Melbourne-based company Hot Dry Rocks plans to construct a 500 kW pilot geothermal plant in the Latrobe Valley in Queensland, Australia.

A $217,000 grant from the state government is backing the development of the plant, which is expected to operate by the end of 2012.

The announcement of details of the federal carbon legislation made the company “all the more determined” to push ahead with the project, said Hot Dry Rocks’ technical director Graeme Beardsmore.

“We chose the Latrobe Valley because it’s the best place to trial this,” he said. “Coal is a good thermal insulator, which traps heat, and the project will drill through the coalbed to the hot aquifers underneath. The thicker the coal, the hotter the water underneath.”

Hot Dry Rocks said that if the pilot plant were successful, then there could be scope to commercialize the technology.

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