www.theaustralian.com.au
December 14, 2009
AS the federal government sets a February deadline for the first round of its solar flagships program, it seems the demise of one of the pioneers of the Australian solar industry, Solar Systems, will be confirmed today. Receiver PricewaterhouseCoopers will tell a meeting of creditors in Sydney this morning it has been unable to secure a buyer despite two months of talks with interested parties. It will ask creditors if they want to attend the receivership for another 45 days in the hope that a deed of arrangement can be concluded, although that looks unlikely.
"It looks like a disappointing outcome, unfortunately," said one shareholder. This was confirmed by administrator Stephen Longley. "It is likely that the companies will be placed into liquidation." Solar Systems was caught in the funding gap between start-up and developer, a hurdle that Ausra, an Australian-founded solar thermal group now based in California, is trying to clear.
Ausra is believed to be seeking between $150 million and $200m to fund projects that will bring its technology to commercial scale. In a conference in Silicon Valley last week, Ray Lane, from key Ausra shareholder Kleiner Perkins, a leading venture capital investor, said Ausra had "a few strategics" chasing it. "A lot of liquidity in green tech will happen this way, as legacy players look for companies that have removed technical risk, but don't have the balance sheet to scale," he said.
Solar Systems failed to eliminate technical risk, which is why 20 per cent shareholder TRUEnergy declined to offer further funding without another major investor, despite government funding to support the development of a 154MW solar photovoltaic plant near Mildura. Solar Systems is believed to owe about $60m to secured creditors, mostly loans from TRUEnergy and other private investors such as Graeme Morgan and Martin Copley, and $10m to unsecured creditors.
Applications for the first round of the $1.5 billion solar flagships program will close on February 15, with the government planning to choose two projects, one involving solar thermal and the other solar photovoltaics, that could target generating capacity of 400MW. Ausra is expected to be among those applications, along with international rivals including Bright Source Energy, FirstSolar and Acciona, with engineering firms such as WorleyParsons and Leighton Holdings Contractors, and finance groups such as Macquarie, Morgan Stanley, UBS, Investec and others.
Wave raising
AUSTRALIA may soon have a second listed marine energy company, with start-up Elemental Energy conducting a $3m raising ahead of a planned initial public offering in early 2011. Elemental is hoping to bring into production a marine turbine dubbed the Sea Urchin developed by director Michael Urch, who has been testing the machine in UNSW facilities at Manly.
Unlike the already listed Carnegie Corporation, which is looking at utility-scale installations for its ocean-based CETO technology, Elemental is focusing on small-scale hydro, particularly in energy-poor ASEAN countries such as Cambodia, where it says it can easily undercut the price of diesel generation.
Elemental says the Sea Urchin is scalable from 1kW to 100kW for river installations, and up to 20MW units for tidal power and ocean current use. Urch says the capital costs are estimated at $2.3m per MW, which is low for marine energy and comparable with wind. The advantage of tidal power systems is that they can deliver predictable baseload power. Urch says the Sea Urchin is 70 per cent more efficient than similar designs and can operate efficiently in relatively low flows, increasing the number of potential locations.
If Elemental can complete the raising of 10 million shares at 30c each - - and it is proving hard, with many rich investors turning their focus away from early stage companies to established stocks - - the company will roll out its small-scale units, and then seek a larger raising, possibly about $15m, at an IPO in 14-18 months.
Farms sow the wind
FARM communities are awaking up to the possibilities of taking a greater stake in the development of wind and other renewable technology - - not just leasing their land. A group of 30 farmers in southeast South Australia are banding together to create a company called Robe Wind that has plans to build a 600MW facility at a cost of more than $1 billion. Similar ideas are being discussed in NSW on a smaller scale. Farmers are getting a rent of as little as $4000 to $5000 per turbine, and ownership, or part-ownership, would give them a greater share of the $700,000 to $1 million revenue that each turbine might generate each year.
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