Investment continues to heat up geothermal power
Monday, 1 December 2008
DESPITE the ongoing global financial crisis, investment has continued to flow into Australia’s renewable energy projects, according to DLA Phillips Fox law firm partner Eugene Fung.
“Despite a difficult market, there is still capital available for quality renewable energy projects,” he said.
A report released by professional advisory firm Ernst & Young this month tips investment in the sector to soar to $2.3 billion a year by 2020, according to Fung.
Fung added that the International Energy Agency’s 2008 outlook found modern renewable technologies would grow most rapidly, overtaking gas soon after 2010 to become the second-largest source of electricity behind coal.
In Australia, the federal government has set a goal of doubling the market share of renewable energy from 10 to 20% by 2020, a target that would require ongoing and substantial investment over the next decade, he said.
DLA Phillips Fox has worked with a number of energy companies investing in renewable energy projects over the past year including Geodynamics, Panax Geothermal and Meridian Energy.
Fung said investment has continued to flow into Australia’s leading geothermal power developer, Geodynamics, with the company completing three capital raisings worth of $150 million this year.
“This was off the back of a successful joint venture with Origin Energy in late 2007 which raised $115 million for Geodynamics’ flagship Cooper Basin hot dry rock project,” he said.
“The capital raisings place Geodynamics in a strong financial position to be able to make an investment decision with its joint venture partner, Origin Energy, on the construction of a 50-megawatt power station next year.”
Fung advised Geodynamics on the Origin JV and all three of its 2008 capital raisings.
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