Carnegie Wave Energy has struck a landmark power purchase agreement (PPA) with the Australian Department of Defence for the electricity from its 2MW demonstration project in Perth.
The HMAS Stirling naval base on Garden Island will buy all of the electricity from the project, which is expected to be Australia’s first grid-connected wave energy plant. Carnegie expects to be able to supply the first power to the grid by the end of 2013.
There was no shortage of potential customers for the wave-generated power. Carnegie said earlier this month that the Western Australian Water Corporation was negotiating a PPA for the demonstration plant's output.
The Australian company has been working with the Department of Defence since the signing of a memorandum of understanding in December 2008. Since then the company says it has successfully demonstrated the CETO technology at large scale in the ocean offshore of Garden Island.
CETO is an array of submerged buoys that pump high-pressure water to onshore hydroelectric turbines.
The project received funding from the Western Australia government through the Low Emissions Energy Development Program as well as from the federal government as part of the Emerging Renewables Program.
“It is significant, in light of current efforts by international navies to increase their renewable energy mix such as the US Navy, for the Australian Department of Defence and Royal Australian Navy to be supporting the development of emerging clean technologies,” says Carnegie’s chief executive Michael Ottaviano.
The news comes after Melbourne-based green investment vehicle 88 Green Ventures purchased an 11% stake in the company from Isle of Man-based Renewable Energy Holdings (REH) for A$1.14m ($1.1m).
In April, REH announced a plan to de-list and wind itself up after selling assets and distributing cash.
Ottaviano says the share sale removes a large active seller from the marketplace and with it, the associated downward share price pressure.
“It replaces REH with a small consortium of supportive investors with a long-term focus, led by an existing shareholder with an outstanding track record in power and infrastructure investment,” he adds.
REH still holds 10% of Carnegie Wave, and will distribute the stake to shareholders before the end of the year.