GDY has very high temperatures in a geologically stable region. You wouldn't want an earth quake to impact your operations.
I don't have the figures off the top of my head, but every 10deg increase in temperature adds significantly to the enconomics of a production plant. Remember, most of the investment in hot rock geothermal is in upfront capital costs. The operational costs are very low (the fuel is free) and the plant is expected to have a 40 odd year life.
GDY believe the economics and scale of what they are planning justify building generation in the middle of nowhere. They believe they can generate sub $100/MW in a commercial operation.
At a recent investor presentation, GDY indicated that the economics of what they are planning will "blow" any issue of distance "out of the water".
If they can pull this off, Australia (which has benefited significantly from cheap coal based electricity) will be able to transition to hot rock geothermal energy (potentially the lowest cost zero emission base load power). I believe Australia's geothermal resources are equal to, or greater than our coal resources.
Remember - The only reason we don't currently use hot rock geothermal is because coal was cheap and there was no cost (i.e. consequences) to burning it. A lot of people used to smoke cigarettes until they found there were long term health consequences.
RNE Price at posting:
81.5¢ Sentiment: LT Buy Disclosure: Held
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