Ocean Power Technologies, Inc. (NASDAQ:OPTT)

CAPS Rating: 2 out of 5

The Company develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves.


Player Avatar devoish (99.07) Submitted: 5/22/2008 6:16:16 PM : Outperform Start Price: $10.70 OPTT Score: -111.59

The capital cost of building OPTT kwhs is 1/2 the cost of solar, comparable to land based wind, and coal and double that of natural gas. Over a 30 year life expectancy including maintanance for OPTT buoys the cost of energy per Kwh is .05-.15 for OPTT, .10-.25 for solar, .065-09 for wind, and .04-.07 for NG or Coal. This data is from the Federal Gov't as of 2005 and from OPTT estimates. Since that time the cost of coal and NG has risen dramatically.
Ocean waves are more reliable and "on" much more than either wind or solar, offering power companys a more reliable energy source. Ocean waves are also closer to the worlds population centers sustantially reducing the cost of transmission lines to get the power where it needs to be.
Waves vs off shore wind. The Long Island Power Authority recently proposed an off shore wind farm to produce 49 megawatts that would have cost $600,000,000. plus transmission lines. It would have taken 8 square miles of ocean. A 50 megawatt wave farm using the 150kw buoys would have cost under $300,000,000. and require .625 square miles. To supply all of Long Islands 5200 mw consumption would require a wind farm the entire length of Long Island and 5 miles wide, 314 square miles. OPTT 150kw buoys would need 65 square miles, the 500kw buoys much less leaving substantial ocean space to help power NYC.

OPTT has had power buoys in the water working perfectly well for over 40 months. They have moved past the R&D stage and are now in commercialization. Because wave heights and lengths vary they have developed electronics to "tune" the power output to retrieve the maximum amount of power available from each wave. They have patents for this technology. Combined these two advantages, lead time and patented "tuning" give them first mover advantage over other wave power companys. Second is Polaris, a privately held company whom I cannot estimate for but I believe has been in the water for almost 12 months. There is probably room for more than one wave power company. OPTT buoys are built to withstand 100 year storms (75 foot waves) at the request of their insurancer Lloyds.
Their business model is to build and sell the wave farms and then contract to run the operation and maintanance. This means capital cost will be paid to them as the buoys are built, and they get recurring revenue from the contracts. They have $10.00/share ($100,000,000) on the balance sheet and a burn rate of 12-13mil/ year. (which they expect to increase). They expect to be profitable at 400 150kw buoys/year and later at 300 500kw buoys/year. The projects they are currently working on if built to the max would require more than 300 150kw buoys.
The catalyst is the increasing cost of coal which may have reached a point where they are the cheapest electricity available of any type. They are clean energy and have sold carbon credits. The recent announcement of a contract with Griffin to build a 10- 100mw wave farm in Australia, which adds 65-650 150kw buoys to their production line. They have also applied to FERC for permits to build 4 wave farms totaling 277mw off the California and Oregon coasts. If approved that would add 1800 150kw buoys to the production line. The applications were applied for in order to jump start business and are probably 1-2 years away.

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Member Avatar devoish (99.07) Submitted: 5/23/2008 1:13:19 PM
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Sorry about that "Polaris" thing. The companys name is Pelamis. As of the best information I can find today Pelamis has two competitive advantages. The capital cost of building OPTT kwhr's is approximately 25% more expensive than building Pelamis kwhr's. (Information was hard to come by and the cost of Pelamis may be 4 times higher than the estimate I used which was the lowest I could find). The Pelamis also lays low in the water, which should reduce complaints from folks who did not want to look at 300 foot wind towers. The OPTT buoys stand 30 feet out of the water. Both are low enough to reguire masts for navigation. Pelamis has experienced delays in delivering their wave energy converter products to their Portugal wave farm which was supposed to begin operation in 2006 and is not yet operational. The first mover advantage for OPTT may be widening. A major Pelamis drawback may be the amount of area required, especially in areas near shipping lanes, and fisherys.A 10 mw OPTT wave farm needs .125 square kilometers of ocean, a 10mw Pelamis farm needs 5.4 square kilometers if their sides are bumping each other. On the Pelamis website it says Pelamis WEC were designed to maximize survivability at the price of maximizing wave power. Lloyds of London is happy to insure the OPTT bouys and that cost is included into the cost of the power.

Member Avatar devoish (99.07) Submitted: 7/14/2008 10:45:16 AM
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7/14/08 year end results announcement: http://phx.corporate-ir.net/phoenix.zhtml?c=155437&p=irol-newsArticle&ID=1174264&highlight=Basically a recap of the progress already announced this past year. Revenues almost doubled, losses up about 50% so they are closing the gap toward actually making money but that I am sure will still fluctuate. Current backlog about 10% higher than 2008 revenues.Looking forward to tomorrows conference call.

Member Avatar devoish (99.07) Submitted: 7/16/2008 12:38:07 PM
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No significant news from the cc, all projects are on schhedule. 150kw pb is almost finished with tank testing and ready for deployment.

Member Avatar devoish (99.07) Submitted: 7/16/2008 2:01:19 PM
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Note: fifth smallest holding of the wilderhill clean energy index (PBW). .024%

Member Avatar devoish (99.07) Submitted: 7/18/2008 2:45:03 PM
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CNBC news report today. 30 second spot and spike.

Member Avatar devoish (99.07) Submitted: 9/9/2008 5:27:16 PM
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First quarte CC Revenues grew, outpaced by expenses, accredited to increased sales efforts and moving toward commercialization. Completed development of underwater "pod" to connect mutiple wave stations, transform up the voltage for more economical transmission to land. Possibility of becoming an "industry standard" though something must already exist for wind. They expect to hire additional engineers and project managers in 2009, and spoke of additional contracts in negotiation. That would be a good sign of progress and acceptance.

Member Avatar devoish (99.07) Submitted: 10/15/2008 8:42:48 AM
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This Act is part of H.R. 1424, recently passed by the US House of Representatives and signed into law by President George W. Bush on October 3, 2008. The Act will for the first time enable owners of wave power projects in the US to receive federal tax credits, thereby improving the long-term economics of wave power as a renewable energy source. Among other provisions, the Act expands the definition of qualifying facilities for the Production Tax Credit (PTC) to include those that generate power from marine renewables (including wave and tidal). As a result, the PTC is now allowed for electricity produced and sold after October 3, 2008 from marine renewable energy facilities with a "nameplate capacity" of at least 150 kilowatts, and that are placed in service anytime between October 3, 2008 and December 31, 2011. The credit rate for marine renewables is $0.01 per kilowatt hour, and the duration of the credit will be 10 years after the facility is placed in service. Dr. Taylor further noted, "The PTC is expected to directly benefit the deployment of OPT's PowerBuoys in the United States. For example, a 50 MW OPT wave power station, could receive credits worth up to $15 million over a 10-year period.

Member Avatar devoish (99.07) Submitted: 11/19/2008 12:53:03 PM
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OPTT deploys another powerbuoy in Hawaii. Of note was this EPA assesment included in the release: "Previously, the OPT wave power project at Oahu underwent an extensive environmental assessment by an independent engineering company in accordance with the National Environment Policy Act (NEPA). This study featured evaluation of potential impacts on the seabed; fish, organisms and mammals; vegetation; and sea quality. The study concluded that the project would have no significant impact on the environment, which is the highest such rating." So unless the mooring actually lands on a fish's head, there is no environmental harm expected.

Member Avatar devoish (99.07) Submitted: 1/2/2009 11:08:11 PM
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As I read more and more about the need for and expense of transmisson lines to get renewable energy from the midwest windfarms to the coastal cities I cannot help but think the oceans are already nearby. OPTT also has a new customer Leighton Contractors. They have contracted OPTT to identify good sites in Austrailia for wave farms and Leighton will work on permiting, power purchase agreements and financing.

Member Avatar devoish (99.07) Submitted: 2/11/2009 12:28:22 PM
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Since my last post:S.A.C capital has been buying shares for seperate accounts. They consolidated those accounts into one holding creating a greater than 5% holding.Announced a contract with lockheed martin to locate sites for development in the USA.Distant competitor Finevera Renewables filed to surrender its FERC development rights to two sites, one in Washington and one in California. They are removed from the game for now as they concentrate on land based wind energy and seek investors into their wave product. http://www.finavera.com/files/2009-01-06%20Finavera%20Renewables%20FERC%20permits.pdfPromotions: CEO and founder George Taylor has been promoted to Executive Chairman, and has been replaced as CEO by Mark Draper who has been with the company since 2004. This is a nice continuity of leadership by executives who have done very well so far. OPTT has also just created the position of Chief Technical Officer and hired Dr Phil Hart to fill it. Dr Hart came from Global Marine Systems a company whose expertise is laying cables on the ocean floor. This suggests that the Power Buoys are successful and the need in the company is to get the power from the buoy to the shore. This seems like a very positive indicator to me.

Member Avatar devoish (99.07) Submitted: 3/24/2009 10:01:23 AM
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3rd quarter, ended Jan 31st 2009; Only a little real news that has not already been reported. Financially expenses are as predicted, no surprises. 150kw powerbouy electronics have been shipped to the Orkney Islands project for deployment.

Member Avatar devoish (99.07) Submitted: 11/9/2009 7:38:37 AM
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Winner. $66 million contract to build a 19 megawatt wave farm in Australia with Leighton Contractors. Much of that money goes to local contractors and fabricators, who build the buoys, but the "guts" of the buoy come from New Jersey. This marks the beginning for production. Cost/megawatt 3.5 mil.
Comparably Accione just completed a 192 megawatt wind farm in Australia for a cost of $2.5mil/megawatt.

Member Avatar devoish (99.07) Submitted: 1/18/2010 9:36:29 AM
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CEO Mark Draper has resigned for personal reasons after less than one year. A sudden resignation is never a good sign. He has been replaced by CFO Frederick Dunleavy who has been with the company since 1990. Hopefully there is nothing more to this.

Member Avatar 1dms (49.15) Submitted: 5/13/2010 8:37:13 AM
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A US renewable energy company is proposing to meet the Government’s target of generating 500 megawatts of electricity from ocean energy systems by 2020, holding out the possibility of generating tens of thousands of jobs in Ireland

Ocean Power Technologies (OPT) made the announcement last night at a reception in the US ambassador’s residence in Dublin’s Phoenix Park during the course of a two-day workshop on marine energy and “smart grids”.

He also revealed that OPT was holding talks with Irish foundries over building all of the devices it would need to meet “all” of the Government’s target of 500-megawatts for ocean power. This would involve constructing 1,000 40-megawatt buoys.

(I think they meant 40 kilowatts.)

According to Mr Jawitz, “we’re talking about a $2 billion number” (€1.54 billion) in terms of investment. This would create “tens of thousands of jobs” in construction and even more indirectly, “and the real key is whether Ireland can step up to the plate”. He was referring to the need for a more streamlined approval process that would “clear all the obstacles” to such developments.

“We’re pretty confident based on the contacts we’ve had here that this is going to happen,” Mr Jawitz said.

(competition, OPTT is still testing 150kw and developing a 500kw buoy.)

Yesterday, it was announced that independent Irish firm Energia has signed a preliminary agreement with an American company, Ocean Energy Systems, for the installation of a prototype wave energy converter on a test site off Belmullet, Co Mayo.

Powered by 2.5 metre-high waves, the prototype device is capable of supplying 500 kilowatts of electricity to the grid, using a technology developed in the US by Dr Michael McCormick, who specialised in ocean wave energy at the US Naval Academy.

(Appreciate your following this devoish. Darrell)

Member Avatar devoish (99.07) Submitted: 5/14/2010 10:02:03 PM
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I have been slack about posting new data, thanks for helping.

Member Avatar devoish (99.07) Submitted: 7/5/2010 9:35:36 PM
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Competitor report - "Apart from this, the policies and regulations set by the government and the lack of awareness on the potential of wave and tidal resources are stalling market momentum. The extremely harsh weather conditions of the ocean require the technology to be very robust. Pelamis Wave Power has halted its 2.5 MW wave farm in Portugal indefinitely. The reason cited for this is water leakage, which has severely affected their buoyancy device. Apart from this, the company is short on funds due to the recent economic recession".

Another competitor - Seabase AB - has been in the water with a prototype since 2006, testing will continue until 2014.

Member Avatar devoish (99.07) Submitted: 8/1/2010 9:43:17 PM
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Ocean Power Technologies, Inc. (Nasdaq:OPTT)(AIM:OPT) ("OPT" or the "Company") announces that its subsidiary, Ocean Power Technologies, Ltd, based in Warwick, England has been awardeda £1.5 million (approximately $2.3 million) grant from the South West of England Regional Development Agency ("SWRDA") for the development of its next generation 500kW PowerBuoy(R) wave power system.

Member Avatar devoish (99.07) Submitted: 3/2/2011 8:15:31 AM
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"The PB150 PowerBuoy is the largest and most powerful wave power device designed by OPT to date, and builds on the Company's 15 years' innovation and in-ocean development experience of producing such systems. With a peak-rated power output of 150 kilowatts - equivalent to the energy consumption of approximately 150 homes - the PB150 is designed for use in arrays for grid-connected power generation projects worldwide.

The development of the device, built and assembled at Invergordon, Scotland, has utilized the skills of local firms and represents a multi-million pound sterling investment in the region. It is currently being prepared for ocean trials at a site approximately 33 nautical miles from Invergordon, off Scotland's northeast coast. The sea trials are expected to commence as soon as weather conditions permit. The Company is seeking additional financing for the commercial utilization of the buoy after the trial phase is completed including its possible deployment at various potential sites. A second PB150 is already under construction in the US for a proposed utility-scale project in Oregon, and the Company is involved in other planned projects in Australia, Japan and Europe that may utilize the PB150.

The ocean trials off Scotlandhave been fully consented by the Scottish Government. In addition, Marine Scotland, the directorate of the Scottish Government responsible for regulating marine and fisheries matters, consulted with many interested parties and stakeholder groups covering areas such as local wildlife, shipping, oil & gas and fishing interests.

OPT's PowerBuoy has a low visual profile, as most of the structure is submerged, and is designed to have a minimal environmental impact. The Company has considerable experience with in-ocean performance of its PowerBuoys, including its PB40 system which has been operating off Oahu, Hawaii, since December 2009 and has subsequently been connected to the grid. That system was developed under a multi-year project for the US Navy and the PowerBuoy underwent an extensive independent environmental assessment. This resulted in a Finding of No Significant Impact (FONSI) - the highest level of environmental assessment rating in the US. In addition, last year the Company signed a ground-breaking agreement with 11 US federal and state agencies and three non-governmental stakeholders for the phased development of a 1.5 megawatt wave power project at Reedsport, Oregon in a manner that protects ocean resources and stakeholder interests. "

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