KUTh Energy sets Vanuatu project into priority
KUTh Energy announces it will elevate Vanuatu project in priority after promising exploration results.
Australian KUTh Energy released exploration results on the magnetotelluric (MT) survey completed on the island of Efate in Vanuatu, and is now stating key positive points for this project to be: “relatively shallow drilling, geothermal legislation in place, strong government support, carbon credits to be earned, high tariff structures and strong interest from international development banks and donors.”
Based on this the company has announced “that the Vanuatu project will now be elevated in priority in a bid to accelerate the potential revenue stream from this promising target.
KUTh has a spread of projects in its portfolio including Tasmania which continues to offer great geothermal potential but has been delayed while we await a much clearer position from Commonwealth and State governments on renewable energy support.
In the absence of an operating Emissions Trading Scheme (ETS) and uncertainty over when and how government renewable energy support programs will be implemented it is important for KUTh to have other projects to maintain momentum and deploy its expertise.
Commenting on the latest results from Vanuatu, KUTh’s Managing Director David McDonald said: “Our Vanuatu project is shaping up to be a well-timed and valuable strategy for our business. By comparison to the challenges faced by the industry in Australia this project has all the elements to allow rapid progress to be made. While the project will start small (approx 4MW of base load) we are comforted by the consistent growth of the market over the last five
years. We also expect added capacity to come online from new development opportunities following the completion of the road upgrade around the coastal corridor. There are many building blocks to be put in place for the successful implementation of a geothermal project and we are fortunate in Vanuatu that the government has laid a solid foundation for us to build on.”
“On the exploration side, we have a surface expression of hot fluids and geophysics results that provide us with confidence in the hot geothermal reservoirs we are targeting. On the political front we have a government strongly behind the project with benefits that are obvious for the people and the economy of Vanuatu. The existence of geothermal legislation in the country
and the government foresight to have drafted the regulations for the Clean Development Mechanism (allowing KUTh to qualify for carbon credits from the project) provides a solid platform for the introduction of renewable energy projects in this country.”
“On the commercial side, KUTh has a Memorandum of Understanding (MOU) in place with UNELCO for the sale of bulk power into the Port Vila grid (ASX Release 16 October 2009). Current power generation from diesel pricing provides KUTh with a price target that should be readily achieved and in the future undercut by increasing geothermal power generation over the mid to longer term. The next steps for KUTh will involve the final feasibility and funding for the project and to this end the company is already in advanced discussions with development banks and donor agencies focused on clean-energy projects in the Pacific Region.”
David McDonald added: “It is unusual at this early stage of the project to have so many of the project stakeholders aligned. We are encouraged and we will definitely benefit from the early government and community consultation that has been undertaken and the initial focus of this project on commercial principles from day one. The stakeholders know what we are trying to achieve and so far we have delivered on our promise. We aim to continue to do this as we move through this project.”
Source: company announcement (pdf)