www.theaustralian.news.com.au
August 01, 2009
Timothy Finnigan, 40, wants to turn Australia's ocean wave and tidal energy into usable electricity.
An ambitious venture for sure, but his company, BioPower Systems, backed by venture capital, already has two pilot programs under way to supply power to Flinders Island and King Island, as well as firm European interest. To the lay person it may sound like science fiction, but Finnigan predicts the ocean will be supplying energy to Australian homes within a few years. "There's huge opportunity; this is not just an environmental breakthrough technology but an economic one," he says.
Bold words from an innovator and entrepreneur who started with only $5000 seed capital five years ago and who has managed to garner over $12 million in investment capital from private equity and government grants to develop his technology. Bold words, too, out of Australia, a nation that must rank as the Saudi Arabia of coal. "We won't be competing against coal; we'll sit alongside wind and solar as a renewable energy source," he says.
As a pioneer in ocean and tidal power energy, Finnigan joins renewable energy innovators from around the globe, leading the march to bringing new base-load energy technologies into commercial production. Finnigan believes the content of the climate change debate is being driven by households. "There's been a change over the last year or two. It's become such an important issue to everyone. People are looking to renewable energy. Investors and government will follow to take a stake in renewable technology."
Formed in 2006, BioPower Systems is commercialising Finnigan's ocean power conversion systems. These are modular machines designed to harness ocean energy and deliver electricity ashore via a cable. Multiple machines are deployed in the coastal ocean as a farm, not unlike a windfarm on land, with the cable running ashore and connected into the distribution grid. Unlike other renewable energy technologies, these systems are fully submerged. "They will have zero visual impact," says Finnigan, a marine engineer with 17 years industry experience.
He adds: "A marine engineer understand the wave mechanics of the ocean and the way wave and ocean imparts forces on structures. They work on design and development of oil rigs and structures like jetties. "I moved into hi-tech to try to get wave and tidal power energy working. I saw how heavy structures need to resist heavy forces in the ocean. I took a simple approach, looking at what types of systems work well in the ocean.
"If you look at how plants and animals resist the forces; they flex and move with the forces. I took this as a design clue. We've adopted nature's mechanisms for survival and energy conversion and have applied these in the development of our systems. The resulting systems move and sway in tune with the forces of the ocean, and naturally streamline when extreme conditions prevail. This leads to lightweight designs and associated low costs. "I needed to consider all the elements of what would construe a viable, commercial technology and build them one by one in a design, coming out the other end with a prototype."
BioPower remains an early-stage, high-risk technology venture. Not surprisingly, Finnigan's transition from engineer to innovator to entrepreneur was a considered exercise. "I looked at the research and laid out the arrangements that I thought might work and did some back-of-the-envelope calculations, then on to the computer and crunched the numbers.
"What came out was a raw, basic estimate that showed, yes, this thing should produce power at roughly the amount that would make it viable. That simple piece of information was enough to raise money and launch patent applications and start tank testing. It was an incremental process. I needed to raise $200,000; that took a year or so."
The usual route of friends and family, together with a $50,000 investment by venture firm CVC REEF, gave Finnigan the funds needed for patent protection. He says his experience in raising capital is illustrative of a risk-adverse culture. "The culture in Australia lags other parts of the world in its appetite for risk, in funding new technology," he says. "We struggle to compete, particularly with the UK and the USA, where institutional investors are willing to back wave and tidal power companies. This is a capital-intensive industry and we have to work very hard to attract capital.
"We're at pilot stage now. The next stage is commercial demonstration. Our technical strategy is to grow our systems to utility-scaled farms of 30 MWs per farm; these become effectively wind farms under the ocean and will get connected to the grid in the same manner as wind farms. "We could supply up to 5 to 10 per cent of Australia's power in the long term."
Energy remains one large puzzle with the major pieces being the incumbent - - coal - - and a slew of renewal energy alternatives including ocean and wave power. "Wave and tidal power have to contribute to the mix. There are cases where wind and solar don't deliver. Wind is erratic; solar turns off at night; waves are much more regular. It fills that need for stable supply. Currently it's on the fringe because it's not yet commercial. But it is on the brink.
"We need a commercial-scale demonstration that (it) can compete against other energy sources. At the early stage it'll be on the expensive side; we'll be looking for government subsidy by way of rebates to make it viable while we move down the cost curve. "There's a clear path to getting to market in Australia. But there's a global industry too. We see opportunities in Europe. Being a small company, one of the ways to get into markets is with strategic partnerships, like utilities or engineering construction companies or government agencies."
Finnigan concedes that his role, currently as CEO, may change. "We're approaching the juncture whereby we'd be broadening and adding depth at executive level. I have full intention in driving the technology. As the company globalises, we'll be looking for a chief executive who can take the technology global." He says Australia's clean energy industry remains dynamic. "The UK is leading the world in ocean and wave. They have government incentive schemes. They're years down the track. (But) we argue that our technology is better."
Riding the new wave of sustainable energy
IT has long been recognised that ocean waves and tides convey vast amounts of energy. Ocean energy is a predictable and abundant source of energy with the ability to supply "approximately 10 per cent of the world's electricity needs", according to the Frost & Sullivan report, "Marine Energy Market", released last year. The energy in ocean waves originates where strong winds churn up the sea surface, for example in the Southern Ocean, leaving swell waves to propagate long distances to our coastlines.
Tides are driven by the gravitational pull of the moon and sun. The rise and fall of the tides creates strong ocean currents in certain locations. Wave motions and tidal power currents are the two primary sources of ocean energy that are being considered for development as sources of clean renewable energy, in Australia and worldwide. William Highland, a principal of venture firm CVC Reef, which has invested in BioPower Systems, said the investment process was a lengthy one. "We did a lot of homework. The ocean and wave as a renewable source of energy is differentiated (from other energy forms). But for us it was also backing the man.
"Timothy Finnigan had good experience, he had a vision which we liked and he had a mature approach to working with investors. He understood the need to work to milestones in order to go to future funding rounds. Early stage technology ventures will hit hurdles; sometimes things fall over. You need people who will get up and surmount the hurdles." Biopower Systems has recently completed a $6million funding round. The private equity investment round was cornerstoned by Lend Lease Ventures with additional investment from CVC Reef and CVC Sustainable Investments. The new capital, together with a recently awarded $5m Renewable Energy Development Initiative grant, will fund the pilot programs for BioPower's systems at grid-connected sites in Tasmania.
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