Wave of Losses Swamps Marine Energy Sector

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The budding marine energy sector has been rocked by more bad news as Aquamarine Power Limited (Edinburgh, Scotland) announced that it was significantly scaling down its business and German engineering giant Siemens AG (NYSE:SI) (Munich, Germany) announced its exit from the sector after just two years.

Aquamarine Power claimed that a mix of challenging regulatory, financial and technical reasons were behind the decision to downsize the business. Siemens has announced that it is exiting the wave power sector and plans to sell Marine Current Turbines (MCT) (Bristol, England), which it bought in 2012. The news comes just weeks after seasoned marine energy company Pelamis Wave Power (Edinburgh, Scotland) went into administration. For additional information, see November 25, 2014, article - Scotland Pledges More Wave Energy Support.

"Following a strategic review the Board of Aquamarine Power has decided to significantly downsize the business," explained Aquamarine Power Chief Executive Officer, John Malcolm. "This will involve retaining a core operational and management team to run the business and continue maintaining our Oyster 800 wave machine at the European Marine Energy Centre in Orkney. We have entered into a consultation process with all of our employees on how we will take forward the restructuring and redundancy programme."

The company employs over 50 people and it is believed that this may be reduced to around 20.

He added: "None of this is a reflection on the extraordinary dedication and hard work of every single member of the Aquamarine Power team; rather it is a consequence of the considerable financial, regulatory and technical challenges faced by the ocean energy sector as a whole."

Siemens blamed the slow pace of development in the tidal energy sector.

Speaking to the media, a Siemens spokesperson said: "This proposal follows a strategic review to explore available options for the emerging business. The market and associated supply chain has not developed at the speed that Siemens expected. A dedicated tidal power industry of critical size will develop in the near future but due to the limited resources it would be a niche market for Siemens. In the event of restructuring ... redeployment within Siemens will be prioritised and complete support will be offered for redeployment or outplacement."

There were signs that things were not going too well in September when Industrial Info reported that Siemens, via MCT, had stopped work on the proposed 10-megawatt (MW) Skerries tidal array project in Wales following the loss of a vital government grant in June. For additional information, see September 2, 2014, article - Siemens Stops Work on U.K. Tidal Array.

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