What we plan for Fiji's geothermal electricity

Please bear in mind that the following projects will depend for success on geothermal drill holes yielding water in sufficient quantity, and hot enough, to power the electricity generating equipment -- and on the projects being subsequently assessed as commercially viable. The first holes are to be drilled in 2011.

The following information is not a solicitation for securities, nor does it constitute a prospectus. Subject to any terms that may be required by law and which cannot be excluded, Geothermal Electric Limited accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by any person or entity as a result of any information on this website or any error, omission or misinterpretation in that information or arising from it.

The first project: Savu Savu

Geothermal Electric Limited has been granted a licence to drill for geothermal resources at Savu Savu, Fijiís most promising geothermal site.
 

Geothermal water vapour visible on the shores of Savu Savu Bay.
Areas of the sand are too hot for people to walk bare-footed here.

If the drilling program is successful, a small electricity generating station will be built. It is expected to supply electricity to houses and businesses presently connected to the Fiji Electricity Authority (FEA) network, immediately reducing the amount of diesel fuel that has to be purchased by the FEA, although the initial amount will be small. The timing of electricity supply, and the quantity, will be derived through close cooperation between the company and FEA.

Further holes will then be drilled. If they yield water of sufficient temperature and flow, a larger plant will be installed, allowing more electricity to be generated. This increased capacity can provide for new developments currently being planned for the area. Among them are tourist resorts, which consume large amounts of electricity, especially for air conditioning.

Although output from Savu Savu may be as low as 3 MWe (only double what the demand it is now), the target is 200 MWe or more, with the possibility of as much as 800 MWe being present. By comparison, Fijiís total demand at present is about 110 MWe continuously.

Wet geothermal power plants are readily available for purchase in a competitive international market. They are highly reliable.

This 2.4 MWe plant in New Zealand, supplied by Ormat, is the size anticipated for Savu Savuís first plant.

The large difference between these upper and lower limits is because of the unknown temperature and volumes of hot water and steam that will be found thousands of feet below the surface, where the hot water for the plants will be accessed by the drilling.  If there is a large quantity of hot water and steam, a large plant can be constructed.  If there is less hot water, then a smaller plant can be built.  But if there is no hot water, nothing can be built.  This is the risk that investors take in drilling for geothermal heat.

The second project: LabasaĖTabia

Again subject to successful drilling, Geothermal Electric Limited plans to develop the geothermal resources of the LabasaĖTabia region, Fijiís second most promising geothermal site. Some of the output is planned to provide power for nearby industry, including ethanol and bio-diesel fuels, and mining projects. Other industries might use geothermal heat rather than electricity -- for example to dry fish and crops or to make furniture or construction materials.

More electricity -- to drive industry and reduce cost

The Savu Savu and Labasa-Tabia projects and similar projects that may be built on Viti Levu will do much to reduce the nationís reliance on diesel fuel. If supplying electricity to the present market only, geothermal could supply 50% of electricity in Viti Levu and 100% in Vanua Levu.

The really exciting potential, however, lies in further directions -- geothermalís ability to stimulate the establishment of large-scale industries. If that takes place, it will bring unprecedented wealth to Fiji and transform the nationís economy.

Cheap, reliable supplies of geothermal electricity will make it economic to set up industries such as mineral processing, an example of which is this alumina refinery at Gladstone in Australia. They will bring many jobs and help to build a stronger economy.

Household, commercial and small-scale industrial users of electricity require different amounts at different times of the day. That is one of the reasons why the price of domestic electricity is higher than the cost of electricity supplied to large-scale industries. Other reasons include the need to deliver the electricity in alternating current, incurring significant transmission losses and high capital costs of transmission. By contrast, a refinery, smelter or mine uses large amounts of continuous power all day, every day. That coincides very well with the optimum for geothermal electricity generation.

There is an important benefit to household, commercial and non-industrial users once large-scale industries begin to use electricity, if the location is favourable: it should then be possible to lower the cost of electricity supplied to household, commercial and non-industrial users. This will make it easier for businesses to operate and cheaper for families to run electrical appliances and lighting.
 

An example of an industry that will need large amounts of electrical energy

The Namosi advanced exploration project in Viti Levu -- a joint venture by Newcrest Mining Limited, Nittetsu Mining Co. Ltd and Mitsubishi Materials Corporation -- is expected to export many millions of dollarsí worth of copper and gold if it proceeds to a mine, and to generate very large flow-on benefits to the Fiji economy.

The power demand of such a project is about the same as the present electricity demand of all Fiji.

If geothermal electricity becomes available, it will be a key factor for projects like Namosi going ahead. Without geothermal, the fast-rising price of fuel oil will make these industries uneconomic and they will simply not be established in Fiji.

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