Ocean Power Buoyed by Progress in Japan

| About: Ocean Power (OPTT)

Ocean Power Technologies Inc (NASDAQ:OPTT) , the American company behind technology that generates electricity from the ocean using sophisticated PowerBuoys, has expanded its relationship with Mitsui Engineering & Shipbuilding (MES) with the signing of a new contract to develop PowerBuoy technology for use in Japanese sea conditions.

Under the terms of the new contract, the two companies will work together to develop a new mooring system for OPT's PowerBuoy, customized for wave power stations off the coast of Japan. The new system will undergo testing at Mitsui’s wave tank facilities to verify the results of extensive computer modelling. OPT expects to receive 18 million yen (approximately $220,000) for its development efforts. Work under this agreement is expected to be carried out over the next six months.

In October 2009, OPT and a consortium of companies including of MES, Idemitsu Kosan Co., and Japan Wind Development Co. signed a Memorandum of Understanding for the development of wave energy in Japan. The companies have since worked with the Japanese government to increase recognition of wave power in Japanese energy policy. As part of the latest deal, OPT and Mitsui intend to complete work on the mooring system and progress the identification of a project site for an in-ocean trial of the PowerBuoy system.

Charles F. Dunleavy, the chief executive of OPT, said: “We are very pleased to continue to build on our relationship with MES. This new agreement is consistent with OPT's global strategy to form alliances with strategic partners in key markets. We believe working with MES will facilitate the realisation of the great potential of wave power as a concentrated and predictable source of renewable energy for Japan.”

The Japanese government has pledged to target a 25% cut in greenhouse gas emissions from 1990 levels by 2020 as part of its intentions to boost renewable energy sources to about 10% of primary energy supply by 2020. The Japanese government has specifically targeted wave energy as a component of this strategy.

Last month, OPT said it had been awarded $2.75m in additional funding from the US Navy for a second stage under its existing contract to provide an autonomous PowerBuoy wave energy conversion system for the Navy's near-coast anti-terrorism and maritime surveillance program. The new award followed the successful completion by OPT of the first stage of a four-year $15.0 million project for the US Navy's Littoral Expeditionary Autonomous PowerBuoy (LEAP) program.

Disclosure: None.