The state government of Western Australia has terminated funding for Carnegie Clean Energy's Albany wave power project.
Carnegie said it is disappointed with the state government’s decision to terminate the Financial Assistance Agreement for the 1.5MW project, after it submitted a revised funding plan in February.
The funding plan outlined the developer's plans to deliver the Albany wave energy plant over an extended timeline at a reduced budget.
The project comprises a single 1.5MW Ceto six point absorber device, due online in 2020.
In the changes presented in the funding plan would enable Carnegie said it would “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.”
In addition, in the funding plan Carnegie factored in additional time to incorporate a number of design innovations into the wave energy generation unit to be deployed in Albany.
The innovations, said the company, “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 developer said it will incorporate the development into a strategic review currently underway and will update the market in due course.
In the second half of 2018 Carnegie and the WA state government became involved in a dispute over a A$5.25m payment due to the company for Albany reaching a key first milestone, as a result of R&D tax incentive changes.
In October 2018 the WA government requested Carnegie provide a detailed funding plan to continue with Albany, which would be used to assess whether the company has the financial capability to complete the project.
The move followed an agreement by regional development minister Alannah MacTiernan to pay Carnegie the previously negotiated and revised first milestone payment of A$2.625m for the Albany scheme.
The financial viability of the project came under question following changes to federal R&D tax incentives.
“The 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,” Carnegie said at the time.
Earlier that month WA government officials made the decision to withhold the previously agreed grant payment to Carnegie, following the resignation of long-standing chief executive Michael Ottaviano.
Source:renews
