Barclays first bank to lend to UK marine energy

The bank provided a five-year loan totalling 3.4 million pounds to cover costs to complete a 2.4 megawatt (MW) near-shore wave device developed by Aquamarine Power, in which UK utility Scottish and Southern Energy owns a 45 percent stake, off the coast of Orkney in Scotland in 2013.

"This demonstrates our confidence in the business model and provides a blueprint of how visionary companies can achieve their commercial aims with the right support," said Jan Love, director of project finance for Barclays Corporate Scotland.

The British government expects power production capacity from marine energy projects to raise seventy fivefold to 300 MW by the end of this decade.

Aquamarine Power's three 800 kilowatt (KW) Oyster devices will capture the force of near-shore waves off the Scottish coast to power a pump which then pushes high-pressure water to drive an onshore turbine to generate electricity.

The Scotland-based company is currently installing the first Oyster device and the two others are expected to start next year and in 2013.

"The key for the industry will be finding the means to secure debt for these early-stage projects without the need to rely on parent company support," said Aquamarine Power CEO Martin McAdam.

The company aims to open its first pre-commercial site of up to 10 MW by 2015-16 and it has acquired lease options on a site for a 200 MW device off Orkney and a 40 MW device off the Ise of Lewis, also in Scotland.

The firm installed a first prototype marine energy device in 2009 and has raised over 50 million pounds in private and public funding, including a 5 million pound public grant from Scottish Enterprise and the Carbon Trust Marine Renewables Proving Fund.

Britain aims to generate 15 percent of energy from renewable sources by 2020, compared with 7.4 percent last year.

Copyright Reuters, 2011