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Pelamis Wave Power Limited to be put into administration

Joint Administrators appointed to assess the options for securing the future for the business and employees of the marine power technology specialist.

The directors of Pelamis regret to announce that they have been unable to secure the additional funding required for further development of the company’s market-leading wave energy technology.1 To that end, Blair Nimmo and Gary Fraser of KPMG have been appointed as Joint Administrators of Pelamis Wave Power, with the goal of assessing the options for securing the business and its employees.

The directors and employees of Pelamis stated that they are dedicated to the success of the revolutionary Pelamis wave technology, and that they remain committed to working with the joint administrators, the Scottish and UK Governments and any future partners to ensure its success.

Industry response to the news was swift and overwhelmingly supportive. “While this news is clearly concerning for the company and its employees, it shows both the challenging conditions in which this sector operates and the risks inherent in developing new technology,” said Lindsay Leask, senior policy manager at Scottish Renewables. “Pelamis Wave Power’s contribution to this emerging industry has helped cement Scotland’s position as a global leader, and it is important to remember that the prize from the eventual commercialisation of wave energy remains hugely significant. The contribution of Pelamis’ employees to the development of this technology has been immensely important, and it is to be hoped that a viable way forward can now be found for the business.”

A spokesperson for the Scottish Government called it a “sad day for Pelamis and an anxious time for employees and their families.” Scottish Enterprise and Scottish Government have been working closely with Pelamis Wave Power and its shareholders to try and find a way forward and help support the company in its current form. According to the spokesperson, the Scottish Government stands ready to engage with the company and has vowed to support affected employees through its initiative for responding to redundancy situations Partnership Action for Continuing Employment (PACE).

Neil Kermode, managing director of the European Marine Energy Centre (EMEC), described the development as a “a big setback in the mission to learn how to harvest energy from the sea.” At the same time, he said the “prize” is still there. “The waves will keep pounding into the Orkney coastline, and the world is still using precious and irreplaceable fossil fuels at an increasing rate,” Kermode explained. “We know marine energy will have its day — it just looks a bit harder tonight.”

The Scottish Government spokesperson agreed, adding that the development demonstrates the challenges of early-stage technologies. Those challenges are magnified, the representative noted, when “blighted by the uncertainty facing the energy sector more widely,” particularly following reforms of the UK’s electricity market.

Despite the jolting news, industry observers believe wave power technology still has its merits. Gina Hanrahan, climate and energy policy officer at WWF Scotland, said marine renewables have the potential to play an important role in the country’s future electricity mix, helping to cut climate emissions and deliver investment and jobs around our coastline.

“Harnessing the power of the waves is a challenge we must rise to if we’re to wean ourselves off fossil fuels,” Hanrahan said. “With over 10 per cent of Europe’s wave power potential and some of the technology’s leading innovators and companies, Scotland is well placed to deliver wave power commercially in the coming years.”

The Scottish Government representative concurred, putting it simply: "Our belief in the future success of wave energy is undiminished."  
 
REFERENCES
 
  1. Pelamis recently received a strong endorsement of this leading position from independent consultants following a series of due diligence exercises. This work included detailed assessments of the onward commercial viability of the technology and designs. The combination of more than 350 man-years of experience in the team, some 15,000 hours of real grid connected test data and intensive parallel R&D work gives Pelamis a unique platform from which to develop and demonstrate the viability of its technology for commercial deployment at scale.

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Energy efficiency  •  Energy infrastructure  •  Other marine energy and hydropower  •  Policy, investment and markets  •  Wave and tidal energy

 

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