$420m solar project on skids

Age
Tuesday 8/9/2009 Page: 1

Solar Systems, the company that planned to build the world's biggest solar energy station in north-west Victoria, has been placed in receivership, putting the future of the project in serious doubt. The announcement is a blow for the renewable energy industry and the Federal and State Governments, which had pledged $125 million towards the $420 million project. The 154-MW solar farm was to have produced enough energy to power 45,000 hones. About 150 workers face an uncertain future after talks between Solar Systems and a potential investor broke down.

Administrator Stephen Longley of PricewaterhouseCoopers said he hoped to tell employees by the end of the week whether they were still needed. "We are assessing Solar Systems' operational and financial position with a view to continuing operations on a reduced scale over the next three months in order to provide its with sufficient time to restructure and sell the business as a going concern," he said.

The Victorian Government has Banded over only $500,000 of its $50 million grant to Solar Systems. None of the Federal Government's $75 million funding has been delivered. Abbotsford-based Solar Systems proposed to use photovoltaic solar cells to concentrate the suns power by 500 tines and feed the energy into the national power and by 2013. A pilot plant to demonstrate the technology has been completed at Bridgewater, central Victoria, but construction has not begun on the main project.

Support for the project began to unravel in July when Richard Mclndoe, managing director of TRUEnergy, whose parent company China Light and Power has a 20% stake in Solar Systems, resigned as a director. Last month China Light and Power wrote down its $HK346 million ($A53 million) investment.

TRUEnergy said yesterday it would be still willing to invest if another co-investor could be found. "TRUEnergy continues to believe that Solar Systems' concentrated photovoltaic technology shows promise and we would welcome any outcome that would allow for the continued development of the.., power station proposed near Mildura," a spokesman said. State Opposition environment spokesman David Davis said "this is a tragedy for renewable energy in Victoria". "John Brumby promoted this project and now Victorian Labor's solar policy is in tatters," he said.

"Where are the 1000 regional jobs, who will power the 45,000 homes and why has John Brumby pulled the rug out?" A Victorian Government spokeswoman said the Government still believed in the technology and hoped a white knight would save the project. "We are disappointed that this promising solar technology start-up business has been unable to raise the additional capital needed for its ongoing development," she said. "As a result of the global financial crisis, the timing of the Solar Systems fund-raising coincided with a much tighter and more risk averse international investment climate." The first meeting of creditors is scheduled for September 17.

Solar Systems did not return calls from The Age.