First loan under InnovFin Energy Demo Project provides €10 million to harness ocean wave energy
Brussels, 6 July 2016
A first-of-a-kind demonstration project that converts wave energy into electrical power, which could be a major step forward in the quest to find new sources of sustainable energy, will be built thanks to an EU loan of €10 million from the new InnovFin Energy Demo Project Facility.
The deal will enable the Finnish company AW-Energy to build a full-scale demonstration unit of their WaveRoller concept in Portugal. The loan, provided by the European Investment Bank (EIB) and backed by the EU's research and innovation funding programme Horizon 2020, is the first under the InnovFin Energy Demo Project, an innovative, sectoral debt facility which aims to support projects that are commercially promising, but are deemed technologically risky.
EU Commissioner for Research, Science and Innovation, Carlos Moedas, said: "An investment in renewable energy technologies is an investment in Europe's leadership of these new industries. We want to support renewable energy pioneers to contribute solutions to global climate change challenges, while generating employment and sustainable economic growth at home in Europe."
Commissioner Moedas, EIB Vice President Jan Vapaavuori and CEO of AW-Energy John Liljelund will sign the loan agreement this afternoon in Brussels. The signing ceremony will take place in the Berlaymont building.
The WaveRoller technology, already supported with EU funding in the SURGE project under the Seventh Framework Programme, the predecessor of Horizon 2020, aims at bridging the gap between a demonstration installation and commercial deployment of a near-shore Oscillating Wave Surge Converter (OWSC) device that converts wave energy into electrical power. AW-Energy has been operating three 100kW prototype units connected to the grid near Peniche in Portugal since 2012. With the support of the new loan of €10 million, it plans to install a full-scale 350kW demonstration device in the same area in 2016. The total project cost is €19 million.
Several innovative ocean energy technologies are being developed but they face obstacles on the way to the market, because of concerns that they may fail to become competitive. The Oscillating Wave Surge Converter, to be demonstrated under the WaveRoller project, shows promising potential. The global market potential for this kind of application is high, estimated at over 200 GW based on feasible sites identified around the world. The project, which spans a five year period, has already stimulated commercial interest in six countries. Collectively, they aim to sell over 50 units in the first four years of operation.
Under Horizon 2020, the EU research programme for 2014-2020, the European Commission and the EIB Group (EIB and EIF) have launched a new generation of financial products and advisory services to help innovative firms access finance more easily. "InnovFin – EU Finance for Innovators" offers a range of tailored products which will make more than €24bn of financing support for research and innovation (R&I) available to small, medium and large companies and the promoters of research infrastructures. This finance is expected to support up to €48bn of final investments in research and innovation.
Launched by the Commission and the EIB in June 2015 as a thematic finance instrument under the InnovFin programme, the Energy Demo Projects facility provides loans between €7.5 million and €75 million, guarantees and quasi-equity to first-of-a-kind industrial demonstration projects in the fields of renewable energy, sustainable hydrogen and fuel cells. The objective is to support the EU's Strategic Energy Technology (SET) Plan, bridging the "valley of death" from demonstration to commercialisation and helping the further rollout of the next generation of innovative low-carbon energy technologies to the market. In order to address this challenge, the scheme has been designed to serve a higher level of risk than that currently covered under InnovFin, allowing projects which are initially non-bankable but are close to generating cash flows to benefit from the risk finance envelope.