Rudd Government plays Santa Claus with renewable energy groups

The Kevin Rudd-led Australian Government which is pushing for a green energy component in Australia's power network, and has plans to saddle mining and other industries with an emissions trading scheme, has just made grants of A$235 million to renewable energy companies

PERTH - 

Public companies are among the recipients of renewable energy grants by Canberra Friday, including the pathfinder "hot rocks" geothermal company Geodynamics Ltd which said it would receive A$90 million (US$82 million) to help fund a 25 MW geothermal plant in the South Australian sector of the Cooper Basin.

Commissioning of this plant was expected late in 2013, much later than the original projections when the company was formed early this decade.

Geodynamics (ASX: GDY) said it applied for funding under the government's renewable energy scheme. The principal objective of this commercial demonstration plant was to "demonstrate cost effective technology at a commercial scale to give lenders confidence to finance the commercial roll out of subsequent units and transmission lines."

Resources and Energy Minister Martin Ferguson said funds granted to four commercial-scale renewable energy projects would end up delivering A$810 million (US$739 million) in renewable energy investment in Australia.

The other companies are Petrotherm   (ASX: PTR), Victorian Wave Partners Pty Ltd and the Hydro-Electric Corporation (Hydro Tasmania).

"These projects will diversify Australia's energy supply and help deliver the government's expanded Renewable Energy Target of 20% by 2020," Ferguson said.

Petratherm, operating in South Australia's far north is a geothermal company like Geodynamics but will deploy a different technology in a different geological setting.

Ferguson said ocean energy technology also has great potential in Australia and the Victorian Wave Partners. project will see ocean energy technology deployed in Australia on a large scale for the first time.

Hydro Tasmania's King Island project will demonstrate the integration of wind, solar and storage with a biodiesel generator. This will provide base load and peak power for King Island's mini grid system and reduce the Island's reliance upon diesel generators.

The question not answered by today's statements is whether the cost of the renewable energy planned in these four cases stand up commercially next to conventional power. However, the mining sector appears to believe Geodynamics and Petratherm may become a key power source for remote base metals and uranium projects in northern South Australia.

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