Age
Monday 4/10/2010 Page: 4

Wave energy might go the way of Australia's solar industry, writes Mathew Murphy.
LACK of government support for the fledgling
wave energy industry is forcing Australian companies to increasingly invest overseas despite having the world's best
wave resource off our coastline. Several Australian
wave energy proponents have started projects in such places as Hawaii, Central America and Ireland, saying Australia's risk-averse tendency is holding back investment. While none has made the tough call to relocate just yet, and all those interviewed by
BusinessDay are still hopeful of commercialising their technology in Australia, positive policy settings in other corners of the world are offering these companies the best opportunity to grow their businesses.
Clean energy advocates are concerned that
wave energy could experience the same sort of brain drain that has hit the Australian solar industry over the past decade. David Mills took his
solar thermal company,
Ausra, to the US nearly a decade ago and last year hit a financial wall because of lack of funding.
University of New South Wales researcher
Zhengrong Shi was forced to take his business,
SunTech, to China, creating one of the world's biggest solar
photovoltaic firms.
Australian-listed
Dyesol, which makes
photovoltaic cells, found greener pastures in Wales, successfully commercialising its power-generating steel panels, which it was unable to do in Australia. Ali Baghaei, the chief executive of
Oceanlinx, said that while the federal government has been relatively supportive of more mature renewable energies such as
wind power, its policy settings needed to support developing technologies in order to get the right mix of power generation.
"It is not about going cap in hand and begging for money for a lifetime", he said. "There should be an amicable way where the government can support a new renewable technology for five or 10 years and then if they do achieve their targets and deliver what they said they would then they can stand on their own feet and won't need any additional help".
Oceanlinx has been testing its technology, which uses the rise of waves to drive a column of air through a turbine, at
Port Kembla in NSW, but also has interests in Victoria and
King Island in Tasmania.
Mr Baghaei said he was keen to develop
wave energy projects in Australia. "I haven't given up all of my hopes yet of government support, either federal or state governments, but it is clearly a concern that we probably aren't getting as much support as what is available outside Australia", he said. "We are fortunate in that our technology is transferable and because of that we have subsidiaries in Hawaii and in Central America which have more advanced projects. There is no doubt we are behind countries like the US, UK and Portugal".
Mike Ottaviano, the managing director of the
Australian Securities Exchange-listed
Carnegie Corporation Wave Energy, is pushing ahead with plans to establish a
wave energy project at
Garden Island, 50 kilometres from
Perth. This has been achieved without support from the federal government. Despite Energy Minister
Martin Ferguson launching the government's $300 million
Renewable Energy Demonstration Program at
Carnegie Corporation's pilot plant in April last year, the company missed out on funding, surprising the market and sending its share price from about
25.5¢ to its current level of about 9¢.
One of the four grants was awarded to US-based
Ocean Power Technologies and
Leighton Holdingss, which together won $66.5 million to construct a 19-
MW wave farm near
Portland, Victoria. A total of $65 million from the fund was not allocated. Dr Ottaviano said a lack of strategic insight into policy settings was hurting local
wave companies. "If you look at Ireland as an example, you have a dedicated
wave energy grant pool. You have a dedicated
wave energy tariff. Your power is guaranteed for 15 years and you have a
wave energy target.
So the combination of those policies is what gives investors confidence which is lacking here", he said. "We certainly aren't saying that we are packing our bags and heading offshore, but all of our business development activities and investments are focused offshore and three of our directors are in Europe. That is no accident because the market there is about 10 years ahead of us in terms of
wave energy".
Matthew Warren, the chief executive of the
Clean Energy Council, said it was disappointing that
Carnegie Corporation, the most advanced in
wave energy in Australia, had missed out on funding. "It sends the wrong message in that if you manage to make it to the last quarter, like
Carnegie Corporation, don't expect to receive the right help", he said. "Our concern is that if we don't get this right then we could potentially be importing technology like
Carnegie Corporation's in 10 years rather than exporting it to the rest of the world.
"The problem with allocating funding in four large cheques is that you have four winners and 38 losers. I am not critical of any of the projects that received funding but it's like betting on a roulette wheel you are more likely to get a return if you put on a number of small bets rather than a few big ones", Mr Warren said. "The
Southern Ocean is the greatest single
wave energy resource on Earth, and Australia, New Zealand, South Africa, Argentina and Chile are the only countries that can access it at scale. Out of those five, Australia is quite clearly the most advanced economically and technically and has the greatest capacity to drive that forward. Yet despite the chance to harness that more cost effectively than perhaps others do we are yet to see a concerted effort by governments to really assist that potential".