Geodynamics learns its lesson from well blowout

The Geodynamics managing director, Gerry Grove-White, said "lessons had been learnt" from the blast at the Habanero 3 well which ripped through a concrete structure seven metres deep and set back the project.

Mr Grove-White said Geodynamics and Origin had renewed its commitment to developing the Innamincka geothermal project in north-eastern South Australia. The joint venture, of which Geodynamics owns 70 per cent and Origin 30 per cent, had planned to have the one megawatt power station operating last year but that has been pushed back to early 2012.

"We didn't have a complete understanding of the brine chemistry and we chose the wrong steels for that chemistry. We have learnt all about that and we now know what steels to choose, which we have chosen for the Jolokia 1 and Habanero 4 wells," he said.

"As part of that process we met with the CEOs of other geothermal companies to help them understand as well what went wrong ... that was important for the future development and credibility of the industry."

The joint venture will make a final investment decision by 2013 on a 25 megawatt power station, which has received $90 million in funding through the federal government's Renewable Energy Demonstration Program.

"Our aim is to deliver 500 megawatts by the end of the decade, with the long-term goal of thousands of megawatts of geothermal power on a commercial scale," he said.

Geothermal energy is achieved by drilling deep wells into the earth. Water is then poured down the wells, spilling over "hot rocks". The water then returns to the surface in the form of steam, which is used for generating electricity.