Vancouver-based Finavera Renewables (TSX Venture: FVR) announced last Friday, February 15, 2008, that the United States Federal Energy Regulatory Commission (FERC) has granted the company a Preliminary Permit for a 100 MW wave energy park in Humboldt County, California. The permit is valid for three years, during which Finavera Renewables may conduct studies of oceanographic conditions, commercial and recreational activities, and other factors that might influence the planned project.Subsequent to the announcement, the stock price sagged 7%, from 20 cents down to 18.6 cents a share.
On December 18, Finavera Renewables announced that it has signed a contract with Pacific Gas & Electric for a 2 MW wave energy project at this same Humboldt location.
Also, towards the end of 2007, FERC awarded Finavera Renewables with a license for their proposed 1MW wave energy pilot plant at Makah Bay in Washington state.
In less favorable news, October 27 was the day of the sinking of Finavera Renewable's wave energy test buoy, following its deployment on September 6. Valued at $2 million dollars, the buoy was 72 feet high and weighed 40 tons. As a test platform, it was only engineered to withstand three months of use, according to a Finavera Renewables spokesman, and ironically had been scheduled to be removed from the water the day after the fateful day it sunk.
In the company's Q3 financial report, issued December 3, the company concluded that the AquaBuOY 2.0, whose prototype was the one that sunk, would never be capable of generating positive cash flow. Finavera Renewables has turned its efforts to AquaBuOY 3.0. The financial report also stated that the company had a working capital deficiency of over 4 million dollars. The report reiterated that the company was considering a private placement, which it also mentioned back in October.
On February 4, Finavera announced a $2 million private placement. Since then, the stock price has eroded from 25 cents to 18.6 cents, a drop of over 25%.The company also faces competition from other wave power companies, such as Ocean Power Technologies Inc. (NASDAQ: OPTT). (See the Hotstocked.com article "Ocean Power".)
Finavera Renewables' future is anything but certain. Will the company sink or swim?
Sources:
http://www.finavera.com
http://www.renewableaccess.com
http://www.waterpowermagazine.com
http://www.nwanews.com
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