Announcement PDF ANNUAL REPORT 2024 We harness ocean energy to make the world more sustainable Corporate Directory Board of Directors Terry Stinson Non-Executive Chairman Michael Fitzpatrick Non-Executive Director Grant Mooney Non-Executive Director Anthony Shields Non-Executive Director Chief Executive Officer Jonathan Fiévez Company Secretary Grant Mooney Registered Office Address 21 North Mole Drive North Fremantle WA 6159 Postal Address PO Box 39 North Fremantle WA 6159 Telephone (08) 6168 8400 Subsidiaries CETO Wave Energy Ireland Limited 4th Floor, North Block, Rockfield Central Dundrum DN 16, W7W3 Ireland Carnegie Technologies Spain S.L. Claudio Coello, 24 – 4A2 28001 Madrid, Spain CETO Wave Energy UK Limited 5 South Gyle Crescent Lane Edinburgh EH12 9EG, Scotland Share Registry Automic Group GPO Box 5193 Sydney NSW 2001 1300 288 664 (within Australia) Auditors HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000 Website: www.carnegiece.com ASX Code: CCE OTCQB: CWGYF 2 Carnegie Clean Energy Annual Report 2024 Table of Contents 04 06 07 Chairman’s Letter Company Overview 2024 has been a year of immense progress. Carnegie is a leader in the wave energy industry. Global Context and Opportunity 10 12 13 UN Sustainable Development Goals Social Media Our Products Proudly supporting several key SDGs. Stay connected with Carnegie on social media for interesting insights. Delivering our CETO and MoorPower wave energy technologies to the world. 20 21 22 Partnerships and Collaborative Ecosystems Garden Island Microgrid Additional Information A unique asset delivering revenue to Carnegie from solar generation. Information highlighted from share registry details. Driving wave energy innovation through strategic partnerships. The emerging wave energy industry will benefit our clean energy transition. 24 Financial Report Carnegie Clean Energy Annual Report 2024 3 Letter From the Chairman 2024 I am pleased to present the Annual Report for Carnegie Clean Energy for the financial year ending 30 June 2024. The past year has been one of immense progress, marked by significant strategic accomplishments that maintain Carnegie’s position as a leader in the rapidly evolving field of wave energy. The impacts of climate change drive the critical need for clean, renewable energy solutions. At Carnegie Clean Energy, we are steadfast in our commitment to commercialising wave energy and playing a pivotal role in supporting the essential global energy transformation. The past year has been a testament to the hard work, creativity, dedication and expertise of our team. The ACHIEVE Programme is moving CETO technology closer to commercial reality, thanks to the support of the EuropeWave Programme, the Basque Energy Agency, and the Spanish Government who are providing combined support of €7.05m ($11.66m) to facilitate development and demonstration of CETO in Europe. These funds, in addition to cofunding provided by the Company, will support the upcoming deployment of a scaled CETO prototype at the Biscay Marine Energy Platform (BiMEP) in 2025. The Company’s co-funding will come via existing shareholder support raised in the 2024 Share Purchase Plan and will also include other financial mechanisms such as guarantees and loans which may be used to support cashflow during capital intensive periods, given the retrospective terms of several key milestone payments from various government backed funding sources. 4 Carnegie Clean Energy Annual Report 2024 The increasing support and engagement from regional, national and European governments represents a significant leap forward, not only for Carnegie but for the entire wave energy sector. It signals growing recognition of the value that wave energy can deliver to enable an affordable and just clean energy transition and helps accelerate our journey towards the growth and profitability that comes with commercialisation. The ACHIEVE Programme is a crucial step on the CETO commercialisation pathway. This scaled demonstration of CETO technology is intended to validate the CETO technological advancements developed over recent years and deliver the technical and commercial due diligence required for future large scale projects with strategic partners. Additionally, a successful deployment and operation will help heighten the commercial interest in CETO through real time demonstration, thus attracting new commercial partners, and ultimately leading to a faster time-to-market and broader adoption of the technology. In parallel, over the past year, our MoorPower technology has demonstrated remarkable potential to reshape offshore energy on barge type applications. MoorPower uses the moorings of offshore moored vessels to capture energy from the waves in addition to keeping the vessel in place. This past year we witnessed the successful deployment, operation and validation of our MoorPower scaled demonstrator, made possible with support from the Blue Economy CRC and delivered in collaboration with partners and future aquaculture customers. The data collected has validated our core design principles and paved the way for commercialscale deployment. The ability to provide clean, reliable energy to offshore aquaculture and other maritime industries represents a vast and untapped market opportunity, and with the success of the demonstrator, we are actively pursuing commercial-scale deployments on operating aquaculture barges. Carnegie’s pursuit of innovation extends beyond the technology deployment projects outlined above. Our global team is also actively participating in industry research programs such as MEGA Wave PTO and WECHULL+, collaborating with industry leaders and engaging with esteemed academic institutions. Working with our partner Hewlett Packard Enterprise, we are also bringing artificial intelligence to ocean energy, delivering results that can improve power and control of our CETO technology. The research projects we participate in continue to progress the core CETO technology towards commercialisation with near term improvements, while also supporting longer term improvements and innovations that will continue to drive future costs down. As we look to the future, I continue to be optimistic. The wave energy industry is gaining momentum, with growing recognition of its role in achieving a sustainable energy mix. Carnegie, armed with innovative technologies, strategic partnerships, and our team of passionate individuals, is well positioned for success during the renewable energy transition. While the world has not yet reached the tipping point into large-scale industrialisation of wave energy, evidence of how wave energy can benefit our future clean energy grids is increasing, support is rising and confidence in commercial success is growing every year, and this was a big year. I extend my deepest gratitude to our shareholders for their continued support. Your investment in Carnegie is an investment in a cleaner, greener future for generations to come. I also express my sincere appreciation to the Board of Directors, the management team, and every Carnegie employee for their tireless dedication and hard work. Together, we are harnessing the boundless power of the ocean for a brighter and more sustainable tomorrow. Terry Stinson Non-Executive Chair Carnegie Clean Energy Annual Report 2024 5 Company Overview Carnegie Clean Energy is an industry leader in the wave energy sector. Offering a portfolio of cutting-edge wave energy technologies that harness the ocean’s power to generate clean, reliable electricity. Our CETO and MoorPower technologies cater to diverse energy requirements, with the potential to power a variety of markets, from large utility grids to remote communities and offshore aquaculture operations. With a deep understanding of wave energy’s potential, Carnegie continues to develop and deploy innovative solutions that support the world’s transition to net zero. Our extensive experience spans the entire development spectrum, from modelling and simulations to large-scale commercial prototypes. With a growing global energy demand and climate change impacts, new sustainable solutions are vital to augment already deployed technologies of solar and wind. Wave energy offers advantages because it provides a consistent, reliable and predictable energy source that is complementary to solar and wind energy. This positions wave energy as a key player in a renewable energy portfolio that can be delivered over the coming years. With its potential to stabilise the energy grid and minimise the requirement for extensive battery 6 Carnegie Clean Energy Annual Report 2024 storage systems, the wave energy industry is poised for significant growth. Upcoming projects, including Carnegie’s ACHIEVE Programme in the Basque Country, are set to validate the CETO technology, attract further investment and pave the way for widespread commercial deployment. Meanwhile, MoorPower projects in Australia are expanding wave energy’s applications in the expanding offshore aquaculture sector. Listed on the Australian Stock Exchange (ASX: CCE) and US OTCQB Market (OTCQB: CYGYF), Carnegie is an Australian company with a global footprint. Our team of world-class engineers, scientists, and professionals - driven by a shared passion for sustainability and renewable energy, are dedicated to harnessing the oceans energy to make the world more sustainable. Global Context and Opportunity Why Wave Energy? Harnessing the immense energy of the oceans waves presents a reliable and consistent solution to the global energy challenge, offering a range of benefits that complement the existing renewable energy mix and enable the required expansion to meet our net zero targets. The global wave energy resource is vast with estimates indicating a global potential exceeding 29,500TWh (Ocean Energy Europe). In order to understand this measurement, that 29,500 TWh is roughly equivalent to the global total electricity consumption in 2023 according to the International Energy Agency. This untapped resource provides a reliable and consistent source of power, particularly in coastal regions where wave energy is most concentrated. Unlike solar and wind which depend on specific weather conditions, waves are generated continuously by wind blowing over the ocean’s surface. This predictability makes wave energy an attractive option for power generation, providing a stable foundation for both grid and offshore energy generation. 300 250 Wave Power [GW] 200 150 100 50 Image credit: Ocean Wave Energy in Australia, 2024. Power Resource for Selected Countries 0 Carnegie Clean Energy Annual Report 2024 7 We harness ocean energy to make the world more sustainable. Wave energy’s natural rhythm complements the variability of wind and solar power. Waves tend to be stronger in winter months and often peak several hours after wind generation, creating a natural synergy that enhances grid stability and reduces reliance on energy storage. By diversifying the renewable energy mix with wave power, we can move towards a more resilient and sustainable energy system around the clock. The potential for wave energy converters to be co-located with offshore wind farms is being further explored, a concept that will lead to cost savings in infrastructure and maintenance. This synergy further strengthens the case for wave energy as a key player in the clean energy transition. Beyond its grid benefits, wave energy offers unique advantages. Carnegie’s CETO device is located offshore and under the surface of the water, it has minimal visual impact compared to other renewables. Installation of offshore technologies such as wave energy as part of a growing blue economy will stimulate local economies and expand local supply chains, creating jobs in manufacturing, installation, and maintenance. The wave energy industry itself is rapidly advancing with significant investments pouring into research and development, driving down costs and improving efficiency. 8 Carnegie Clean Energy Annual Report 2024 As the industry advances, further cost reductions will be delivered through learning by doing and learning by research, making wave energy increasingly competitive with traditional fossil fuel sources and alternative renewable energy technologies. Wave energy is expected to follow a similar cost trajectory as was seen for both wind and solar energy along their commercialisation pathways, with scale being a significant driver of cost reduction and commercial viability. Harnessing wave energy creates new and significant economic, environmental and technical benefits. Countries are beginning to recognise these benefits with Europe and the USA ramping up efforts to provide the support required to capture the market opportunities. Australia is lagging behind, but still has a window of opportunity to develop the vision and policies required to capture the benefits associated with the wave energy industry. In a world grappling with the urgent need to decarbonise our energy generation, wave energy represents a compelling solution, offering a clean, reliable, and abundant source of power that can help us navigate the challenges of climate change and build a brighter energy future. Wave Energy’s Global Momentum With strong government backing, wave energy is riding a wave of momentum towards rapid expansion and a vital role in the clean energy transition. Over the coming years, private investment should be driven into the sector on the back of strategic visions, roadmaps and policies from global governments. 29,500TWh 12% Global wave energy potential exceeds 29,500TWh. (IRENA and OEE, 2023) Co-locating wave and offshore wind can save up to 12% in costs. (Offshore Wind Consultants Ltd, 2023) €195M Wave energy complements wind and solar for a reliable power supply. (Ocean Wave Energy in Australia, 2024) 137MW Europe saw €195M public funding for ocean energy in 2023. (Ocean Energy Europe) Deployment targets and revenue support are crucial for industry growth. (Ocean Energy Europe) Europe leads in ocean energy with a 137 MW project pipeline. (Ocean Energy Europe, 2024) 25GW £19bn $112.5M The UK has a 25GW wave energy potential. (EVOLVE, 2023) Wave energy could be worth £19bn to the UK economy by 2050. (University of Edinburgh) The US announced $112.5M funding for wave energy commercialisation. (US Department of Energy) €240M €65M 300GW Spain’s ‘RENMARINAS DEMOS’ Program awarded €240M to marine renewables, including €12.2M to wave energy. (IDAE) France provided a financial package including at least €65M for the 17.5 MW FloWatt tidal stream project. (Ocean Energy Europe) The average power of the ocean waves crossing the perimeter of Australia’s continental shelf is estimated at around 300 GW, ten times Australia’s average rate of electricity consumption. (Ocean Wave Energy in Australia, 2024) Carnegie Clean Energy Annual Report 2024 9 United Nations Sustainable Development Goals Carnegie supports the United Nations Sustainable Development Goals (SDGs) to create a better and more sustainable future for all. As we reflect on the past year, we are proud to share several key SDGs that resonate with our mission and vision. 10 Carnegie Clean Energy Annual Report 2024 SDG 6: Clean Water and Sanitation: Ocean energy can power desalination to transform seawater into clean water, ensuring access to clean water for coastal communities. SDG 7: Affordable and Clean Energy: Carnegie remains at the forefront of the clean energy revolution. We will continue to develop affordable, sustainable wave energy solutions that reduce carbon emissions. SDG 8: Decent Work and Economic Growth: Our commitment to innovation and sustainable practices is not only contributing to environmental preservation, but also creating employment opportunities and driving economic growth in the regions we operate. We believe that a green economy can be a source of prosperity for all. SDG 9: Industry, Innovation, and Infrastructure: Carnegie is driving innovation in wave energy infrastructure, leading to advancements that will benefit industries, economies, and societies globally. We are committed to technological excellence and sustainable development. SDG 12: Responsible Consumption and Production: We recognise the importance of responsible consumption and production. By promoting the use of clean energy, we are contributing to a more sustainable future, where resources are used efficiently and sustainably. SDG 13: Climate Action: The fight against climate change is a global priority. We continue to play our part by harnessing the power of the oceans to generate clean, renewable energy. SDG 14: Life Below Water: Through innovation and responsible ocean energy solutions, we are committed to safeguarding the rich biodiversity of our oceans. SDG 17: Partnerships for the Goals: None of these achievements would be possible without the strong partnerships we have forged with governments, organisations, and communities around the world. Together, we are driving towards a sustainable and prosperous future for all. SDG 11: Sustainable Cities and Communities: Our work is not only about technology but also about transforming communities into sustainable, resilient hubs along our coastlines. By providing clean energy solutions and infrastructure, we are empowering coastal communities to thrive in a rapidly changing world. In the coming year, Carnegie remains dedicated to our mission of delivering clean, sustainable wave energy solutions and fostering partnerships that will support progress against these Sustainable Development Goals. Carnegie Clean Energy Annual Report 2024 11 Social Media Stay Connected with Carnegie Carnegie’s social media channels offer engaging insights into the world of Carnegie and the wave energy industry. You’ll find interesting industry news, project highlights, and behind-the-scenes glimpses into our work, team members and partnerships. Connecting with us on our social media platforms provides a deeper understanding of the wave energy sector and Carnegie Clean Energy’s role in shaping its future. We’re excited to see our online community grow as more people join us in the journey towards a cleaner future. Our LinkedIn platform has welcomed 2,692 new followers this year – a 24% increase. We appreciate the support and engagement from all who have connected with us to share in our commercialisation journey. To stay updated with Carnegie’s email newsletter, featuring market updates and industry news, Scan the QR code provided to find the link to our mailing list. Connect with Us on Social Media Join the clean energy conversation and stay connected with Carnegie Clean Energy on social media. Follow us to discover the latest advancements in renewable technology, learn about our impactful projects, and be inspired by the positive change we’re creating together. Scan the QR code to find us on your preferred platforms and become part of the movement towards a sustainable future. 12 Carnegie Clean Energy Annual Report 2024 Our Products CETO ® Technology CETO is Carnegie’s core wave energy converter technology named after a Greek sea goddess. Its distinctive, fully submerged design operates discreetly beneath the ocean’s surface and converts the consistent and predictable waves into clean, grid-ready electricity. This submerged configuration not only minimises visual impact but also enhances CETO’s resilience in challenging ocean conditions. The units are designed to harmonise with the ocean’s natural rhythm. While moving with the waves, CETO’s power take-off system efficiently transforms wave energy into electricity utilising advanced control systems to optimise the performance of the technology. A versatile and scalable solution for a broad spectrum of applications, CETO can provide energy independence to remote communities, demand applications and islands in addition to contributing to large-scale renewable energy grids. As the wave energy industry matures and cost efficiencies are realised, wave energy is expected to follow a similar growth trajectory observed in solar PV and offshore wind sectors. Carnegie is currently validating the CETO technology through the ACHIEVE Programme, which includes the design, manufacture, deployment and operation of a scaled CETO prototype in Europe. Tested Flexible Over 15 years of onshore, tank and tens of thousands of hours of in-ocean testing Operates in variety of water depths, swell directions, tides & seafloor conditions Minimal Visual Impact Storm Survivability Fully submerged and invisible from shore Desalination Fully submerged and dives deeper under extreme wave conditions Maintainable Zero-emission freshwater co-production allows pseudo energy storage Easily towed to port for upgrades and maintenance Clean Scalable Minimal environmental impact, co-exists with and encourages marine life Consistent, Predictable and Complementary Provides grid benefits when deployed in portfolio with other renewables Modular array design Security Provides emissions free sustainable energy and water security to countries and islands Carnegie Clean Energy Annual Report 2024 13 ACHIEVE Programme Carnegie and its international subsidiaries (CETO Wave Energy Ireland and Carnegie Technologies Spain) continue advancing the CETO wave energy technology towards commercial readiness via the ACHIEVE Programme, which will deploy a CETO prototype in the Basque Country. The first CETO deployment in Europe. Carnegie’s ACHIEVE Programme has received significant recognition and support, with its top ranked tender being awarded a contract via the EuropeWave Pre-Commercial Procurement (PCP) Programme, and additional grants awarded by the Basque Energy Agency (Ente Vasco de la Energía) and the Spanish Government’s RENMARINAS DEMOS Program. ACHIEVE Programme: Design, Manufacture, Deployment and Operation of a CETO prototype at BiMEP Project: Deployment of the CETO wave energy converter at the Biscay Marine Energy Platform (BiMEP) in Bilbao, Basque Country, Spain. Deployment Site: BiMEP (Biscay Marine Energy Platform), dedicated testing ground for wave energy installations. 14 Carnegie Clean Energy Annual Report 2024 Wave energy is special. A portfolio of wave, wind and solar energy can deliver an affordable clean energy future. CETO Wave Energy Ireland’s successful completion of Phases 1 and 2 of the EuropeWave programme was followed in September 2023 with the award of a €3.75 million Phase 3 contract to deploy CETO in Europe. This award unlocked the deployment of a CETO device at the Biscay Marine Energy Platform (BiMEP) in the Basque Country. Receiving the highest score in the programme provided the Company with the strategic advantage of selecting its preferred berth location at BiMEP for the deployment. Achieving and number one ranking from the original 36 applicants is a testament to the quality of the team and the CETO technology. Phase 3 activities under the ACHIEVE Programme commenced immediately in September 2023. The project has gained further traction through securing a berth reservation at BiMEP, awarding contracts for critical CETO component design and manufacture, and achieving the crucial Authority to Proceed (ATP) milestone which reinforces the EuropeWave Buyer’s group’s confidence in Carnegie’s ability to deliver a successful deployment. Following the successful award of the EuropeWave Phase 3 Contract and selection of the BiMEP site in the Basque Country, Spain, Carnegie’s Spanish subsidiary, Carnegie Technologies Spain, secured additional funding to support the deployment of CETO at BiMEP through the Spanish Government and regional Basque Energy Agency. ▷ A €1.2 million grant from Spain’s RENMARINAS DEMOS Program is enabling the Company to extend and enhance the CETO deployment at BiMEP. This includes extending the operational period to two years, improving wave prediction capabilities, developing local infrastructure, and fostering collaboration with BiMEP on environmental surveys, knowledge dissemination, and operations and maintenance. ▷ A €2.1 million grant from the Basque Energy Agency (Ente Vasco de la Energía) is providing targeted support for crucial CETO components such as the Buoyant Actuator, Mooring System, Power Take Off, and integration of the Reinforcement Learning Controller. This funding is not only bolstering local manufacture in the Basque Country but also reducing technical and financial risks, paving the way for accelerated commercialisation and increased investor confidence. Carnegie Clean Energy Annual Report 2024 15 Funding Support for the ACHIEVE Programme The ACHIEVE Programme is being delivered by Carnegie Subsidiaries CETO Wave Energy Ireland and Carnegie Technologies Spain with support from Carnegie Clean Energy and additional funders as outlined below. EuropeWave PCP Contract: €3.75m ▷ CETO Wave Energy Ireland ▷ Focus: Accelerating wave energy development ▷ Funds a scaled CETO prototype deployment The EuropeWave project has received funding from the European Union’s Horizon 2020 Research and Innovation Programme under grant agreement No 883751. CETO WAVE ENERGY IRELAND JULIA F. CHOZAS CONSULTING ENGINEER RENMARINAS DEMOS Grant: €1.2m ▷ Carnegie Technologies Spain ▷ Focus: Advancing marine renewables in Spain ▷ Enhances CETO deployment (extended operation, wave prediction, infrastructure, local knowledge) MINISTERIO PARA LA TRANSICIÓN ECOLÓGICA Y EL RETO DEMOGRÁFICO Technologies Spain Basque Energy Agency (EVE) Grant: €2.1m Technologies Spain ▷ Carnegie Technologies Spain ▷ Focus: Supporting local involvement, technological advancements ▷ Targets specific CETO components (Buoyant Actuator, Mooring System, PTO, RL Controller) External Funding: €7.05m 16 Carnegie Clean Energy Annual Report 2024 Additional Research and Development Activities Industry Partnerships and Engagement In addition to its core CETO product validation work being undertaken via the ACHIEVE Programme, Carnegie Clean Energy and its subsidiaries are active participants in several international research and development (R&D) projects. The Company has been selected to provide technical expertise on two European research projects that are driving longer term improvements to wave energy technologies: Over the past year, Carnegie has increased industry engagement with potential supply chain partners across Europe. The engagement and partnerships developed with the supply chain for the ACHIEVE Programme are important as they also support the ongoing validation and commercialisation of the CETO technology. ▷ The MEGA Wave PTO Project, focused on advancing the power generation technology options for wave energy converters. ▷ The WECHULL+ Project, centred around developing sustainable and environmentally friendly concrete structures for offshore structures like wave energy converters. These engagements utilise our team’s technical expertise in wave energy technology to further innovation within the sector. By actively participating in these initiatives, we continue to contribute to the advancement of wave energy development. The company’s involvement in these projects also provides access to a variety of industry expert knowledge, ensuring that Carnegie stays at the forefront of technological advancements and can use that know-how to benefit the commercialisation of our wave energy technologies. Participation in ongoing R&D creates opportunities to learn valuable lessons from the projects and also support the growth of the wave energy industry. This year also delivered strengthened existing industry partnerships such as with Hewlett Packard Enterprise (HPE) on the development of the Reinforcement Learning based advanced controller for CETO. In addition to delivering technical value to the commercialisation of CETO, the partnership is also enabling Carnegie to reach new audiences. During the year, Carnegie’s collaboration with HPE was highlighted through several media pieces and at the HPE Discover Conference at in Las Vegas, USA, a key technology event in the USA. Carnegie and HPE’s collaboration was discussed by HPE’s CEO during his keynote address at HPE Discover, held in Sphere, Las Vegas. In addition, during the event Carnegie’s CEO presented in a session focused on how AI is revolutionising industries and driving innovation. Our work got further exposure through the CETO animation and model wave tank which were displayed in the HPE DIscover Showcase, for over 14,000 people in attendance at the Venetian Exhibition Centre in Las Vegas. Carnegie Clean Energy Annual Report 2024 17 Our Products MoorPower® Technology As the aquaculture sector moves operations further offshore, new challenges are encountered to access clean and reliable energy. Without shore-based power, energy intensive offshore aquaculture operations such as feeding barges are reliant on diesel generators with many associated costs, risks and carbon emissions. This is also true of many moored vessels across the blue economy. Carnegie’s solution to address this challenge is MoorPower, a spin-off technology that incorporates core aspects of Carnegie’s CETO technology and know-how into a novel wave energy converter system for use in offshore energy demand applications. The first market for this product is expected to be aquaculture barges and vessels that require energy for electrical loads operating offshore. Carnegie’s new wave power product addresses the challenge of securing clean and reliable energy offshore and replaces the diesel generation that would otherwise be required. The concept and vision for MoorPower grew out of engagement with stakeholders in the Blue Economy CRC (BE CRC) including key aquaculture companies and their technology providers, ensuring that Carnegie understood their