The group of SME participants in the AQUAGEN project aims to address a major market opportunity by developing a power take-off (PTO) system targeted at marine energy applications, with the potential to significantly improved reliability and efficiency of around 20%, and with less 25% of O&M costs, when compared with currently available solutions. Since it is a water-based PTO system, the risks of oil leaks in the ocean will also be fully eliminated. The system and components developed will have a broad range of applications, from wave energy, as the main application area, to water desalinization and small hydro power generation, and will therefore benefit a European value chain of SMEs specialised in engineering and green energy generation. To achieve our objectives, we need to develop new scientific knowledge in: design of innovative system components such as a variable speed generator, an adaptative blade turbine, elastomeric structures and the overall hydraulic system; protective coatings for marine environments; modeling the ageing of elastomeric structures; and wireless controlled monitoring of offshore moving equipment. Due to the technical challenges of testing the system, there was a conscious decision to hold the activities of AQUAGEN during a 39 month period. Whilst the SMEs form a supply chain for the manufacture of the ultimate PTO system we have neither the facilities nor the resources to undertake the necessary R&D. The Research for SMEs funding instrument provides the ideal solution, allowing us to outsource the R&D to four RTD Performers – VP, NTNU, UM and CMG. The Foreground Intellectual Property (FIP) generated in the AQUAGEN project will be owned and exploited by the SMEs, envisaging several market segments and a geographical distribution of non-exclusive licenses for markets outside Europe. If the project meets its targets the SMEs will benefit from sales and licensing of the FIP to several millions of €'s.