Panax Geothermal (ASX: PAX) is a pure geothermal company with access to some of the world's most promising geothermal assets. As climate change projections worsen, Panax Geothermal is well positioned to commercialise sustainable sources of base-load energy, powered from the Earth.
The long term vision of Panax is to become a major participant in the geothermal industry, both nationally and internationally. The scope of its geothermal interests will be broad, including both conventional geothermal resources (volcanic related) as well as enhanced geothermal systems (EGS) such as hot fractured rock (HFR) geothermal systems.
Panax Geothermal study confirms commerciality of Penola Geothermal project to supply power
Panax Geothermal (ASX: PAX) has announced that renowned US based geothermal consultant, GeothermEx has provided further positive conclusions on the commercial attractiveness of Panax's Penola Project at the Limestone Coast in South Australia.
The detailed project model, and assumptions relating to electricity pricing, tax and depreciation were audited by KPMG.
The study demonstrated that Panax's advanced, conventional geothermal project is commercially attractive. Penola Project is located within a few kilometres of the national grid (NEMMCO grid).
The development concept underlying this analysis is the same as previously advised by Panax in prior studies, i.e. being a staged development as follows (Panax Base Case):
• Demonstration Plant (5.9 MW net);
• Phase I Plant (17.7 MW net); and
• Phase 2 Plant (59.0 MW net).
To provide bench-mark costs for comparison with the costs of other forms of renewable “clean energy” such as wind, a separate financial analysis of a stand-alone 59.0 MW (net plant) Penola Project (rather than the staged development in the Base Case) has also been completed by Panax (Stand-Alone Case).
The main inputs of this Stand-Alone Case assume the costings of the Phase 2 plant without the additional costs that are incurred on a unit basis which are associated with the staged development under the Panax Base Case.
Key outcomes of this new Stand-Alone Case are as follows:
- The Penola Project can produce zero emission, base-load power, on a net plant, grid connected basis, at a long range marginal cost of A$51 per MWh (pre-finance) and A$83 per MWh (post-finance assuming a 10% cost of equity).
These results are competitive with wind power, with the added advantage that the Penola Project can deliver base-load power (24 hours/day, 7 days /week) and that it is located ‘close to the grid’.
Both of the above cases are based on the generation of 6.7MWe gross and 5.9MWe net plant power per production well, in accordance with assumptions in previous statements, (i.e. 59 MW plant is based on the net-plant output from 10 production wells).
Drilling of the first production well (Salamander-1) is scheduled to commence during October 2009. Both the well and drilling programme design have greatly benefitted from off-take data from 28 previously drilled, deep petroleum wells. Salamander-1 will be the first drill test of a geothermal, hot sedimentary aquifer in Australia (see above) and site preparation has commenced.
The well testing programme is designed to establish an initial geothermal reserve, sufficient for a decision to commence the development of a 5.9 MW net plant Demonstration Plant, within three months of completion of drilling.
