New Jersey-based Ocean Power Technologies, Inc. (Nasdaq: OPTT; OPT.L) has signed an exclusive agreement with a consortium of three Japanese companies to develop a demonstration wave power station in Japan.
The Japanese consortium comprises Idemitsu Kosan Co., Mitsui Engineering & Shipbuilding Co., and Japan Wind Development Co. (the “Consortium”). Further, OPT has been invited to become a member of the Tokyo Wave Power Initiative, a committee including the city of Tokyo, regional governments and national agencies involved in the promotion of new energy sources.
This agreement is the Company’s first project in Japan. OPT now has a range of power generation projects globally, including those in Oregon and Hawaii, USA; Scotland and Southwest England; Spain; Australia; and Japan.
The initial phase of the project will be for OPT and the Consortium to work with the Japanese government to increase the recognition of wave power in Japanese energy policy, and to identify favorable sites for OPT wave power stations and assess their commercial prospects.
Subject to the successful identification of a project site and completion of economic assessments, the parties plan to enter into an agreement to build a demonstration plant with up to three of OPT’s PowerBuoys®. The trial plant would provide the basis for the expected building of a commercial-scale OPT wave power station with an initial capacity of 10 megawatts (MW) or more. Total output from the wave power station would be sold to electric utilities, and at 10MW, could provide power for up to 3,000 households in Japan.
Under the anticipated agreement to build the demonstration plant, OPT will sell the equipment for the power station to the Consortium. For subsequent wave power stations, the Consortium will provide manufacturing and maintenance of the power stations and on-going plant operations, while OPT will provide its PowerBuoy technology under license and also sell certain subsystems of the plant to the Consortium.
Idemitsu Kosan is a Japanese energy company; Mitsui Engineering & Shipbuilding is an industrial business focused on machinery and shipbuilding; and Japan Wind Development primarily develops and operates wind power stations.
Japan’s recently elected Prime Minister, Yukio Hatoyama, has pledged to target a 25% cut in green-house gas emissions from 1990 levels by 2020. The government also said it plans to introduce a feed-in tariff, or other financial reward, for renewable energy production as part of its intentions to boost renewable energy sources to about 10% of primary energy supply by 2020.
Mr. Akira Kurosaki, of the Business Development and Innovation Headquarters of Mitsui Engineering & Shipbuilding, said, “OPT’s in-ocean experience and technical strength make it a strong partner. Wave power is a very concentrated and predictable source of renewable energy that has great potential for Japan. We believe that OPT’s PowerBuoy technology will be an important part of our common vision of reducing dependence on imported fossil fuels.”
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