Hot Rock applies for US$8m government grant

In an announcement “Australian Hot Rock (ASX: HRL) says it has lodged applications today for grants totalling up to $9 million with the Victorian Government to expedite the advancement of the company’s flagship Koroit Geothermal Project in south west Victoria.

On August 16 HRL was awarded a Geothermal Drilling Program (GDP) grant for $7 million from the Australian government. The grant funds are to go toward the drilling at Koroit in the Otway Basin, starting in early 2011, followed by the development of a pilot plant by 2012.

Koroit is among Australia’s leading renewable, base-load energy projects, with the potential to become the nation’s first commercial geothermal power generator.

Mark Elliott, executive chairman, said, “we are excited to be advancing Koroit to the Proof of Concept stage, with plans for drilling early next year. Should the drilling confirm our model, we envisage developing a source for renewable, base-load energy within three years.”

“We welcome the opportunities for support by the Commonwealth and State governments, both providing initiatives and grants that are an essential part of funding new energy technologies aimed at reducing carbon emissions.”

HRL has applied for funds under two programmes directed at promoting environmentally friendly energy solutions for the state.

Under the government’s Energy Technology Innovation Strategy (ETIS), the company has applied for a $4 million grant for the Sustainable Energy Research and Development (SERD2) Program.

If awarded, the grant will fund the testing and evaluation component of the Koroit Proof of Concept drilling program, set to commence in early 2011.

In addition, HRL has lodged an Expression of Interest (EOI) for a $5 million grant under the Victorian government’s Sustainable Energy Pilot Demonstration (SEPD) Program to assist in the development of a pilot scale demonstration plant at the Koroit Project.

Short-listed applicants from the EOI process will be invited to submit a comprehensive application for assessment.

The Victorian government has recently taken a leadership role in Australia by announcing renewable energy initiatives aimed at delivering cleaner, more diversified electricity supply sooner.

This includes reducing greenhouse gas emissions by at least 20% by 2020 and introducing its first feed-in tariff to encourage investment in large-scale solar generation plants in Victoria. It is also examining using a feed-in tariff for electricity generated by geothermal energy.”

Source: Proactive Investors