Another project allocated funds under the former Labor government has missed its target, with Petratherm advising that it is unable to raise funds for what was once considered one of the country’s flagship geothermal projects.
Petratherm announced on Monday that it had been unable to secure the additional $5 million in equity required to draw down on the $13 million Emerging Renewables Program (ERP) Grant.
The event means that the grant is effectively terminated, and it will not be able to access the $24.5 million that was awarded for a 7MW geothermal power plant at Paralana in South Australia.
The grant was awarded in 2009 by the fore-runner of the Australian Renewable nergy Agency. The REDP program was criticised for its funding choices and mechanisms, and was one of the reasons why ARENA was made an independent body.
The Petratherm fail follows news last week that a 19MW wave energy project in Victoria – once dubbed the world’s biggest, had been pulled because the technology was no longer viable.
The company involved, OPT, is now required to return $4.5 million. It did not access the rest of the $66 million grant allocated.
It also means that the country’s once promising geothermal industry is now at a virtual standstill. Geodynamics is hoping to strike a deal with a shale oil company to possibly develop its project in the Cooper Basin, but otherwise it is unable to move forward.
“This is disappointing for the Company and its shareholders given the technical success the Paralana Project has achieved,” Petratherm managing director Terry Kallis said in a statemnt.
“Despite our best efforts in Australia and internationally we have been unable to raise the necessary funds to satisfy the ERP grant conditions.
“However, this is reflective of the difficulty in raising monies in the equity markets for small exploration and development companies.
“As outlined in our earlier announcements, the Company will continue to investigate new investment opportunities that will reward shareholders.”
Giles Parkinson is founder and editor-in-chief of Renew Economy, and founder and editor of its EV-focused sister site The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.
