Greenearth Energy well placed for new A$126m Australian Government funding

Greenearth Energy (ASX: GER) is set to benefit from the design of a new Government program announced in July called the Clean Energy Future package which includes a carbon price of $23/tonne of CO2 and $13.2 billion in clean energy funding initiatives.

Martin Ferguson, Minister for Resources and Energy, announced today that the Emerging Renewables program will have funding of $126 million with geothermal companies well placed to benefit from the new program design.

Importantly, the program allows a flexible approach to funding and Greenearth should benefit from this in its quest to establish base load renewable energy generation in Victoria.

In November 2011 Greenearth signed a memorandum of intent (MOI) with Alcoa (ASX: AAI), representing a significant and substantial development for the Geelong Geothermal Power Project (GGPP), providing a potential pathway from the preliminary planning stage through stage 1 exploration to stage 2, demonstration and grid connection.

Alcoa has operated a power station in Anglesea for over 40 years, with the Greenearth Energy proposed GGPP resource area just 9 kilometes northwest of the Alcoa operation.

At least one third of the total program funding is expected to be available to support the development of geothermal energy in Australia.

This initiative has come on the same day that Greenearth Energy and fellow Australian geothermal explorers Torrens Energy (ASX: TEY), Green Rock Energy (ASX:GRK) and Hot Rock (ASX: HRL) have mutually executed deeds of termination with the Australian Government for their Geothermal Drilling Program (GDP) grant funding.

The economic conditions over the past year combined with the agreed construct of the GDP grant limited project recipients’ ability to attract project funding, resulting in them not meeting the requirements of their GDP grants in the timeframes stipulated.

The Clean Energy Future package includes the $10 billion Clean Energy Finance Corporation and the 3.2 billion Australian Renewable Energy Agency (ARENA) will cut pollution and drive investment in new clean energy sources, such as geothermal.

Geothermal remains the country’s only potential large scale zero-emission renewable baseload 24/7 energy source, and this has been recognised with the announcement today by the Australian Government.

The Emerging Renewables program aims to reduce the costs of new technologies, improve skills across the renewable energy industry, and leverage finance from the private sector as well as state and territory governments.

Greenearth is also waiting on the finalisation of a $25 million grant from the Victorian Government for the Geelong Geothermal Power Project, first announced in December 2009.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/18443/greenearth-energy-well-placed-for-new-a126m-australian-government-funding-18443.html