THE state government is conducting a statewide review on geothermal energy and will consider whether or not it will scrap a licence for a $30 million geothermal project in Koroit.
Victoria’s fledgling geothermal industry has failed to deliver projects, prompting a statewide review due to be handed down in a fortnight.
The company behind the Koroit project, Hot Rock Limited (HRL), has axed three of its five projects but has left its south-west plans on the books.
Geothermal companies have been sitting on five-year exploratory licences around Victoria waiting for investors.
When the permits expired last year the government extended them by another 12 months while it decided what to do with the troubled sector.
HRL executive chairman Dr Mark Elliott told The Standard the company would know within weeks if the Koroit project would proceed.
“They’re forming a policy and deciding what to do with the geothermal projects,” Dr Elliott said.
“What we would like them to do is grant us another five-year permit so hopefully in that time we can see the investment market improve.
A spokeswoman for Energy and Resources Minister Nicholas Kotsiras said the review was being handled by the Department of State Development, Business and Innovation (DSDBI).
“DSDBI is in the process of considering applications for renewal of geothermal licences in accordance with the processes set out in the Geothermal Energy Resources Act 2005,” she said.
“The Geological Survey of Victoria has undertaken heat flow measurements across Victoria and is developing heat flow maps, which will help the industry to focus its exploration efforts.”
But Dr Elliott conceded the government could be poised to pull the licence.
“They could because of non-compliance ... but we are still very committed to making it work,” he said, adding no other company had met compliance either.
The Koroit project was lauded when first announced, promising to deliver jobs and money into the Koroit community.
“We’ve kept Koroit ... we believe that it’s the best geothermal project for potentially delivering in the near term,” Dr Elliott said.
The chairman said market confidence in the Koroit project had been damaged by underwhelming results from enhanced geothermal systems — a separate method of extracting geothermal energy similarly to coal seam gas.
The company was given $7 million from the Commonwealth three years ago but only saw $350,000 after it failed to meet targets required for the other instalments.