Carnegie loses state’s financial backing for Albany wave power project

The Albany site. Source: Carnegie Clean Energy Ltd

March 12 (Renewables Now) - Western Australia has decided to cancel the financial assistance agreement for Carnegie Clean Energy’s (ASX:CCE) wave energy demonstration project off Albany.

The state government said in a press release that, following an assessment of the company's financial capability to deliver the project, it has determined that the timely completion of the project is unlikely. Regional development minister Alannah MacTiernan blamed the termination of the deal on the proposal to change federal research and development (R&D) tax concessions, as well as on Carnegie’s recent asset write-downs and losses from other operations.

"The unexpected proposal to change Federal R&D tax concessions created an environment of uncertainty that destabilised the company's finances,” she stated.

In October 2017, the company won an overall AUD-15.75-million (USD 11m/EUR 9.9m) grant from the Western Australian government for the Albany scheme, including a revised first milestone payment of AUD 2.625 million. The remaining AUD 13.125 million in the budget for this project will now be directed towards delivering radiotherapy services in Albany, the latest announcement says.

Carnegie said it was disappointed with the decision and explained that it had presented a plan in February to deliver the project over an extended timeline and with a reduced budget, relying on an optimised spend profile and technology innovations.

The wave energy developer is in a tough situation as it is in a hurry to secure funds in order to proceed as a going concern. The loss-making company is also trying to get rid of a bad investment in the field of solar and battery storage. Its shares were earlier suspended from trading because of a delay in filing its financial report for the first half of 2018/19, which eventually unveiled a loss of AUD 45 million.

The state government noted that it will continue the co-investment in the University of Western Australia's Wave Energy Research Centre with a focus on marine renewable energy and supporting Albany's marine industries. The surveys and mathematical models on wave conditions in Albany that were concluded in cooperation with Carnegie will be made available to UWA and other interested parties.

(AUD 1.0 = USD 0.707/EUR 0.628)

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