An Orkney-based firm developing wave energy technology has called in administrators due to economic problems caused by the lack of private investment.
Edinburgh-headquartered Aquamarine Power, which has been testing its full-scale Oyster wave energy generators at the European Marine Energy Centre in Orkney, said it chose to go into administration while it looks for a new investor.
"The team at Aquamarine Power has worked tirelessly over many years to design, build and demonstrate Oyster wave energy machines,” said Aquamarine Power's chief executive Paddy O'Kane.
"During this time we have achieved a number of major milestones that have put our technology at the forefront of the industry. However, today's news underscores the financial as well as technical challenge in bringing an entirely new form of energy generation to commercialisation. New private-sector funding is required now to deliver our technology roadmap."
The firm, which prides itself on having developed the only proven wave technology that can operate in all ocean conditions, has agreed on entering the administration on Tuesday.
Administrator BDO LLP will take over running of the company while looking for a new investor or buyer.
"The lack of private-sector backing to supplement public funding support placed the company under cashflow strain and the directors concluded the best prospect of concluding a transaction was via the protection of administration,” said BDO administrator James Stephen.
“The company holds liquid funds which will allow this strategy to be pursued. We are continuing discussions with interested parties who were in discussions with the company prior to our appointment and are working closely with the Aquamarine.”
Aquamarine Power has previously secured a £580,000 EU grant to develop its technology as well as a £2m contract from Wave Energy Scotland. However, the firm said the current economic climate has significantly affected the business. The firm’s 14 employees will be kept on.
Scotland's Energy Minister, Fergus Ewing, said he was disappointed that the firm has gone into administration.
"The company has benefited from significant public support in recent years to commercialise its wave energy technology and has built up valuable expertise and intellectual property in the sector," the SNP minister said.
"I am therefore pleased the administrator plans to continue trading while it seeks a buyer and that all staff will be retained at what will be a difficult time."
Industry body RenewableUK described today's announcement as a cause for concern and said the technology has repeatedly proved its worth in British waters.
"The news adds weight to the case for action to support the development of wave energy, following similar announcements from other leading companies in the sector such as Pelamis," Deputy chief executive Maf Smith said.