Sunday, 6 June 2010

Hot-rock projects stall over rebate

Adelaide Advertiser
Thursday 3/6/2010 Page: 57

SOUTH AUSTRALIA's geothermal sector faces a year of stagnation as companies defer investment to benefit from an exploration rebate to be introduced next year. As much as $60 million in exploration investment could be deferred as geothermal companies wait for the more attractive investment environment. The rebate, in the Government's proposed resources super profit tax, will reimburse 30c for every dollar of exploration expenditure.

Adelaide-based hot-rock company Petratherm managing director Terry Kallis said the sector was attempting to have the rebate changed to be effective from this July 1. "The rebate puts an incentive on people deferring their investment," he said. "It potentially puts it (the geothermal industry) in a hiatus period. "There are four or five companies that could be drilling in the next year and each of those are going to be spending $15 odd million, so you are deferring potentially $50 to $60 million in expenditure."

Mr Kallis also is chairman of the Australian Geothermal Energy Association. The organisation will meet with representatives from Resources Minister Martin Ferguson's office in Canberra tomorrow. Mr Kallis was confident of having the timeline for eligible exploration adjusted, even if the rebate was not paid until next year. "I think the Government will understand that it has got two programs in place and the best way to make them work, is to make them work together," he said.

Mr Kallis told Petratherm's general meeting in Adelaide yesterday, changes to the Renewable Energy Target certificate scheme, which are likely to be passed by the Senate, will be positive for the sector.