The Kimberley Tidal Power Consortium - comprising of Leighton Contractors, Tidal Energy Australia and US investment back Babcock and Brown - pulled out on Friday morning, hours before the bids closed.
A spokesperson for the consortium said a 120% rise in the cost of key mechanical equipment and technical problems increased costs to more than $400 million. The consortium planned to build a tidal power station 15km north of Derby between two creeks with the aim of supplying power to Derby and Broome.
The decision leaves four consortiums in the hunt for the contract - Burns and Roe Worley, StateWest Power, Kimberley Power and Energy Developments - all of whom have submitted plans to use gas, diesel and biomass plants.
Western Power will make its decision on the contract in the next three months.
