Sunday, 3 April 2011

Panax in new green Indo deal

Courier Mail
24 March 2011, Page: 55

SHARES in Brisbane based geothermal energy developer Panax Geothermal have rallied 22% since Monday, bolstered by a new agreement to start exploration on its third geothermal project in Indonesia. Panax Geothermal has signed an initial deal with an Indonesian government owned power company to start exploration on project areas on the east coast of central Sumatra, with the aim of developing geothermal resources of up to 80 MWs per project.

As part of Indonesia's plan to slash its greenhouse gas emissions, the government plans to add more than 4000 MW in electricity generation capacity from geothermal energy in the next four years, or the equivalent of about 12 power stations. In order to encourage zero emission power plants, the Indonesian government has announced a guaranteed feed in tariff of $US97 ($96.15) per MW, plus carbon credits, to geothermal energy generators. Panax Geothermal said Indonesia's policies were providing investment certainty for renewable energy projects, noting this was in stark contrast to Australia where such incentives and investment certainty were not available.

Analysts say a major roll out in Australia of new power stations with zero greenhouse gas emissions, such as from wind, solar and geothermal sources, would require a carbon price, national feed in tariffs and improved incentives for research and development. "There is enormous potential for geothermal development in the Asia Pacific Region. Indonesia has commercially attractive tariffs, abundant geothermal resources and incentives for geothermal energy generators", Palm managing director Kerry Parker said. Panax Geothermal shares closed up 0.54¢ or 9.8% at 5.6¢ yesterday.