One of Australia’s leading geothermal energy proponents has taken to task the country’s wind power sector - saying it is time misconceptions were laid to rest about wind generating mainstream electricity supply as part of the drive to greener energy.
In a major positioning statement for hot rock power ahead of this week’s key Australian Geothermal Energy Conference in Melbourne, Adelaide-based Petratherm Limited said that geothermal would compete very favourably with wind on both commercial and performance grounds.
Petratherm took the initiative today, saying it had completed the two sectors’ first “dollar-for-megawatt” cost assessment of wind versus geothermal, based on the Company’s emerging Paralana Geothermal Project in SA’s northern Flinders Ranges.
Paralana is one of Australia’s most advanced geothermal projects and is expected to produce the country’s first commercial flows of geothermal energy, in 2010, for Petratherm (ASX: “PTR”).
Releasing the first comparison of likely cost estimates for Paralana versus likely costs for equivalent wind power performance, the Company’s Managing Director, Mr Terry Kallis, said Paralana would compete almost equally with wind power on a dollar-for-megawatt installed basis.
“Including estimated transmission and substation costs, Paralana will cost $190-200 million to develop initially to 7.5 megawatt (MW) capacity and then to the second stage 30 MW capacity,” Mr Kallis said.
“The third and fourth stages will take it to national grid status supplying base-load power of 260 MW and 520 MW.
“Our assessment is that at every one of these supply capacity points, Paralana is commercially viable.”
Mr Kallis said this meant that the cost per megawatt of installed capacity for Paralana at the 30 MW benchmark equated to about $6 million per megawatt.
At that benchmark, it would provide initial base-load capacity, operate 24 hours a day, seven days a week and deliver its total capacity in excess of 95% of the time – equivalent to 250 Gigawatts per annum.
“Although wind power costs about $2 million per megawatt of installed capacity for an equivalent 30 MW project, it would typically only operate for about a third of the time, producing about 87 Gigawatt hours annually,” Mr Kallis said.
“So for a comparable annual output of 250 Gigawatt hours, the wind farm would need to be almost three times the capacity of Paralana. Hence, the overall capital costs for a wind farm of that size would be around $180 million – very similar to Paralana’s projected $190-200 million development outlay to get to 30MW.
“When you also factor in the off-grid pricing of power from a 30 MW Paralana plant – let alone the larger capacity stages - and its 24/7 consistency in comparison to other renewable energy sources - the overall project economics and advantages over wind are compelling.
“The comparison confirms what Petratherm has promoted all along - that Paralana will not only produce a constant and reliable source of base-load power, but do so, on a favourable cost and performance profile.”
Australia’s third largest energy retailer, TRUenergy recently added to the Paralana momentum, with a $57 million farm-in entitlement to 30% of the project. This is in addition to a $30 million farm-in commitment for 36% of the project by Top 4 listed energy group, Beach Petroleum Limited.
The Petratherm JV is currently finalising rig negotiations ahead of a drill start on the deep wells late in 2008/early 2009. The next stage will establish a viable flow of hot water between the first two deep wells at Paralana at a cost of $25-30 million. A second stage will develop a 7.5 MW pilot plant at surface for start-up in mid-2010, at a cost of an additional $40-45 million. Initial output is targeted for Heathgate Resource’s nearby Beverley uranium mine.
The third stage will develop the 30MW demonstration plant, at a further cost of $125-130 million - for a total cost by the end of that stage of $190-200 million. The longer term plans have Paralana supplying into the national power grid.
The Australian Geothermal Conference opens in Melbourne on Wednesday.
Review all our latest Renewable Energy news and companies
