Scottish government defends role in wave energy development

Image source, Pelamis
Image caption,
Wave energy device developer Pelamis is already in administration

The Scottish government has been accused of "pulling the rug" from under the country's leading wave energy companies.

One of the firms, Pelamis, is already in administration while its rival, Aquamarine Power, is making more than half of its workforce redundant.

Workers have told BBC Scotland the withdrawal of public funding is to blame.

But the Scottish government insisted it had supported the sector.

It argued that it had done more than any other administration in Europe to promote the development of wave energy devices.

A deadline set by administrators for expressions of interest in Pelamis passed this morning.

Oliver Epsom, a wave energy engineer, is one of the dozens of staff at Aquamarine Power in Edinburgh who expect to lose their jobs.

He said: "Two of the biggest wave energy companies, not just in Scotland but in the world, are now facing severe difficulties, purely as a result of the funding withdrawal by the Scottish government.

"They have the power to reverse this at any time."

Wave power funding:

Since 1998 both Pelamis Wave Power Ltd and Aquamarine Power Ltd have received substantial public and private funding.

Scottish Enterprise has invested a total of £15.5m in Aquamarine Power in the form of grants, equity and loans.

The company has also received £3.4m from the Scottish government's Marine Renewables Commercialisation Fund. The public sector investment helped leverage £66m of private sector funding.

Pelamis has attracted more than £95m - made up of about £70m of private investment, £12.9m from Scottish Enterprise, £2.47m from the Marine Renewables Commercialisation Fund and about £9.8m from other sources.

The Scottish Green Party is demanding answers about the Scottish government's role in the crisis and the organisation it has set up to support wave energy research, Wave Energy Scotland.

Alison Johnstone, Green MSP for Lothian, told BBC Scotland: "There are potentially hundreds of jobs in this technology, so I'd really like to understand why the government's pulled the plug and what Wave Energy Scotland is about.

"What is its budget, what does it hope to achieve and how many of these talented engineers is it going to employ?"

In response, a Scottish government spokesman said: "Sadly, there is currently no prospect of further commercial investment in the two major wave energy companies in Scotland.

"We have therefore reached the full extent of public support possible for these companies, under the EU state aid framework and the rules for prudent public investment.

"Wave Energy Scotland will promote collaboration between industry and academia in order to solve the common challenges facing the sector."

Image source, Aquamarine Power
Image caption,
Aquamarine Power has been developing its own wave energy technology

Industry experts have warned rebuilding confidence in the sector will be crucial, if companies are to attract private investment.

Neil Kermode, from the European Marine Energy Centre in Orkney, where wave and tidal energy devices are tested, said: "Confidence is what drives whether investments are made.

"We know that there's energy, we know that the technology works, we know it does that alchemy thing of turning seawater into electricity.

"But without confidence, you can't actually get the investment. It's the investment that's needed."

'Bright future'

Trade body Scottish Renewables has said it believes the wave energy sector still has a bright future in Scotland.

Lindsay Leask, senior policy manager for Offshore Renewables, said: "We're still at the forefront of this world leading industry and we will continue to be there.

"We have built up so much experience through both Aquamarine and Pelamis that we will continue to play a huge role in the development of wave energy."

Aquamarine Power chief executive John Malcolm said: "It is clear Aquamarine Power is in a challenging financial position.

"However, we are confident that once our restructuring programme is complete we will continue as a going concern, and will continue to make a positive and significant contribution to the wave energy industry in Scotland."

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