Interview series: Jack Hamilton, Managing Director, Geodynamics

It is a pleasure to post this interview with Dr. Jack Hamilton of Geodynamics as part of the interview series prior to the GRC/ GEA event in Sacramento starting next week.

Jack was appointed Managing Director and Chief Executive Officer of Geodynamics in June after being a Non-executive Director of Geodynamics since 2006.

His experience is both local and international within the renewable energy industry and oil and gas sector. He has served in senior roles at Woodside, Shell and most recently as Chief Executive Officer of Exergen, a low emission coal development company.

How would you describe your company and your key activities?

Geodynamics’ vision is to become a world-leading Australian geothermal energy company, supplying competitive zero carbon energy and base-load power.

Holding geothermal licences over highly prospective areas in South Australia, New South Wales and Queensland, Geodynamics’ current focus is on commercializing the extraction of energy from out geothermal tenements near Innamincka in South Australia’s Cooper Basin, where the world’s hottest known deep granite resources exist. This entails the development of geothermal power using Enhanced Geothermal Systems (EGS) technology through a joint venture with Origin Energy, where Geodynamics is the operator. We have another joint venture with Origin focused on Hot Sedimentary Aquifer (HSA) exploration on the same Cooper Basin tenements, where Origin is the operator.

We are also evaluating and planning exploration activities at our highly prospective tenements in the Australian states of New South Wales and Queensland.

What are your company’s key projects and what is their development status and outlook?

Jack: Australia does not have any traditional volcanic geothermal resources. Early on, Geodynamics identified an opportunity to develop power from hot rocks. With the discovery of an underground reservoir in the Cooper Basin, the technology has evolved such that we’re now leading the way in the development of Enhanced Geothermal Systems (EGS) technology through our ‘Deeps’ Joint Venture project. We’re exploring the Hot Sedimentary Aquifer potential of the region too. Geodynamics also has EGS projects in the Hunter Valley (New South Wales) and Cooper Basin (Queensland) which are in early exploration stages.

Underlying Geodynamics’ ~2,000km2 of tenements in the Cooper Basin is hot granite. Geodynamics has accessed temperatures of ~280degC at 4,900m depth. These temperatures are the hottest identified globally at these depths.

In 2009 Geodynamics achieved proof of concept at our Habanero site. Proof of concept demonstrated a number of key elements:

• Resource definition
• Ability to drill and complete wells
• Ability to hydraulically stimulate fractures
• Ability to develop a substantial reservoir volume
• Achievement of well productivity and injectivity
• Confirming fluid circulation between production and injection wells
• Forecasting resource degradation

Following achievement of proof of concept, the next phase of Geodynamics’ Business Plan is focused on development of a 25MW Commercial Demonstration Plant with the plant targeted to produce power in 2015.

What incentives or support do you think would be crucial to speed up development in Australia?

Australia is fortunate in that we have a stable legal and regulatory regime, low sovereign risk and a strong (AAA) credit rating, each of which provide a strong backbone for our economy and make it an attractive market in which to invest and develop new technologies.

Geodynamics currently enjoys strong support at Federal and State Government levels. We were recently awarded a $90 million grant under the Federal Government’s Renewable Energy Demonstration Program (REDP) and this funding will assist in the development of our planned 25MW Commercial Demonstration Plant.

There are strong signals that the formalisation of a carbon trading policy isn’t far off – and we think it’s inevitable that a framework is established during the next two to five years. Policy developments that see the introduction of a price on carbon and continued focus on supporting emerging renewable technologies are key to industry development and will play an increasingly important role in securing Australia’s energy future.

Geodynamics would support a mechanism for pricing carbon whether it is a carbon tax or an emission trading scheme to provide a clear framework for investment certainty.

The Renewable Energy Target has gone a long way in creating focus for the industry. We would also support an expansion and extension of the Renewable Energy Target (RET) to underpin investment beyond 2020.

Another mechanism that would support industry development industry in Australia, is the introduction of feed-in tariffs.. Feed-in-tariffs have the benefit that projects are only supported once they are real and producing power. This reduces the risk of providing a grant to an emerging technology that may or may not successfully achieve power production.

What do you think holds back speedier development of geothermal energy projects globally?

Developing geothermal power using EGS is still a reasonably new concept and up until recently, the technology that’s been required to exploit the enormous potential stored in the granites below our feet has just not been available.

Now as technology has advanced and breakthroughs have been made, we are witnessing expansion of geothermal exploration and development and with continued emphasis on energy security and low emissions technology, geothermal projects are becoming increasingly attractive.

This is translating into government support such as, for example, the recent announcement made by the U.S. Department of Energy (DOE) that is putting $20 million into the research, develop, and demonstrate geothermal technologies. This kind of investment is encouraging as exploration and development projects by their very nature tend to have a high upfront capital cost.

Geodynamics continues to work with technology suppliers domestically and internationally to improve technology and break new ground using innovative solutions. During September we were thrilled to have a breakthrough where a purpose-built imaging tool assisted with detecting the presence of a fracture network in our Jolokia 1 well. That work provided us with data that will assist in our upcoming hydraulic stimulation program. Of course, we are working to perfect methods and all the tools we use, and more focus on innovation will help with speed of development.

What are your expectations for the event in Sacramento?

Jack: I’ll be taking the opportunity to learn from other projects successes and challenges, and to connect with investors and media also attending the event. I’ve not had the opportunity to attend a GRC annual meeting before, but I hear that thousands of people from the international geothermal community attend, so look forward to enjoying the atmosphere associated with the event.

The company website: www.geodynamics.com.au