A Scottish marine renewables company with a revolutionary product which could help make the country’s industry commercially viable has attracted funding of up to £550,000.
Kelvin Capital, one of Scotland’s most active Business Angel investment groups, has entered the renewable energy market by partnering with the Scottish Investment Bank (SIB) to back QED Naval and its Subhub project – which it believes can provide a major breakthrough in reducing the costs of deploying tidal turbines and help the industry become more commercially viable.
The investment deal sees Kelvin and SIB – the investment arm of Scottish Enterprise – invest £200,000 now through the Scottish Co-investment Fund, with a second tranche of funding to come early next year.
The Subhub is a foundation structure for transporting and installing wave and tidal turbines which, if successful, will replace the need for large, specialist vessels to deploy turbines and also improve the performance of those turbines when compared with a typical tower installation.
“We are always keen to invest in young businesses with global ambitions, but who require the capital to achieve those. Jeremy and the team at QED Naval have patented technology which could be transformational for the tidal energy sector in Scotland and beyond, and has already attracted significant government backing.
“We’re delighted to provide them with the investment and support they’ll need to see the project through to commercial success.“
Jeremy Smith, Managing Director of QED Naval, which was advised by MBM Commercial, said:
“We are delighted to be partnering with Kelvin Capital who have been quick to recognise the UK and global potential for the Subhub in an immature market which is showing strong signals as being the next high growth energy industry.
“Tidal energy has the potential to fulfil 20% of the UK’s current energy consumption putting a severe dent in our requirement for fossil fuels.
“We are confident that we can deliver a step change in deployment costs of tidal turbines offering improvements in power output, and hence revenue, as another benefit. These funds will allow us to commercialise the Subhub in a strategic manner, to minimise the technical risks of the project providing confidence to the investors.
“The next six months will see us prove the system in the world class Flowave tank testing facility in Edinburgh, that will independently verify the design and design process. We are on course to deliver a community scale prototype delivering an array of tidal turbines to a test site, capable of producing a 150kW, equivalent to supplying power to over 120 homes, by 2016.”
The project is still in early stages of its demonstration phase, with £1.75 million required for a two-year plan which will culminate in a three-month trial in real offshore conditions.
In May this year, the Subhub project was awarded a Scottish Enterprise SMART: SCOTLAND R&D grant to support its ongoing development during the demonstration phase.
Following successful testing and demonstration, the Subhub will first be used for community scale projects of up to 1MW. However, the Subhub is aimed at larger commercial devices of 1MW and above, replacing the large, specialist vessels typically used to install these devices.
QED Naval was founded by Managing Director Jeremy Smith, who has more than 15 years experience in R&D for the naval sector.
Sandy Finlayson, Senior Partner at MBM Commercial, said:
“This financing will enable QED to build a prototype Subhub which could be transformational for the tidal energy industry. We wish Jeremy and his team every success in the next stage of their journey to commercialisation”
Kerry Sharp, Head of the Scottish Investment Bank, said:
“Renewable energy holds exciting commercial potential for innovative, outward looking young companies like QED Naval. We are delighted to be supporting them as they take advantage of the opportunities afforded by Scotland’s emerging tidal energy industry.”
Pictured (r) is Jim Hall, co-founder of Kelvin Capital