Marine Energy Market in Europe Still Weathering Economic Storm

Frost & Sullivan: Government Support and New Investments are now Vital

LONDON, November 17 - The nascent European marine energy industry is still weathering storms
unleashed by the global economic crisis. This market was particularly hard
hit by the recession because it relied so heavily on venture capital and
private equity investment. But now, it looks as though the UK government and
the EU will extend long-awaited lifelines helping companies continue to
develop this predictable and abundant energy source that is capable of one
day supplying 10 percent of the world's electricity needs. Government support
and new investments are key factors to boost the market.

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Frost & Sullivan (www.power.frost.com) estimates that if ocean energy
technologies continue to be supported and achieve their predicted potential,
approximately 3 gigawatts (GW) of installed capacity could be available in
the EU by 2020.

The recession has effectively bottlenecked investment, temporarily
slowing down development. In response, the UK government recently announced a
raft of rescue measures. The UK Carbon Trust granted 250,000 GBP and 150,000
GBP to Pelamis and MCT respectively to focus on installation and maintenance,
while the Marine Renewables Deployment Fund has offered a 22 million GBP
grant to wave and tidal developers. A part of a 20 million GBP of venture
capital from the budget for low carbon technologies has been earmarked for
marine energy technology developers.

The EU is also supporting the sector. A consortium led by the Finnish
wave energy company AW Energy, signed a 3 million EUR contract with the EU in
October 2009 under the CALL FP7 - Demonstration of the innovative full size
systems. The project will focus on deploying a 300kW device, known as the
WaveRoller, in Portugal for a one year testing period.

"Continued government intervention is absolutely necessary to boost the
marine energy market," says Frost & Sullivan Industry Analyst Gouri Kumar. To
a certain extent, this is an inevitable consequence of the fact that the
sector is still in the prototype development stage. "Consequentially, the
injection of venture capital, private equity or government grants is
critical, especially since the financial crisis effectively sank
contributions from private investors," Kumar adds.

Now more than ever, government support is imperative. However, such
support alone will not be enough to boost the market and push it in the right
direction. Investment from venture capital and private equity players would
be ideal at this stage, but is unlikely to be extended at sufficient levels
until the economy starts to recover.

It remains, then, for companies to try to weather the current economic
climate. To do so, major players should strive to differentiate the merits of
their technology in order to showcase the future potential of the device and
solicit enough capital to be able to reach commercialisation. With investors
getting pickier these days, the overall environment is becoming much more
difficult and competitive.

The Copenhagen summit in December may pose further challenges as there is
growing concern that it will not be able to produce a successor to the Kyoto
Protocol, thereby undermining the carbon markets. "This will have very little
effect on the marine energy market in Europe," explains Gouri Kumar.
"Although a high long-term price of carbon will contribute to the growth of
the renewable energy sector, there are other factors that will play a greater
role in the growth of the industry. The high price and volatility of oil and
gas in the future, energy security, the falling cost per kilowatt hour of
renewables electricity and the ambitious renewable energy targets set by
various governments and regions will collectively continue the push for
renewables. The credit crisis and government support are the most important
factors affecting the industry at the moment due to the stage of development
the market is at."

For more information on Frost & Sullivan's research on the Marine Energy
Market in Europe, please contact Chiara Carella, Frost & Sullivan Corporate
Communications, at chiara.carella@frost.com, with your full name, company
name, title, telephone number, company e-mail address, company website, city,
and country.

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    Contact:
    Chiara Carella
    Corporate Communications - Europe
    P: +44-(0)-20-7343-8314
    M: +44-(0)-753-3017689
    E: chiara.carella@frost.com

www.frost.com

Chiara Carella, Corporate Communications - Europe of Frost & Sullivan, +44-(0)-20-7343-8314, mobile, +44-(0)-753-3017689, chiara.carella at frost.com