Geothermal Advances - Interview with Geodynamics Managing Director

Australian geothermal company Geodynamics is a global leader in hot fractured rock (also known as enhanced geothermal system) technology. It is at an advanced stage of the testing process, and then expects to begin small-scale power generation. A 50MW power plant is planned for 2012.

Managing Director Gerry Grove-White answered questions from Green Technology Investor.

You are currently involved in closed loop flow testing trials. How significant are these trials? When can we expect some results? Can you say anything about the progress of the trials to date?

We are currently awaiting the delivery of the repaired re-injection pump from Schlumberger’s Singapore workshop (the pump supplier). We will then re-start the six-week circulation test. The test involves injecting organic tracers and measuring their return to the surface. The results will be analyzed and fed into the reservoir model to confirm “Proof of Concept”. The results will be externally validated by Geothermex of the USA. The review of the results will take some six weeks after completion of the tests. It is expected to re-start the test before the end of November.

You recently released a statement of your estimated geothermal resources, suggesting you are eventually capable of providing something like 20 per cent of Australia’s entire power needs. More realistically, how much electricity might you be supplying, say, 10 years from now?

We believe it is quite credible to be generating well in excess of 500MW within 10 years.

You have no debt and large cash holdings. What will you be doing with this money? Does it mean that you are quite immune to the current credit crunch, or do you still have concerns about future fund raising?

We enjoy a strong financial position - A$140 million (US$98 million) in the bank, plus Origin Energy farm-in funding as a result of a series of capital raisings over the last 11 months. [Origin Energy holds a 30 per cent interest in Geodynamics' geothermal venture.] This funding allows us to continue with our development plan despite the current economic woes and provides a significant part of the funding required for the first 50MW commercial demonstration plant.

In September 2008 Tata Power Company of India took a 10-per-cent, A$44-million (US$31 million) equity stake in Geodynamics. Over the long term, what kind of benefits do you think will develop from this relationship?

Tata and Geodynamics will be exploring opportunities in other countries than Australia. In addition the Tata group have a number of companies who provide services that will be complementary to Geodynamics' activities.

When we talk about renewable energy and the future we hear a lot about solar and wind, but far less about geothermal. However, do you think it possible that, say, 10 or 15 years from now, geothermal could be far more important than those two?

We believe that geothermal energy will be the most credible and most economic source of zero-carbon base-load power in 10 to 15 years

Thank you.

November 5th, 2008

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