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Siemens Buys Stake in Marine Current Turbines

|Includes: VAALCO Energy, Inc. (EGY)

Siemens Energy (NYSE: SI) has acquired a minority stake in Britain's Marine Current Turbines, a developer of tidal current energy turbines.

Financial terms of the deal were not disclosed. 

With the acquisition of just less than 10%, Siemens is marking its entrance into the ocean power market, which has the potential to provide up to 200 gigawatts of power worldwide by 2025 according to a recent report.

Marine current turbines generate electricity by utilizing water flows such as tidal currents. The turbine is fixed on a pile and is driven by the flow of the tides. This technology effectively is similar to an underwater wind turbine. The rotor blades are not driven by wind power but by marine currents. The water has an energy density of more than 800 times that of wind. Twin rotors rotate with the movement of the tidal flow and pitch through 180 degrees to optimally track tidal current direction and speed. The key advantage is that the generated power is predictable in the tidal cycle.

Marine Current Turbines has already implemented its first commercial demonstrator project SeaGen in Strangford Lough in Northern Ireland. Since November 2008, two axial turbines with a combined capacity of 1.2 megawatts (MW) have been feeding power into the grid to supply about 1500 homes.

Suitable sites are essential for the success of such projects. In particular, coastal regions with strong tidal currents such as those in the UK, Ireland, Canada, France and East Asia, offer major potential for this ecofriendly power generation technology. Tidal power stations are part of the Green Grid plan for the North Sea. Nine European countries are planning to connect renewable power generation sources like wind, tidal or hydro power to a HVDC underwater energy grid in the North Sea.

Martin Wright, Managing Director of Marine Current Turbines said: "Siemens' investment in MCT underlines the significant commercial potential that exists for tidal energy across the globe, and enables us to draw upon the company's extensive knowledge and experience in turbine generation technology."

Marine Current Turbines Ltd was established in 2000. The company has its first commercial demonstrator project SeaGen in Strangford Lough in Northern Ireland and it is working on a deployment in Canada's Bay of Fundy with Canadian company, Minas Bay Pulp & Power. Since February 2008, the company has partnered RWE npower on plans to develop a tidal farm in waters off Anglesey, North Wales. Other shareholders include Carbon Trust Investments (since December 2009), EDF Energy, ESB International and Bank Invest.

Last month the US Department of Energy released a report examining the potential environmental impacts of ocean energy development.


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