The Western Australian Government has terminated its Financial Assistance Agreement with Carnegie Clean Energy to deliver the Albany wave energy technology development project.
In October 2018, the State Government exercised its power under the agreement to require Carnegie to provide a comprehensive and detailed funding plan for their $25.6 million contribution to the project.
The move followed concerns about the company’s finances, driven by uncertainty surrounding the future of Federal R&D tax concessions, losses from other operations and asset write-downs.
The plan was submitted on February 15, 2019. The State Government has assessed that the company is unlikely to be able to deliver the project in reasonable time, and has terminated the funding agreement.
Carnegie Clean Energy released a statement saying it is disappointed with this decision as the State Government were provided with a revised Project Funding Plan in February which outlined Carnegie’s plans to deliver the Albany Project over an extended timeline and with a reduced budget.
According to Carnegie Clean Energy, the changes presented in the Funding Plan would:
- Enable Carnegie to optimise the project spend profile in order to reduce the amount of Research and Development (R&D) Tax Incentive cash rebates that would be lost under the proposed changes to the R&D Tax Incentive.
- Provide additional time to incorporate a number of design innovations into the CETO unit to be deployed in Albany. These innovations would reduce the capital cost of the project and the long-term levelised cost of energy of the CETO technology, a key driver of Carnegie’s technology development pathway.
The $13.125 million in the state budget for this project will be directed towards delivering radiotherapy services in Albany.
The State Government’s co-investment in The University of Western Australia’s Wave Energy Research Centre will continue, focusing on marine renewable energy and supporting Albany’s marine industries.
Works completed by Carnegie with State Government funding, including geophysical and other surveys and mathematical models on wave conditions in Albany, will be made available to UWA and other interested parties.
WA Regional Development Minister, Alannah MacTiernan, said, “We are committed to diversifying regional economies, and this project was just one in a suite of initiatives to drive new job opportunities in the regions.
“The unexpected proposal to change Federal R&D tax concessions created an environment of uncertainty that destabilised the company’s finances.
“Carnegie’s finances were in good order when the contract was signed and there was no way to predict the changing circumstances over the last 12 months.
“Our Government remains committed to research and development to ensure WA is a technology maker, not a technology taker – The University of Western Australia will continue its research work in Albany, which has already attracted scientists to the region.”