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Despite hundreds of millions of dollars' worth of investment, the value of Carnegie Clean Energy's supposed world-leading wave technology has plummeted from $83 million to $15 million in the latest sign the company is on the edge of collapse.
Key points:
- The value of Carnegie's wave energy technology has dropped $68 million in less than two years
- The company has raised nearly $200 million in government grants, equity and debt
- It has been reluctant to say how much energy its CETO technology produces
The latest valuation of its CETO technology — which uses submerged buoys to convert ocean wave energy into electricity — was revealed in its half-year results, which were due for release last week.
However, the company failed to meet its reporting deadline, resulting in it being suspended from the ASX.
The news that Carnegie had once again written down the value of its only asset — valued at $83 million in June 2017, dropping to $50 million in June last year — was the latest sign of a company in crisis.
But it also raised questions over why taxpayers continued to fund the significant financial risks of developing this technology and why they — and shareholders — have not been told how much energy it is producing.
Company statements show Carnegie has raised almost $200 million in government payments, equity and debt.
The Federal Government's Australian Renewable Energy Agency (ARENA) committed more than $28.5 million in funding to Carnegie's projects — almost twice as much as the value of CETO today.
Details kept secret
ARENA was established in 2011 with the aim of funding renewable energy businesses, developers and researchers to help their technologies become commercial.
But neither ARENA nor the company have ever told taxpayers or shareholders just how much energy this technology has produced in previous trials, and they have also been reluctant to tell the ABC.
Professor David Harries, an architect of the Renewable Energy Target and a member of the University of WA's school of engineering, said taxpayers had every right to know how their investment is performing.
"The only non-disclosure should relate to protecting [intellectual property]," he said.
"And you've got to be careful about how that's used as an excuse for not disclosing.
"I think if the public is taking a huge risk in technology development, it needs to be kept as informed as possible as to what's happening to that investment."
ARENA declined to provide details of Carnegie's performance on Garden Island, where it tested its CETO 5 incarnation of the technology.
An ARENA spokesperson has said on different occasions that the information was "confidential" because it was part of a "commercial-in-confidence" funding agreement.
Energy production not in contract
Regional Development Minister Alannah MacTiernan is also aware of CETO's performance at Garden Island, but was reluctant to say how much energy it produced.
"I have seen some results," she told the ABC last year.
"They indicate that CETO 5 took the project to a certain phase and now there is a revised model that hopefully will be, and is designed to be, more productive."
Her government does not require Carnegie to produce any amount of energy in its $16 million contract for a CETO 6 project in Albany, on WA's south coast.
This is despite the Albany wave farm being an election promise which would "power households" and "create jobs" in their hundreds in the regional coastal city.
Carnegie also received many other grants from the WA Government, including $10 million from the Low Emissions Energy Development Fund.
The man who steered the development of CETO as Chief Technology Officer for six years and now leads Carnegie, chief executive Jonathan Fievez, also could not say how much energy it produced.
"I do not have that off the top of my head," he said when previously asked by the ABC.
'Negative media' blamed
The company plans to test the latest incarnation of CETO at the Albany project, telling shareholders that CETO 6 is the commercial prototype.
Professor Harries, who sat on the board of solar microgrid company Energy Made Clean (EMC) before it was bought by Carnegie, said companies like Carnegie felt the pressure to tell a positive story to keep investors and governments interested.
"I think if CETO was performing well, from just a marketing perspective they would be out there crowing," he said.
"I don't think that is part of the commercial in confidence."
In a statement to the market, Carnegie said it may reinstate part or all of the write-down if its share price, which has sat at about 0.04 cents in recent months, improved.
It said the value of CETO had been written down to reflect the company's market value, which had dropped because of $6 million losses by its EMC solar microgrid arm, sales of shares by big shareholders and negative media around its funding for the Albany project.
Since July, more than 30 employees have left the company, including former long-standing chief executive Michael Ottaviano, who was made redundant.
The company yesterday told the ASX that it will remain in suspension until Wednesday, when it will announce changes to the EMC business and a planned capital raising.
Topics: business-economics-and-finance, electricity-energy-and-utilities, alternative-energy, wind-energy, perth-6000, wa
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