Pelamis Wave Power looks like it is taking in a bit of water.

Phil Metcalf has resigned as the CEO of the company by mutual agreement, according to Max Carcas, the business development director. Carcas, however, denied rumors that the company has or is contemplating layoffs. Pelamis has about 70 employees.

Right now, the company is concentrating on getting its next-generation device out the door and into the waters off of Scotland's Orkney Islands. The 170-meter long devices headed for the European Marine Energy Centre will be owned and tested by E.on. Carcas also reported that EDF and some Portuguese industrialists are interested in reviving a wave power experiment that was kicked off, but shut down off the coast of that country in 2008. The Portuguese consortium, however, won't likely go to the dry-docked Pelamis wave machines. Those machines are "sub-optimal," said Carcas. The new device coming out are 30 meters longer than the next generation machines and the joints holding the segment of the Pelamis are not as good. The owners of those devices have been trying to sell them.

"It's a challenging environment," he said.

The news of Metcalf's resignation could be both good and bad news for the wave and tidal power industry. Critics will assert that it shows that wave and tidal power remain impractical and expensive. The potential for ocean power might be tremendous, but the engineering and maintenance costs currently outweigh the benefits. Pelamis, after all, has raised 43 million pounds and still not really in commercial deployment. Finavera Renewables gave the industry a black eye earlier when its test buoy was lost off the Oregon coast.

On the flip side, various wave and tidal execs have complained that Pelamis promoted the concept too much, raising expectations for wave and tidal power before the devices were ready. And interest remains high in wave power. For its part, Pelamis maintains it remains ahead of most competitors and will produce electricity from waves that will be sold commercially.

The company's claim to fame is the eponymous Pelamis Wave Energy Converter, an orange, undulating device that looks like a sea monster and harnesses power from trains of ocean waves. Pelamis tinkered with prototypes for years and last year claimed to become the first company to produce wave power commercially. (See a video of the devices here.)

Three of its devices, each capable of producing 750-kilowatts of power, were installed off of the coast of Portugal in 2008. At times, the individual devices were producing around 200 kilowatts of power, Carcas said earlier this year.

However, Pelamis hit technical problems and had to tow the devices into shore in November 2008. The technical problems were fixed, but by then the financial crisis was raging throughout the world. The owner of the devices, energy services company Babcock & Brown, then decided not to redeploy the devices and looked for ways to sell them.

All that occurred in 2008. Pelamis, however, was keeping a lid on the news because Babcock & Brown had not gone public with it. "We're still in the work-up phase. We only got things going September. But the results are in line with what we were expecting," Carcas said in February 2009. A few weeks later, it came out that the devices had been on land for several months.