Money issues cloud Mid West solar thermal project

Funding issues may jeopardise a renewable power station proposed for the Mid West town of Morawa, which continues to suffer from an unreliable power supply.

Morawa, which was made a 'SuperTown' along with eight others in mid 2011 under a Royalties for Regions initiative, is earmarked to receive $3.5 million as part of the state government's plan to improve regional towns and decentralise forecast population growth.

Under its SuperTown status, Morawa shire is slated to receive money for two key projects: a two-stage town centre revitalisation project to attract more people and industries to the town; and a new concentrated solar thermal power station to increase power reliability.

The mainly agricultural shire, which has an emerging iron ore mining industry, is on the fringe of the state's electricity grid and has experienced a number of brownouts and blackouts.

The North Midlands Solar Power Thermal Project is being developed by a Perth-based business using Australian technology will provide 1.5 megawatts, half its original size, and will be valued at $14.25 million when built.

However the Morawa shire has reallocated $1 million from the Department of Regional Development, originally set aside for the capital costs of a 3MW solar thermal project, to a separate project.

Morawa shire council agreed with the shires of Mingenew, Perenjori and Three Springs to reallocate the $1 million in April to pay for a new project combating black spot mobile coverage.

This reallocation of funds was made so the shires could present a business case for the new project before a May Department of Regional Development deadline.

Minutes from the April 18 Morawa shire council meeting indicate that, while the solar thermal project is awaiting the outcomes of the feasibility study due for completion in January 2014, the council decided to defer the $1 million originally put aside for the project

"With the funding not being required until after the feasibility study has been complete the allocated funds for 2012-2013 will need to be reallocated or the funding opportunity lost," the minutes said.

A growth and implementation plan for Morawa SuperTown published in 2012 by the state government lists the solar thermal project as planned to start construction in 2013 and be online by 2016.

It lists the project as a 'priority' because it will be a reliable power source for the growing shire and can be implemented in the short term.

The Department of Regional Development has provided Morawa shire with $500,000 for a feasibility study for the solar thermal project.

The money is currently held by Treasury and bank records show it has accrued interest to a total of $513,398.28 in May.

A spokesperson for the department said the scope of the solar thermal project was still under consideration and declined to comment on what dates funds were received by the council, any stipulations attached to the funds, or on the reallocated $1 million.

Morawa shire acting CEO Lindsay Delahaunty said the process had been delayed but the council was currently in the process of going to tender.

"We've been given the role to coordinate the brief with Western Power and the Department of Public Utilities. Because it is part of the SuperTown development, the council is virtually a vehicle to coordinate the advertising of the feasibility study," Mr Delahaunty told Business News.

In June, project developer Carbon Reduction Ventures and technology partner Solastor announced the state government's Low Emissions Energy Development (LEED) fund would award the project $3.775 million in a 1:3 matching scheme, requiring $11.325 million to be raised independently.

Carbon Reduction Ventures managing director and founder Rob Coltrona said he did not understand why the project's feasibility study was going to tender or why it was taking so long when the money was already available.