Good morning! Welcome everyone to the Q4 presentation from Ocean Sun. If you can flip the slides or... There, yeah, thank you. As always, we give a short introduction to Ocean Sun and the purpose of the company, and we will go through the ongoing operations and the business development going forward, and of course, the financial numbers for the last quarter. Ocean Sun is all about floating solar energy. Last year, in 2023, I think it was a new record. It was 1 billion solar panels manufactured during that year. It's an increasing number of the capability of solar and the search for the new surfaces to place and install the solar panels, have led to the advent of floating solar energy.
The Ocean Sun is in the business of providing a special patented design to solve this technological challenge. It's based on the large surface membranes suspended in the flotation collars, which are then moored to the sea floor. And we can make a high number of these circular discs carrying a significant amount of solar panels and provide utility-sized power plants deployed on water bodies. We claim that this is the best way to deploy solar panels on water, and the benefits is the low capital expenditure. It's very, very important, of course, for the LCOE and the cost of the price of energy, and this is achieved through the efficient use of material, the lean and the sheer amount of plastic, polymer materials going into the vessels and the floating units.
Very important in the big solar farms is also the speed and how easily it is for the workers to install all these solar modules. Another important benefit of doing it this way is the lean transportation. Most of the floating solar technologies are based on flotation buoys, pontoons that are very bulky and take up a lot of space, and thereby using a lot more of the 40-50 transportation containers, up to 10-15 times the number that we can achieve with, in comparison with the membranes.
We also have an especially high efficiency in the operating temperature in the solar panel because of the thermal conductivity to the thin membrane and the strong heat dissipation to water, which is a lot more efficient than the traditional air cooling of solar panels, and particularly useful in warm climates, high ambient temperatures, and, and, in, in the lower latitudes, also, where the sun is high in the sky. The whole concept and the system gives a better seaworthiness due to the, the ruggedized flotation rings, that are very much a derivative also from the aquaculture farming industry that has been developed in the last 40, 50 years in, in, Norway and elsewhere.
Not mentioned here also, these large membranes can also serve as a huge catchment area for precipitation, for the collection of freshwater rain. And conversely, it is a very efficient barrier to evaporation of freshwater in the large freshwater reservoirs, preventing water lost into atmosphere. So the ongoing operations, on the right here, we see our pilot system in the Philippines is the largest floating solar system in the Philippines on the Luzon Island. In June, this will be five years in operation, designed for the very strong winds that can occur. Very good production and operation by the operators of the hydropower plant. They also then now can do the floating solar. On the Banja in Albania, this is our largest, the 2 MW four-ring system.
We are intensifying the operation and maintenance activities, and we have plans there to improve on not only to maintain the low temperatures in these solar panels, but also to have particularly clean solar panels. We will achieve this by we have the ability to put a filter to clean water on top of these membranes, and then to wash out any, let's say, atmospheric dust or other airborne pollutants in the region. This is a very promising technology development that we're taking on. We will also now soon have a new project under construction in Iberian Peninsula. This is also a pilot system of the similar size that you can see on this picture. Believe this will start already next week.
For the contracts that has been entered, we have in Singapore completed engineering, hydrodynamics, electrical circuitry, and single line diagrams. We are also been honored the payments for these projects, part payments on the license fees. In Singapore, authorities are still working on authorization and permitting of this type of floating power plants. Same situation a little bit in Greece. I was yesterday at the International Floating Solar Conference in Amsterdam, and there was an update there from Greek authorities, and there is now a ministerial decision for their national development program for floating solar. So this is now high on the agenda in the Greek administration, and we hope, of course, this will progress quickly.
That will also be the trigger for the deployment of the 2 times 2 megawatt piloting system close to Athens. We in last year December, early December, we deployed this that you can see behind there. It's a large the floating construction finalized there close to the pier. There's many dignitaries from administration in the Canary Islands, also led by vice president of the Canary Islands. And it was the final milestone in the three-year European Union financed R&D program called BOOST, bringing Ocean Sun to the market. And this is a very special location. This is outside the break waters. There is towards open sea.
It's actually a free fetch towards south, southeast, to all the way to South Pole. And we are now having there has been some delay in the electrical completion and electrical works. This is an off-grid system, and we are also awaiting subsea cable to connect this. And during this period, the last two months, we have had taken the decisions to take away the solar panels due to some stray currents. It's not really safe to run 1,500-volt power plant like this without full electric and load. And we then don't have the RCD, the residual current device in operation, and this can lead to short circuits and even arcing.
To prevent any more stray currents on the system, this has been taken off until we can proceed at this site. There's a big interest from other, from PLOCAN research institution in Canary Islands and also local industry in this area, so we think this will progress. Some other business updates. Cooperation agreement which is dedicated for the aquaculture industry. These are, I would say, smaller type system, but that are typically powering, feeding barges in the salmon industry, for instance, and this we do together with the company Inseanergy. And for each of those projects, there will be a separate agreement, project agreement for those projects, but there is a collaboration agreement in place, and they will produce this one with a license from Ocean Sun.
We are also ramping up or increasing activity on desktop studies. These are the pre-feasibility or even so-called the front-end engineering design studies for large energy corporations that are looking into floating solar, and this is also now becoming a source of revenue, these reports that we produce. I can also mention the very good progress and interest we have from India with its high large population and people density there, and the many state-owned hydroelectric power companies that have a strong interest in the floating solar. We're discussing with several of those now, and as we remember, we also entered MOUs with SJVN and Green Energy and also ANERT out of the province of Kerala. On the picture here, we can also see there is an installation.
This we are very proud of. It is, in the one of the-
... largest museums in Oslo, it's the Museum of Science and Technology, and we are then become part of a permanent display within the subject of energy and also pointing a little bit into the future. It's great to see that floating solar is mentioned in that context. So, okay, so with that, I think we can move over to the-
It was a good quarter last quarter.
Indeed, it was. Thank you, Børge. Yeah, last quarter, we had an operating income of NOK 5.9 million. For the full year, we see that revenue increased by 60% compared to 2022, which is, of course, good. In these NOK 5.9 million, we also have the delivery of 4 pre-feasibility studies, which are a monetary contribution, of course, but also great recognition of interest-paid interest from our potential customers, paying us to study potential future sites. So that's very positive and indicates the activity. The loss was at NOK 4 million for the quarter, and we had a positive cash flow of NOK 2.6 million due to positive effects in the working capital.
The cash balance at the end of last year was NOK 46.7 million, so we still have a strong and solid financial base to stand on as we go forward into 2024. We open up for Q&A. As always, you can send your questions in using the chat. The first question was about regarding the technical museum. I saw a LinkedIn post of a big delegation from Philippines. Can you explain a little bit more there?
Yes. There was shortly after the inauguration of that display, I think it was on January 26th, and then we met a large group from Department of Energy in the Philippines, but also industry players too, almost 20 people, I think. So we thought it was a good idea to bring them to the museum, and also to give a separate presentation at that facility. And the curators of the museum also very helpful and showed the entire group around the energy, the new energy display, and also stopping a little bit at the Ocean Sun installation, of course. Yeah.
Then we have a lot of questions from Kjell Blevik, and I will take them one by one. The first question is: How long do we have money for the operation of the company? And do you view a share issue likely in a couple of years?
There is no emission plan for Ocean Sun. That's the last question. There it's with this capital- and this, of course, depends on how aggressive we invest and... But there is a runway for at least two years with this capital, and even more if spent carefully. Yeah.
Yeah, and we see that, as I said, the cash position is good, and we see that we have enough cash to carry out our business plans and do not need to find more at this time.
Yeah.
And then, the Danish company, Vestas, reported good results and are distributing money. Can Ocean Sun become a dividend company in a few years?
Yeah. Vestas has been operating for—it's a little bit older entity than Ocean Sun in the wind turbine business, so for several decades. So, but that floating solar can reach the magnitude of wind power, that I'm quite certain it will in the future. Yes. If you're looking at the total solar resources globally, these are far bigger than when you study the wind resources, which are more sparsely distributed geographically. Wind power is, yeah.
The third question is, why don't you market hybrid solutions?
Well... We do. I would say we are partners in the so-called Hydrosun project. This is a EUR 8 million project supported by Innovation Norway. We together with Scatec and also Prediktor, TGS, and Ocean Sun are studying then the hybridization of hydroelectric power and floating solar in that project. But yeah, so.
To reiterate, the business model of Ocean Sun is to be a technology provider of the floating solar to large utility scale customers and projects. We think that's the right way to go to get our technology out there, and to get the competence in an SPV that you need to build these larger energy assets. In those projects, we collaborate with the biggest and the most recognized energy companies in the world, like Scatec and others, like Statkraft, to build hybrid assets, but we focus on the floating solar.
Yes, and and very often, I think a majority actually, of the hydropower plants are state-owned companies in most, or in many countries. So it's, yeah, so...
Number 4, what is the comparative advantage with the localization, proximity to densely populated areas for sun energy, compared to wind?
Yes, well, there are many things, but first of all, I think perhaps you're thinking about the visual appearance of these systems. These are completely flat, so if you are on a beach, when this is 500 meters perhaps away from the beach, it's very difficult to actually see it. It's completely noiseless, and it is also much less intrusive than now the large wind turbines reaching up to 250 meters in height. So, it is a kind of a different way to produce energy, and also you can be closer to the consumers, and save a lot on the transmission cables, of course.
Yes, and the solar resources, in contradiction to wind, are the same if you're in the city or just outside the city than far out at sea. But for wind, it's better if you're up in the mountains or out at sea.
Yeah.
So there's a big advantage of going there, but for sun, you get no increased production by being in the middle of the North Sea.
That's, that's right, yeah.
Which is positive, as you can be much closer to the consumers and save money on cables and all. And then, number five, and last question: Why does Norwegian government speak so much about wind power in the ocean, and not about solar energy in the ocean and in freshwater reservoirs?
I think that question should be directed to the Norwegian government, and not really for Ocean Sun to answer. But I think there is a tendency now that this is also an increased awareness about this new technology. It's... Wind power has been going on for quite some more time than floating solar, but I think this is improving, yeah.
Worth mentioning, as we have many Norwegian shareholders, on a global scale, the share of energy production from solar and the amount of solar resources are much greater than wind. So if you step outside of Norway, and in countries in the Asia-Pacifics, and in more sun-rich countries, they speak about solar as the solution and not wind.
Yeah.
Those are also the markets for Ocean Sun, being a global company.
Yeah, that's a very good point, Karl. So in isolation in Norway, wind resource is quite strong, while solar is less important.
Yeah, and then there's a question if we get any recurring revenue from Banja.
Then no, we don't have a share. The PPA, the power purchase agreement from Banja, is owned by Statkraft and towards the Albanian state, so we don't have a share of that. But we supply the technology, and that is our source of revenue. But that is on a one-time type.
Yes.
Maybe one day they will expand. There is room for expansion, so that will, then you will have recurring revenue, in a sense.
That was the last question.
Okay, so with that, I think, yeah, we can say thank you very much for listening to the Q4 presentation from Ocean Sun. Thank you.