As announced by the company, “Panax Geothermal (ASX:PAX) has an independently reviewed pre-feasibility study which shows that the Penola project, South Australia, has the potential to generate zero emission base-load power at a total cost per megawatt hour net power output of $63.” (the company that did the study was GeothermEx based in the U.S.)

This cost is highly competitive with other forms of alternative energy and is similar to that of gas fired power generation.

The Penola project is based on generating power from existing hot water (or brine) produced from a known sedimentary basin in the Penola Trough, located within the Otway Basi.

This trough is associated with an independently assessed measured geothermal resource totalling 11,000 petajoules.

The project has the scope to sustain the generation of hundreds of megawatts of low cost, zero emission, base-load power.

The fact that the project is located within sight of the national grid adds further to the potential.

The study is based on a production rate of 175 kg/second squared of brine per production well at a temperature of 145 degrees Celsius.

The study is based on a three-stage development, starting with a demonstration plant based on one production well and one injection well and finishing with a phase 2 plant based on ten production wells and eight injection wells.

Drilling of the first production well is scheduled to start in September, 2009, and this in turn is expected to lead to the development of the grid-connected demonstration plant by the end of 2011.”

Source: iStockAnalyst (further details at Proactiveinvestor.co.uk)