Financing the Future of Marine Energy

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DTIs Marine Energy Workshop Mission to Portugal
Northern Spain 11-15 April 2005
Financing the Future of Marine Energy
Presented by Peter Sweatman Director of Climate
Change Capital Iberia DTI Marine Renewables
Mission Lisbon-Bilbao, April 2005
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Agenda

• Intro CCC and Marine Energy
• Driving the Agenda Into the Blue
• Raising Funds
• Policy developments in the UK
• Marine Energy and the Financial Markets
• The industry as the markets see it
• Raising finance for marine energy
• Issues for the industry

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CCC and Marine Energy
Driving the Marine Agenda
INTO THE BLUE FINANCING THE FUTURE OF THE
EMERGING WAVE TIDAL SECTOR

• Specialist Investment Bank focused on Climate
  Change and Energy Security
• 30 person pan-EU team with HQ in London
• Core areas of work
• Policy Advisory
• Fund raising
• Example Clients
• BWEA, DTI, DfT
• D1 (Bio diesel)
• REH (renewable energy)

• CCC commissioned by BWEA
• Key objectives
• Apply rigorous financial thought
• Resolve a policy impasse
• Develop a consensus

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CCCs Integrated Approach to fund raising
Policy
Support Regimes / Market Systems
Delivering the policy objective
Entrepreneurs
Capital
Investment
CCC operates to develop successful policies and
investments which lead to the delivery of policy
objectives by entrepreneurs
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Agenda

• CCC and Marine Energy
• Driving the Agenda Into the Blue
• Raising Funds
• Policy developments in the UK
• Marine Energy and the Financial Markets
• The industry as the markets see it
• Raising finance for marine energy
• Issues for the industry

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Funding Issues for Marine Renewables
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Progress in UK Policy
Into the Blue and the current state
Announcement on final scheme for wave and tidal
support in the UK expected soon
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Agenda

• CCC and Marine Energy
• Driving the Agenda Into the Blue
• Raising Funds
• Policy developments in the UK
• Marine Energy and the Financial Markets
• The industry as the markets see it
• Raising finance for marine energy
• Issues for the industry

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Financiers see a myriad of devices
Many designs of wave device often very different
Many designs of tidal device often surprisingly
similar!
Our due diligence has uncovered 51 companies
doing what you do recently reported comment
from an investor
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Raising Finance for Marine Energy

• Two successful flotations
• One dedicated wave company OPT
• One with wave as part of portfolio REH
• In both cases potential for revenues ahead of
  scale deployment mitigated risk for investors

Public Markets

• Raise funds from interested and related parties
• Marine Current Turbines has done this
  successfully
• Installation contractors as investors
• Utilities as investors

Industry Investors

• Venture capital is generally the route explored
  by these companies
• Some success in raising funds, but no successful
  exits to date

Venture Capital
There are funds available for the right
businesses with the right teams, on appropriate
terms
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Utility / deployment relationships play a key
role in building investor confidence
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Agenda

• CCC and Marine Energy
• Driving the Agenda Into the Blue
• Raising Funds
• Policy developments in the UK
• Marine Energy and the Financial Markets
• The industry as the markets see it
• Raising finance for marine energy
• Issues for the Industry

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Issues for the Marine Energy Industry

• Industry long in invention and short
  entrepreneurship
• with some notable exceptions
• Many have failed to deliver projects to schedule
• Financial markets are unforgiving

Entrepreneurship / delivery

• Too many companies
• Highly confusing for investors
• Spreads limited support over too many parties
• Leads to subsidy harvesting

Industry Structure

• Getting sites is crucial to speedy delivery
• Consenting issues need to be resolved
• Compromises will need to be made

Consenting
The industry must start to deliver tangible
results over short time horizons
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Disclaimer
The financial services outlined in this
presentation constitute regulated activities as
defined by the Financial Services and Markets Act
2000 (Regulated Activities) Order 2001 and as
such may only be undertaken by an authorised
person. Climate Change Advisory Limited ("CCA"),
a wholly owned subsidiary of Climate Change
Capital Limited ("CCC"), is authorised and
regulated by the Financial Services Authority
consequently the regulated activities of the CCC
Group are carried out by CCA rather than directly
by CCC. This presentation is made exclusively to
persons who qualify as an intermediate customer
or market counterparty. Persons not falling
within this description should not rely on this
presentation. Please refer to the disclaimer on
the Climate Change Capital Group website
www.climatechangecapital.com for further details.