complete collapse after shareholders in New Zealand rejected a financial restructuring plan, forcing it into administration.
Meanwhile UK company Pelamis Wave Power, the technology provider for the Povoa project, has announced the signing of a contract with E.ON UK to develop a similar project in Scotland using a new generation of power converters.
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