Geodynamics Commissions Australia’s First Geothermal Plant
It’s been a long time coming, but finally Geodynamics has commissioned Australia’s first trial geothermal power plant. It’s great news for the fledgling company, which still admittedly has a long way to go before it proves Australia’s geothermal resources can play a significant role in our power sector.
The 1MWe Habanero Pilot Plant trial will run until August, with the company saying it is fully funded until that point. Full commissioning of the plant is scheduled for the end of April.
“The commissioning of the 1 MWe Habanero Pilot Plant is a long anticipated and major milestone for Geodynamics and our shareholders. It marks a significant achievement in Australian and global geothermal exploration and will be the first Enhanced Geothermal System (EGS) derived power in Australia,” Geodynamics chief executive Geoff Ward said.
“We anticipate building on the good results achieved in the first two open flow tests and the major stimulation test already undertaken at Habanero-4, through additional open flow testing and closed loop testing we will undertake during the demonstration trial.”
The good news came just days after the company announced major backer Origin Energy had quit its joint venture arrangement. That too was a long time coming, after Origin first opted out of the work program last year before then deciding not to fund its joint venture share of the Habanero 4 well.
Origin is heavily focused on its gas resources off the coast of Queensland and any costs outside this are receiving heavy scrutiny right now. The bottom line for Origin is that it sees geothermal playing no significant role in meeting the 2020 renewable energy target and as such, sees little value in funding its development while it has major costs to cover in gas development. Incidentally, its endeavors on this front received a blow this week.
Origin’s withdrawal from what is referred to as the Innamincka Deeps and Innamincka Shallows Joint Ventures will be effective from the end of the 2012/13 financial year, six years after they were formed.
Investors reacted positively, with Geodynamics’ share price up over 25% since the commissioning announcement on Wednesday. It had, however, lost close to 15% on the news of Origin’s exit last Thursday and remains 10% off where it started the year. At 10 cents a share, the company is also a long way from its high of more than $2 back in 2007.