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Geothermal search heats up

Western Australia could be just a few years away from delivering geothermal power, according to one of the state's emerging geothermal exploration companies.

With the government soon to award the state's first geothermal exploration permits, managing director of New World Energy Solutions, John Libby, is confident his company will have a small-scale five-megawatt demonstration plant in operation by 2012.

New World Energy has been assessing the geothermal potential of the Perth basin for the past 18 months, and is awaiting news on its bids for exploration lots near Dongara and Eneabba, and further south, near Binningup.

The company is focused on generating electricity from geothermal resources, with a view to eventually develop power stations capable of generating between 30 and 50MW of electricity.

"There's a range of different things you can do with geothermal energy. You can use it for direct heating or cooling, you can use the heat to directly desalinate water, which is generally a very energy intensive process," Mr Libby said.

"We are setting ourselves up as an energy company, so we'll generate electricity from the geothermal resource."

While the company has a couple of geothermal exploration licences in South Australia, the most active state in terms of geothermal exploration, it remains focused on developing assets in WA.

Mr Libby said there were several advantages to developing geothermal assets in WA, rather than SA.

He believes that, while areas with the best geothermal potential in SA tended to be hundreds of kilometers from transmission lines, geothermal resources in the South West of WA are close to well-developed power infrastructure and major industry.

This greatly reduces the cost of exploration and development, and allows WA explorers to generate electricity economically from much lower temperatures - about 140 degrees celcius, compared with 200 degrees plus in SA.

"We've identified the highest heat is in the Perth basin at the right depths, at about 2.5 kilometres to three kilometres, which is reasonably deep, but no where near as deep as in SA, which is around five kilometres," Mr Libby said.

He said while the cost of a demonstration plant was difficult to assess at this early stage, it would probably be in the tens of million of dollars.

"There's nothing new about geothermal. The stuff in SA is pushing new boundaries in terms of the depths they're drilling," Mr Libby told WA Business News.

"The drilling is similar to oil and gas exploration...it's new but it's not that new."

Mr Libby, a geologist with more than 20 years' experience in the resources industry, is joined on the board by Ted Ellyard, former managing director and chief executive of Hardman Resources, current chairman of Key Petroleum Ltd and director of Minemakers Ltd.

New World Energy joins fellow WA geothermal exploration companies, Australian Securities Exchange-listed Green Rock Energy Ltd and Torrens Energy Ltd, as the state's key emerging players in the industry.

West Perth-based Green Rock Energy Ltd currently has three key projects - two in SA, including one at Olympic Dam, and another in south western Hungary.

The company has also applied for geothermal exploration rights, by itself and jointly with other companies, in and around the Perth basin, through the government's tender process.

Torrens has several exploration licences in SA, the most advanced being the Torrens Project Area north of Port Augusta.

The company would not comment on whether it submitted bids for exploration lots in WA.

The state government received 64 valid bids from nine different companies for 38 lots, equating to a total area of 12,160 square kilometres, in its first geothermal exploration acreage release.

The most popular areas were Dongara, Eneabba, Kwinana and Pinjarra.

A second acreage area, in the Carnarvon basin region, will be released later this year.

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