Resolute Marine (RME) - Wave2O

Over two billion people suffer from the effects of water scarcity and the vast majority of those affected live in coastal areas in developing countries and remote communities. 

Bangladesh has one of the highest population densities in the world, and an estimated 24 million lack access to safe water because of their remote locations or because of natural arsenic contamination. As a result, more than 40,000 people die each year. 

Because our target customers typically lack sufficient grid capacity and cannot afford the capital or time required to build and deploy grid-connected systems, Resolute Marine has devised a unique solution to this problem - the world’s first wave-driven desalination system (Wave2O™) that can be deployed quickly, operate completely “off-grid” and supply large quantities of clean fresh water at competitive cost. Furthermore, Wave2O can also co-generate electricity to replace existing solutions driven by diesel generator.

Our solution targets “off-grid” places like Bangladesh where more than 20M people do not have access to safe water and where access of electricity for the 10M people living in coastal communities is less than 3%. In these places, Wave2OTMhas the unique advantage of filling a large gap in the market between utility-scale and micro-scale fresh water production systems. 

At macro/utility scale, “on-grid” solutions (dams, pipelines, power plants) require large capital investment, take many years to build and, in general, are only available to wealthy nations.  At micro/household scale, solutions focus on increasing the utility of water that is polluted or inaccessible and provide relief for relatively few people.  

At “middle scale”, there is only one incumbent technology, diesel-powered desalination systems, which can be partially or wholly displaced by Wave2OTMin off-grid communities with access to an energetic wave resource. 

“We have evaluated RME’s integrated desalination solution. Because the system runs on free energy from ocean waves, it is a perfect fit for our immediate needs. We would definitely place an order if the pilot proves successful. The need is critical and RME’s economics and localized approach are very compelling.”

Alexandre Fontes, CEO, ELECTRA

We believe Cape Verde represents the shortest path to commercialization because it suffers from severe water scarcity and is dependent upon diesel-electric desalination systems for 85% of its water supply and because we have secured a commitment from the local power and water utility, Electra, to purchase a full-scale plant after a demonstration have been successfully completed. This effort is already financed in part by the African Development Bank (AfDB).

Our marketing strategy is to go beyond the deployment of infrastructure by engaging key local stakeholders and using Wave2O as a platform for job creation, co-creation of IP, and capacity building. E.g. our AfDB grant includes training and purchasing of equipment for our partner INDP.

Once successful in Cape Verde, we will quickly expand globally. The prize from the tiger challenge could enable us to conduct pre-feasibility studies in Bangladesh and replicate our marketing strategy there.

Wave2O™ is unique because it harnesses the abundant and consistent energy of ocean waves to directly drive the desalination process (i.e. without an intermediary stage of producing electricity to drive the desalination process).   

The key technologies that enable Wave2O™ have been validated in a series of tests which have proven that Wave2O™ can be a reliable and cost-effective water production system with utility in multiple places and in multiple uses around the world. While Wave2O™ has been designed with simple operation and maintenance in mind, it incorporates several innovative technologies invented by RME.  

Wave2OTMconsists of several WECs deployed at the perimeter of the surf zone (i.e. close to shore) that pressurize seawater which is piped ashore to drive a seawater reverse-osmosis (“SWRO”) desalination system.  An important advantage of Wave2OTMis that the brine (saline byproduct of the RO process) is fully diluted before it is returned to sea and thus does not harm the environment. Wave2OTMfits in standard marine containers, installs in a matter of days, does not require any connection to an electrical grid and complies with U.N. Sustainable Development Goals for sustainability.

Wave2OTMhas been under development for over 8 years and its wave energy converter (WEC) subsystem has undergone successful ½ scale sea trials. We are currently developing and/or adapting several other key components and processes and will test Wave2O™ in laboratory conditions in 2019. Wave2O™ will then be tested in ocean conditions during a “technical pilot” at PLOCAN in Las Palmas, Spain. The successful completion of the technical pilot in 2020 will trigger the launch of our commercialization activities, starting in Cape Verde.

Our business model is to manufacture, sell, install and maintain Wave2OTMsystems for independent project developers around the world. In our markets, dedicated Special Purpose Vehicles (SPV) will established to operate and maintain Wave2O™ plants and manage water sales to customers.  

Levelized Cost of Water (LCOW) is theprimary concern of prospective customers and Wave2O™ will readily sell wherever it can produce water at an LCOW that reduces or eliminates water subsidies. We have estimated that at commercial stage, a 4,000 m3/day Wave2O™ plant will deliver a LCOW of $1,25/m3before profit and financing costs i.e. more than 3.4x lower than current cost and providing more than $3/m3to be shared among RME and the financial partners who fund Wave2O™ deployments and customers who buy the produced water. 

RME’s technology and business strategy is innovative to incumbent desalination industry technologies, i.e. large-scale “traditional” desalination, diesel-driven desalination and renewable-driven desalination, because we offer a range of compelling benefits to our customers including grid independence, low levelized cost of water (LCOW), simple operation & maintenance, quick installation and minimal environmental impact. The new dimensions of performance we create are the following:

Fit with customer’s need: We serve a large customer base that has limited alternatives with a “good enough” solution that provides access to a large and reliable source of low-cost fresh water;

Value: Our business model enables us to monetize and share the value we create because our cost of water production is much lower than incumbent technologies;

Agency: We enable our customers to gain control over a critical commodity, because our low capital cost and simple operation & maintenance means that, with adequate training, our customers can own and operate our systems

Outreach: Wave2O™ enables broader access to desalination technology. It is completely grid independent which allows water resource managers great flexibility in matching water supply to demand. Wave2O™‘s modular design allows customers to “start small” if necessary i.e. fulfill immediate needs and grow steadily in step with demand and access to additional capital.  

Disruptive Wave2O™ is disruptive to all significant incumbent technologies because Wave2O™ utilizes “free” energy from ocean waves, an energy that is much less intermittent than other renewable energy resources.

• Activities: 

  • Water utilities and communities have access to new water production capacity. The water is clean; economical and is free of “water rights”.

  Outputs: 

  • Water scarcity: solved!
  • Job creation: Wave2O™ systems O&M will require skilled labor and suppliers and will create many local jobs. 
  • Social and political acceptability: Wave2O™ is largely exempt from water rights issues which have high political costs and can cause a wide range of conflicts
  • Energy supply: Wave2O™ has the potential to shift energy consumption to other sectors enabling better management of existing electrical capacity;
  • Social/Economic Impact: improvements in health, local jobs and increased productivity related to water fetching which disproportionately impact women and children;
  • Environmental Compliance: Wave2O™ is powered by a renewable energy resource.

  Short term outcomes:

  • Energy scarcity: Wave2O™ has the potential to shift energy consumption to other sectors enabling better management of existing electrical capacity;
  • Social/Economic Impact: improvements in health, local jobs and increased productivity related to water fetching which disproportionately impact women and children;

  Long term outcomes

  • Improve balance of trade: The provision of water (and potentially electricity) at large scale could positively impact trade balance by reducing oil and food imports while improving tourism;
  • Climate change: By displacing diesel generators, Wave2O™ can reduce emissions of greenhouse gases. Wave2O™ can limit the over exploitation of indigenous water resources;
  • Prevent and reverse urbanization: Because Wave2O™ can operate completely off-grid, it enables the deployment of decentralized water and power infrastructure in rural areas and thus prevent large population movements toward urban centers

Y0:0

Y1:0

Y5: 190,000

If we achieve our goal of deploying five Wave2O commercial plant (4,000 m3/day) by 2023, we expect to supply fresh water to 190,000 people/year, create 40 new jobs/year and eliminate 22,000 tons/year of CO2 emissions (the equivalent output of over 4,200 cars).

Our goal next year (2020) is to complete the last mile developments of Wave 2O™ in Boston, i.e. the demonstration in lab conditions. This milestone already received the support from the US Department of Energy ($2M grant); the European Union (through the MaRINET2 project); and Ireland (€200K grant).

In 2021, our goal is to demonstrate Wave2O performance in ocean conditions at PLOCAN (a test site) in Las Palmas, Spain and for which, preliminary test site clearances have been obtained. The project is already supported by European Union (through a €400K Interreg Grant).

In 2022, our goal is to complete the demonstration Wave2O performance in a commercial context in Cape Verde. The test site has already been approved and site characterization are going on financed by a $1M grant from the African Development Bank. We also received support from UNIDO through a $150K grant.

Finally, from 2022 to 2025, our goal is to deploy five 4,000 m3/day plants. For that we are currently working on the creation of a multi-stakeholder working group in Cape Verde, under the responsibility of the Ministry of Economy, to analyze the potential for Wave2O™ deployment across the Cape Verdean archipelago. This group includes ANAS (water regulation), Electra (Utility), INGT (Land use), MDR (Agriculture), Municipalities and local NGOs. 

Our global commercialization will go beyond Cape Verde. The proceed of the Tiger challenge competition could help us replicate our marketing strategy in Cape Verde to design a path to commercialization that fits the needs of Bangladesh.

Access to equity financing: Our most imminent barrier is to secure the financing required to bridge the gap from where we are to our first commercial demonstration in Cape Verde. We estimate $9M will be necessary to cross this “valley of death”.

Access to project financing: Project financing partners may stipulate conditions that hinder some of our expected social impacts such as our desire to maximize local content and job creation. 

Standards and Certification: Another obstacle is the lack of standards in our industry, critical so that equity investors, commercial banks and insurance companies can play their role in the development of a robust and sustainable industry.  

Adoption Risk: The fact that the market for Wave2O™ is concentrated mostly in Africa adds complexity and risk to our projects in terms of logistics, operations, financing, and regulation. 

Access to equity financing: our strategy is to raise as much capital as possible through non-dilutive financing such as grants and competitions to help creating the momentum needed to have investors supporting us. So far, we raised more than $4M in grants and Signed a term sheet for a $9M Series A preferred stock investment with a U.S.-based family office to finance all activities up to the commercial pilot in Cape Verde

Access to project financing: Due to the importance of water in our launch markets, we believe we will have access to financing instruments from multi-laterals that shares our vision as illustrated by the support we received from the African Development Bank and UNIDO.

Standards and Certification: We are already well positioned to address this issue because Bill Staby, our CEO, is the chair member of the US delegation to both IEC TC-114 (standards) and the Marine Energy Operating Management Committee (ME-OMC) (certification);

Adoption Risk: We believe there is already great demand for medium-scale, distributed water production systems that are less capital intensive and that can be deployed relatively quickly, however, in order to address this barrier we adopted a marketing strategy to engage with key local stakeholders; and use Wave2O as a platform for job creation, co-creation of IP, capacity building and community improvement.

If awarded, the proceeds of the Tiger Challenge would be use to conduct a pre-feasibility studies of the market in Bangladesh. This will include site visits; presentation of Wave2O to key stakeholders; gathering from publicly available data information about local market and resources etc. The purpose would be to build a business case that we could then present to local customers and financing partners.

In term of market opportunity, we estimate that approximately 24 million people in Bangladesh lack safe access to water (4 million because of remoteness; 20 because of natural arsenic contamination). At least 88% leave in coastal Area (<100 km from the coast, [1]). Assuming our addressable market would cover 100 liter/person/day at a clearing price of $1/m3 then, our addressable market would be approximately $0.8B/year.

[1] National Aggregates of Geospatial Data: Population, Landscape and Climate Estimates (PLACE), June 2003. Socioeconomic Data and Applications Center (SEDAC), Center for International Earth Science Information Network (CIESIN)

Full-time employee: 2

Full-time experts: 4

Full-time interns: 3

Part time advisors: 4

Bill Staby and Olivier Ceberio, our founders, have expertise in entrepreneurship, general management and technology product development. They have accumulated over 40 years of professional experience and have lived, worked and shared their lives with people in more than eight different developing countries.

Our technical team in the US and Ireland is composed of senior engineers with expertise in hydrodynamic modeling, mechanical and electrical engineering, desalination systems, and offshore IO&M. Five of our teammates (Peter, Darragh, Andrew and Matt) have worked, often in executive positions, for competing wave energy companies (e.g. Aquamqrine Power, WaveBob and Oceanlinx) and, thus, bring to our team decades of experience critical to avoiding the pitfalls our competitors encountered.

Our local team in Cape Verde is composed of the former CEO of INDP, the Cape Verde Institute for Fisheries which is the repository of all ocean and coastal data in Cape Verde, and a current Board member of ANAS, the local water regulation authority. Both people have an excellent reputation and an extensive network giving RME valuable credibility and goodwill.

RME maintains relationships with leading academic institutions and research labs including in the US and Canada: MIT, University of Michigan, University of Minnesota and University of Victoria, the National Renewable Energy Laboratory (“NREL”) and Sandia National Laboratories (“SNL”); and in Cape Verde: the University of Cape Verde, the University of Piaget, INDP (fisheries), and INMG (meteorology).

We have also developed commercial partnerships with providers of desalination systems that can provide engineering expertise and equipment as well as local personnel and infrastructure in RME’s target markets. Partnerships include: Parker Hannifin, Ricardo Inc., Danfoss, and Aquatera. 

Finally, we are aggressively developing our network at federal, state, and local levels. RME is an active member of the Marine Energy Council of the National Hydropower Association, the Washington-based trade association that helps shape legislative, budgetary and regulatory policy. Our CEO is Chairman of the U.S. delegation to IEC TC-114 which is developing international standards for the marine hydrokinetic industry. He is also a member of the Advisory Board of the University of North Carolina Coastal Studies Institute and a member of the board of the World Ocean Council which is a global industry leadership alliance committed to corporate ocean responsibility.

Our business model is to manufacture, sell, install and maintain Wave2O™ systems for independent project developers around the world. In our markets, dedicated Special Purpose Vehicles (SPV) will be established to operate and maintain Wave2O™ plants and manage water sales to customers.  In anticipation of the launch of our first projects, we have established SPVs in Cape Verde and South Africa.

The SPVs will be financed separately, in part by RME and in part by RME’s equity and debt partners, using the well-established Build, Own and Operate (BOO) project development model. Our business model will generate three revenue streams: 

- A non-recurring stream related to equipment sales and installation during the construction phase;

-  A recurring revenue stream related to long-term maintenance contracts;

-  A recurring revenue stream related to profits on water sales. 

A 4,000 m3/day plant will generate $12.8M from construction (COGS $5.6M); $247K/y from maintenance (COGS: $165K/y); and $165K/y of dividends calculated from the following assumptions:

- Financing: 70% debt (5%, 15y); 30% Equity (Required IRR 25%)

- Revenue: PPA $3.5/m3; 4,000 m3/day; Wave energy (kW/m): Average (16.71); Spring (16.29); Summer (12.81); Fall (15.16); Winter (22.39)

Capex (total $25M): 

- Feasibility ($280K); 

- PG&E ($200K); 

- Sales ($320K) 

- Legal and permit (#320K); 

- Equipment ($12M); shipment ($274K); 

- Construction ($2.3M); 

- Commissioning ($350K); 

- Success fee ($6.8M); 

- DSRA and cash ($880K); 

- Other ($400K).

Opex (total $1.16M/y): 

- Equipment ($1M/y); 

- Labor and services ($165k/y)

As mentioned earlier, raising equity financing is our most eminent barrier that we need overcome if we want to be successful. Our strategy is to raise as much capital as possible through non-dilutive financing such as grants and competitions to help creating the momentum needed to have investors supporting us. So far, we raised more than $4M in grants and signed a term sheet for a $9M Series A preferred stock investment with a U.S.-based family office to finance all activities up to the commercial pilot in Cape Verde.

Once the pilot completed, we secured a commitment with our partner in Cape Verde, Electra, for the purchase of the 4,000 m3/day plant, paving the way to our financial sustainability.

We view the Tiger Challenge as a way to help us address the “Adoption barrier” in Bangladesh. We believe problem of water scarcity and safe access to clean water will not be addressed in Bangladesh without technology breakthrough such as Wave2O. But we also recognize that implementing an innovative technology also has risks. That’s why our marketing strategy seeks for the mobilization of key local stakeholders so that we could (1) identify and anticipate these risks, and (2) use Wave2O as a platform to create jobs, co-creation of IP, capacity building, and improvement of local communities.

Our key barrier is equity financing. Any support would be greatly appreciated.

We would like to partner with local organizations who could guide us in Bangladesh, provide access to local knowledge and help us designing a marketing strategy dedicated to Bangladesh.