Latest News

Interview With Atlantis Resources’ CEO Timothy Cornelius

Atlantis Resources Corporation is currently assessing opportunities in several countries in the Asia Pacific region.

Company’s CEO Timothy Cornelius, who is scheduled to speak at the forthcoming 3rd International Tidal Energy Summit 2009, spoke to Tidal Today about the current regulatory and business environment in Australia and other markets. Excerpts:

Last year, you were quoted as saying that the company was lobbying state governments in Australia for support to build fields of underwater turbines off the coast of Western Australia and Victoria. Can you provide the current regulatory and business environment for marine energy in Australia?

Timothy Cornelius: It is well documented that Australia has vast marine power resource, however there is a material difference between total potential resource and total economically exploitable resource.

Australia’s fuel mix is dominated by thermal (coal) generation, which has a low long run margin cost of generation. As a result, the prevailing wholesale power price is one of the lowest in the world making it difficult for renewable projects to stack-up financially. Project economics are further detrimentally impacted by the increased cost of construction and installation associated with remote locations and distance of transmission to industrial load. Diesel replacement remains an attractive albeit fragmented and relatively small market in terms of installed capacity.  Remote industrial loads (50+MW) in Australia associated with the mining industry are now typically serviced by long term gas fired generation contracts. So any renewable project that does not receive an additional government subsidy in the form of a feed-in tariff or capital grant will have to compete against the prevailing long run marginal cost of generation for gas in places like Western Australia.

The recent split of the mandatory renewable energy target from the ETS bill which was passed by the Senate and House of Representatives demanding that 20% of electricity come from renewable sources by 2020 will drive investment in the cleantech sector, however the cost of renewables will still have to be lower than the marginal cost of abatement, which will remain a challenge for most categories of renewables. The Australian Government has a focus on clean coal technology given its vast reserves of coal.

Marine power will require additional financial incentives to be put in place at a federal level to make tidal power projects a viable investment alternative on a commercial scale in Australian waters in the near future. Australia’s new renewable energy target matches one set by the European Union, which leads the world in green power technology. The Government will now have to follow the lead of the various members of the European Union and offer specific support to the marine power industry by way of feed in tariffs to push projects into the money and offer investors an attractive IRR.

Atlantis has received a huge amount of support at a State and Local Government level with respect to permitting and regulatory approval for installation, especially in Victoria and Western Australia. These state governments should be commended for their early adoption of marine power technologies before the industry ‘took-off’ in Europe. It is at a Federal level that the support mechanisms need to be implemented with vigour. Without a clear carbon pricing signals upon which to model revenue streams and base investment decisions and a feed in tariff specifically applicable to both wave and tidal power generation, it is difficult to see how large scale (100+MW) projects will be developed in Australia when there are more attractive investment opportunities available in Europe, the USA and other CDM compliant countries in the Asia Pacific region.

How do you assess the overall progress made by tidal energy in the Asia Pacific region?

Timothy Cornelius: The marine power industry is no different to the trends observed in other renewable technologies in that significant progress has been made in jurisdictions that have established specific support mechanisms to nurture sector development.  The Asia Pacific region has tended to support technological development via various grant schemes to offset the cost of R&D and prototype development/installation, however it has not supported the development of commercial scale projects via feed in tariffs or tax incentives.  Hence the market, from a commercial perspective, lags the United Kingdom, Portugal and other European countries that have specific financial support mechanisms for marine power projects. The industry has moved past the pure R&D phase and needs to tackle the larger issues of project finance, insurance, availability and power curve guarantees and grid integration.

Atlantis is currently assessing opportunities in Australia, Korea, India, Philippines and Japan – all of which are resource rich but have challenges associated with project development.  Local partnerships are the key to successful execution in each of these jurisdictions. One thing we have noticed is a marked change in attitude towards sustainable development in the Asia Pacific region. We anticipate that there will be an increased penetration of renewable generation into the region’s fuel mix over the next decade, and we are working with the private and public sectors in multiple countries to ensure that Atlantis is at the forefront of this generation transformation.

How do you foresee your company becoming a force to reckon as far as deployment of this technology in the Asia Pacific region is concerned?

Timothy Cornelius: Atlantis has positioned itself as an end to end supplier of marine power solutions to the global utility market. Success for the entire sector, not just Atlantis, will emanate from successful execution of the first 100MW of installed tidal power capacity in a single array formation. Atlantis is working with governments, traditional providers of Tier 1 & Tier 2 project finance, regional and international banks, offshore and onshore construction companies, insurance companies, utilities and transmission asset owners to originate projects of significant commercial scale. These projects will be offered to power companies and significant players in energy intensive sectors who will have material generation liabilities in the new carbon constrained world as financially viable, financeable, code compliant renewable projects which must be attractive as standalone investments.

Atlantis hopes to have up to 800MW of installed capacity within five years. You had mentioned that the company already has got credibility and “and now we have confluence of supporting mechanisms that is driving interest”. Can you elaborate on this please?

Timothy Cornelius: Atlantis is developing a global pipeline, however our core financial and human capital investments are in the UK at present where we are focussed on developing and delivering large-scale tidal power projects for our customers. We have industry and investor support from some of the largest corporations in the power/utility and banking sectors, a supportive financial regime in Scotland for tidal power and a defined process through which to develop commercial scale projects. The future of the marine power sector has never looked better due to the support of the UK Government, significant developments made on the technological front over the past 24 months and an investor environment that is pro-green power.

3rd International Tidal Energy Summit 2009

Timothy Cornelius is scheduled to speak at the forthcoming 3rd International Tidal Energy Summit 2009 in London this year (November 17-18).

Story from: http://social.tidaltoday.com/news/interview-atlantis-resources’-ceo-timothy-cornellius