ARENA boosts its coffers as Geodynamics funding reduced

The Australian Renewable Energy Agency has further boosted its potential spending money after recouping more $30 million  from yet another project awarded before the institution became an independent agency, taking its total recapture of funds from projects that will not see the light of day to more than $230 million.

On Wednesday, Australian geothermal hopeful Geodynamics agreed to a variation of its funding deal for its flagship hot rocks project with ARENA, with the total overall amount adjusted to $59.55 million, a $30.45 million reduction on the $90 million grant the ASX-listed company was originally awarded.

To date, the company has drawn down a total $32.4 million under the ARENA grant, which has gone towards the continuing development of its Cooper Basin geothermal resources – particularly the drilling and stimulation of Habanero 4 and subsequent Habanero 1 MW Pilot Plant trial.

Under the new agreement, ARENA will continue to contribute up to $27.15 million of grant funds in support of a revised program of future activities, which will be paid in arrears upon completion of milestone activities.

The result is not a bad one for Geodynamics, and it suggests ARENA now has more resources at its disposal after pulling $75 million in funding from Silex’s planned 100MW ‘big dish’ solar project in Mildura, Victoria, as well as $60 million from the Solar Oasis project in Whyalla, and recouping $65.5 from the abandoned Ocean Power Technologies 19MW wave energy project.

The ARENA funds allocated to Geodynamics, like those allocated to fellow geothermal outfit Petratherm, have been under a cloud since the Abbott government confirmed plans to abolish the Agency as soon as the Senate permitted.

Despite ARENA’s pledge to continue serving its legislated purpose as long as a majority of the Senate supported it, it was not clear if funds for projects like Geodynamics’ would return to treasury coffers or have the ability to be re-allocated.

Geodynamics says that with the successful completion of the Habanero 1MW Pilot Plant Trial, as well as the emergence of significant unconventional shale gas resources in the Nappamerrie Trough area in the Innamincka region, it has “reviewed its future development activities to align with the requirements of this future customer base.”

“A revised work program and milestones have been agreed with ARENA that build on the success and learnings gained from the pilot plant trail,” says the company statement.

“This program will demonstrate the cost, reliability and environmental benefits of utilising large scale geothermal direct process heating in new gas processing facilities to be developed in the Cooper Basin. The final objective of the program is securing customer agreements and financing necessary to develop the supply of large scale process heat from Geodynamics Cooper Basin geothermal resources.”