OpenHydro signs water turbine agreement with energy giant EDF
FRENCH ENERGY giant EDF has hired Irish group OpenHydro to build underwater electricity turbines in a deal industry sources say is worth more than €20 million.
EDF, one of Europe's biggest utilities and nuclear-power operators, has appointed One51-backed OpenHydro to build and install underwater tidal turbines at a site off Brittany.
OpenHydro will install four to 10 turbines at a site off the Breton coast at Paimpol-Bréhat that will be capable of generating between two and four megawatts of electricity, which is enough to power between 2,000 and 4,000 average households.
The turbines will be connected to the French national grid - the system for distributing electricity from generators to customers - in 2011.
Neither side put a value on the deal at the weekend. However, industry estimates say the total value of the project will be between €23 million and €27 million.
EDF chose the Breton site because it has some of the strongest ocean currents off the European coast.
The project will allow both parties to test the technology in "real-life" conditions.
In common with other big power companies, EDF is seeking to develop "green" energy sources.
European governments provide incentives and supports for alternative energy.
In addition, utilities tend to emit large amounts of greenhouse gases, for which they have to buy carbon credits. Developing and investing in alternative energy allows them to offset some of this cost.
OpenHydro is one of a number of Irish companies developing ocean energy systems. Last May, the company connected a test model of one of its turbines to the British national grid from a site at Orkney off the Scottish coast.
OpenHydro designs and manufactures turbines at a facility in Greenore, Co Louth. Its systems convert tidal streams directly into electricity.
Last February, Canadian power company Emera paid €10.2 million for a 7 per cent stake in the group. The deal valued the overall business at €145 million.
The Emera investment put a value of more than €16 million on the 11 per cent stake held by One51, the investment vehicle backed by former Iaws chief executive Philip Lynch.
Emera is one of Canada's biggest power companies, with profits of more than 150 million Canadian dollars (€96 million) last year.
OpenHydro has raised more than €50 million since 2005 to pay for the commercial development of its turbines.
The company is led by chief executive James Ives, an engineer who has worked for consultancy Accenture and who previously advised clients such as Mercedes-Benz and Ferrari.
EDF is the world's biggest operator of nuclear reactors. Last week, it backed out of a bid to buy Constellation Energy in the US, citing market turmoil. The company said it still intended to build four nuclear reactors in the US.
EDF recently paid €12 billion to buy a majority stake in British Energy, making it the biggest utility in the UK.
It is planning to build a new nuclear power plant at Hinkley Point on the Bristol Channel in the south of England.