Re: Carnegie CETO Update

3 May 2011

Renewable Energy Holdings plc

("REH" or the "Company")

Re: Carnegie Commercial Scale CETO 3 Completes Initial Operational Run

Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor in, and operator of, European wind power, notes an announcement released on 2 May 2011 by Carnegie Wave Energy Limited, in which REH holds 232,600,000 fully paid ordinary shares, representing 27.0% of the entire issued share capital.

"2nd May 2011

Commercial Scale CETO 3 Completes Initial Operational Run

·; Commercial scale CETO unit successfully completes primary offshore testing phase

·; Results in line with expectations across a range of sea states

·; Sufficient data now collected to advance to demonstration project stage

Wave energy developer Carnegie Wave Energy (ASX: CWE) is pleased to advise that its commercial scale CETO 3 unit has successfully completed its primary offshore testing phase with sufficient data collected to allow the finalisation of the design for a grid connected commercial demonstration project.

During the test period the system operated in line with expectations through a range of sea states including 1m to 4.6m wave heights. The pump stroked its full range of displacement through to 3m and was successfully dampened at high loads. The pump also produced hydraulic pressures in excess of 90bar which is more than that required for reverse osmosis desalination. New video of the system in operation is available on Carnegie's website at www.carnegiewave.com 

Carnegie's Managing Director Dr Michael Ottaviano said, "We're very pleased with the performance of the CETO 3 unit. We now have an enormous amount of data that the Carnegie team is now analysing which will allow us to validate our computational models and which in turn allows the finalisation of the design for our grid connected demonstration project."

Recovery of the buoyant actuator and pump assembly will allow for a full visual and technical inspection to take place as well as the retrieval of monitoring equipment and data contained in the buoyant actuator which was not connected to the remote communications system. This data includes motion and location of the buoyant actuator from an inertial measurement unit located on the buoyant actuator which recorded the exact position of the buoyant actuator in 3 dimensions for the testing period. This data will be used to verify and enhance Carnegie's understanding of the buoyant actuator's hydrodynamic behavior through a wide range of sea states.

The balance of plant for the CETO 3 test system, including the subsea hydraulic module, foundation, communications system and data buoy remain offshore in preparation for subsequent testing phases.

The results of the offshore test phase will continue to be analysed over the coming weeks and then be used along with the recently completed conceptual design study to allow the completion of the detailed design of a small scale, grid-connected, commercial demonstration project. Final site selection for this project will be made over the coming months.

The successful installation, operation and removal of the CETO 3 unit, along with the completion of the demonstration project conceptual design marks the end of Stage 1 of the Perth Wave Energy project which was achieved with the support of the State Government of Western Australia through the LEED grant program.

Images and video footage of the installation and operation can be found on Carnegie's website www.carnegiewave.com 

About the Perth Wave Energy Project

Carnegie's Perth Wave Energy Project is located offshore in the ocean between Garden Island and Five Fathom Bank at a depth of approximately 25 metres. Upon completion, it will be Australia's first commercial scale wave energy project.

The primary aim of the project is to demonstrate the CETO technology in commercial operation. The project site could also be a base for a desalination pilot project utilizing Carnegie's CETO technology.

About CETO

The CETO system distinguishes itself from other wave energy devices by operating out of sight and being anchored to the ocean floor. An array of submerged buoys is tethered to seabed pump units. The buoys move in harmony with the motion of the passing waves, driving the pumps which in turn pressurise water that is delivered ashore via a pipeline.

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 greenhouse gas emitting electrically driven pumps usually required for such plants.

CETO Technology characteristics include:

·; CETO converts wave energy into zero-emission electricity and desalinated water

·; CETO is environmentally friendly, has no visual impact and attracts marine life

·; CETO is fully submerged in deep water away from popular surf breaks

About Carnegie

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

Ends

For further information, please contact: