Australian Government Grants AUD 10 Million to Carnegie’s Perth Wave Energy Project

Wave energy developer Carnegie Wave Energy Limited announces the award of a $9.9m Federal Government grant from the Australian Government’s Emerging Renewables Program (ERP) to support Carnegie’s world leading, grid-connected wave energy project. The Minister for Resources and Energy, Martin Ferguson AM MP, announced the grant today at Carnegie’s Wave Energy Research Facility inWestern Australia.

The combined grant funding package has allowed Carnegie’s Board of Directors to approve the location of Carnegie’s first grid-connected CETO wave energy project at Garden Island in Western Australia.

The Australian Government funding will be received as part of the Australian Centre for Renewable Energy’s (ACRE) Emerging Renewables Program. This is matched with $5.5m in grant funding from Government of Western Australia’s Low Emissions Energy Development (LEED) program. The funding agreement governing the drawdown of the Federal grant was signed yesterday. The WA funds will come from Carnegie’s existing $12.5m State Government agreement. The combination of State and Australian Government funding also allows the project to proceed with approximately 50% Government funding.

The project will be up to 2 MW in capacity and, based on the recently completed preliminary design, is expected to cost $31.2m. Detailed design will now begin immediately and involve Carnegie seeking all government approvals required for the construction and operation of the Project and carrying out further community consultation. Construction and commissioning of the Project will occur in 2013 with first power due for delivery into the grid at the end of 2013. Further details of the Project will be released as detailed design and approvals process proceeds.

The project will deliver Carnegie its first power sales revenues through the sale of the electricity. Power supply arrangements are expected to be finalised shortly. Carnegie has signed Memorandums of Understanding covering the supply of power from the Perth Wave Energy Project with both the Australian Department of Defence and the Western Australian Government owned power retailer, Synergy.

A subsequent funding arrangement has also been secured with the Australian Special Opportunity Fund, LLP, a New  York-based institutional investor, managed by The Lind Partners, LLC (together, “Lind”), allowing a maximum $16.3m to be advanced to support the Project. Carnegie has negotiated maximum flexibility with this facility, including the ability to pause or terminate with no fee, so that other sources of capital can be utilised where advantageous to do so.

Carnegie’s Managing Director and Chief Executive Officer, Dr Michael Ottaviano said:

“This represents the culmination of a lot of work and negotiation from Carnegie’s world class team and we are delighted to have reached this outcome. I’d like to thank the Australian Government for its support along with the Government of Western Australia who has supported the project since its inception in 2009. I’d also like to thank our loyal shareholders for their support.”

“Australian Government support allows Carnegie to deliver its first revenue generating wave project in its own backyard in Western Australia which, once completed, will unlock a global market opportunity.  There is enormous global demand for a reliable wave energy technology from industry and Government alike.  We firmly believe Carnegie and the CETO technology are best positioned to capitalise on that demand.”

“We are also pleased to have signed the arrangement with Lind Partners. We have been working with the core team at Lind for 2 years, and that core team has viewed our operations and participated in previous Carnegie capital raisings. The facility allows us to minimise dilution for existing shareholders by raising capital when there is strong share price momentum whilst maintaining maximum capital management flexibility.” 

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Offshore WIND staff, May 1, 2012; Image: Carnegie