Carnegie Wave Energy : CETO 5 Operational

• First CETO 5 unit now installed and operating.

• Initial operational period in line with expectations.

• Second CETO 5 unit installation and grid connection to follow.

The CETO 5 unit was successfully installed on the first attempt and has now been operating for a little over a week. The sea state conditions experienced during this initial operation period have ranged up to maximum wave heights approaching 3.5m and unit performance to date has been as expected with no faults identified.

Carnegie's Chairman, Mr Grant Mooney, said:
"We are delighted to have successfully commissioned the first CETO 5 unit. This moment is the result of an enormous effort by the entire Carnegie team as well as the incredible support from our shareholders, the Western Australia State Government, the Australian Federal Government, the Department of Defence, the Royal Australian Navy and the City of Rockingham."

Carnegie's Managing Director, Dr Michael Ottaviano, said:
"The successful operation of CETO 5 marks the completion of a critical phase in Carnegie's evolution and culmination of 3 years of design, financing, development and construction. It is also now the start of a new phase as we learn as much as we can about CETO 5 via the data collection and analysis that has already commenced. This initial CETO 5 unit is currently delivering significant amounts of real time data in regards to hydrodynamic movement, pressures, flows, loads, displacements and the like. All of which is critical to validating Carnegie's proprietary computational models which can then be used with confidence in finalising the design of Carnegie's 1MW CETO 6 system in 2015."

Ivor Frischknecht, the CEO of the Australian Renewable Energy Agency (ARENA) said the achievement at the Perth Wave Energy Project was of great significance for wave energy in Australia.
"This project demonstrates that wave energy has a real future as part of Australia's energy mix," Mr Frischknecht said. "It is also evidence that developing and commercialising new technologies takes considerable time, resources and financing. The CETO technology has been progressively scaled up over the past decade and has made great strides towards offering a competitive renewable energy solution."

The second CETO 5 unit is currently being finalised ready for deployment which will likely take place in December, subject to suitable weather conditions. Once confidence is established with its operation, installation of the third CETO 5 unit would follow. It is also likely during this period that Unit 1 will be retrieved for a complete inspection prior to a redeployment.
Connection to the Western Power grid will occur once Carnegie has full confidence in the power quality and system control being achieved. Until that point the hydraulic energy delivered ashore will be measured and run through a load bank at the onshore power station site at HMAS Stirling on Garden Island. Integration of the wave energy into the desalination plant will occur after electricity generation and grid connection has been achieved.

Over the past months, Carnegie has been working through a rigorous program of onshore testing of the CETO units in advance of offshore installation and commissioning. This onshore testing program was designed to test and verify that individual components meet specification, component subsystems integrated and tested and to identify and remedy any problems before deploying the CETO units offshore.
The testing and preparation also extended offshore to tow tests of the CETO unit and function testing of the deployment system at the site in the days ahead of unit installation and commissioning.

The Perth Wave Energy Project has been under construction for approximately 12 months beginning with the installation of the CETO 5 unit offshore foundations last summer. The construction was proceeded by some 2 years of design, approvals, offtake, financing and procurement activity. More than $30m has been invested in the design, development and construction of the project. The CETO technology takes a unique approach to wave power by generating both power and water from the ocean swell while remaining fully submerged beneath the ocean surface, increasing its ability to survive large storms.

About Carnegie

Carnegie Wave Energy Limitedis an Australian, ASX-listed (ASX:CWE) wave energy technology developer. Carnegie is the 100% owner and developer of the CETO Wave Energy Technology intellectual property.

About CETO

The CETO system is different from other wave energy devices as it operates under water where it is safer from large storms and invisible from the shore. The technology is capable of generating power onshore or offshore depending upon the specific characteristics of a project site.

CETO technology characteristics include:

• Converts ocean wave energy into zero-emission electricity and desalinated water.

• Environmentally friendly, has minimal visual impact and attracts marine life.

• Fully-submerged in deep water, away from breaking waves and beachgoers, and unaffected by storms.

Perth Wave Energy Project ('PWEP') Fact File

• Upon completion, PWEP will be the first commercial-scale CETO grid and desalinated water connected wave energy project.

• The Perth Wave Energy Project is supported by $13.1m in Australian Government funding through the Australian Renewable Energy Agency's Emerging Renewables Program.

• PWEP is supported by $7.3 million from the Government of Western Australia's Low Emissions Energy Development (LEED) Fund. This is part of a larger $10 million LEED grant, awarded to Carnegie by the Western Australian Government, to support the development of the CETO technology from concept through to completion of PWEP.

• The Desalination Pilot is supported by a $1.27m AusIndustry grant from the Clean Technology

Innovation Program.

• Providing clean, renewable energy and potable desalinated water to Australia's largest naval base, HMAS Stirling, on Garden Island in Western Australia.

The CETO 5 technology being utilised in the Perth Wave Energy Project (PWEP) is configured to utilise the CETO pumps to pressurise water and deliver it onshore via an underwater pipe. Then, onshore,

high-pressure water is used to drive hydroelectric turbines, generating zero-emission electricity. The high-pressure water can also be used to supply a reverse osmosis desalination plant, replacing or reducing reliance on greenhouse gas-emitting, electrically-driven pumps usually required for such plants.

Dr Michael Ottaviano

CEO & Managing Director

Carnegie Wave Energy Limited

+61 8 9486 4466 enquiries@carnegiewave.com Website: www.carnegiewave.com

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