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210309 | Cornwall’s Wave Hub asks for more cash in advance of sale to the private sector

Cornwall’s Wave Hub asks for more cash in advance of sale to the private sector

Posted By theboss on 9th March 2021

By Graham Smith

Cornwall Council leader Julian German is due to approve a further multi-million bail-out for the Hayle Wave Hub, in the hope that it can one day become part of a private-sector offshore wind energy project.

Mr German is due to make the “individual decision” on 29th March – without formal reference to his council cabinet colleagues, and inside the so-called “purdah” period which is supposed to prohibit controversial decisions in the run-up to elections on 6th May.

The Wave Hub is asking the council for an immediate cash injection of £435,000 – which it says it needs to keep going, whether or not a long-planned sale to the private sector ever happens.

The decision by Mr German is then necessary to complete the sale of the Wave Hub, taking it out of direct council control, before the end of March. The original deadline for selling off the Wave Hub had been December 2020.

The terms of the proposed sale now require the council to lend the project a further £1 million immediately, and to then take a further £4 million out of a special reserve fund which had been ring-fenced exclusively for decommissioning costs.

The requirement for Mr German to make his “individual decision” is not entirely without some scrutiny: a progress report on the proposed sale is due to come before a committee of councillors next week.

The council has hired accountants KPMG to act as agents for the sale, which it says is “now close to conclusion.

“The sale details and participants are commercial-in-confidence and will remain so until transaction completion, but the current process envisages a Mar-21 completion date.

“The sale will be of Wave Hub Limited (WHL), the company, with all of the project’s offshore assets included. Non-Sale assets [will be] transferred to a separate company, Wave Hub Development Services Limited (WHDS), whose ownership [will be] transferred to Cornwall Council and which will take over all non-sale related operations currently undertaken by WHL.”

The council is still nevertheless preparing for the possibility that the sale might fall through, in which case it plans to spend £2.65 million on decommissioning. In 2016 the government gave the council a £15 million “dowry” to protect local taxpayers against future costs associated with the project. That dowry is now almost spent and still the Wave Hub has not delivered on its original 20-year-old promise.


“The legal liability for decommissioning lies with Cornwall Council, as owners of Wave Hub Limited, and oversight of a decommissioning operation will require the employment of specialist offshore renewables staff, with capabilities and experiences including but not limited to those of the current WHDS executive staff,” says the Wave Hub business plan.

County Hall is hoping to display its offshore wind energy plans during the G7 summit in June – by which time there might have been a change in the political leadership of the council. The Wave Hub business plan, in its “worst case scenario,” paints a picture of a failed sale and decommissioning completed, with all scrap metal removed and the sea bed restored, by the end of 2022.

The Wave Hub has consumed more than £40 million and never delivered a single watt of commercial electricity.

 

 

 

Via Cornwall Reports

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