The Solomon Islands could follow smaller island nations such as Tokelau and become 100% renewable, or close to it, should a major geothermal project go ahead in the next few years.
That’s the assessment of Australian geothermal company Geodynamics, which has completed a pre-feasibility study on its Savo Island geothermal resource and concluded that it would be sufficient to power the capital Honiara, the main Gold Ridge mine, and surrounding areas.
Geodynamics is currently looking at a project of 20MW, or possibly two 10MW projects on the volcanic island that would be used to reduce, and possibly remove, the bulk of the island nation’s dependence on diesel for electricity – a source that is costing consumers 80c/kWh, but is still unreliable and dirty. Many businesses currently look after their own power needs. Many parts of the country have no access to electricity.
The project is unlikely to be built before 2017, given that that exploration drilling will begin in the dry season in 2014.
The company also needs to secure agreements with landowners and the Solomon Islands Electricity Authority in relation to electricity supply and power purchase agreements, and build a transmission line from Savo Island to the main island.
The Savo Island joint venture was formed in November 2012 with Kentor Energy, a subsidiary of listed miner Kentor Gold, with Geodynamics able to acquire up to a 70% interest in the project through a two stage earn-in agreement. Geodynamics now holds 25% of the project.
Geodynamics has also recently commenced commissioning of its Habanero 1MWe pilot plant, using new enhanced geothermal system technology to unlock heat resources lying more than 4kms underground.
Meanwhile, Geodynamics has received an R&D Tax Incentive refund of $22.2 million under the Federal Government’s R&D Tax Incentive Scheme. Under the scheme, companies with a turnover of less than $20 million are entitled to a cash refund of 45 cents per dollar spent on eligible research and development in Australia.
The Geodynamics claim relates to the costs of research and development conducted on the Cooper Basin EGS Project for the 2011/2012 financial year. CEO Geoff Ward said the refund and existing financial resources put Geodynamics in a strong position to continue the development of its Habanero Project and Savo Island projects.