Ann: Geelong Geothermal Power Project Ticks All T, page-7

re: Ann: Geelong Geothermal Power Project Tic... "received cash thats almost tripple its market cap .. the SP should be going nuts.... am i missing something?"

A condition of these grants usually requires matching funding from the company and the funds are usually for a specific purpose. I expect that this will apply in this case. If so the company will need to raise extra funds, probably with a share issue.

The grant probably will be available in steps with the next step being dependant on the successful completion of the previous one.

Taking that into account it is still great news for the company.The press release is reproduced below;



ASX ANNOUNCEMENT AND MEDIA RELEASE, 9 December 2009
$25M GRANT AWARDED TO GEELONG GEOTHERMAL POWER PROJECT
Greenearth Energy Limited (ASX:GER) (Greenearth Energy) are pleased to advise that its
Geelong Geothermal Power Project (GGPP) has been awarded a $25 million grant under the
Victorian Government’s Energy Technology Innovation Strategy (ETIS) for large scale, precommercial,
sustainable energy demonstration projects.
Energy and Resources Minister Peter Batchelor and Environment Minister Gavin Jennings
today announced that Greenearth Energy was a successful applicant under the Victorian
Government’s Energy Technology Innovation Strategy (ETIS). The funding was awarded
following a competitive process forming part of an overall $72 million funding allocation.
The $25 million grant has been awarded to Greenearth Energy which assists the first two
stages of the Geelong Geothermal Power Project (GGPP). The Stage 1, Proof-of-Concept
stage, has been awarded $5 million to drill a deep geothermal production well, an injection
well plus flow testing. The Weatherford Drilling International Rig 828 has been secured for
this initial stage and drilling is planned to commence in the second half of 2010. (A separate
Australian Government Geothermal Drilling Program (GDP) application for the maximum
$7 million has been submitted and Greenearth Energy are awaiting a decision).
Upon successful completion of Stage 1, an additional $20 million has been granted by the
Victorian Government towards the development of the Stage 2, 12MWe Geothermal
Demonstration Plant.
Greenearth Energy are delighted with the vision, leadership and support shown by the
Victorian Government through the awarding of this substantial grant. This decision
demonstrates the commitment of the State Government to the environment, renewable
energy alternatives and Victorian-based companies who have demonstrated innovative
projects that will assist in advancing Victoria in achieving its objectives of being a world
leader in the fight against climate change.
Mark Miller, Managing Director commented: “The Victorian Government’s support is
tremendous, not only in financial terms but also in terms of a clear endorsement of our
flagship Victorian geothermal power generation project.
“The community of Geelong and the Surf Coast Shire have provided fantastic support to our
flagship project, we thank them and look forward to working with them to deliver communities
and industries alike a greener, cleaner, renewable energy alternative.
“Our highest priority is now to secure the remaining funding to commence Stage 1,
Proof-of -Concept as soon as possible".
Greenearth Energy will work with the Department of Primary Industries in the coming weeks
to formalise the required paperwork and execute the funding agreement.
The media release from the Minister for Energy and Resources is attached.
For more information, please contact Mark Miller on (03) 9620 7299 or 0407 035 800.
Mark Miller
Managing Director
Greenearth Energy Limited
Greenearth Energy Ltd.
Level 14, 500 Collins Street
Melbourne Vic 3000
(03) 9620 7299
www.greenearthenergy.com.au
Media contact: Emma Tyner 0409 023 131 www.premier.vic.gov.au
Media release
From the Minister for Energy and Resources and the Minister
for Environment
Wednesday, 9 December, 2009
GEELONG REGION HEATS UP AS A HUB FOR GEOTHERMAL
The Brumby Labor Government will provide up to $25 million for a major clean energy project
that could create Victoria’s largest demonstration geothermal power plant.
If successful, the Geelong Geothermal Power Project could eventually power more than 120,000
homes with clean, renewable energy.
Energy and Resources Minister Peter Batchelor and Environment Minister Gavin Jennings today
announced that Greenearth Energy’s proposal was the first to share in $72 million for largescale,
pre-commercial, sustainable energy demonstration projects.
“Our Government is continuing to move towards a low-emissions energy future by driving
investment in cleaner energy projects throughout Victoria,” Mr Batchelor said.
“The Greenearth Energy project, located about 11 kilometres north-west of Anglesea, will be
planned in two stages.
“We will provide $5 million immediately for stage one, which involves work to confirm the extent
and quality of hot sedimentary aquifers at the project site. The company will drill to depths of up
to 4000 metres to test temperatures.
“If the geothermal resource meets expectations, the Brumby Labor Government will provide a
further $20 million towards the construction and demonstration of a $64 million 12MW
geothermal power plant that can feed renewable power into the local grid.
“This would be Victoria’s largest demonstration geothermal power plant connected to the grid.
“Importantly, the location is close to crucial electricity grid infrastructure and heavy industry,
which is important to the expansion and commercialisation of the project.”
Geothermal energy is a clean and green renewable energy source generated from naturally
occurring heat from hot rocks and water reservoirs deep beneath the earth’s surface.
Preliminary work by Greenearth shows that the geothermal resource at the site is capable of
supporting greater than 140MW of renewable base-load power generation.
Mr Jennings said providing funding for sustainable energy projects was just one of the ways the
Government was driving investment in cleaner energy sources.
“Geothermal energy is a renewable energy source that has the potential to provide a constant
flow of base-load power to the state’s electricity grid,” Mr Jennings said.
“Government investment in this exciting project underscores the Brumby Government’s
commitment to ensuring Victoria is a leader in renewable and clean energy development.
Member for South Barwon Michael Crutchfield said the announcement was great news for the
Geelong region.
Media contact: Emma Tyner 0409 023 131 www.premier.vic.gov.au
“Victoria’s south-west is rapidly emerging as a cleaner-energy hub and projects like
Greenearth’s are creating a climate of opportunity for regional Victoria,” Mr Crutchfield said.
“The development of projects like this is great news for all Victorians who will see not only the
environmental benefits from developing cleaner electricity generation, but the economic benefits
from new renewable energy jobs.”
Mr Batchelor said the Government awarded three geothermal exploration permits, covering
almost 19,000 square kilometres, to Greenearth Energy in May 2007.
These permits enable the company to explore and develop geothermal resources in the Latrobe
Valley and Gippsland, Bellarine Peninsula and Surf Coast and the Geelong/Daylesford area.