OPT leaps as Lockheed takes key role in Australia wave project

By Giles Parkinson on 12 July 2012

Shares in US-based Ocean Power Technologies surged on Wednesday after the company announced it would bring in US defence contracting giant Lockheed Martin in a “teaming agreement” on its proposed, but much delayed 19MW wave energy project near Portland in Victoria.

Lockheed Martin effectively replaces Australian company Leighton Holdings as the major contractor on the $230 million project, which was awarded a $66.5 million grant in 2009 under the Federal Government’s Renewable Energy Development Program, but like some other projects in that program, has made little progress to date. However, the company says it now intends to begin construction and development in 2013, will deliver the first electricity to the grid in 2014, but the installation of all 28 of its PowerBuoy units will not be complete until 2017.

Still, OPT’s shares jumped 72 per cent on the news – albeit from record lows of around $US2 to a five month high of $US3.79, and a close of $US3.55 – as investors reacted to the involvement of Lockheed, which is an industrial and defence giant with $46 billion in annual sales.

OPT has been working with Lockheed for nearly 8 years, mostly on wave energy projects for the US Navy, and last October OPT said Lockheed would provide design, manufacturing, system integration and supply chain management expertise for a proposed 1.5W wave energy project in Reedsport, Oregon.

The latest announcement says that Lockheed Martin will assist with the design of OPT’s PowerBuoy technology, lead the production and system integration of the wave-energy converters and support overall program management of the project in Victoria.