The Minister for Resources and Energy, Martin Ferguson AM MP, and Senator Don Farrell, Senator for Southw steam at the Panax Salamander-1 geothermal site near Penola in South Australia.
The Panax geothermal project received funding of $7 million from the Australian Government's $50 million Geothermal Drilling Program to help it become a pioneer in the exploitation of hot sedimentary aquifers in Australia. The resource available in this region has the potential to provide up to 1500MW and is close to existing electricity grid connections.
Representing Minister Ferguson at today's official release of steam at the site, Senator Farrell congratulated Panax on this milestone.
Senator Farrell said: "Today's steam release is tangible evidence of what companies like Panax and the other Australian geothermal companies are searching for - the naturally occurring geothermal heat buried beneath our feet."
"Geothermal energy has the potential to deliver baseload, reliable and clean energy to Australian households and as a South Australian I am pleased that the Commonwealth Government is playing a major role in helping to develop South Australia's significant geothermal resources."
Preliminary analysis by Geoscience Australia suggests that the extraction of one per cent of the energy from Australian geothermal sources could yield 190 million petajoules of energy. This could power Australia for 26,000 years.[1]
Minister Ferguson said the Penola project is one of seven awarded grants of $7 million each under the $50 million Geothermal Drilling Program, supporting companies with the high cost of drilling wells for proof-of-concept projects. Two geothermal energy projects have also been awarded almost $153 million in grants under the Renewable Energy Demonstration Program.
Through our expanded $5.1 billion Clean Energy Initiative the Australian Government has now committed more than $200 million to accelerate geothermal energy technology development, demonstration and deployment in Australia, leveraging a total investment in excess of $720 million.
Minister Ferguson said: "The Australian Government is a strong supporter of geothermal energy in this country, and we have made significant investments in the sector. Our support for these early-stage projects will help to demonstrate the commercial and technical viability of geothermal energy in Australia, and help to drive down its costs."
The Panax well is 4,025 metres deep, and was drilled in 44 days, with no Lost Time Incidents, setting a drilling record in the Australian geothermal sector.
To further support Australia's geothermal sector the Australian Government recently announced a new Resource Exploration Rebate. The rebate, to operate within the company income tax system from 1 July 2011, will provide companies with a refundable tax offset at the company tax rate for their exploration undertaken in Australia. The rebate will provide significant cash flow benefits to exploration companies, particularly the small, pre-profit companies which are common in the geothermal sector. For a company in a tax loss position that spends $1 million on exploration, the resource exploration rebate will provide an immediate cash benefit of $300,000.
In the recent Budget the Australian Government also announced a further $652 million over four years to establish a Renewable Energy Future Fund to support the deployment of renewable energy projects and the uptake of energy efficiency.
[1]Based on 2005 primary power usage