Seatricity’s Wave Hub future hangs in the balance

Oceanus 2 (Photo: Wave Hub)

Wave energy company Seatricity is considering the future of its testing program at Cornwall’s Wave Hub which has stalled due to delays with an ERDF grant that was supposed to support this year’s Oceanus 2 trials.

Oceanus 2, a wave energy device owned by Falmouth-based developer Seatricity, had hit the waters of Wave Hub testing center twice – first in 2015, and then again in 2016 – but questions have been raised about future redeployment of the device at the Cornish wave testing center.

Responding to enquiries from Tidal Energy Today, a source within Seatricity revealed that the company has been put into paradoxical situation as a ‘direct result’ of having been provisionally selected for a European Regional Development Fund (ERDF) grant funding.

The grant would have been used to support a 2017 redeployment of Oceanus 2 for trials aimed at proving its commercial viability.

The issue lies, as the source explained, in the belated requirement for securities made by the ERDF’s Managing Authority – Department for Communities and Local Government (DCLG).

The requests delayed the funding decisions due for fall of 2016, as DCLG asked that Seatricity finds guarantors not only for the match funding element of the project’s budget, but also for the full value of the potential grant award in the amount of £750,000.

“We secured full match funding and now the goal posts have moved. If we’d had guarantors for the full sum of the grant, we would not have needed to apply for the grant – from a fund which anyway purports to provide ‘funding of last resort’,” said Seatricity.

Seatricity has funded the previous deployments completely by itself, and is now facing financial restraints as a result of the uncertainties arising from the delays with the grant award, and bearing the cumulative costs of previous trials.

“Our own resources have meanwhile been steadily depleted by the need to continue trials year on year entirely at our own expense and committing very substantial investment into Cornwall on the basis of what now appear with hindsight to be some rather hollow promises,” the wave developer added.

Additional costs on the horizon for Seatricity

Furthermore, having retrieved the Oceanus 2 device from Wave Hub, Seatricity is now confronting the forthcoming additional costs of decommissioning pre-laid mooring blocks used in previous deployments to satisfy the terms under the marine license, despite having hoped to re-use the blocks for future trials.

The decommissioning is due by the end of May, 2017.

Meanwhile, the time necessary to prepare and re-deploy the Oceanus 2 at any time in 2017’s favorable summer weather window has practically passed, the source said.

Cornwall Council is believed to have been considering whether to provide some form of underwriting mechanism to satisfy DCLG’s security demands since late autumn 2016, but the deliberation has been similarly protracted and the outcome remains uncertain.

“Seatricity cannot wait forever on the promises of ‘jam tomorrow’. Delay has costs which hits our own pockets and reduces the capital available to trial and take the Oceanus into production elsewhere in the world.

“In the wider context of continuing uncertainty over the UK’s energy policies and governmental commitment to marine renewable energy sector, the balance of probability is that Seatricity Ltd will move to more helpful surrounding,” Seatricity said.

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