Company Report: Geodynamics Limited
Turning up the heat Energy Digital learns how Australia’s largest geothermal company is doing its part to address the global climate crisis

Geodynamics Limited

Geodynamics Limited

Geodynamics Limited

Geodynamics Limited

Geodynamics Limited

Mr Gerry Grove-White

Established in 2000, Geodynamics of Milton, Queensland is pushing the boundaries of geothermal drilling techniques on an international scale as it efforts to produce hot fractured rock geothermal energy.

“The company was essentially formed by some scientists and went public in 2002 to raise capital and had an additional capital raising in 2007. They drilled their first well in 2003 and, to their considerable delight and surprise, found the granite structures. They knew they were there; what they didn’t know was that they were highly pressurized with water trapped in the granite,” says Managing Director Gerry Grove-White, who joined the company in 2007 charged with delivering the next stage of the company’s business plan and preparing for commercial rollout.

Geodynamics is operator of the Innamincka Joint Venture and its approximately 2,000 square kilometer tenement in The Cooper Basin is regarded as the hottest spot on earth, excluding volcanic centers. Hot fractured rocks (HFR) are granite bodies generally located from three to five kilometers below the surface, ranging in temperature from 200 to 250 degrees Celsius. In 2006, MIT Professor Jefferson Tester identified the Geodynamics’ tenements as the most prospective geothermal system in the world.

With an extensive background as a power industry CEO, Grove-White’s expertise and knowledge is the perfect match to lead Geodynamics from explorer to commercial producer. Including consultants, the company now employs 80 and has market capitalization of approximately $300 million.

STANDING ALONE AMONG MANY
By Grove-White’s count, 48 geothermal companies now operate in Australia. Yet, Geodynamics dominates the field with nearly 10 times the market capital as the next company. Geodynamics has benefited from a 30 percent interest buy-in from Origin Energy, a joint investment made by Sunsuper Pension Fund and Sentient Private Equity, and a 10 percent stake investment by India’s Tata Power.

“We went into the global financial crisis very well cashed up. What distinguishes us is our results, our resource size and the temperature. We were also the first to have had such successful fracturing of the granite. The stress in the rock is in our favor – it fractures extremely well and we can create underground heat exchanges,” he explains.

Grove-White says geothermal energy is but a piece of the overall renewable energy strategy required to reduce the global carbon footprint. “The magnitude of the problem requires them all and geothermal complements wind and solar well. Australia has very favorable thermal conditions and within 20 to 30 years, in Australia, geothermal could be providing 40 to 50 percent of the energy base-load,” he says.

Though expensive to build, geothermal operating costs are negligible. And, Grove-White notes, “There are no residual issues – when the resource is exhausted, you can clean up completely. There are no legacy issues whatsoever.”

OPERATIONS AND LESSONS LEARNED
Geodynamics has drilled five high-pressure wells – Habanero 1, Habanero 2, Habanero 3, Jolokia 1 and Savina 1. “Typically, we’re drilling four to five kilometers below ground. Every so often we’ll stop and realize that we’re working really deep under the surface. We employ a whole range of high-temperature, high-pressure drilling technology. The combination of the two defines who we are and what we’re doing,” says Grove-White.

Not that there haven’t been setbacks. This past April, a failure at Habanero 3 resulted in the flow of steam and water for nearly a full month. The flow was stopped with weighted mud and the well was secured with two cement plugs in the well bore. An immediate investigation was launched.

“We’re re-assessing and have investigated what happened but expect to fully mobilize the rig by March. If we hadn’t had that capital raising (in 2007), the well control incident would have taken us down as a company,” says Grove-White, adding completion measures are also planned for Jolokia 1.

For Grove-White, implementing best safety practices are absolute and unequivocal. “I walked through my first set of power station gates 44 years ago. Safety is not optional; it is absolutely my number one priority and I’m passionate about it. It is there in the front of my mind the whole time. If we see behaviors among our suppliers that don’t match ours, then they are no longer our suppliers,” he asserts.

HUMAN CAPITAL
Geodynamics’ innovative nature is reliant upon its work force. “We have the normal range of humanity, a bunch of guys and girls who are doing extraordinary things. We have an incredibly talented staff of technical, financial and IT people who have allowed us to create quite an unusual internal and very empowering culture,” Grove-White praises.

A sense of social responsibility drives the organization.  Grove-White cites as an example the company’s world-class Reservoir Manager, who returned from a successful career in the United States to take up the cause.

“People come here because they absolutely believe in what we’re doing. They come here to attempt to do something about remedying one of the most pressing issues of our time,” Grove-White says. “This is a global effort. We just happen to be doing our bit in Australia.”

IN THE FUTURE
With the Habanero 3 incident behind it, Geodynamics is poised to next carry out of one of the deepest fracturing exercises ever attempted, probing to a depth of four and one-half to five kilometers. A year’s worth of test validation will follow.

Grove-White expects the company will bring a 25 MW demonstration plant online by the end of 2013. That will precede the rollout of commercial 500 MW plants in 2016 and 2018.

He was hopeful December’s Climate Conference in Copenhagen would provide a road map but knows the hard work remains. “I think you have to put a price on carbon.
Somehow, you have to make it hurt. If you get that, then I believe that in 25 years from now, we will have either achieved or will be well on our way to having geothermal energy provide 10 to 15 percent of the base-load,” Grove-White concludes.

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