UK wave energy pioneer seeking finance

Three of Britain’s biggest engineering groups are being sounded out in an effort to find a solution to the conundrum of how to finance one of the world’s most advanced suppliers in the fledgling wave energy sector, the FT reports.

The company up for sale is Pelamis Wave Power of Edinburgh, which hopes to attract interest from BAE Systems, Rolls-Royce and Weir after receiving £45m in funding from venture capital groups since it was started in 1998.

The response to ideas about acquiring Pelamis will be a useful test of corporate interest in wave power machines, which employ a range of mechanisms to extract energy from the oceans and convert it into electricity.

While the technology is considered one of the most promising areas of renewable energy, the costs of producing Pelamis’s hardware are 5-10 times higher than they need to be before the machines can rival conventional forms of power, such as gas turbines.

Other companies to be canvassed about their potential interest in acquiring Pelamis, which is thought to be worth £30m-£50m, include Siemens of Germany, Caterpillar of the US, ABB of Switzerland and Alstom of France.

All are interested in zero-carbon forms of power and could, at least in theory, afford the outlays of perhaps £10m-£20m that might be needed in the next few years to bring Pelamis’s technology to fruition.

Per Hornung Pedersen, Pelamis’s chief executive, said: “We have reached the stage where it makes most sense to look for financial support from a large engineering company rather than [to] seek further investment from venture capital groups.”

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