Origin Energy writes off Sliver, wind, geothermal investments

Origin Energy has decided to write off its investment in Transform Solar, taking a $153 million hit, but has vowed to continue research in the Sliver technology first developed in the Australian National University a decade ago.

The write-down was flagged in May when Origin Energy and its US partner, Micron Technologies, said the Transform Solar operation at its new Idaho plant would be wound down because it was clear that the technology could not compete with cut-price China modules.

“Having demonstrated Sliver’s investment proposition through its 20MW production facility, Transform Solar will retain Sliver’s intellectual property and currently expects to continue its development at a laboratory scale,” the company said in a statement.

Origin Energy CEO Grant King told RenewEconomy earlier this year that it saw no point investing in 50-100MW manufacturing plants unless it was clear that it could compete with Chinese manufacturers at a gigawatt-scale, although he was hopeful at the time it could be done. Now that the prospects are minimal, it is taking the technology back to the drawing board.

The announcement came as Origin Energy also announced further write-downs in its Australian geothermal portfolio, and in its wind portfolio.

Another $44 million hit has been taken on its geothermal “deeps” joint venture with Geodynamics, as well as the “shallows” program that Origin Energy led in a drilling campaign last year. It adds to the $204 million written off in the 2011 fiscal year from those hot rock geothermal investments, including $196 million from the “deeps” venture and the direct stake in Geodynamics.

Origin Energy said the carrying value of its share of the geothermal interests was now “fully impaired” because the activities “have not met expectations for a timely and commercial development of the geothermal resources.” The company recently refused to contribute more funds to the Habanero 4 well being drilled in the Cooper Basin by Geodynamics because the drilling had run over cost.

A further $65 million was written down from its portfolio of wind development projects following what it called the “deprioritisation” of certain sites, which appears to follow its decision to sign a power purchase agreement with the proposed 270MW Snowtown wind project in South Australia.

It said it was still looking for options on its most advanced project, at Stockyard Hill in western Victoria, which could have a capacity of between 300 and 500MW, and was seeking offers from third parties to build the project, or provide equity for the project while Origin Energy would support the financing through a PPA.

Origin Energy said it had enough renewable energy certificates to last until 2017 – through a combination of banked certificates, its Cullerin Range Wind farm in NSW, and the anticipated generation from Snowtown II.