Geodynamics Limited expects to be generating electricity from the first hot fractured rock geothermal power plant in Australia before the end of the March quarter in 2009.
Geodynamics Managing Director Gerry Grove-White today announced forecasts for the company’s key project in the Cooper Basin region of South Australia ahead of Thursday’s annual general meeting in Brisbane.
Mr Grove-White said Geodynamics should achieve a number of milestones in early 2009, including the successful completion of the ‘proof of concept’ stage, which would help the company’s share price “rebound”.
He said a 1 MW pilot plant to power the company’s joint venture operations with Origin Energy in the outback town of Innamincka is planned to be commissioned from February 1, 2009.
“We’re looking to power Innamincka before March 31, 2009,” Mr Grove-White said.
He said Geodynamics hoped to make Innamincka, which has a population of just 12, the proving ground for hot fractured rock geothermal energy.
“From that one small step, Geodynamics aims to make the great leap into making the Cooper Basin a major new energy province for Australia,” Mr Grove-White said.
He said the achievement of ‘proof of concept’ following a six week closed-loop circulation test would be a major landmark for Geodynamics and its shareholders.
“We recognise the shareholder pain in the current share market price slump but we expect the company share price will rebound on the back of the upcoming developments,” he said.
Mr Grove-White said Geodynamics was in a strong financial position with $120.58 million in the bank to the end of September 2008 and $150 million in development funding committed from Origin Energy.
He said funds raised from Indian company Tata Power’s $44.1 million cornerstone placement also strengthened Geodynamics’ balance sheet.
Mr Grove-White said Tata Power had identified geothermal prospects in India and Indonesia, but Geodynamics’ focus would remain on the Cooper basin.
Geodynamics aims to start construction of a 50 MW power station in 2009 and deliver commercial scale power in 2011.
The company hopes to deliver 500 MW to the electricity grid annually by 2015 and eventually it is envisaged that output will reach 10,000 MW – the equivalent of 10 to 15 coal-fired power stations.
“That would give hot rock energy a justifiable claim as a great Australian resource to rank with the Snowy Mountains Hydro Electric Scheme,” Mr Grove-White said.
He said Geodynamics will be working towards final investment decisions in late 2009. These include competency building, technology acquisition, financial capacity, power station design and transmissions.
Mr Grove-White and Geodynamics Chief Financial Officer Paul Frederiks are holding shareholder briefings this week in Sydney, Melbourne, Canberra and Adelaide.
Hot rock geothermal energy is produced using heat extracted from buried hot granites by circulating waters through an engineered, artificial reservoir or underground heat exchanger. Geodynamics has created the largest of these reservoirs in the world at its Cooper Basin site.