Industry Minister Ian Macfarlane today said the funds would allow Petratherm to further develop its “groundbreaking” approach of using geothermal energy at its Paralana site in the Flinders Ranges.
The project is expected to create 200 jobs and will use Heat Exchanger Within Insulator (HEWI), a new technique to collect heat from sedimentary rocks at depths of 3-4km rather than from harder granites at much deeper depths.
“If this innovative approach is validated as a cost-effective option, it could significantly accelerate the building of sustainable, large-scale geothermal electricity generation capacity in regional and remote areas, both here and overseas,” Macfarlane said.
“Australia has vast hot rock energy resources and this project gives us a new path forward to use this energy source to make a very real contribution to Australia’s future electricity requirements.”
Federal Environment Minister Malcolm Turnbull said the Petratherm project had the potential to prove the viability of geothermal projects across Australia.
“Geothermal could provide secure and reliable energy for up to 10% of Australia’s electricity consumption by 2050,” he said.
The grant is the second financial milestone for the project in as many months.
Petratherm last month announced a joint venture with Beach Petroleum in a deal designed to take Paralana right through to production by end-2009.
“The grant offer means the financial foundation for Paralana is highly robust,” managing director Terry Kallis said.
“It ensures we have full focus on the technical and operational challenges ahead with a commercial horizon that is now near term rather than undefined.”
Under the JV, Beach has the right to contribute $10 million to the creation of the underground heat exchanger to earn a 21% equity stake in Paralana. The total cost of this stage of work is estimated at $20 million.
Following the successful completion of the underground heat exchanger, Beach also has the option to increase its equity by a further 15%, to a total of 36%, for an additional contribution of $20 million.
The Paralana project aims to initially provide electricity to the Beverley uranium mine, where demand is expected to grow from around 7.5MW to as much as 30MW.
The company then plans to expand to around 520MW and supply the national electricity market via two entry points – Port Augusta and Olympic Dam.
Petratherm estimates the Paralana geothermal resource has the potential to yield 13,000MW of power, more than eight times South Australia’s average daily capacity need.
