Orbital Marine Power (Orkney) Debenture 2

What does the company do?

Orbital Marine Power Limited (“Orbital”), is a developer of floating tidal stream turbines with offices in Orkney and Edinburgh. The company has been testing and scaling up its ambitions since starting in 2002, with increasingly larger floating turbines being installed at the European Marine Energy Centre (EMEC) in Orkney’s fast flowing tidal stream. The company aims to drive down the cost of tidal energy as it scales its technology and installs additional tidal turbines.

The company’s turbine is a novel floating technology designed to reduce the costs of installing and maintaining the turbines, and therefore make tidal energy a competitive source of low carbon electricity for our energy mix. The turbine design allows it to be installed and maintained using small, low cost workboats and designed so that the majority of all maintenance work can be carried out quickly and cost effectively while the turbine remains on site. Floating systems can also be deployed over a greater range of tidal sites and sit within the most energetic part of a tidal stream. These factors all contribute to driving down the cost of the energy it produces while offering greater versatility.

Orbital is the ultimate owner of Orbital Marine Power (Orkney) plc which was set up to own and operate the Orbital O2 2MW turbine and associated project assets - the company’s first production scale turbine installed in 2021 with the aim of further driving down the cost of tidal energy.

The O2 turbine has a 74m long hull structure with twin 1MW power generating nacelles at the end of retractable leg structures designed to give low cost access to all major components for servicing. Ten metre blades give the O2 more than 600m2 of ‘swept area’ to capture flowing tidal energy. The floating structure is held on station with a four-point mooring system where each mooring chain has the capacity to lift over 50 double decker buses. The O2 has been designed so that installation of the turbine, and all its associated moorings, can be carried out by small work vessels and servicing can be carried out by RIB (rigid inflatable boat) vessels – minimising downtime and lowering construction and operational costs. Electricity is transferred from the turbine via a ‘dynamic cable’ to the seabed and a ‘static cable’ along the seabed to the local onshore electricity network.

The O2 turbine is expected to operate in the waters off Orkney for 15 years. It has the capacity to meet the annual electricity demand of around 2,000 UK homes with clean, predictable power from the fast flowing waters and offset approximately 2,200 tonnes of CO2 production per year. In a further ground-breaking element of the project, the O2 is to provide power to EMEC’s onshore electrolyser to generate green hydrogen that will be used to demonstrate decarbonisation of wider energy requirements. The company earns revenues from the sale of electricity generated by the O2 turbine, and also receives 5 renewable obligation certificates (ROCs) - a form of subsidy - for each unit of electricity generated.

Why did the company raise money?

The construction of the O2 turbine was part funded by a £7 million investment through Abundance in 2019, with it successfully launching and generating power in 2021. This second investment through Abundance provided some of the funds to repay the construction finance for the O2 turbine and support the future growth of the Orbital business.

How does the company expect to repay the investment?

The company expects to repay investors from the operational revenues it earns from selling electricity and its renewable obligation certificates.

How is the company making an impact?

Tidal stream energy harnesses the energy from moving water generated by the tides using turbines to generate renewable electricity. It is one of the newest entrants into the renewable energy market and as costs continue to fall it could make a significant contribution to the UK’s energy security and net zero targets, as well as a wider global market.

As a form of renewable energy, tidal energy has some particular advantages. Driven by the measurable tides, the energy produced is highly predictable and can compliment more intermittent renewables like wind and solar.