The tide bringing in returns for investors

Written by Rebecca O'Connor on 28th Jun 2017

If there is one energy source that makes a lot of sense for the UK, a small island, it’s tidal power.

Yet so far, the waves have remained a relatively untapped source of energy.

Abundance Investment, the peer-to-peer lending platform, is offering people the chance to invest in the development of the UK tidal industry with a 5-year, 8 per cent annual return, peer-to-peer loan to Atlantis Resources, an AIM-listed tidal energy company. Investments made via the platform’s Innovative Finance ISA wrapper will be tax-free. If you have a Self-Invested Personal Pension, you could put it in that, too.

(The UK) can be considered the Texas of tides

The project raised more than £1mn of a £5mn target in its first day yesterday, from 401 investors.

Atlantis is the operator of Meygen, the world’s largest tidal stream project, off the coast of Scotland. It plans to use the money to invest in its technology and expand to new sites.

Bruce Davis, co-founder and joint Managing Director, Abundance, said: “It’s often claimed that the UK is the Saudi Arabia of wind – we can be considered the Texas of tides. With some of the best tidal resources in the world the UK can and should become a global leader in this proven and exciting technology, and pioneering companies like Atlantis are making it happen. We are proud to be offering the British public the chance to share directly in the returns this exciting new renewable energy will earn.

“For Abundance’s customers, this is the first time they have had the chance to invest in a UK-quoted company with global interests, an important sign that the green finance sector is also maturing and helping to drive the growth of the green economy.”

Tim Cornelius, CEO, Atlantis Resources Ltd, said: “This is the most exciting time in the history of tidal power. We want to raise further capital to take advantage of our recent success which will help us achieve the huge potential the ocean offers for generating clean, environmentally benign, highly predictable power across the world. The success of our flagship Scottish project MeyGen has significantly raised awareness of tidal as one of the most rapidly growing sources of sustainable electricity generation for the future, and this offer is a chance for ordinary investors to help it grow and share in its financial success.”

Whilst harnessing energy from the tides has been happening for centuries in traditional tidal mills, it has only recently developed as a technology for generating commercial scale renewable electricity, with previous projects reliant on large barrages.

Tidal turbines are the newest form of the technology; they operate like underwater windmills but driven by the power of consistent, fast-moving marine currents. The power generation avoids many of the problems associated with other forms of renewable generation. It has the advantage of being completely predictable; the turbines can’t be seen beneath the water; they have a very low impact on marine life; they don’t impede fishermen and don’t interrupt recreational or commercial sailing vessels.

Atlantis estimates that there is potential for 20 GW of tidal stream power projects in the world, of which more than 11 GW is in the UK, much of it in the fast-flowing waters off the coast of Scotland. The first phase of the MeyGen project – the largest of its type in the world – is 6MW (generating enough electricity for the equivalent of 2,600 homes) and is planned to reach its 86MW aggregate installed capacity by the end of 2019, with further phases of 166 MW and 146 MW aiming to be completed in the next 10 years.

As well as the MeyGen project in Scotland, Atlantis has other tidal stream projects in the pipeline in France, South Korea, Canada and Indonesia. It is also working to develop a tidal barrage project in the Wyre estuary in the UK and investigating opportunities associated with pumped and battery storage.

Like all Abundance offers, investment in Atlantis Ocean Energy starts from only £5 and the debentures are eligible to be held tax-free in an Innovative Finance ISA. The bond offer seeks to raise a minimum of £2 million. Together with the capital raised in Atlantis’ recent £4 million share offer, funds are expected to be used to progress and accelerate the development of the best opportunities in the Atlantis project pipeline, to repay some more expensive debt, and to provide general working capital for the Atlantis Group.

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