Minesto-led consortium awarded €2.25m for tidal energy power plant
Power Engineering International
Posted on: 2 July 2025
A Minesto-led consortium has been awarded a €2.25 million grant to build a tidal energy power plant for baseload electricity production to microgrids.
Ocean energy developer Minesto is heading a consortium of four that has been awarded a total of 25 MSEK grant funding from Swedish Energy Agency to build a tidal energy power plant in the Faroe Islands.
Minesto is collaborating with microgrid technology provider Capture Energy, Faroese utility company Sev and IVL Swedish Environmental Research Institute to demonstrate a unique tidal-based microgrid solution that provides baseload power.
The project is built on a partnership with technology leader in microgrid management Capture Energy. By integrating Minesto’s tidal power plants with Capture Energy’s microgrid capability, a significant global market for autonomous power plants and island-mode grid can be accessed.
Minesto’s existing customer Sev will play a key role in the project as an advanced user of microgrids and on feasibility work related to local commercial installations to come. IVL Swedish Environmental Research Institute, will provide expert analysis on the environmental footprint of the solution.
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The tidal energy power plant project will deliver a complete product offer for a microgrid installation with integrated battery storage to offer a stand-alone base-load power plant to an island mode user.
The total consortium project budget over two years is €5 million ($6 million), with €2.25 million of grant funding being provided by the Swedish Energy Agency.
The microgrid system will be built, commissioned and operated at Minesto’s current production site in Vestmanna based on existing infrastructure and environmental permits. The project starts in August and will deliver a complete microgrid in 2026.
The Minesto tidal energy power plant used in the project will be an upgraded and customized Dragon-class tidal power plant.
Non-grid connected islands in the Faroes are the first targets for commercial deployment. The Faroe Islands, like many remote island communities, face unique challenges in energy production and consumption. The islands are dependent on imported fossil fuels, making them vulnerable to price fluctuations and supply disruptions. At the same time, the islands possess vast untapped marine energy resources, especially tidal energy, that could offer a sustainable and locally sourced solution to meet growing energy demands.
The total addressable microgrid market for tidal powerplants is estimated at €300 billion ($354 billion). The market spans across small kW installations to multimegawatt installations. Minesto will be able to offer its tidal energy kites for large arrays also into this area without modifications, thus contributing to volumes and step-in business opportunities.
“The global multibillion-Euro microgrid business is a vital parallel track to build-out of larger Dragon Farms (multimegawatt arrays) based on the same Dragon-class systems. This new partnership with Capture Energy makes it possible for us together to offer turn-key microgrid tidal power generation to local customers in need of renewable base-load energy,” said Dr Martin Edlund, CEO of Minesto.
“The microgrid business has significant strategic value for Minesto. It is in itself a substantial global market and it also offers market entry projects with new commercial partners to create confidence in our unique technology and to speed up collection of local data for environmental permitting and certification,” concluded Edlund.
