Geothermal energy company Panax Geothermal Ltd
(ASX:PAX) says a drilling rig at its Salamander-1 well in South Australia has produced steam.
According to the Australian Associated Press, when the well was opened in March, Federal Energy Minister Martin Ferguson revealed that the government’s renewable energy targets would not be met if geothermal power was not realised.
Mr Ferguson told media at the opening that geothermal energy is where Australia needs to make the break through otherwise it will be challenging to meet the government’s target of 20% renewable energy by 2020.
Mr Ferguson says wind power is not reliable, where as geothermal is the clean equivalent of a coal-fired power station.
Panax Geothermal says it plans to have a demonstration plant in operation by 2011 if all goes well at the Salamader-1 well.
Panax Geothermal posted a loss in the year to June 30, 2009.
