Tidal energy heads to market

Click to follow
The Independent Online

MCT, which will launch the UK's first commercial tidal energy project in September, has appointed KPMG's corporate finance division to advise on a sale of the company or a flotation on the Alternative Investment Market.

The company, which has backing from EDF Energy, wants to raise money to build and test more tidal projects across the world.

Should it opt for a float, it hopes to raise £20m to £30m by listing on AIM, the London Stock Exchange's market for smaller companies, although a private placing is also possible. Following KPMG's strategic review, MCT plans to go ahead with one of the options in the first three months of next year.

In September, the company will launch one of its Seagen devices off the coast of Northern Ireland. This will generate 1 MW, enough to provide electricity for almost 1,000 people.

But MCT is planning to build a much larger tidal energy project, generating 10MW, off the Welsh coast. It will submit an application, probably next month, to install 10 of the Seagen devices. The whole project would cost around £25m, but the company hopes that the Government's marine development fund and EDF Energy will meet most of the cost. Under an agreement with MCT, the French-owned EDF has first refusal on investing in the company's projects.

Martin Wright, the managing director of MCT, said: "If this is to become a serious technology, we need to accelerate these developments." Money raised from a listing or private placement would go on rolling out similar projects abroad.

He said the aim was for MCT to break even by 2009. It will take several years to get planning permission and to build the larger development in Wales. But the company hopes to boost revenues by licensing its technology to other projects.

Advocates of tidal energy say it is more reliable than the other marine technology, wave power. Unlike wave - and wind - farms, tides are predictable. The devices use technology similar to wind farms or hydropower, with underwater turbines being driven by the force of the tide to generate electricity.

Comments