Greenearth Energy awarded $25 million grant for Geelong Geothermal Power Project

Shares in Greenearth Energy (ASX:GER) have rocketed a massive 35% after the company was the recipient of a $25 million grant from the Victorian Government for its flagship Geelong Geothermal Power Project.

Following the announcement, shares in the company shot up 6.5c, or 35%, to 25c.

The company was awarded the grant under the State Government’s Energy Technology Innovation Strategy for large scale, precommercial, sustainable energy demonstration projects.

Greenearth Energy managing director Mark Miller said the company was grateful for the Victorian Government’s support, not only in financial terms but also in terms of a clear endorsement of the company's flagship Victorian geothermal power generation project.

“The community of Geelong and the Surf Coast Shire have provided fantastic support to our flagship project, we thank them and look forward to working with them to deliver communities and industries alike a greener, cleaner, renewable energy alternative," Mr Miller said.

“Our highest priority is now to secure the remaining funding to commence Stage 1, Proof-of -Concept as soon as possible."

Greenearth Energy will work with the Department of Primary Industries in the coming weeks to formalise the required paperwork and execute the funding agreement.

Energy and Resources Minister Peter Batchelor and Environment Minister Gavin Jennings announced that Greenearth Energy’s proposal was the first to share in $72 million for largescale, pre-commercial, sustainable energy demonstration projects.

Mr Jennings said providing funding for sustainable energy projects was just one of the ways the Government was driving investment in cleaner energy sources.

“Geothermal energy is a renewable energy source that has the potential to provide a constant flow of base-load power to the state’s electricity grid,” Mr Jennings said.

“Government investment in this exciting project underscores the Brumby Government’s commitment to ensuring Victoria is a leader in renewable and clean energy development."

Member for South Barwon Michael Crutchfield said the announcement was great news for the Geelong region.

“Victoria’s south-west is rapidly emerging as a cleaner-energy hub and projects like Greenearth’s are creating a climate of opportunity for regional Victoria,” Mr Crutchfield said.

The $25 million grant has been awarded to Greenearth Energy which assists the first two stages of the Geelong Geothermal Power Project.

The Stage 1, Proof-of-Concept stage, has been awarded $5 million to drill a deep geothermal production well, an injection well plus flow testing. The Weatherford Drilling International Rig 828 has been secured for this initial stage and drilling is planned to commence in the second half of 2010.

A separate Australian Government Geothermal Drilling Program application for the maximum $7 million has been submitted and Greenearth Energy are awaiting a decision.

Upon successful completion of Stage 1, an additional $20 million has been granted by the Victorian Government towards the development of the Stage 2, 12MWe Geothermal Demonstration Plant.

"Greenearth Energy are delighted with the vision, leadership and support shown by the Victorian Government through the awarding of this substantial grant," Mr Miller said.

"This decision demonstrates the commitment of the State Government to the environment, renewable energy alternatives and Victorian-based companies who have demonstrated innovative projects that will assist in advancing Victoria in achieving its objectives of being a world leader in the fight against climate change."

Greenearth Energy’s domestic geothermal exploration and development focus is on HSA  geothermal resources. HSA geothermal resources along with other hydrothermal systems have been successfully developed for power generation since the 1980s HSA geothermal power plants are successfully operating in the United States, Austria, Germany and Australia.