the rise and fall of geodynamics

If Geodynamics were to succeed, it would be an environmental miracle providing almost endless electricity with little negative impact on the environment. Once in place, the power plant would provide low-cost energy whether the sun was shining, the wind blowing, the water flowing… But, success would secure one thing: the failure of the company.

As the Board of GDY are all too eager to point out, the technology already exists for geothermal power. Oil companies have the equipment and the skills when it comes to drilling, and geothermal power generation is already operating in Japan, Iceland and New Zealand. For the Board this is evidence that GDY is not some technological wet dream, some geologist’s fantasy. It is proven technology taken one step further and there is every reason it will succeed.

Assume for a moment that it does – GDY builds a plant that successfully generates electricity in the manner that the company predicts. Every power company in the country would see that geothermal works and that the dominance of old technology, especially coal, is set to decline. There would be a rush to grab a share of this new means of energy generation. And remember, the barriers to entry are low: as the Board tells us, the technology already exists. Yes, GDY will have some advantages. It will have experience. It will have the requisite drilling platforms. It will have hot-rock tenements scattered around the country. But, not a single one of these advantages would be sufficient to lock other companies out of geothermal. GDY does not have a patent on the idea of hot fractured-rock geothermal power generation, nor does it own or control any of the technology involved in geothermal power generation. It does not control all of the hot-rock tenements in the country; in fact, it controls a tiny number of existing tenements in just a few locations around Australia.

Having watched Geodynamics for a couple of years now and having seen it achieve a number of key milestones, my view is that it will succeed. But once it does, the great rush for geothermal power will be on, and GDY will fade into history. It will be pioneer with a monument in downtown Innamincka and nothing more.

For the record, I do not own shares in GDY and I will not buy shares in GDY.