Within 15 minutes of the opening of trading, the price had fallen to 26c, but it climbed again to close at 27.5c, and opened today at 27c.

Trading under the ticker “KEN”, the Hobart-based company raised $5.83 million through the issue of 23.3 million shares at 25c. Its IPO had allowed for the issue of up to 30 million shares to raise $7.5 million.

The funds will pay for geothermal exploration of its extensive tenement holding in Tasmania and others under application in Queensland.

The listing comes after the Prime Minister announced on Sunday that the Australian Government would introduce a new national Clean Energy Target (CET) requiring 30,000 gigawatt hours of electricity to be produced from zero and low emissions sources by 2020.

KUTh’s general manager Malcolm Ward said this provided his company with a greater incentive to accelerate its exploration plans.

“The announcement has major implications for renewable energy in Australia, and this incentive may yet be exceeded in a response by the Opposition,” he said.

“The CET will drive additional investment in renewable electricity generation.”

KUTh was last year awarded a 12,360 square kilometre permit, SEL26-2005 in eastern Tasmania following research into prospective areas.

“Tasmania has an unusually high heat flow, with one of Australia's highest recorded values – almost two-and-a-half times the norm – recorded from a granite in the project area,” chairman Dr John Bishop said.

“This, combined with other geophysical and geological data, suggests that there is an excellent probability that the required conditions for enhanced geothermal power (EGP) production will be met within KUTh Energy's licence area.”

Bishop said the permit contained high voltage power lines which would minimise the cost to connect a successful hot rocks project into the electricity grid, while the Basslink interconnector could provide access to the mainland energy markets.

KUTh is the preferred tenderer for two conventional geothermal exploration permits – EGP7 and EGP 9 – in northern Queensland.

The company is also evaluating opportunities overseas.

KUTh's name is made up from chemical symbol for three radioactive elements – potassium (K), uranium (U) and thorium (Th) – that provide about 99% of the earth's internal heat generation.