There was a joke running around the clean energy industry a few years ago that if you wanted to get government funds for a big project, all you needed was a big corporate name.
One of the problems of relying on a government bureaucracy to allocate grand funding was that their commercial and technical knowledge was limited at best. But they, and their political masters, were more likely to be impressed by a big corporate name that could lend credence to a proposal.
Such was the case with Ocean Power Technologies, an obscure US-based technology developer that won $66.5 million of funds for a $230 million project that was billed as the world’s largest wave energy project.
OPT was able to use the name of Woodside Petroleum, a minor shareholder in an Australian offshoot, and flout the name of US defence giant Lockheed Martin as a potential technology partner.
It seemed to be enough to convince the decision makers in the department. If it was good enough for Woodside, then it must be good enough for the government.
Woodside, of course, wasn’t risking any of its own money.
The Portland project – which has now been pulled – was typical of the dumb decision-making at the time – the emphasis on the grandiose rather than the worthy. The same problem was replicated in the Solar Flagships scheme, and worthy Australian technologies were shunned.
It says a lot that one of the companies that missed out on those funds, Carnegie Wave Energy, is now – slowly and steadily – putting together the world’s first multi-machine wave energy installation and is about to give the green light to its first commercial-scale deployment.
Finally, with some industry professionals at the helm, the Australian Renewable Energy Agency has allocated funds, along with the Clean Energy Finance Corporation.
Now, however, the Abbot government wants to take ARENA and stick it back into the department, stripping it not only of new funding but the technical, commercial and financial expertise that it had built up over two years.
Despite the declared stance of Ricky Muir, the Palmer United Party and the Greens, along with Labor, to oppose the repeal of the ARENA act, the government seems unmoved.
But today there is huge confusion over the fate of ARENA. As of midnight on Tuesday night, the terms of ARENA chairman Greg Bourne and director Judith Smith came to an end, bringing the five-member board down to just one – Glynnis Beauchamp, from the department of Industry headed by Ian Macfarlane.
There is confusion about whether the board can function with just one director, whether ARENA will be able to operate as effectively as it has over the last two years, and who, if anyone, will be asked to continue.
And there is confusion – yet to be resolved in the Senate – about how much money ARENA will have to deploy.
The other big misses in funding allocation under the old Ferguson regime – to which ARENA could well return – included the Whyalla-based Solar Oasis project featuring “solar dish” technology developed at the ANU.
Two geothermal projects, allocated a combined $153 million, have stalled and have only drawn down a tiny fraction of their funds.
They have been victim of higher than expected costs, an aversion to risk, uncertainty about renewable energy policies, and an excess of base-load generation in Australia. But some smaller, and less costly options were ignored.
There have been some successes. The King Island renewable integration project is nearly complete, and a fantastic insight into how bigger grids can incorporate wind and solar and battery storage.
The 44MW solar boost project at Kogan Creek in Queensland, featuring solar thermal technology developed in Australia, is delayed one year but scheduled to open at the end of 2014.
The new mechanism, under an independent board appointed in 2012, is working much more judiciously – allocating smaller amounts to more projects.
Sure, there will be some misses, such as the sinking of the Oceanlinx 1MW wave energy generator. Those $4.4 million in funds are likely to be lost, depending on the outcome of the receivership.
But it needs the smart touch of industry professionals. Putting it back in the department would be a massive step backwards.