Current currency

Elaine Maslin

June 8, 2015

The success of MeyGen will help lay the ground work for the future of the tidal power industry. The CEO of the company behind it, Atlantis Resources, believes he has the recipe for success. Elaine Maslin reports.

Tim Cornelius. Image from Atlantis Resources. 

Marine renewable energy has everything, says Tim Cornelius, CEO of Atlantis Resources. “It ties together engineering, commerce, and politics - from a most local level, such as land owners and fishermen, to macro-issues, such as the Scottish referendum.”

Holding Cornelius’ attention is no easy task, not least this year, which is poised to be the firm’s busiest following a successful IPO on the stock market and securing £50 million funding for its milestone MeyGen project last year. Atlantis has just started construction work on the MeyGen project, the world’s first commercial-scale multi-turbine tidal energy project, and in late April it bought out turbine developer Marine Current Turbines from global firm Siemens, which in turn has taken a 9.99% stake in Atlantis.

Cornelius, who has already had careers as a commercial diver, ROV pilot and roles in management, alongside developing an interest in power and emissions trading and gaining an MBA, will soak up the challenge.

The Australian-born Cornelius started out studying marine biology aquaculture. After completing his degree he went to dive college in order to work on tuna and salmon farms in southern Australia.

But, at dive college his attention was gripped by others who were training in underwater welding and construction. “I though this looked better than working in a laboratory and went on to do my commercial diving certificate and started life as a commercial diver,” he says.

He worked in the submarine rescue escape team in Australia before moving to the North Sea to work in the oil and gas industry, retraining in submersible engineering and then as an ROV pilot. From there, Cornelius rose through the ranks, working around the world for Subsea 7, particularly in deep water areas off Brazil and Trinidad and Tobago.

The taste for training, and now also management, as well as a growing interest in power and emissions trading, led him to his next step – an MBA at Bond University in Australia. At Bond, he was approached by Atlantis, then a small tidal technology concept developer.

“I have a strange background. An underwater engineer that understands how markets and emissions trading works,” he says. “They asked me to help build a concept for tidal power, initially very much on an interim basis while I was completing my MBA. Once I got involved I realized the potential, but saw that the company needed restructuring.”

The challenges facing tidal energy development caught Cornelius’ interest – understanding subsea engineering challenges, understanding the market on a macro-economic basis and how renewables fit in, as well as the influence of politics on renewables.

Atlantis was originally formed by serial entrepreneur and deepsea fisherman Michael Perry in Australia about 15 years ago. He had had success in other types of start-ups, including a regenerative drive train system. His passion, however, was harnessing energy form the ocean, so he set up Atlantis to develop a design for an elliptical design turbine, called the Aquanator.

“It has evolved considerably since then,” says Cornelius. These days the company has become a project developer, which also does technology development, because it can, and some in some cases because it has to. The business has a global strategic alliance with Lockheed Martin, giving its technology, the AR1500, blue-chip engineering support and development.

But, the company isn’t solely tied to using the AR1500 either. “To a degree, the firm is technology agnostic – if there is a better piece of kit at a better price, they will use it,” Cornelius says. “We view ourselves as a leading developer of tidal power projects, a seabed real estate developer, with a fantastic partner in Lockheed Martin.”

Atlantis also made another move which has put it in good stead, says Cornelius – the acquisition of Current Resources, the project of origination arm of Morgan Stanley, which was looking specifically at the seabed as an undervalued asset. Having Current Resources applied an incredible amount of rigor to the way the company looked at development opportunities, he says.

“Current Resources view was holistic, meticulously assessing financial and commercial constraints, studying current and future grid options, and working out if sites were viable and what the pinch points were. If you don’t have a fundamental project which stacks up, it is pointless having the best turbine.”

All work up to this point has led Atlantis to the MeyGen project in Scotland’s Pentland Firth. “I think a significant part of the future of the tidal power industry, not just in the UK but globally, hangs on phase 1a of the MeyGen project,” Cornelius says. “For Atlantis, it is our flagship project and the most important thing we will execute in 2015.”

The project’s first phase will install four 1.5MW turbines offshore and construct the onshore infrastructure to support the project. When fully operational the 398MW array will generate electricity to power 175,000 homes by the early 2020s.

It’s not Atlantis’ only project however. The company was recently awarded a feed-in-tariff for an up to 4.5MW project at the Fundy Ocean Research Center for Energy (FORCE) offshore Nova Scotia, Canada.

It is also looking at a development in China, where it has supplied equipment for a state-funded program, and India. But, a key focus will be extending the company’s portfolio of sites in the UK.

Despite his immersion in the offshore renewables industry, Cornelius still keeps a close eye on the oil industry, however, and for good reason, to see how it influences the renewables market. “Marine renewables is a beneficiary of the recent reduction in CAPEX, which has reduced vessel costs by 40-50%, which makes our operations a lot more affordable. The biggest variable in our cost base is the cost of installation.”

The company also has a larger pool of potential staff and supply chain companies to draw on as oil workers and contractors look to other industries in the downturn.

But, there are other dynamics. Due to the low oil price and high operating cost in the North Sea, more assets could be decommissioned sooner, which would result in strong competition for yard space, so it’s not a simple picture. It is a picture that keep Cornelius’ constant attention, however.

"Right now we believe the best possible model developed from green field take through to consent then start building a commercial first phase, say 10-50 MW on a particular site. Being consented for maybe 200MW, a traditional project development role. Once we have the first phase at that time look to syndicate down equity to more natural infrastructure owner to maintain the site.

Longer term, Cornelius could see Atlantis becoming an independent power producer (IPP). “There has been a change in the dynamic in the UK and Europe from large utilities to smaller independent power producers. Once we have a track record developing projects and operating them, we could ourselves become a small track IPP. But that’s very future thinking,” he says.