Management's review
Beskrivelse af virksomhedens væsentligste aktiviteter:The principal activities of the company Like previous years, the principal activities are to develop and produce solutions, advice and make investments in renewable energy.
Our focus in 2022 has been on laying the foundation for installing our full-scale system in Gran Canaria, conducting onshore and accelerated testing, and initiating our EUR 2m equity issue. The consequences of the devastating war in Ukraine, the rising prices and longer lead times have all affected our activities and plan. Despite these challenges, we have managed to overcome them, albeit with a slight delay in the final installation, which is now scheduled for the summer of 2023.
Demonstration Project 1: SME Phase 2 – Competitive Wave Energy on Islands (CWEI) The project has been on hold during the preparations for the W2EW installation. It was resumed in September 2022 to prepare for installing an updated version of the energy collectors end of 2023.
Demonstration Project 2: Fast Track to Innovation - Wave to Energy and Water (W2EW) Our focus, in collaboration with our consortium partners, Vryhof, Fiellberg and Enermed, has been on ordering and finalising the manufacturing and testing of the components for the W2EW system.
All parts except the energy collectors are ready at the mobilisation site. Energy collectors have been ordered with delivery time Q2-23. Infrastructure work on the PLOCAN platform was finalised and we have connected the power generation and desalination units. They are now ready to be connected to the system.
All instrumentation to measure system performance and loads have been manufactured and tested. Our simulation tools (digital twin) have been refined. Now we need experimental data to align the digital world with the real world.
Accelerated and virtual testing: Horizon 2020 - Verification through Accelerated testing Leading to Improved wave energy Designs (VALID) In 2022 we finalised the construction of the onshore test rig and started the accelerated testing of our pumps. It has been of vital importance to test the performance, seals, valves, welding etc. Furthermore, we have performed destructive testing that resulted in critical failures that we have been able to mitigate. The purpose of the testing is to increase the understanding of the system and to find potential failures before installation at sea. Once at sea, any malfunctions or breakdowns will become significantly more difficult to diagnose and manage.
The testing will continue in 2023. Economy Our actual costs are in total well below the budgeted framework of 2022. The reason is partly that we have pushed some of the investments in the demonstration system to 2023 and partly that we have waited to expand the team until we have secured the required funding for our next phase.
Staff costs have been kept stable, equalling 2021 at a total of DKK 5. 9m, 20 % below budget. External costs on material, assistance etc. , in total DKK 5m, is DKK 7. 5m lower than budgeted, pushing the investments into 2023.
Costs related to "non-project" activities have slightly exceeded the budget due to extensive efforts in connection with our capital raise. We initiated our capital raise in 2022 with the target of reaching EUR 2m to finance the remainder of the ongoing projects and prepare for our next phase. In 2022 the financial markets experienced a “cool down” of risk capital. Despite the change in market conditions, we managed to lift the first part of the needed capital, DKK 4. 5m (EUR 0. 6m), from our existing shareholders, and at the same time laid the foundation for finalising the raise in 2023.
Going concern The management expects that the necessary liquidity for the budgeted activities can be obtained on an ongoing basis. We have in Q1-23 secured the required total of EUR 2m in equity. Based on this, the management presents the annual report in accordance with the going concern criteria.
Organisation Per 31/12-2022 we were 8 full time employees and 2 freelancers in Wavepiston Denmark. In addition, we were 3 full-time employees in Wavepiston Gran Canaria. We have managed to keep a stable base and a low employee turnover. We have said goodbye to one employee in 2022. A replacement is in place per February 2023.
We continued to expand our network of suppliers and potential future partners. Commercialization, Communication and PR In 2022 we were so fortunate to participate and be the winner of the Green Impact Week finals, we were selected as a Nordic Top 50 Impact Company, and we were awarded the Solar Impulse Efficient Solution label. We continued to participate and present at several conferences and events. Finally, most of them physically. The most important were: - OEE-ICOE 2022 - Desalination for the Environment: Clean Water and Energy - BlueInvest - Marine Renewables Emerging Technologies Industry Forum - Green Impact Week
Presenting and participating at the seminars and conferences is important to spread the good message about Wavepiston and build relationships with potential business partners and customers.
We continued the large effort on presenting and pitching for potential investors and partners. With these, we lay the foundation for future strategic investors and partnerships. We have kept a steady activity level on social media with 30 posts on LinkedIn where we currently have 2,966 followers, an increase of 636 followers in one year. We are still on Twitter as this is where we can get exposure towards politicians, currently with 123 followers.
We continue to participate in the work to influence Danish politicians in ordaining more favourable policies for the development of wave energy. We have had the pleasure of hosting several politicians at our office in Kronborg. In June we had a visit from the Mayor of Helsingør, Benedikte Kiær from the Conservative party. And in August we invited the members of the Danish parliament, the Socialdemocrats Anne Paulin, spokesperson on climate, energy and utilities, together with Henrik Møller, spokesperson on labour market. We discussed the future of the green energy transition incl. the role and advantages wave energy.
There have been articles and features about Wavepiston in the following media: International media (online magazines) - https://www. offshore-energy. biz/ - https://www. energetica21. com/ - https://bluerloop. com/ Danish media (podcasts, newspapers and online magazines) - https://www. energy-supply. dk/ - https://helsingordagblad. dk/ - https://www. altinget. dk/ - WaterWeDoing (podcast)
Our PTO patent has now been issued in the USA, and the patent is thereby issued in all strategic countries. We have two other patent applications pending and follow the strategy of broadening and extending the protection of Wavepiston's intellectual property rights. We continue to identify and engage potential locations for our first commercial projects. The two focus locations are still the Canary Islands and the French Caribbean. For the Martinique project we initiated discussions with a project developer. Stakeholders, potential business partners and customers from locations around the world contact us on regular basis. We observe a global and growing awareness on renewable energy sources (RES), for mature technologies and newly developed RES, such as wave energy. In this respect it is of large importance that the UK in 2022 completed their Contract for Difference (CfD) program with technology specific prices including a price of GBP 178. 54 per MWh for tidal energy. Wave energy is expected to be introduced within the next 2-3 years. Investments in Europe is important as both USA and Asia are catching up to Europe and are now investing more in ocean energy.
Plan for 2023 The uncertainties that we encountered in 2022 in the post-COVID world, war, lockdowns, inflation, increased interest rates etc. has continued into 2023. We continue to navigate in these uncertain times. Despite the uncertainties and cool down on the markets for risk capital, we managed in Q1-23 to secure the required EUR 2m via our existing shareholders, a few new ones, and another equity crowdfunding round.
Early 2023 we signed a collaboration agreement with the French project developer YS Energies Marines Developpement on the Martinique project. We have high expectations on this collaboration. In 2023 the focus is to show results from our full-scale installation. This will be the foundation to land a strategic investor (group) that besides money is expected to have competences and network in the energy and or offshore sector.
In 2023 we plan to: - Keep a stable team to finalise the demonstration phase successfully and prepare for the commercialisation phase. - Demonstrate successful results from our full-scale installation at PLOCAN, Gran Canaria. - Prepare and enter an agreement with a strategic investor (group). - Expand our network of potential partners and customers, including communication campaigns and preparations of the first commercial projects. - Secure public co-funding for our next projects. With each progressive stride, we are receiving further validation that the Wavepiston technology holds immense potential. We remain unwavering in our conviction to transform the wave energy industry, and to position Wavepiston as a leading provider of cost-effective wave energy solutions that can complement wind and solar energy, as well as facilitate the desalination of seawater.
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