October 5 (Renewables Now) - Western Australia today pledged to protect its investment in a wave energy demonstration project off Albany after the federal government made changes to the research and development (R&D) tax incentive.
The government of Western Australia said in a statement that it has agreed to make the previously negotiated revised first milestone payment of AUD 2.625 million (USD 1.85m/EUR 1.6m) to Carnegie Clean Energy Ltd (ASX:CCE) for the said project. In October 2017, the company won an overall AUD-15.75-million grant from the Western Australian government for the Albany scheme.
The state, though, noted that the developer’s finances will be affected by the proposed changes to the R&D tax incentive and for this reason it wants Carnegie to prepare a detailed funding plan for its contribution to the project over a period of nine weeks. This will help the state determine whether the company has the financial capability to complete the project.
Earlier this week, the Coalition government announced plans for a redesigned R&D tax incentive that includes a credit rate of 15%, a AUD-120-million cap on eligible expenditure, and a minimum R&D expenditure threshold of AUD 50,000 per year.
"The Federal Government's proposal to change R&D tax incentives, contained in their 2018-19 Budget, has threatened the bottom line of several Western Australian companies - from renewable energy to tech metals,” commented Alannah MacTiernan, Western Australia’s regional development minister. She pointed out that the state government has already inked the funding deal for the Albany scheme and is now committed “to protecting its investment and building safeguards in the project to minimise financial exposure”.
Carnegie has been planning a wave farm in Albany for years. The plan include an initial 1-MW phase, then a 20-MW expansion, and then, potentially, more work to turn the site into a 100-MW wave farm. The company initiated design and development activities in November 2017. The project will not only demonstrate the company’s CETO 6 wave energy technology but also deliver common user infrastructure for other sector players.
(AUD 1.0 = USD 0.706/EUR 0.614)