A proposed multi-million dollar wave power project off the south-western Victorian coast has been scrapped.
The company behind the plan, Ocean Power Technologies, has told US financial markets it will no longer proceed with its $230 million wave power project at Portland which captures the power of the ocean and converts it to energy.
The development was expected to create hundreds of jobs in the region and had more than $60 million in backing from the Australian Renewable Energy Agency.
Gilbert George, a director in the Australian arm of the company, said energy costs were going up and the small company needed to find $140 million for the project from other sources.
"It's a large project [which is] under constant review," he told 774 ABC Melbourne.
"Our parent company in the US arrived at conclusion that the risk was too high.
"The potential downside for a small company to take on that financial burden was not acceptable."
Mr George said the company had only received the first instalment of funding from the Government, which will be repaid.
"The money is still with the Government except for the original payment ($5.5 million) which was made about two months ago, which we'll be repaying in full to the Government," he said.
"The other $60 million has not been paid.
"We don't get these payments up front.
"The Government looks after taxpayers' money very carefully."
Clean Energy Council policy director Russell Marsh says it is disappointing that the project is not going ahead, but it does not spell the end of marine power technology in Australia.
"It's a fairly new technology in Australia and you're going to get failures. Not every project is a success," he said.
"But just because this has failed doesn't mean marine energy doesn't work in Australia."
He said the technology is still developing and he has no doubt wave energy will be used in the future.
But Mark Wakeham from Environment Victoria said the current political environment is not helping projects like this.
"The renewable energy investment environment is not looking great at the moment," he said.
"Obviously the carbon price is on its last legs and there's a lot of uncertainty about the Renewable Energy Target federally."