The plant, located in the remote Queensland town of Birdsville, is also one of the few low-temperature geothermal stations in the world. It draws water that has a temperature of 98C from a free-flowing bore that taps into a geothermal reservoir in the Great Artesian Basin.

A quarter or 80kW of Birdsville’s electricity is currently generated this way. However, the study will investigate building a new plant capable of generating four times more power to supply all of the town’s needs. Birdsville has a population of about 100.

Ergon Energy has managed the power station since 1999 and last year spent $A100,000 upgrading it to meet safety requirements.

Corporate communications manager Gaylene Whenmouth told EnergyReview.net that the plant, which started operating 14 years ago, is nearing the end of its working life and needs to be replaced.

“Three quarters of Birdsville’s energy is supplied by LPG and diesel, so we looked at this and thought, why can’t geothermal power produce 100% of the town’s energy requirements?” she said.

“Part of our investigation will involve looking at whether we can find a hotter water resource and at the same time reduce the net volume of water taken from the aquifer.”

The feasibility study will also address the plant’s potential electricity generating capacity, bore location and depth, community expectations and needs, potential impacts on the Great Artesian Basin, as well as examining more modern geothermal power station technology.

Electricity from the existing plant is generated by running the hot water through a gas-filled heat exchanger, which heats and pressurises the gas to drive a turbine and alternator.

The partly-cooled water is then channelled into a pond for further cooling and reticulated into the town’s water supply and lagoon on the opposite side of the town.

Ergon is also hoping to change this last stage of the process, Whenmouth said.

“What we’d like to do is reinject the water back into the ground to make the process more sustainable,” she said.

“As part of the new station, we propose to drill a new bore and use the existing one as a water re-injection well.”

Upon successful results from the study, Ergon expects the new plant could be fully-operational by 2008.

Conventional geothermal power is derived by tapping the energy potential of naturaly occurring "hot springs" and is well-developed in countries such as New Zealand.

"Hot rocks" technology, currently under development by companies such as Petratherm and Geodynamics, attempts to artificially create similar conditions by pumping water down to hot stratas of rock below the surface and capturing the resulting steam to generate power.