A consortium led by ocean energy company Minesto has received a 25 million SEK grant from the Swedish Energy Agency to develop a tidal-powered microgrid system in the Faroe Islands. The two-year project has a total budget of 56 million SEK and aims to deliver a complete microgrid installation by 2026.
The project brings together Minesto, microgrid technology firm Capture Energy, the Faroese utility SEV, and IVL Swedish Environmental Research Institute. The group plans to demonstrate a stand-alone tidal energy system capable of providing baseload power to remote or off-grid areas.
The microgrid will be built and operated at Minesto’s current site in Vestmanna, using an upgraded version of its Dragon-class tidal power plant. Capture Energy’s control systems will manage the grid integration. IVL will assess the environmental impact of the system.
“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 initiative targets non-grid-connected islands in the Faroes as initial deployment sites. The project will also involve site assessments and environmental risk evaluations as part of installation planning.
The microgrid will include integrated battery storage, providing a complete off-grid solution. The goal is to replace diesel-based generation and other fossil fuel-reliant systems currently used in remote locations.
Minesto views the microgrid market as a major strategic opportunity. The company estimates the total addressable market for tidal-based microgrids at 300 billion EUR, ranging from small-scale to multi-megawatt installations.
“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,” Edlund said.
The Faroe Islands rely heavily on imported fossil fuels and face challenges due to fluctuating prices and supply uncertainty. However, the region has strong tidal energy potential, which this project aims to harness.
“This award from the Swedish Energy Agency adds vital financial support and recognition to Minesto’s commercial agenda,” Edlund added.
