Geodynamics on Wednesday said it had reached a $6 million agreement with US-based Recurrent Technology, a subsidiary of US company AMP Capital, to acquire the sub-licence and intellectual property for Kalina Cycle power. Developed in the 1980s, the technology improves the efficiency of the conversion of heat to power by 20 to 40 per cent, using a mixture of water and ammonia as the working fluid in power plants. It is currently used in four power plants around the world - two demonstration plants in California and Japan and two commercial facilities in Iceland and Japan, where the technology is used by Sumitomo Steel. Geodynamics chief executive Bertus de Graaf said the cash and scrip deal would provide an excellent bolt-on business for the company's Hot Dry Rocks (HDR) geothermal power project in South Australia's Cooper Basin. "Geodynamics is in a position to combine the world's largest known geothermal source in the Cooper Basin, with the world's best heat to power conversion technology," Dr De Graaf said. "Importantly, Kalina has the potential to lower the capital and operating costs for our HDR geothermal project by up to 25 per cent below our prior assumptions and to broaden the scope of HDR projects over a larger temperature range. Geodynamics, which started negotiations to acquire the technology in April after being approached by engineering firm Siemens, will have exclusive licence and intellectual property rights to Kalina Cycle projects in Australia and New Zealand and non-exclusive rights globally. The Kalina Cycle carries a performance guarantee by Siemens, which has an agreement with licensee Recurrent Resources to roll out Kalina Cycle power plants across the world. Geodynamics expects to establish a demonstration plant in Australia or NZ in the near future and will also bid to install Kalina Cycle plants on two geothermal power projects in New Zealand. The new technology, which can also be applied to existing power stations including coal-based facilities, provides Geodynamics with an extra business unit with potential stand-alone revenue streams. "It broadens our base of operation and gives us a diversified revenue stream, with cashflow expected within two to three years," Dr De Graaf said. The agreement is subject to regulatory approval, the raising of $6 million split between cash and scrip, technical due diligence and an extension by Siemens' of its performance guarantee.