New Grants

Geothermal Drilling Program

Launched on 20 August 2008, the $50 million Geothermal Drilling Program (GDP) provides assistance to companies seeking to develop geothermal energy with the cost of proof-of-concept projects including drilling geothermal wells.

Applications for GDP Round 2 close on Tuesday 4 August 2009 at 5:00pm AEDST

The GDP is a competitive merit-based grants program provided as dollar for dollar matched funding and is capped at $7 million per proof-of-concept project.

A proof-of-concept project involves drilling an initial well to the required depth to reach the desired temperature, usually between three to five kilometres. If necessary, fracturing of the rock at this depth is undertaken to allow fluid passage and create an effective underground heat exchanger. Most projects will involve the drilling of a second well to intersect the reservoir. Testing is undertaken to provide information on how much fluid can be circulated through the underground heat exchanger and at what temperature. This description does not preclude the eligibility of other geothermal projects that are primarily for the purpose of commercial energy production.

Once a suitable geothermal resource is “proven” to exist, a commercial viability study is undertaken, and then development is begun. Whereas the proof-of-concept phase involves as few as two wells, development of a large scale resource may involve the drilling of more than 100 wells.

This program will help get the industry over the short-term hurdle of high drilling costs, which is delaying the ability of companies to demonstrate proof-of-concept in a variety of locations and, thereby, demonstrate the robustness of the technology to private sector investors. It is possible that the first small-scale geothermal power plants could be in place in the next four to five years.

Round 1 Results:
Only two geothermal companies were succesful in round 1 funding grants: MNGI Pty Ltd and Panax Geothermal Limited. Panax was awarded the $7 million grant for the drilling of Panax’s Salamander-1 production well, which is on schedule to spud in mid-September 2009. Under the terms of the Grant Agreement, 60% of the grant amount is expected to be received prior to the spud date, as part compensation for pre-spud expenditures such as mobilization, tubular, etc.

Please contact Treadstone to find out how we can help with your Government Grant submission  on (03) 9016 3575 .

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