Funding agreement with Carnegie Clean Energy terminated

  • Financial Assistance Agreement with Carnegie Clean Energy for the Albany wave energy technology development project terminated
  • Unexpected proposal to change Federal Government’s Research and Development tax incentive scheme contributed to destabilisation of the company’s financial position 
  • The State Government has terminated its Financial Assistance Agreement with Carnegie Clean Energy to deliver the Albany wave energy technology development project, following an assessment of the company’s financial capability to deliver the 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.

    That 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. 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.

    The $13.125 million in the 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.

    As noted by Regional Development Minister Alannah MacTiernan:

    “Research and development projects always carry risk, and our Government won’t apologise for supporting local renewable energy R&D.

    “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.”

    /Public Release. View in full here.