Australian resource tax sparks call for geothermal incentives

Australian resource tax sparks call for geothermal incentives Geothermal drilling rig at Jolokia, Australia (source: Geodynamics)
Alexander Richter 20 May 2010

Clean Energy Australasia is asking for new incentives to geothermal developers to offset damage caused from the new resources tax.

in a news piece from Australia, it is reported that “a geothermal company working in western Queensland says state and federal governments need to offer new incentives to geothermal explorers to offset damage from the resources tax.

The Federal Government is planning a 40 per cent tax on super profits of miners but there is been strong opposition from the mining sector.

Clean Energy Australasia (CEA) is working to raise millions of dollars in capital to build demonstration plants at Winton and Longreach in western Queensland in the next two years.

CEA officials will visit the Winton and Longreach areas over the next week to talk to landholders and councils about their plans.

CEA spokesman Joe Reichman says the tax will not directly impact on the sector but sends the wrong message to investors.

He says a new subsidy should be considered.

“It would be very important to start something like a subsidy along the lines of the petroleum drilling subsidy that was so successful in the ’50s and ’60s – where the Federal Government at least fronted up and paid 50 cents in the dollar for every approved petroleum well that was drilled in those times,” he said.

“Of course that led to this huge petroleum industry that we have now got in Australia.

“Unfortunately it [the proposed tax] gives a general perception of increasing the sovereign risk of investing in Australia and that is most unfortunate.

“What we are lobbying both to the federal and the Queensland Government is that to counteract that it would be very important to start something like a geothermal drilling subsidy.”

Mr Reichman says CEA still needs to raise several millions of dollars in capital, but geothermal power could offer the region competitively priced electricity into the future.

“Both Longreach and Winton are at the end of the grid and it’s very, very expensive to transmit electricity over these long lines,” he said.

“The other region of course we’ve been looking at is the Mount Isa mining region, which has got an enormous hunger for power and they are in fact off the grid.”

Source: ABC News