Tata Power, the country’s largest private sector power generator by market value, has picked up 11% stake in Australia-based geothermal resource development company Geodynamics Ltd.
The acquisition not only ensures Tata Power’s entry into the renewable energy market of Australia but also imparts it the expertise to exploit several thousand megawatts of untapped geothermal energy embedded under India’s crust.
A Tata Power release said the company acquired 29.4 million ordinary shares of Geodynamics, representing 11.4% of the current issued share capital (equivalent to 10% of the increased share capital after allotment by Geodynamics).
The shares will be acquired at $1.50 per share (Australian dollar), entailing a total investment of approximately Rs 165 crore.
An official release from the company said Tata Power on Thursday acquired 29.4 million ordinary shares of Geodynamics Ltd.
With the 11% stake in Geodynamics, Tata Power will also get a directorship on the board.
Both the companies have also agreed to review the potential of geothermal prospects outside Australia by leveraging each other’s strengths. This will give Tata Power an opportunity to tap India’s geothermal resources too.
“Currently, India does not generate any geothermal energy, but there is a huge potential,” said D Chandrasekharan, a professor with IIT Bombay. He said the estimated geothermal reserves could be beyond 15000 mw in the country.
Geothermal energy is the natural heat found within the earth, where temperature increases with depth, typically by 10-50 degree Celsiuskm. With the enhanced geothermal systems (EGS) technology, heat is extracted from granites located at a depth of more than 4,000 metres by circulating water through them in an engineered artificial reservoir. The heated water returns to the surface under pressure and is converted into electricity via a heat exchanger and conventional geothermal power plant.
The acquisition will strengthen Tata Power’s position in the renewable energy space.
Currently, the company generates 62.1 mw of wind power and is building a wind energy park of 85 mw in Maharashtra at an estimated cost of Rs 400 crore. The company also has a stake in Tata BP Solar, a company in solar electricity generation in India.
Source: DNA India