Ocean Power Technologies Sees Solid Growth on Horizon with More than $1 Billion in Projects in Oregon and Australia

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Researched by Industrial Info Resources (Sugar Land, Texas)--Ocean Power Technologies Incorporated (NASDAQ:OPTT) (OPT) (Pennington, New Jersey), which designs and produces wave-energy devices for the renewable power sector, reported continued progress on several major projects in the third quarter of 2012, including the first license for a wave power station to be issued by the U.S. Federal Energy Regulatory Commission (FERC). Industrial Info is tracking more than $1 billion in planned OPT projects.

Revenues for the quarter totaled $982,396, compared with $1.91 million in the same period last year. The lower revenues were attributed largely to the U.S. Navy's Littoral Expeditionary Autonomous PowerBuoy (LEAP) program, which saw much lower revenues as it was completed earlier in fiscal 2012. OPT said that the program produced "extremely positive results," including higher-than-predicted power harvesting capability and enduring Hurricane Irene. Partly offsetting the drop in revenues were strong results from the company's grid-connected WavePort power station project near Santoña, Spain.

Net losses for the third quarter were reported for reported to be $4.34 million, compared with losses of $5 million in third-quarter 2011. The drop in losses was attributed largely to a 38% decrease in project development costs.

OPT's contract backlog, which includes both funded projects and unfunded projects that are expected to be funded in the future, was $5.8 million at the end of the third quarter.

Industrial Info is tracking three OPT projects worth a total of more than $1 billion that are in the planning stages: the estimated $600 million construction of a wave energy park in Reedsport, Oregon; the estimated $240,000 construction of a wave energy park in North Bend, Oregon; and the estimated $222.1 million construction of a wave energy power station in Portland, Victoria, Australia.

The Reedsport project, which is a grassroot wave energy park, involves constructing an offshore power plant utilizing a150-kilowatt (kW) PowerBuoy wave energy converter unit in Phase I, a pilot project that is expected to be ready for development in early October. Phase II will add nine 150-kW PowerBouys, and Phase III is expected to create 100 PowerBouys to provide renewable energy via submarine cable to the local grid. FERC approved the deployment of up to 10 PowerBouy devices in August, totaling 1.5 MW, which OPT says will be enough to light up about 1,000 homes. This is the first FERC license for a wave power station to be issued in the U.S. The company received funding for the project from the U.S. Department of Energy.

"The license is for 35 years and covers grid connection and wave energy production," said Brian M. Posner, the chief financial officer of OPT, in a conference call. "Many other permits issued to date for competing technologies have been for a significantly lower number of years. The fact that ours it for 35 years supports the commercial prospects of wave power, and OPT's technology specifically. We are now in the process of final assembly and on-land testing of the first PowerBouy and are planning for its deployment."

He later added, "We expect that this PowerBouy will be ready for deployment in early October."

The North Bend project, which is a grassroot, 50- to 100-MW wave energy park, involves constructing a plant utilizing PowerBuoys technology to provide renewable energy to the local grid.

The Portland, Victoria project, which is a grassroot, 19-MW wave station, involves constructing 126 PowerBuoys, of 150 kW each, and a substation to supply renewable energy to the grid. The station is planned be built in three stages, starting with a 1.5-MW pilot stage that will be built utilizing 10 PowerBuoys, then gradually amped up over three years to 19 MW. The project is among several wave energy plans in Australia that are being enacted to ensure that renewable energy accounts for 20% of Australia's energy share by 2020. For more information, see August 25, 2011, article - Wave Energy Rolls onto Australia's Shores.

Earlier this month, OPT announced that it has entered into a cooperative research and development agreement with the U.S. Department of Homeland Security Science & Technology Directorate to perform a new round of in-ocean tests on the company's Autonomous PowerBuoy, a product that converts ocean wave energy into useable electrical power for remote and near-shore at-sea applications. OPT aims to demonstrate the effectiveness of its long-duration maritime vessel detection platform by redeploying a PowerBuoy off the coast of New Jersey, the site of last year's LEAP program.

"Through this collaboration, we'll be performing and further demonstrating the flexible capabilities of our Autonomous PowerBuoy, with the intent of increasing its potential use for advanced ocean surveillance," said Phil Hart, the chief technology officer of OPT, in the conference call. "More specifically, we will demonstrate persistent maritime vessel detection, expanding on work begun on our LEAP program last year. The APB350 PowerBouy developed under the LEAP program was deployed for the U.S. Navy off the coast of New Jersey in 2011, and performed extremely well."

He later added: "OPT is placing increasing emphasis on our Autonomous PowerBuoy offerings, which we believe hold great promise for technological advancement and market potential. We continue to seek out new applications for Autonomous PowerBuoys of all sizes and configurations, for the marine oil and gas industry, though academic oceanography and desalination."

For more information, visit Industrial Info's North American Renewable Energy Project Database.

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