IN a blow to the region's renewable energy generation prospects, Greenpower Energy Limited (ASX: GPP) has announced that its will not pursue its geothermal energy exploration project at its Mount Ridley site near Esperance.
Last year Greenpower secured a state government co-funded drilling grant of $120,000 for the Mount Ridley project through the Royalties for Regions' Exploration Incentive Scheme.
Drilling at the site commenced earlier this year, with testing for radiogenic granite for hot dry rock (HDR) geothermal energy generation potential. Dry steam geothermal energy can be produced by steam from reservoirs of hot water several kilometres below the earth's surface.
However, in its quarterly activities report released late last month, Greenpower said it had advised the Western Australian Department of Minerals and Petroleum that it had relinquished its Mount Ridley geothermal exploration permits.
"Greenpower's target was a radiogenic high grade metamorphic rock structure in the Mount Ridley area to the north of Esperance," the report said.
"A 400 metre cored drill hole was completed into the structure. The drilling and accompanying down hole geophysical logging failed to confirm an anomalous geothermal gradient in the rock sequence."
"Exploration has ceased and the two tenements relinquished."
Greenpower chief executive officer John Watts said it was disappointing that the project could not continue.
"Sadly, there was insufficient encouragement for further exploration," he said.
A study conducted earlier this year by Regional Development Australia (RDA) Goldfields-Esperance found that the potential of the region's renewable energy sector was hamstrung by a number of factors, such as the initial high capital cost of investment and the availability of cheaper non-renewable energy.