On the crest of a wave
Maynooth firm Wavebob is one of the early leaders in the global ocean-energy sector.
A long time ago, scientists realized that if the power of the ocean could be harnessed, it would go a long way towards solving the world’s energy problems. One of the companies at the forefront of developing technology to do just that is a little-known Maynooth-based outfit called Wavebob.
The 10-year-old company has developed a patented technology of the same name that converts ocean waves into electricity. Sounds simple, but, as CEO Andrew Parish explains, designing a piece of equipment – known as a wave-energy converter – that can absorb the sea’s power, without getting destroyed in the process, is a major technical challenge.
“It’s complex technology; it’s up there with the aerospace sector in terms of a machine that can absorb energy in a very aggressive, dynamic environment, but not absorb so much that it wrecks itself.”
The design Wavebob has come up with is akin to a bicycle pump in that it has two distinct components that act against each other, creating a pumping effect to generate power.
The company has strong Maynooth connections. Wavebob is based in the town’s business campus and the bulk of its 20 employees work there (it also employs several people in Killybegs, Co Donegal, where it services its ocean-going equipment). Parish holds a degree in maths and chemistry from National University of Ireland, Maynooth. Furthermore, Wavebob has research links with the university and has licensed technology from it.
Parish, who worked in environmental consultancy for several years, as well as in the Irish Energy Centre (now Sustainable Energy Ireland), joined Wavebob two years ago at the invitation of its founder, William Dick. Up until that point, the company had been focused on technical development and refinement of a concept. From now on, its priority would be to commercialize it.
Parish believes the biggest challenge facing Wavebob is not finding a market for its technology – it demonstrably exists – but in “trying to meet the huge and tangible market opportunity that is quite literally knocking on our door”.
But just how big is the potential market? “It’s at least as big as the global hydroelectric or nuclear [energy] market,” he responds.
“The accessible wave energy resource has been estimated at US$700bn in technology sales. In an Irish context, if you look at the amount of accessible energy that’s available off the west coast, there’s probably at least as much energy as the installed capacity on the whole island.
“Not only could we be self-sufficient, but we could also be exporting high-value green electricity into the UK and European markets and that’s where there is a real commercial opportunity for Ireland as a country.”
Warming to his theme, Parish continues: “Re-greening the Emerald Isle such that we become a net exporter of renewable electricity is something that people like [Airtricity’s] Eddie O’Connor and ourselves have been talking about for quite a while. It’s actually a reality now and there is widespread recognition within Government departments and state agencies that this is a real opportunity for Ireland to develop real wealth, jobs and indigenous intellectual property that supports economic recovery.”
Parish also argues that there is a growing acceptance about how our reliance on fossil fuels is unsustainable, both environmentally and economically.
“A country such as Ireland, with an abundance of wind, waves, and biomass, could be completely self-sufficient in terms of renewable energy – that is not only an economic advantage, but it also gives us a security-of-supply advantage. As it stands, we import over 90pc of our primary energy. Environmental and economic imperatives have come together to create probably the most favorable time to develop alternative energy,” he adds.
Parish believes all the pieces of the jigsaw are now in place to spur the development of the green-energy market: enlightened government policy, good support infrastructure, a thriving research community and innovators such as Wavebob. He contends that: “Ireland is now seen internationally as probably the country that has all the right ingredients to commercialize this technology.”
But actually making it happen will require international investors to get behind such projects. And for that to occur, they will need to see wave energy as a credible (and profitable) alternative to oil. So far, that hasn’t happened because, despite its wild price fluctuations, oil has been available in sufficient quantities and at the right price to satisfy user demand.
Parish acknowledges that raising sufficient capital to fund its growth plans in the current bearish investor market is a big challenge for the company. Developing wave-energy technology is extremely capital intensive – a one-megawatt wave-energy converter costs in the region of €3m to €4m – and so will require a lot of money upfront. The good news for investors, he says, is that ongoing maintenance and operational costs are low, such that over the lifetime of a project the economics become “very attractive”.
The current shareholder base comprises company founder William Dick, the Irish Marine Institute, Norwegian shipping line Fred Olsen, plus several private Irish individual investors. Parish says that as Wavebob ramps up its funding efforts, it will increasingly be looking to big European or US investors to raise the €25m he estimates will be needed to take the company to break-even. Raising its profile with US investors was one of the main reasons Wavebob opened an office in Annapolis, Maryland last year.
He says that, in return for their stake, investors can get in early on a company that has spent 10 years developing and refining wave-energy technology and that’s working with some major energy players. One of these is Sweden’s Vattenfall, with which Wavebob has entered a joint venture. The companies have set up a fifty-fifty joint venture company called Tonn Energy whose mission is to develop commercial wave farms off the west coast of Ireland. As well as providing some technical expertise and significant financial support, Vattenfall will also secure a route to market for Wavebob by becoming a customer for the electricity that’s generated.
Tonn Energy has applied for licenses to begin investigating possible wave-farm sites along the west coast, particularly off the coast of Mayo, with a view to building a 200-megawatt wave farm. Parish expects that the farm will be built and supplying electricity to the grid within three years. Separate to this, Wavebob is also working with a number of other wind-farm development partners to investigate other potential wave sites around the coast.
However, Wavebob is not an electricity generator. Its primary revenue will come from selling machines to wave-farm developers and then maintaining such equipment. Having a share in a small number of wave farms will be an additional revenue stream, but that won’t be its strategic focus, says Parish, who expects the company to sell its first machine in 2010.
While Wavebob has come a long way to reach this point, Parish readily concedes that the bigger challenges are still to be faced. “It’s very much like being in the Kitty Hawk with the Wright brothers. We’ve managed to get this thing down the runway. The next job is to get it across the Atlantic.”
This article first appeared in Irish Director magazine