Hot Rock Ltd. receives US$6.3m drilling grant for Koroit project
Australian Hot Rock Ltd. receives governmental drilling grant for its project at Koroit, Otway basin in the state of Victoria, Australia.
Announced by Hot Rock Ltd. (ASX: HRL), the company “has signed the contract for the Au$7 million (US$6.3million) grant from the Australian government to carry out a drill and test program at its flagship Koroit Hot Sedimentary Aquifer Geothermal Project in the Otway Basin in southwest Victoria.
The company said the Geothermal Drilling Program (GDP) Round 2 Funding Agreement, which was signed with the Department of Resources, Energy and Tourism (DRET), demonstrates the government’s confidence in Hot Rock’s management and geothermal business model.
The Proof of Concept program will test the potential of the geothermal reservoir to supply hot water to a geothermal power plant. This involves drilling two deep holes (approximately 3,700m deep) in the Koroit area to test water temperature and fluid flow rate from the geothermal reservoir.
Two potential drill sites have been selected, and preparations for completing the drilling pad and ponds are well advanced. Hot Rock has completed the well designs, and are currently finalising discussions with a drilling company to supply a suitable rig to drill the wells in 2011.
Mark Elliott, executive chairman, said “receiving the GDP funding for the Koroit Project is a major milestone for Hot Rock in moving closer to generating electricity from geothermal energy in Australia within the next two years.”
The drilling and testing program at Koroit will start in early 2011 and if successful will be followed by the development of a pilot plant by 2012.
Importantly, geothermal energy is base-load which is power generated 24 hours a day, 7 days a week, it is renewable and has no greenhouse gas emissions.
Geothermal has the highest capacity factor of all power generation methods and is the best renewable power option for replacing Victoria’s current high reliance on electricity generated from brown coal fired power stations.
Commercial geothermal power generation using HSA has been operating in the USA for over 25 years and represents potentially the lowest risk and best short term development option for commercial geothermal energy developments in Australia.”
Source: Company announcement via Proactive Investors