The $25 million grant was awarded under the Victorian Government’s Energy Technology Innovation Strategy.

The funding will assist with two stages of the Geelong Geothermal Power Project’s (GGPP) development – the first being the establishment of a ‘proof of resource’ using $5 million in funding.

This stage will involve the drilling of an initial well to a depth of approximately 4,000 m, and a short-term flow test to analyse the results in terms of temperature, geothermal fluid flow-rate and formation permeability.

A further $20 million will be awarded for stage two – the construction of a 12 megawatt (MW) geothermal demonstration plant.

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The separate tranches of the funding are paid on the achievement of set milestones and are subject to a number of conditions, including securing the necessary project funds to complete each stage.

The final stage is expected to result in a 140 MW project, possibly located across a number of sites.

“The achievement of this [funding] milestone, after many months of negotiations, is most welcome and underpins the potential value this flagship geothermal project holds for the state,” said Managing Director of Greenearth Energy, Mark Miller.

“We will now seek support from the Australian Government in the form of an application to the newly-announced Emerging Renewables program for support for Stage 1 of the GGPP,” said Mr Miller.

While a site for the project is yet to be finalised, Greenearth Energy holds an exploration licence that covers an area around the Geelong-area townships of Gherang, Wensleydale and Anglesea.

“Greenearth already has a significant consultation program underway and the Government expects Greenearth Energy to work closely and cooperatively with any communities in which it seeks to operate,” said Minister O’Brien.

Greenearth Energy is also working closely with mining company Alcoa, who own a coal plant in Anglesea. A Memorandum of Intent (MOI) signed between the two companies in late November 2010 stipulated that they would be mutually engaged in exploring the possibility of selecting a site for the GGPP and that grid connection of the GGPP could be achieved via Alcoa infrastructure assets. Additionally, the MOI specified that Alcoa and Greenearth would cooperate in investigating the implementation of other low-carbon technologies.