TRUenergy to Spend A$57 Million on Geothermal Venture

By Angela Macdonald-Smith

Aug. 4 (Bloomberg) -- TRUenergy Pty, the Australian power and gas supplier owned by CLP Holdings Ltd., will invest A$57 million ($53 million) in a geothermal energy project as it seeks to cut emissions blamed for global warming.

TRUenergy will take as much as 30 percent of Petratherm Ltd.'s Paralana project in South Australia state, which seeks to tap underground heat resources for conversion into electricity, the Melbourne-based company said today in an e-mailed statement.

Australia's government has a target to generate 20 percent of the nation's power from renewable sources such as the sun and wind by 2020 as it seeks to tackle greenhouse gas emissions. Hong Kong-based CLP, producer of electricity in six Asian economies, has a target to cut carbon emissions per unit of generation by 75 percent by 2050 and has invested in wind energy projects in China and India, and in an Australian solar venture.

``We certainly believe that this technology has a very major part to play in reducing the overall carbon footprint of the Australian energy sector,'' TRUenergy Managing Director Richard McIndoe said in a telephone interview. ``We felt we really needed to get a foothold in the geothermal and hot rock technology sector.''

Petratherm, based in Adelaide, gained 19 cents, or 29 percent, to 84 cents in Sydney trading at 10:40 a.m. local time, its biggest advance since November 2006.

Heat From Granites

TRUenergy has committed about A$1 billion in renewable and clean energy generation projects and expects to add more, McIndoe said.

TRUenergy, the nation's fourth-biggest electricity and gas retailer, will contribute skills in power generation, transmission and marketing to the venture, Petratherm Managing Director Terry Kallis said by telephone. Beach Petroleum Ltd., the Adelaide-based oil and gas producer, also has a stake in the Paralana project, which aims to convert heat from underground granites into steam that will drive power turbines.

Petratherm and Beach are in the ``advanced stages'' of negotiating a contract to start drilling wells at Paralana, Petratherm said in a separate statement to the exchange.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net