Blue Energy Canada rolls in $500M for tidal power

Vancouver, British Columbia-based Blue Energy Canada brought in a $500 million financing today, but it didn't come from the company's Wall Street connections or venture capital investors.

The company announced it signed a joint agreement in which Auckland, New Zealand’s World Energy Research, which plans to finance the development of Blue Energy’s first 200-megawatt commercial tidal power project. The company’s CEO Martin Burger told the Cleantech Group his pre-commercial stage tidal-power company has been trying to get a financing for the past five to six years.

“With the economic meltdown, everyone was worried it was going to hurt companies like Blue Energy, but it turned out to be beneficial,” he said.

World Energy Research is an independent energy research, management and operating company, which specializes in developing and commercializing clean technology. Its existing projects include oil and natural gas, solar centers, wind turbines, and ocean turbines.

"After exhaustive research, World Energy Research found several companies capable of producing small amounts of energy, but none on the scale of Blue Energy's Davis Tidal Turbine, which was developed specifically to harness tidal power on a large scale," said Chad Willis, managing director of World Energy Research, in a news release.

Burger said in the past few years his company has rejected three separate $10 million financings due to unfavorable conditions. One would have required $250,000 in audits, he said. The company has been funded to date by private placement, friends and family.

“We almost lost the company,” he said.

Burger said there are some subtle distinctions between technologies in the market.

“There’s still a lot of confusion about what constitutes a tidal power company. A lot of companies got funding beyond what they merited,” Burger said.

Blue Energy’s tidal turbine technology has a “resource-driven design,” Burger said, meaning it has been designed specifically for tidal power, while other companies have “adaptive technologies,” which try to adjust wind-power equipment to perform in water.

“I think most of the 10 to 12 companies out there will fall by the wayside,” Burger said.

Blue Energy’s Davis Hydro Turbine is capable of converting tidal currents into electricity, the company said. Between 1990 and 2000, Martin collaborated with inventor and veteran aerospace engineer Barry Davis to develop the turbine, evolving its design from a stand-alone unit to an ocean class tidal bridge.

Blue Energy thinks it can eventually achieve 2 cents per kilowatt hour with its technology, but it’s starting out small. The company plans to build a 1 MW and then a 10 MW tidal power project before the 200 MW one, which Burger expects to be in place within five years. He wouldn’t disclose the location.

There are two ways to create tidal power: the use of tidal dams or ocean currents. The sources of Blue Energy’s tidal power production are fast flowing tidal currents.

With the alternative, dams are based on using a barrage at a bay or estuary with a large tidal range, where power generation comes at ebb tides as the barrage creates a significant head of water, according to Blue Energy. This technology is established at La Rance, France where a tidal power station has been in place since 1966, operated by state-owned Electricite de France (see Tidal power gets modern in France). EDF also announced plans in 2008 to put three to six turbines in place off the northern coast of Brittany.

EDF has a hand in modern tidal power through its EDF Energy unit, which owns a stake in Bristol, England-based Marine Current Turbines. Marine Current said its SeaGen turbine delivered electricity into the grid for the first time in 2008, marking the first commercial-scale tidal power system to do so (see SeaGen swims into Northern Ireland and SeaGen delivers power to grid).

A 2008 study from industry analysts Frost & Sullivan indicates the UK as the global leader in marine energy, with government policies and natural resources to derive 20 percent of its energy needs from wave and tidal power (see UK holds half of Europe's wave energy potential). Frost & Sullivan said it could take five to six years for full commercialization of marine energy. Marine energy could deliver 10 percent of the world's energy needs, with about 7 percent or 8 percent coming from wave energy and the remainder from tidal projects.

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