Penola Pennant
19/03/2008 Page: 2
Penola could host the nation's biggest geothermal power plant within five years. Potential for the project is "building momentum", according to Osiris Energy. The company has released recent studies after drilling to depths of 3500 metres in the area. Resulting analysis has shown the area's "hot rocks" resource could be commercially harnessed.
Osiris is now seeking up to $115m in investment to secure the renewable energy project and with extensive research complete and suitable modular power plants available "off the shelf', it hopes to secure one of the first commercial geothermal power plants in the country. Steps are also underway to list the company on the stock exchange, building its financial capabilities. Directors are also hoping the Penola Pulp Mill will proceed to support the power plant.
Mill developer Protavia could be a customer for the potential 20MW power plant's waste hot water, which could be used to dry pulp and boost income for the costly investment. Osiris executive director Ian Reid said water was extracted from underground at 143C and was still 70C after being used to generate power and could have a secondary use before being returning beneath the earth's surface.
"The costings we have done suggest we can produce geothermal energy cheaper than wind power and when you combine that with selling the co-generated heat to make an extra income stream, it does become economic," Mr Reid said.
"Without the pulp mill we would have more trouble getting a second income stream from the co-generated heat - so having a potential purchaser on our doorstep is attractive for the whole project." He said other options could be investigated if the pulp mill did not proceed, such as using the waste heat for agriculture or aquaculture.
Osiris has reported conclusions from its reservoir modelling, which found energy could be commercially produced for $55 to $65 per megawatt, making it competitive with wind energy. Mr Reid said he was awaiting finalisation of carbon trading schemes and emission targets by the Federal Government to show where the project could "fit in" to national plans.
He said the Penola development would begin with a pilot plant, including drilling of two wells, which would take around a year, and a 20MW power plant could be built once the effectiveness of the concept was proven. "Upwards from that, the sky is the limit," he said. However, two and a half years of geological studies are required before work begins on the pilot plant.
Eight wells, each costing $4m, and at least half as many injection points to return hot water underground, would then be needed for the commercial power plant, requiring around a year of drilling work. It would then take another year to build the $64m power plant, according to Mr Reid, but drilling of the wells was likely to be the biggest employment generator, requiring around 30 people to operate a contracted rig.
"There is a lot of work involved in building wells, but once they are drilled and the plant is installed it would be a venture with low operating costs and could run for 50 years, providing cheap energy once it was installed, only needing low level staffing," Mr Reid said. "Getting the initial investment is the hardest thing with renewable energy in Australia, but once it is installed it generates income for a long time."
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