Ocean Power Technologies, Inc.

Ocean Power Technologies, Inc. (“OPT”) is an energy technology company supplying intelligent wave power electrical generation systems to utilities, independent power producers and the public sector. OPT is capitalizing on the increasing demand for low cost electricity, the need for distributed generation and the awareness of new environmentally sensitive power generation technologies. OPT is offering its customers a tested, leading edge, proprietary product which generates electricity in a reliable, non-polluting and cost-effective way.

OPT HAS DEVELOPED AND TESTED THE FIRST COMMERCIAL WAVE POWER GENERATION SYSTEM IN THE USA

OPT’s product is a scalable wave energy conversion system which is based on the integration of patented technologies in the areas of hydrodynamics, electronics, conversion mechanics and computer control systems. It has been designed and tested to solve the problems usually associated with harvesting wave energy: uneconomical scale, variable wave regimes and a severe environment.

OPT believes that its wave power generation system is unique in that:

· The system is a modular buoy-based product in which the modules are relatively small and hence relatively inexpensive to build and install compared to large wave energy generation systems

· Regular low cost maintenance will permit a lifetime in excess of 30 years since the system is constructed from rugged buoys, marine quality hydraulics and proven conventional moorings and anchoring and underwater transmission power cable

· The modular nature of the system allows for simple installation and easy scale-up, as well as immediate revenues streams, as the power buoys are incrementally brought on-line

· The cost of electricity produced by the system ranges between 3-4 cents/kWh for primary power and 7-10 cents/kWh for secondary power applications

OPT’s system trials include multiple tests in the US Navy’s wave tank facility near Washington, DC, as well as operation of a unit off the coast of New Jersey for 11 months. Over that period, the ocean system produced power in varying conditions, and survived several major storms and a hurricane with waves as high as 10 meters. Based on the successful testing of the system, the Company has come to be regarded by independent experts as the world leader in buoy-based wave power generation devices.

OPT COMMANDS STRONG COST ADVANTAGES RELATIVE TO COMPETING SOURCES OF ELECTRICITY GENERATION

The cost of generating power from an OPT wave power station is projected to be 3-4 ¢/kWh for 100MW systems and 7-10¢/kWh for 1MW plants.

While the capital cost of OPT’s system is relatively more expensive at the secondary power level, the cost is competitive at the large scale 100 MW level compared to traditional fossil fueled systems.

Comparison of Operating Cost (cents/kWh)

	Secondary Power (1 MW)	Primary Power (100 MW)
OPT System	7-10	3-4
Fossil Fuel	N/A	3-5
Wind	10	5-6
Diesel	12-100	N/A
Photovoltaic (Solar)	25-50	10-15

CAPITAL COST OF OPT SYSTEM

Comparison of Capital Cost

(Dollars/kW)

	1MW	100MW
Coal Plant	N/A	1,500-3,500
Fuel Cells	5,000	N/A
Microturbines	Low	N/A
Wind/Solar	8,000	4,000
Other Wave Systems	45,000	N/A
OPT	6,200*	2,300**
20 unit cluster of 50kW units *500 unit cluster of 200kW units

Note: This data is based on OPT projections of detailed costs for 100 MWsystems. Coal-based power plant costs are based on operating cost information from various utilities analysts, and Resource Data International, Inc.

THE OPT SYSTEM DELIVERS LOWER COST PER KWH OVER ITS LIFETIME

While OPT’s power plant equipment is at a somewhat higher projected purchase price per kilowatt than existing conventional power plant, the total cost per kilowatt hour over the life time of the plant is much lower (see Table below). This is because the OPT Power Systems require no fuel, and maintenance operations are lower in cost (based on standard buoy maintenance procedures promulgated by the US Coast Guard).

Wave Energy Compared to Wind and Solar Energy

Type	Energy Density	Predictability	Availability	Potential Sites
Wave Energy	High	Predictable in most sites	80 – 90%	Virtually unlimited
Wind Energy	Low	Unpredictable - except in limited number of sites	20 – 30%	Very limited
Solar Energy (Photovoltaic)	Low	Unpredictable - except for medium number of sites	20 – 30%	Medium number

Source: independent analysts, US Department of Energy, and various periodicals.

OPT HAS SUCCESSFULLY SIGNED ITS FIRST COMMERCIAL CONTRACTS

After successfully testing the complete wave power system, OPT has received its first commercial contracts for wave power generation systems from the US Navy, an electric utility in Australia and the State of New Jersey.

OPT’s WAVE POWER GENERATION SYSTEMS

· High energy density for production of primary electric power

· Essentially unlimited quantities of renewable energy close to centers of population and industry. Since OPT’s power generation systems use no fuel, there are no costs of transport, storage, handling or the uncertainties of fuel pricing.

· Predictable, high duty cycle power generation which can be fed into the power grid or stored

· Efficient at low and variable speed operation suited for natural energy sources.

· Highly modular system enabling lower costs, reduced construction and commissioning period, and ease of expansion or reduction of power capacities. Conventional power stations must be built on a large scale to be economical, making them vulnerable to failure and difficult to maintain. Furthermore, the modular, scaleable nature of OPT’s systems enables the power capacity planned to avoid resource commitment until it is justified by actual demand.

· Also ideally suited for powering salt water desalination and hydrogen generation plants

· Non-polluting and safe energy - no toxic gases, acids or greenhouse effect and no waste disposal problem

· For conventional power plants, the “footprint” of the plant superstructure, surrounding grounds and additional facilities such as fuel unloading areas, waste settling ponds, etc. can occupy up to two square miles of expensive real estate for a 100 MW site. A comparable OPT power plant would occupy approximately the same area of effectively free ocean surface out of sight from the shore.

· Conventional power plants are based on a small number of large generators. Unscheduled maintenance and equipment down-time can significantly diminish capacity output and negatively impact costs. OPT’s power generation systems are based on a large number of small generators and the effect of equipment down time or unscheduled maintenance on single units has a minimal effect on capacity output.

OPT POWER WAVE STATION PHYSICAL PARAMETERS

(Based on nominal 2.0 meter wave height)

Based on Nominal 2.0 Meter Wave Height
Station Capacity Megawatts	Quantity OPT Units Deployed	Surface Area Acres	Min./Max. Ocean Depth Feet**	Offshore Distance Miles (Typical)
1	20	5	100-300	0.5-5.0
5	50	25	100-300	0.5-5.0
10	100	50	100-300	0.5-5.0
50	200	240	100-300	0.5-5.0
100	500	480	100-300	0.5-5.0

Note: 640 acres equals 1 square mile **Power output is reduced in ocean depths of less than 100 feet. Mooring costs increase significantly for depths greater than 300 feet.

OPT’S TECHNOLOGY

OPT is the world’s leader of wave energy generation systems

• Wave energy is the most concentrated form of renewable energy

- Widespread throughout the world

- Close to population centers

- Predictable and dependable

- Non-polluting: no exhaust gases, no noise, no visibility from shore

- Scalable to high capacity power stations (100MW+)

- 100 square miles of ocean area off coast of California is estimated capable of producing all

of California’s electrical power

• Availability factor of 90%, with wind and solar availability factor of 30-40%

• OPT’s system captures wave energy in a simple and cost-effective manner

- Modular design makes system flexible, reliable, durable and easy to scale

- Proprietary system

- Innovative design allows for easy installation and maintenance

OPT’s wave energy generation system is based on a “smart”, modified ocean-going buoy designed to capture and convert wave energy into a controlled mechanical force which drives the OPT electrical generator

• The rising and falling of the waves causes the buoy like structure to move freely up and down. The resultant mechanical stroking is used to drive the electric generator

• The generated AC power is converted into high voltage DC and is transmitted ashore via an underwater power cable

• The OPT device is a proprietary, “smart” system as the buoy sensors continuously monitor the performance of the various subsystems and the ocean environment, so as to efficiently convert the random wave energy into useful electrical power

• In addition, the OPT system includes sophisticated techniques for automatically disconnecting the system in very large waves, and automatically reconnecting when the waves return to normal regime

HEARING BEFORE THE

COMMITTEE ON

ENVIRONMENT AND PUBLIC WORKS

UNITED STATES SENATE

On

May 30, 2001

PRESENTATION BY

1590 Reed Road

Ocean Power Technologies, Inc.

Availability

OPT’s WAVE POWER GENERATION SYSTEMS

OPT POWER WAVE STATION PHYSICAL PARAMETERS

OPT’S TECHNOLOGY

MODULARITY

EXPANDABILITY OF THE TECHNOLOGY

PRODUCT APPLICATIONS

SUPPORT FROM UNITED STATES GOVERNMENT