Minesto to enhance Deep Green product range and intensify market penetration activities
Minesto intends to develop a smaller Deep Green device, DG100, which will provide the company with an additional commercial product to open new markets and business opportunities, including those in Asia. At the same time, Minesto intends to intensify and expand its activities for market penetration to establish the company's unique Deep Green technology in more markets.
The preparations in Wales for offshore testing of Minesto's first commercial-scale Deep Green device is now in its final phase. Installation is due to commence in April 2018, with the ambition to generate electricity during the third quarter 2018. This is a key milestone in the overall development of the Deep Green technology and the results will enable customers, project financiers and funding partners to take the next steps in cooperation with Minesto. The performance results generated during Autumn 2017 by Minesto, based on its model-scale ocean testing and analytical simulations, indicates areas where performance can be increased and hence competitiveness in future design iterations.
The future global renewable energy mix must consist of a combination of technologies that utilise different natural resources for power generation, to provide the world's population with cost-effective and reliable sources of renewable energy. Minesto's Deep Green concept is such a technology, as it is cost competitive in comparison with fossil energy as well as solar and wind power in parts of the world.
Global expansion potential
Based on a new internal analysis of university and marine research studies, Minesto estimates that the identified exploitable potential of the company's product exceeds 600 GW installed capacity; three times higher than previous assessments. This translates into a long-term global expansion potential for Minesto’s technology equivalent to one and a half times today's global nuclear power capacity. In addition, predictable and secure base load power generation and non-use of land areas provide further potential economic benefits of Minesto's technology.
As a first step towards realising this potential, Minesto intends to enhance the company's product range while intensifying and expanding its activities for market penetration.
Enhancement of the product range
The combination of dialogue with global energy industry players providing small-scale energy systems (micro grids), customer enquiries and market analysis, has indicated to Minesto that there is a significant customer demand for smaller-scale autonomously operated (“Island Mode”) Deep Green systems. Island Mode installations can be utilised across a wide spectrum of applications from remote industries to entire communities that do not have access to centrally distributed electricity either today or in the future.
A smaller Deep Green DG100 unit, with a rated power of up to 100 kW and a 4–5-meter wing span provides Minesto with an additional commercial product that can be supplied into more customer and partner-funded projects, thus cost-effectively opening new tangible markets and business opportunities – in Asia as well as on other continents.
Intensified activities for market penetration
During the Autumn of 2017, political uncertainty surrounding the United Kingdom’s revenue support mechanism for new renewable energy technologies has arisen. In addition, negotiations on the UK’s exit from the EU have not yet yielded any results related to the marine energy industry in Britain.
Minesto's current work in Wales is not affected by this, nor does it affect potential following financial support from the European Regional Development Funds in Wales. However, there are potential for delays to future deployment phases of Holyhead Deep given that the political uncertainties potentially will last for a long time. An alternative revenue support mechanism for the UK marine renewable energy industry has been proposed, but is not yet in place, which complicates project investments in the UK.
To mitigate this uncertainty, and to take advantage of identified business opportunities, Minesto intends to intensify and broaden its activities for market penetration to three geographical markets:
- The ongoing development in Wales. The first phase of the project, to commence commercial-scale electricity production with DG500, is a crucial milestone to Minesto. Scope and content for the next step in the development of Holyhead Deep will be adapted to the political environment that will be formed in 2018. The long-term goal of expanding the Holyhead Deep site into an 80 MW array remains.
- Site development within the post-Brexit EU to build on and capitalise on developments in Wales. This initiative aims to ensure full access to the EU's ambitious support structures for the expansion of renewable marine energy. By collaborating with the company's current supply chain, project developers within the EU and Minesto's investor InnoEnergy (owned by European utilities), Minesto estimates the conditions for commercial breakthrough in this market to be good.
- Intensified activities in Taiwan to establish a tidal stream site in Keelung and a first installation in ocean currents.
Share Rights Issue
The Share Rights Issue, proposed by Minesto’s Board of Directors and announced on December 22, 2017, aims to:
- Ensure the successful completion of the first installation and demonstration of the Deep Green technology in Holyhead Deep.
- Strengthen and expand Minesto's commercial ability to ensure the fastest path to a commercial breakthrough.
Accordingly, the funds raised are planned to be used mainly for:
- Installation, testing and demonstration at Holyhead Deep, Wales.
- Enhancement of the product range.
- Site development and activities for market penetration in the UK, EU and Taiwan.
For a more detailed description of Minesto's operations and details of the Share Rights Issue, please refer to Minesto's website www.minesto.com and the Swedish prospectus, which is expected to be published around 25 January.
For additional information please contact:
Dr Martin Edlund
CEO, Minesto AB
+46 31 29 00 60
Communications Manager, Minesto AB
+46 70 570 75 08
Minesto is a marine energy technology company with the mission to minimise the global carbon footprint of the energy industry by enabling commercial power production from the ocean.
Minesto’s award winning and patented product, Deep Green, is the only verified marine power plant that operates cost efficiently in areas with low-flow tidal streams and ocean currents.
In May 2015, Minesto secured a €13m investment from the European Regional Development Fund through the Welsh European Funding Office, for the commercial rollout of Deep Green.
Minesto was founded in 2007 and has offices in Gothenburg, Sweden, Holyhead, Wales and Portaferry, Northern Ireland. The major shareholders in Minesto are BGA Invest and Midroc New Technology. The Minesto share (MINEST) is traded on the Nasdaq First North Stockholm stock exchange, with G&W Fondkommission as Certified Adviser.
Read more about Minesto at www.minesto.com
Press images and other media material is available for download via bit.ly/minestomedia.
The information in this press release is such that Minesto AB (publ) shall announce publicly according to the EU Regulation No 596/2014 on market abuse (MAR). The information was submitted for publication, through the agency of the contact person set out above, at 08:30 CET on 15 January 2018.