Tuesday, 10 November 2009

Renewable 16 energy in fund boost - Geothermal, wind the big winners

Saturday 7/11/2009 Page: 3

Geothermal and wave technologies have been given a boost under a $235 million round of renewable energy grants from the Federal Government. Energy Minister Martin Ferguson announced the grant money in Canberra yesterday to four commercial-scale renewable energy demonstration projects. In an expected decision, two South Australian geothermal projects received significant grants - $62 million for Petratherm's 30-MW plant and $90 million for GeoDynamics' 25-MW multi-well power project.

The announcement sent the share prices of GeoDynamics and Petratherm soaring. GeoDynamics was up 9.6%, or 8c, to 91C, while Petratherm rose 20.5%, up 7.5C, to 44C. GeoDynamics' commercial manager, Alistair Webb, said the company was now ready to proceed with the first stage of the 25-MW project. Located in the Cooper Basin, it will be the world's first commercial-size demonstration of a multi-well, hot-fractured rock power plant.

Mr Webb said the project would require about $300 million by its completion in 2013 but the Government funding - which will be staged over the life of the project - would make finding money in the market much easier. "We are not in need of capital straight away, but it is on the radar," he said yesterday. Mr Webb said the project would aim to demonstrate the technology at a commercial scale and drive down the price so geothermal could compete with other energy options.

Speaking in Canberra yesterday, Mr Ferguson said he placed the same level of importance on the commercial development of geothermal as on carbon capture and storage technologies. He said if geothermal was not commercially demonstrated by 2015-20, then Australia would have a big challenge in moving to a low-carbon energy market. "These projects will diversify Australia's energy supply and help deliver the Government's expanded renewable energy target of 20% by 2020," Mr Ferguson said.

Australian Geothermal Energy Association chief executive Susan Jeanes said the funding was a show of confidence in the geothermal industry. "Once established in Australia, geothermal energy is widely predicted to be the lowest-cost form of renewable energy and it has the enormous advantage of delivering large-scale, baseload energy into the national grid," Ms Jeanes said. A 19-MW wave project in Portland, led by US-based Ocean Power Technologies and Leighton Holdings, received $66.5 million. It beat more fancied West Australian projects, which Ocean Power Technologies Australasia director Gilbert George credited to the partnership with Leighton Holdings.

Mr George said the project would have to raise a further $100 million at least on the market before full realisation, but he was excited about the Government grant's potential to drive that. Mr George said Ocean Power Technologies could now begin more detailed discussion on potential purchasing agreements for the power, including talks with Alcoa for supply to its Portland aluminium smelter.

A biodiesel project led by Hydro Tasmania will receive $15.3 million to demonstrate integration of solar, wind and storage to provide baseload and peak power to the King Island grid. The Government grants come from the Renewable Energy Demonstration Program funded in the 2008-09 budget. An expected $100 million in funding to renewable projects from the program was not delivered last year. Mr Ferguson is expected to announce funding to small-scale solar projects later this month.