Wave energy might go the way of Australia’s solar industry, writes Mathew Murphy.

LACK of government support for the fledgling wave energy industry is forcing Australian companies to increasingly invest overseas despite having the world’s best wave resource off our coastline. Several Australian wave energy proponents have started projects in such places as Hawaii, Central America and Ireland, saying Australia’s risk-averse tendency is holding back investment. While none has made the tough call to relocate just yet, and all those interviewed by BusinessDay are still hopeful of commercialising their technology in Australia, positive policy settings in other corners of the world are offering these companies the best opportunity to grow their businesses.

Clean energy advocates are concerned that wave energy could experience the same sort of brain drain that has hit the Australian solar industry over the past decade. David Mills took his solar thermal company, Ausra, to the US nearly a decade ago and last year hit a financial wall because of lack of funding. University of New South Wales researcher Zhengrong Shi was forced to take his business, SunTech, to China, creating one of the world’s biggest solar photovoltaic firms.

Australian-listed Dyesol, which makes photovoltaic cells, found greener pastures in Wales, successfully commercialising its power-generating steel panels, which it was unable to do in Australia. Ali Baghaei, the chief executive of Oceanlinx, said that while the federal government has been relatively supportive of more mature renewable energies such as wind power, its policy settings needed to support developing technologies in order to get the right mix of power generation.

“It is not about going cap in hand and begging for money for a lifetime”, he said. “There should be an amicable way where the government can support a new renewable technology for five or 10 years and then if they do achieve their targets and deliver what they said they would then they can stand on their own feet and won’t need any additional help”. Oceanlinx has been testing its technology, which uses the rise of waves to drive a column of air through a turbine, at Port Kembla in NSW, but also has interests in Victoria and King Island in Tasmania.

Mr Baghaei said he was keen to develop wave energy projects in Australia. “I haven’t given up all of my hopes yet of government support, either federal or state governments, but it is clearly a concern that we probably aren’t getting as much support as what is available outside Australia”, he said. “We are fortunate in that our technology is transferable and because of that we have subsidiaries in Hawaii and in Central America which have more advanced projects. There is no doubt we are behind countries like the US, UK and Portugal”.

Mike Ottaviano, the managing director of the Australian Securities Exchange-listed Carnegie Corporation Wave Energy, is pushing ahead with plans to establish a wave energy project at Garden Island, 50 kilometres from Perth. This has been achieved without support from the federal government. Despite Energy Minister Martin Ferguson launching the government’s $300 million Renewable Energy Demonstration Program at Carnegie Corporation’s pilot plant in April last year, the company missed out on funding, surprising the market and sending its share price from about
25.5¢ to its current level of about 9¢.

One of the four grants was awarded to US-based Ocean Power Technologies and Leighton Holdingss, which together won $66.5 million to construct a 19-MW wave farm near Portland, Victoria. A total of $65 million from the fund was not allocated. Dr Ottaviano said a lack of strategic insight into policy settings was hurting local wave companies. “If you look at Ireland as an example, you have a dedicated wave energy grant pool. You have a dedicated wave energy tariff. Your power is guaranteed for 15 years and you have a wave energy target.

So the combination of those policies is what gives investors confidence which is lacking here”, he said. “We certainly aren’t saying that we are packing our bags and heading offshore, but all of our business development activities and investments are focused offshore and three of our directors are in Europe. That is no accident because the market there is about 10 years ahead of us in terms of wave energy”.

Matthew Warren, the chief executive of the Clean Energy Council, said it was disappointing that Carnegie Corporation, the most advanced in wave energy in Australia, had missed out on funding. “It sends the wrong message in that if you manage to make it to the last quarter, like Carnegie Corporation, don’t expect to receive the right help”, he said. “Our concern is that if we don’t get this right then we could potentially be importing technology like Carnegie Corporation’s in 10 years rather than exporting it to the rest of the world.

“The problem with allocating funding in four large cheques is that you have four winners and 38 losers. I am not critical of any of the projects that received funding but it’s like betting on a roulette wheel you are more likely to get a return if you put on a number of small bets rather than a few big ones”, Mr Warren said. “The Southern Ocean is the greatest single wave energy resource on Earth, and Australia, New Zealand, South Africa, Argentina and Chile are the only countries that can access it at scale. Out of those five, Australia is quite clearly the most advanced economically and technically and has the greatest capacity to drive that forward. Yet despite the chance to harness that more cost effectively than perhaps others do we are yet to see a concerted effort by governments to really assist that potential”.

Source: FFG Gippsland.