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CWE carnegie wave energy limited

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Well done Bonus, it was a great and reassuring read for a Sunday...

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wagga dave

614 Posts.

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13/03/16

20:20

Post #: 17263459
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Originally posted by Bonus ↑

CWE Presentation Sydney

I will go through the slides as they were presented by MO. I have left some slides numbers out as the info he discussed about the particular slide was not anything new.

Slide 3 - A Global Leader in Wave Technology
MO stated that Angus McCrone from Bloomberg New Energy Finance has provided this information. MO believes that Bloomberg are the pre-eminent analysts in clean energy. McCrone is attributing all wave energy forward looking statistics solely to CWE. McCrone’s forecasts for wave energy MW capacity are all currently dedicated to CWE as the field leader by a mile in the wave energy spectrum. The supply chain is also looking to Carnegie as the leader in wave energy going forward.

Slide 4 - Carnegie have approx. $60 million available for future projects and they have never been so well capitalised. Any other wave energy company would love to have these funds. – No equity raisings are required.
Carnegie are the only wave company that have 10’s of thousands of “in ocean operational time”. Until you built a system and put it in the ocean you simply don’t have a technology.

Slide 5 - the Board are deeply focused on the direction of Carnegie.

Slide 6 - Carnegie have and are doing a great deal of work in high value markets such as UK/European & Island markets. There are also some cheaper options in Chile.

Slide 7 - CWE are receiving great recognition. Awards are great but not what CWE is focused on. These awards are important and these brands on this slide are following CWE. All affiliations on this slide are driven by the companies listed here. CWE have no PR dept. and don't need one

Slide 8 – None of these brands work with companies who are not delivering.
These brands are paranoid about risk, especially the Department of Defence in Australia and globally. The other large organisations in this slide being involved in Carnegie Wave Energy is a big tick for them. Governments hate involving themselves with losers and this is a big positive with the runs on the board that CWE currently have.

Slide 10 - Offshore Wind Energy is the closet to wave energy in the development pipeline. CETO buoys can easily be placed in between these wind turbines. The buoys need 50 metres between them simply to be able to drive a boat through for servicing reasons.

The water at the Hornsea Wind Farm is approx. 30-100 metres deep which is easily suitable for CETO 6. 140 pounds per MWH which is approx. $280 AUD per MWH is 28c per kilo watt hour which in Australia is expensive, but it is definitely not expensive in the UK. There are lots of synergies with offshore windfarms and wave energy. The supply chains are non-existent in Australia whereas the UK & Europe have highly leveraged supply chains.

Slide 12 – there were no blips whatsoever in 6 metres waves. Results were within 6.7% of accuracy measurements of which CWE and stake holders were very happy with these results.

Slide 13 – Shows Tuning Control Systems measurements which is paramount to data gathering measured in 20 minute increments. The Buoy has a natural resonance with the size of the buoy being built to the dominant sea state. The tuning is then tweaked for the sea state resonance. This is what CWE have been doing to the CETO 5 buoys for the past year to November when they were removed from the water. “By increasing and decreasing the pressure across the piston we can manipulate the response of the buoy in real time”
A team of operators were setting pressures for every sea state which can’t be done in a wave tank.

Slide 15 – Electrical generation is inside the pod which is inside the buoy. The pod was sitting on the sea floor with CETO 5.

Slide 16 - Shows 6 access ports (modular access system) on the top of the buoy which equipment such as power generation modules are installed and retrieved. This gives the ability to swap out failed components or those due for maintenance.

Slide 17 – a regular tug tows the CETO 6 to site with no requirement for divers. A lot of forethought has gone into the deployment of the CETO units. Installation considerations need to be factored in before the buoy was even built. It’s no good having a great wave energy device if you can’t deploy it safety and efficiently.
Construction will start on CETO 6 at the end of this year and will be operational by the end of next year 2017.

Slide 21-22 – Interesting comments made here by MO
This is a snapshot of the sites open for business but they are empty. CWE already have a birth as we know at Wavehub. In these sites there are 100MW of capacity ready to use for a wave company with a leading technology such as Carnegie. Carnegie won’t be in this market forever but will use them as a platform to launch projects anywhere in the world
Carnegie are easily the leading wave energy company worldwide with daylight, shadows and thoughts second and the next company a very distant 3^rd.
Westwave is in construction in Ireland. The other sites are ready to go. These sites are doing their utmost to get Carnegie to come to site. All infrastructure is already in place on these sites which is a huge opportunity for Carnegie which is well at the front of the queue. These projects are the reason MO is now in Europe and the UK. These sites will be the first outside of Perth.

A 10-15 MW project at any of these sites will offer a commercial return.

Carnegie have an application for funding lodged & are waiting on the sizable grant from the EU which is due in Q3 this year. The EU will heavily grant fund 2/3 of the CAPEX for the first unit. The UK government is to provide the site & the feed in tariff and the EU’s role is to provide the capital support. CWE will not be doing the heavy lifting as far as providing funds are concerned, they will be well supported.
The first step is 1 unit this unit will be installed and checked by the fund providers then the next 9 units will be installed. There is a very clear template in place for this methodology.

Slide 23 – Newer technologies are always looked at for future years of operation. This slide refers to Artemis from Mitsubishi Heavy industries who approached CWE. They were represented at the presentation in Sydney by one of their Leading Managers. These technologies cost CWE nothing to develop.

Slide 24 – Many islands have approached Carnegie over the past few years to install wave energy systems but installing into an existing power grid is very involved and return on investment is paramount. No one across the world appears to be an island power grid specialist. Carnegie need to know small island states can also pay their way. The way Carnegie will deliver into island power grids is through Microgrids.

There is huge opportunity for renewable energy & especially wave energy capacity to be deployed into island nations as the slide indicates. Island nations don’t like to be leveraged to expensive diesel. Just because the price of oil is low doesn’t mean the costs are now low. Transport costs to get the diesel to the islands is the most expensive part of the pie.
Carnegie will need to integrate their wave energy system into the existing power grid and research/analysis on the islands power gird is very involved. The total market is massive but there are many considerations to take into account, in this regard the big power providers across the world are not highly involved in island states. This is where a nimble company such as Carnegie can flourish and Mauritius is the start.
Carnegie are currently studying the power grid in Mauritius and are developing a renewable energy road map to design a Microgrid project.

Consistent with these arguments funding needs to be arranged and DFAT were approached as they were already providing funding to islands. Carnegie said to DFAT why don’t you channel the funding through us and they eagerly agreed. DFAT can promote Australian technology & jobs and still provide funding to island neighbours.

A wave energy buoy will be dropped of Mauritius very soon.

Carnegie don’t have the full capability to integrate into island nations electricity grids as yet and this will take time.
Carnegie tried to outsource the control systems for CETO 5 to a large reputable company (EDF – Reunion Island) but they completely stuffed it up along with DCNS. They didn’t think about how to get the unit into the water and it was a disaster. Carnegie then brought this back in-house and built it themselves. This was painful but needed to be done at the time.

Western Power realise that Microgrids are the future and are actively championing distributed power stations through Microgrids. Carnegie are hoping to unlock some funding for this very soon.

My opinion is that MO is not just in Australia for these presentations. There are other reasons he is here which you can see between the lines in the text above. There is an election coming up very soon and the Federal Government has a need to promote the world leading wave energy company which conveniently is in their own backyard.
Carnegie has a great relationship with the DoD and a recently retired commander of the Stirling Naval base was at this Sydney presentation also. This gentleman was taking MO to his next meeting after the Sydney KPMG presentation and didn’t want to be late.

There is a lot going on with Carnegie. CETO 5 at Garden Island is now ancient history. The money $12 million has been put in the bank from the deliberately written off CETO 5. Models are replicable and wave energy has a huge advantage in the Microgrid space in the future.

Questions were:
Will CETO 6 in Mauritius precede CETO in the UK? – No, the first commercial project Cornwall already has infrastructure in place. Mauritius will be next after Cornwall.

Is the Bosch Rexroth Power generation system mature? – yes. It is ready to go into CETO 6.

There was a project called Wavepod with Aquamarine who were Carnegies peer. Aquamarine died unfortunately, they were the lead component for Wavepod. This project will now never happen.
Carnegies relationship with Bosch predates Wavepod and their relationship with Bosch is in excellent shape & ongoing.
MO is keen to get his hands on Aquamarines old assets. The asset belonged to Aquamarine not Bosch and $2million pounds were spent on it.

Does CETO 6 create cheaper energy? – yes and it’s easier to integrate. CETO 6 can also simply plug into and Desal plant whereas CETO 5 needs much more infrastructure.

What has happened to Bermuda and Triton Energy? – They are still desperately waiting for this technology but Carnegie need to work on the Microgrid intricacies first. UK/Europe will be first for commercial reasons ie $$$ then Mauritius then other island nations will come. Stay tuned as Bermuda is coming, as are other island nations.

Will the UK Wavehub components be built in the UK? – almost certainly. Components cannot currently be made in Australia.

EDF have had the licence for CETO for some years are they making a contribution? – they are waiting for Carnegie to commercialise the product as they do not commercialise products. MO talks to EDF every few months or so.

Are island markets approaching Carnegie? can they wait 10-15 years for this technology? – Carnegie are trying to go as fast as they can without risk. Carnegie have a product to sell and want to be a power solutions provider but this will take time.

When will you generate income? – Profit forecasts will not be made at this time. Carnegie are about developing a technology at this stage. MO is not happy with the current share price and thinks CWE are hugely undervalued. He thinks the share market has got it wrong in regards to Carnegie’s recent massive successes. MO’s view is now is not the time to sell CWE.

cheers..... sorry for the lateness of this post from Mondays meeting

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Well done Bonus, it was a great and reassuring read for a Sunday morning. Now, I have done some back of the beer coaster calculations for the 10 C6 buoys in Cornwall, and would love others to ratify/criticize/correct me:

$280 per MWh times 10 (10 buoys) = $2800
$2800 times 24 hours = $67 200
$67 200 times 365 = $24 528 000

Obviously lots of assumptions, including best efficacy of buoys, big waves etc.

So, $24+ million in revenue by the end of 2017 ish??? Then there is Mauritius and more...

if these numbers are a realistic possibility, sp is cheap!

what say you??

DYOR

CWE Price at posting: 3.6¢ Sentiment: Hold Disclosure: Held
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