The West Australian government has decided to stop subsidising a company that planned a wave power project in the state's south but ran out of cash.
Carnegie Clean Energy was in October handed a $2.625 million payment despite not meeting targets for the Albany project and last week posted a $45 million half-year net loss, revealing it only has $1.68 million left in the bank.
On Tuesday, regional development minister Alannah MacTiernan said the government had terminated the funding agreement to protect the interests of taxpayers.
“It is with considerable regret that we have concluded that it is unlikely they will be able to meet their obligations under this agreement,” Ms MacTiernan told reporters.
“There is always going to be an element of risk in an R&D project.
“We’ve gone in there with good faith.”
Carnegie last month submitted a funding plan for its $25.6 million contribution to the project, proposing an extended timeline and reduced budget.
The state government had requested the plan amid concerns about the company’s finances, including losses in its solar micro-grid business and uncertainty surrounding the future of federal R&D tax concessions.
Carnegie, which has been suspended from trading on the Australian stock exchange since March 1, said it was disappointed with the decision, a significant development that had to be incorporated into its strategic review.
Ms MacTiernan said the WA government still believed the region had potential for wave power and the money given to Carnegie wasn’t wasted because most had been spent on research.
That would be made available to the University of WA and the state government for their Wave Energy Research Centre co-investment in Albany, and would also be useful for other future proponents, she said.
The Nationals labelled the saga a “gross waste of taxpayer funds” that defied warning signs and failed to deliver hundreds of promised jobs.
Opposition spokesman Dean Nalder said it was a “classic case of pork-barrelling gone wrong”.
“There was a lack of due process.”
Carnegie has changed the design of its wave power technology multiple times over about 20 years.
Despite hundreds of millions of dollars of investment, including federal and state grants, the company now values its CETO intellectual property at only $15 million.
Ms MacTiernan said the $13.125 million that had been allocated in the state budget for the wave power project would be instead spent on radiotherapy services in Albany.