CBD Energy (ASX: CBD) has received a gift by way of a $15.28 million Federal Government grant to advance the King Island Renewable Energy Integration Project.
The multimillion dollar grant was announced by Federal Minister for Resources and Energy Martin Ferguson today.
Despite the news, shares in the company were trading 0.5c lower at 17.5c.
CBD believes the project will demonstrate the potential for enabling technologies to help integrate renewable technologies into established electricity networks and mini -grid systems in remote areas.
CBD and Hydro Tasmania have established a 50/50 Joint Venture vehicle called Integrated Energy Solution to deliver the King Island Wind Expansion and Carbon Block Project and potentially other components covered under this REDP grant.
CBD managing director Gerry McGowan was humbled by receipt of the grant, saying CBD and Hydro Tasmania had been working together on the project for many years.
"It is gratifying to see this support from the Federal and Tasmanian Governments,” Mr McGowan said.
“This truly sees CBD emerge from i ts restructuring phase to a genuine diversified renewable energy company with projects in wind, solar, storage and grid augmentation. During 2010 we will have projects under construction in Australia, New Zealand and China.
"Additionally our projects have long term offtake agreements that will improve group cash flows."
The agreement is subject to negotiations.
Mr Ferguson said the projects would diversify Australia’s energy supply and help deliver the Government’s expanded Renewable Energy Target of 20% by 2020.
“The REDP will support the commercialization of renewable energy and help accelerate the deployment of renewable energy technologies for power generation in Australia," Mr Ferguson said.
Tasmanian Premier David Bartlett said the project would bring direct benefits to the islanders and also the environment.