High-profile geothermal hopeful Geodynamics Ltd says it's moving closer to creating an operating heat exchanger and validating the geological model of its joint venture Innamincka project in South Australia.
Operations have started at Jolokia 1, a joint venture with Origin Energy in the Cooper Basin, to complete the well, fracture the granite and create a geothermal reservoir, Geodynamics said in a statement on Friday.
Rig 100 has re-entered Jolokia 1 and successfully drilled through the cement plug set in September 2008, the well has been cleaned and Geodynamics is undertaking scheduled logging to check the condition of the well.
A simulation program is expected to start in late July and run through August.
Geodynamics will then return to Habanero for the drilling of two more wells and the commissioning of the one megawatt Pilot Plant, with the aim of being in a position to make the final investment decision regarding development of the 25 megawatt Commercial Demonstration Plant.
Giles Parkinson at the Climate Spectator reports that cleantech stocks haven't done too well in Australia in recent times, with geothermal energy companies being the worst performers of all - CLIMATE SPECTATOR: The cleantech bubble blowout.
Australia’s first cleantech bubble has well and truly burst. The geothermal energy industry has lost practically all support from the investment community, and share prices are just a fraction of what they were just a year or two ago. Hundreds of millions in market value has been wiped from the board.
In the history of market bubbles, this event might have passed unlamented. But geothermal energy is not a mere passing fad, or a cool iPhone app – it forms a crucial part of the government’s renewable energy strategy, and is supposed to be the centre of $15 billion of investment over the next decade.
As things currently stand, that looks impossible, and the government, in danger of another embarrassing debacle in its renewable energy policy, is under increasing pressure to take action to help de-risk the sector.
Cleantech and renewable energy investments as a whole are in a sorry state in this country. The 75-company Australian Cleantech Index, a basket of renewable, environmental, waste and biofuel stocks with a combined market value of $10 billion, slumped 32 per cent in fiscal 2010, compared to an 11.8 per cent gain for the ASX200 and a 10.5 per cent gain for the ASX Small Ords.
Cleantech Australia managing director John O’Brien blames “weak and inconsistent political leadership” on environmental issues for this fall. “The story of environmental investments in Australia is a depressing one compared to global cleantech stock performance,” he says.
The geothermal index was the weakest component, losing 57 per cent in the last 12 months, following a 34 per cent loss the year before. Even the two market leaders, Geodynamics and Petratherm, who share $153 million in government grants between them – if they can advance their projects far enough – have slumped by two thirds in the last six months.
Yet, according to the federal government’s own estimates, geothermal energy could provide more than one quarter of 41,000 gigawatt hours required to meet its 20 per cent renewable energy target. And the government’s own Energy Resource Assessment rates geothermal as the likely cheapest and cleanest form of baseload energy (including “clean” coal and nuclear) by 2030.
But in its current state, the industry fears it will be unable to deliver. It simply doesn’t have the support of the market to raise funds for the relatively expensive task of drilling.