Geodynamics writes off Cooper Basin geothermal assets

6 01 2014

Hat tip to my mate Dave Kimble who emailed me this piece of info….

This item slipped by without me noticing at the time.  After 11 years, Geodynamics finally got two 4,200m wells drilled and hooked them up to a 1 MW generator and produced some power.  But they have still to sell this power to the local outback oil and gas drillers, who obviously already have their own electrical generation equipment.

Never daunted, Geodynamics are now “planning” six wells to produce 5 – 10 MW.  They clearly won’t go ahead with this unless they have contracts for the power, and for a transmission system.

If a pair of wells can only produce 2-3 MW in the best location in Australia, then the whole idea is a non-starter and Geodynamics must have known this for years.

Looks like Tim Flannery’s done his dough…..

GDY.AX shares at 7.6 cents today.

GDY.AX.2002-13

http://reneweconomy.com.au/2013/geodynamics-writes-cooper-basin-geothermal-assets-40047

Geodynamics writes off Cooper Basin geothermal assets

Australia’s flagship geothermal developer, Geodynamics, has written down the value of its Cooper Basin operations and plant assets, citing the subdued outlook for electricity demand in Australia.

The decision to write $88.8 million off its Cooper Basin assets comes as the company completes a trial of its 1MW Habanero pilot plant near Innamincka, which sourced energy from super-heated rocks 4.2kms below the surface – deeper than any other geothermal plant in the world.

However, despite the fact that the carrying value of deferred exploration and development costs have been written down to zero, and the Habanero plant down to “fair value”, Geodynamics said the does not change its view about the future of enhanced geothermal systems (also known as hot rocks geothermal technology).

Geodynamics said the results from the Habanero trial, including steam flows and reliability, supported its belief that EGS could play a material role in Australia’s energy future because it could deliver large scale, continuous, predictable and controllable energy.

But it said that developing the Cooper Basin resource will require “significant capital investment” for further exploration, development and to extend transmission infrastructure.

“Under the current market conditions, this scale of expenditure is not economic and significant changes in the level of demand and improvement of wholesale power prices will be required to support such national scale infrastructure development,” the company said.

The National Electricity Market is experiencing an unprecedented fall in demand, caused by the popularity of rooftop solar PV, the impact of energy efficiency measures, and declining manufacturing and industrial activity in some areas.

AGL Energy recently said that 9GW of baseload power is surplus to requirements. Geothermal energy producers would look to compete with baseload power generators. Origin Energy, a former partner to Geodynamics, last week expressed frustration that the renewable energy target provided no support for emerging technologies such as geothermal.

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