Geography and discovery have helped define the Portuguese as one of the great seafaring peoples of world.

With the vast waters of the Atlantic Ocean carving out the country's western and southern coastline, and Spain dominating land borders to the north and east, the Portuguese have historically relied on the sea to bring them wealth and prosperity.

500 years ago, it was Prince Henry the Navigator and Vasco da Gama that thrust Portugal to the forefront of Europe's "Age of Discovery." Wealth didn't flow directly from the sea. Instead, the open waters beyond the country's long coastline facilitated trade and carried prosperity in on the rolling waves.

Today, it's not the cargo, but the waves that Portugal seeks value from. With an energy mix dominated by foreign fossil fuels, limited square miles for wind and solar power, and hydro opportunities largely tapped out, the Portuguese government has thrown its full support - and a navy frigate - behind a Scottish "sea snake."

De Ondas da Aguçadoura I

In mid-July, the world's first commercial wave power project was plugged into a subsea cable off the northern coast of Portugal.

The device, a Pelamis P-750, gently creaked in-and-out of incoming waves sending electric current three nautical miles underwater to a substation near the Portuguese parish of Aguçadoura. It was at that moment that wave technology started making money.

Requiring an investment of about €9 million, Aguçadoura was initially a joint venture between Enersis and Pelamis Wave Power - formally known as Ocean Power Delivery.

Babcock & Brown inherited a stake in the project when it purchased Enersis three years ago (IJ News 20 December 2005). The international infrastructure investment specialists were convinced by its new staff and Pelamis that the technology was not only viable, but the best available.

According to Ian Sharpe, Babcock & Brown also liked the idea of getting in early on a developing industry. That's how the firm began in wind, and now it owns the world's fourth largest portfolio of wind farms (IJ Case Study: BBW wind refinance 2007).

Government support from legislation passed in 2001 gave the investors a clear signal that Portugal would facilitate wave power development. The legislation outlined a permitting process, offered grants and set an attractive long-term tariff of €0.23 per kWh. The legislation was amended in May 2007 and will offer €0.26 per kWh for the next round of projects up to 20MW.

Max Carcas with Pelamis Wave Power said government support was crucial to the existence of the Aguçadoura wave farm. When he learned of Portugal's legislation in 2001, he travelled to Porto and began making contacts that would eventually lead Pelamis to form a joint venture with Enersis.

What followed was three years of intense development. After some delays, including a problem with foam associated with the submerged mooring system, Pelamis and Enersis were finally able to inaugurate the project this month.

The two companies shared a global stage with the Portuguese government and invited local and international press to view the devices courtesy of a three-hour "embed" aboard a Portuguese Navy frigate.

Manuel Pinho, the government's economic minister, was present and seven years after his country laid foundations for development, it was clear that he felt Portugal had something important to show the world - a 2.25MW array of three Pelamis Wave Energy Converters.

One Pelamis P-750 remained in port for an up-close look. The other two were viewed at a distance from the frigate - one being towed out to sea and the other operating onsite between four cardinal buoys.

Pelamis - how it works

Pelamis is an ancient Greek word for a venomous yellow-bellied sea snake.

As a serpent, it's found in the Pacific and Indian oceans; as a wave energy device, deployment has so far been restricted to Scotland and Portugal.

However, as the technology shifts from research and development into full-scale commercial operations, Pelamis Wave Energy Converters are likely to be positioned off many other coastlines in the not too distant future. Even Google is curious and has incorporated the Scottish firm's technology into patent designs to power offshore floating data centres.

From concept to commercial operations, it has been a long journey with many small steps. The company's chief executive Phil Metcalf said it has taken 10 years and £40 million to get Pelamis this far. The company raised £13 million a couple of years ago (IJ News 28 June 2006) and is leading a pack of diverse technologies seeking to cash-in on one of the world's largest untapped resources.

The Aguçadoura project consists of three 750kW wave machines built of carbon steel. They each weigh 700 tons (with ballast) and are about 142 metres long with a diameter of 3.5 metres.

They are semi-submerged, articulated structures composed of cylindrical sections linked by hinged joints. As waves roll in, the motion of these joints is resisted by hydraulic rams, which pump high-pressure oil through hydraulic motors via smoothing accumulators.

The hydraulic motors drive electrical generators to produce electricity. Power from all the joints is fed down a single umbilical cable to a junction on the sea floor. The devices are connected together and linked to shore through a single subsea cable.

Energy produced by the Pelamis is dependent upon the conditions of the installation site. On average, the machines will produce 25-40 per cent of the full rated output over the course of a year.

Looking ahead, the project's next challenge is surviving the winter. The ability for a wave device to manage rough seas is nearly as important as its ability to produce power. One advantage of the Pelamis design is that its machines naturally dive into waves - allowing a majority of the force to pass over them. Antonio Sa da Costa from Enersis said the Pelamis device is able to withstand waves up to 26 metres high.

In addition, the machines are fairly quick and easy to maintain. Thanks to the submerged mooring system, Carcas said the units can be installed within hours and detached within minutes - making it quick to retrieve devices for onshore maintenance.

If the three Pelamis Wave Energy Converters do well this winter, Enersis and its partners will be looking to take the project out of venture capital and into project finance - adding an additional 25 units.

"We certainly hope to be building other machines over the next few months," said Carcas. "All of the elements are in place now for a commercial roll out."

The second phase of Aguçadoura will boost the project's capacity to 21MW.

Portugal's wave resource

One of the prevailing questions for Britain's Pelamis is why develop this first commercial project in Portugal? Why not Scotland, where the company is based?

One reason - though hardly the defining one - is that Portugal has some natural advantages over Scotland. Building a project that can capture a strong resource, but not be overwhelmed by extreme weather is a delicate balance. Portugal's swells are not as strong, and storms not as big when compared to Scotland.

There are also transmission issues to consider. Roughly 80 per cent of Portugal's electricity consumption occurs within 50km of coast. With roughly 50 per cent of its population in and around Glasgow, Scotland's best waves break across its north-western shores, far from its centres of population.

Portugal has other advantages. Along the its 500km of western mainland coastline, its continental shelf drops relatively quickly to 50-100 metres only three to six miles offshore. Sa da Costa, who is also president of Portugal's renewable energy association (APREN), says these deep-water conditions make it difficult to build offshore wind farms, but its ideal for wave power technologies.

However, the key factor leading Pelamis and its partners to install this historic project in Portugal is pretty simple - the Portuguese government offers a better incentive. The feed-in tariff is much more attractive to independent developers than Britain's Renewable Obligation Certificate (ROC), which favours integrated utilities.

In return for its support, the Portuguese government is hoping wave power not only delivers clean electricity, but that that it also develops into a global industry.

Pinho said wave power is a natural fit for his country - adding Portugal has an opportunity to be a pioneer in it. If successful, the Portuguese could build the kind of businesses and expertise in wave power that Denmark developed in the early days of wind energy. In terms of security and sustainability, waves are potentially Portugal's greatest source of renewable power.

New partnerships - Ondas de Portugal

As part of the Aguçadoura inauguration, Babcock & Brown revealed a new partnership and ownership structure that includes local heavyweights Energias de Portugal (EDP) and Efacec.

Babcock & Brown said it will retain a 46.2 per cent share in the project with EDP and Efacec each taking 15.4 per cent. Pelamis Wave Power holds the remaining 23 per cent. Further to the deal, EDP will have the option to acquire an additional 15.4 per cent from Babcock & Brown.

Aguçadoura may just be the beginning for Enersis and its new partners. The project is part of a broader partnership called Ondas de Portugal or "Waves of Portugal."

Ondas de Portugal will focus on the development of 500MW of experimental wave energy projects in the country. As Pelamis Wave Power is not an official equity partner, it's not a foregone conclusion that the new consortium consisting of Enersis (35 per cent), EDP (45 per cent) and Efacec (20 per cent) will work exclusively with the Scottish technology.

"Never say never," said Sa da Costa.

While he believes that Pelamis currently has the best technology in the market, he does not discard its competitors.

Instead, he recalls the early days of wind energy. Back then, as with wave today, the technology was less efficient and more expensive. Several different designs were available in the market.

Some used one, two or even four blades - others had radically different systems all together. Eventually, costs came down, the technologies developed and one single design featuring three blades emerged to become the industry standard.

Sa da Costa said Pelamis has the "three-blade design" for wave power. If he's right, then Aguçadoura truly is just the beginning of much bigger things to come.