Tata Power buys stake in Australia's Geodynamics

Mumbai's Tata Power said today it would buy a 10 percent stake in Australian enhanced geothermal systems firm Geodynamics for $37 million, boosting Tata Power's presence in Australia. Power producer Tata Power is part of the Tata Group, India's largest industrial conglomerate.

The deal follows a high-profile investment in enhanced geothermal systems last month by Google.org, the philanthropic arm of Mountain View, Calif.-based Google (Nasdaq: GOOG) (see Google pushes for enhanced geothermal).

Google.org put more than $10 million into Sausalito, Calif.-based AltaRock Energy, Redwood City, Calif.'s Potter Drilling, and the Southern Methodist University Geothermal Lab in Texas.

Under today's deal, Tata Power will get a seat on the board of Geodynamics. In addition to Tata's cornerstone investment, the companies have agreed to review the potential of geothermal prospects outside of Australia.

"This strategic partnership not only strengthens our renewable portfolio but also creates opportunities to get a foothold in the growing renewable energy market in Australia," said Prasad Menon, managing director of Tata Power.

"We look forward to the synergistic opportunities that the alliance presents us."

Geodynamics has geothermal exploration interests in three Australian states including a license for exploring 2,000 square kilometers in the Cooper Basin in South Australia. Tata Power said the Cooper Basin contains the hottest granites on earth, estimated to provide a thermal resource equivalent of 50 billion barrels of oil.

In July, Australia's Origin Energy boosted its investment in a geothermal joint venture it owns with Geodynamics (see Origin Energy puts more cash into geothermal venture). Origin made a further commitment of Aus$9.6 million in the Cooper Basin venture, bringing Origin's total funding to Aus$150 million.

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