IGAS.L Regulatory News (IGAS)

14 Dec 2005 07:01

KP Renewables PLC14 December 2005 Press Release 14 December 2005 Wave Energy Project in Wales KP Renewables Enters Joint Development Agreement for UK's First Wave Power Station Copenhagen, Denmark and London, England: KP Renewables plc ("KPR"), theAIM-quoted, renewable energy project developer, announces today that it hasentered into a joint-development agreement ("JDA") with Wave Dragon Limited ("Wave Dragon") which provides a framework for the two stage development,financing, construction and operation of up to 77MW of wave energy projects inWales. The first stage would involve the deployment of a 7MW Wave Dragon unit off thecoast of West Wales, near Milford Haven, by spring 2007. The unit is projectedto provide sufficient electricity to power up to 6,000 homes. An application fora £5m "Objective 1" grant for the first stage of the project has been made tothe Welsh European Funding Office ("WEFO"). If the first unit deployed proves successful, the second stage would feature upto 11 Wave Dragon units at a deeper water, more energetic site, with a totalcapacity of 77MW (subject to regulatory consents) These units are expected to bedeployed during 2008 and 2009 and projected to provide sufficient electricityfor up to 60,000 homes. Andrew Davies, Minister for Economic Development and Transport said, "Wales hasa significant marine energy resource and the Wave Dragon project has thepotential to harness that power to provide clean, renewable energy. Our visionis to make Wales a showcase for clean energy production and energy efficiencyand our marine assets offer new opportunities for the production of renewableenergy and help us meet our targets by 2020. It also offers us the opportunityto develop the supply chain for these emerging technologies, and bring furthereconomic benefits to Wales." A Wave Dragon unit is an offshore floating device that works by channeling wavesinto a reservoir which is above sea level. The water is then released through anumber of turbines and generates electricity in the same way as hydro powerplants. The technology has been developed and tested over the past eight yearsin tanks in Denmark and Ireland. The Danish prototype is believed to be thefirst offshore device in the world to deliver power to a national electricitygrid. It is expected that the energy generated from the project will be sold by KPRunder its Power Purchase Agreements, as outlined in its AIM admission documentdated 26 July 2005. The energy will provide an alternative to fossil fuelderived electricity, thereby reducing net CO2 emissions. Renewable electricityalso generates valuable credits in the form of Renewable ObligationCertificates. The total cost of the first stage of the development is projected to be £12million. The JDA signed between the parties, while non-binding, provides aspecific framework for the projects to be developed by the parties. The outlineterms of two further agreements, detailing the individual development stages ofeach of the 7MW and 70MW stages, have been agreed although the final ownershippercentage and investment by the parties will be finalised for each individualproject as they are developed. It is intended that the projects in Wales will be managed by the Special PurposeVehicle, Wave Dragon Wales Limited. The Wave Dragon technology would be providedby Wave Dragon ApS and KPR would be responsible for the overall development ofthe project, including financing. The directors of KPR believe that development of the Wave Dragon wave energyproject has the potential to generate new jobs in a wide range of industriesacross Wales and beyond, including maritime services, engineering, construction,and via extensive collaboration with Welsh universities. More specifically,Swansea University has expressed an interest in becoming involved through thedevelopment of power electronics and participation in environmental studies. Ifthe second stage of the development is undertaken, the directors of KPRanticipate that the construction phase could create up to 1,000 jobs with around20 permanent operational jobs. Dr James Watkins, CEO of KPR stated that, "We believe that the UK's wave energypotential is even greater than the potential for the UK's wind energy industry.Having already developed a promising pipeline of wind energy opportunities, wefelt the need for a strong presence in wave power, which is a crucial componentof the UK renewables mix. After a thorough review of the available wavetechnologies in the market, we chose Wave Dragon because we believe it is theonly wave energy technology which is scaleable and can be delivered in largemodules allowing us to develop operational power plants on a scale similar toconventional size power plants; i.e. from 70 to 500MW." Chairman of the board of Wave Dragon, Hans Christian Sorensen added, "We arelooking forward to the cooperation with KPR in developing these projects usingWave Dragon's technology. KPR has a management team and Board that are veryexperienced in the development and roll-out of renewable energy plants in theUK. The successful commissioning of the first stage 7MW Wave Dragon unit willopen up the renewable energy market in the UK for Wave Dragon's technology. Thesubsequent development, in the second stage, of a full-scale 70MW installationwill represent the UK's first true Wave Power Station." - ENDS - For further information please contact: KP Renewables Tel: +44 20 8231 8820Dr James Watkins, CEORobert Smyth, Finance Directorrsmyth@kprenewables.com www.kprenewables.com Wave Dragon ApS Tel: +45 3536 0219Hans Christian Sorensen, Chairman Tel: +45 2811 0219Erik Friis-Madsen, Inventor & Consulting Engineer Tel: +45 3537 0211 www.wavedragon.net Media enquiries:AbchurchGareth Mead / Martin Sutton Tel: +44 (0) 207 398 7700gareth.mead@abchurch-group.com www.abchurch-group.com Notes to Editors About KP Renewables plc KPR was established to be the leading independent renewable energy company inthe UK. The Company has already agreed framework Power Purchase Agreements tosell up to 520MW of renewable energy on pre-agreed terms to British Gas,BizzEnergy and Scottish and Southern Electricity. This energy will be based ona mix of wave, wind, biomass and "Carbon Recycling" projects that qualify forRenewable Obligation Certificates ("ROC"s). Electricity retailers have an obligation to source an increasing percentage oftheir supplies from renewable energy (10.4% by 2010). Failure to meet thesetargets will result in ROC buy-out penalties. KPR's agreements are designed tohelp these companies attain their targets. KPR was listed on the AIM market of the London Stock Exchange in July 2005 underthe symbol KPR and is also quoted on the Frankfurt, Munich and Berlin StockExchanges under the symbol K1P. About Wave Dragon Erik Friis-Madsen designed the patented Wave Dragon device in 1994. Wave Dragonis a world leader in wave energy technology, harnessing extensive industrialexpertise and cutting-edge scientific knowledge. Wave Dragon Limited is the newholding company set up to handle the UK roll-out of the technology developed byWave Dragon ApS. Wave Dragon Wales Limited is the Special Purpose Vehicleincorporated to operate this project and is the body that submitted the fundingapplication to WEFO. Through a strong management team, led by Hans Christian Sorensen, the Companyhas successfully evolved Wave Dragon into a world leading renewables technology.Since 1997 more than 14 academic and industrial partners from 6 Europeancountries have collaborated in the research and development of Wave Dragon.Total investments to date stand at around £7m. Regulatory Context The location outside Milford Haven was chosen after undertaking apre-environmental assessment of a number of potential sites and throughconsultation with relevant local bodies. The WDA Energy Office has beeninstrumental in working closely with Wave Dragon over the last 3 years to helpfacilitate this project in Wales. To encourage the deployment of wave and tidal demonstration projects, theGovernment recently published the consent process for such projects in Englandand Wales, thereby putting in place the conditions that will allow thesector-leading UK marine industry to demonstrate and fulfill the renewableenergy potential of our seas. The required consents in Welsh Waters include consent from Department of Tradeand Industry (DTI) under Section 36 of the Electricity Act 1989 and the EnergyAct 2004, consent from the Welsh Assembly Government under Food andEnvironmental Protection Act 1985 and consent for any onshore grid connectioninfrastructure This information is provided by RNS The company news service from the London Stock Exchange