BEND, Ore. -- Experimental technology that might unlock the geothermal power beneath Newberry National Volcanic Monument south of Bend will get $80 million in federal stimulus funds.

A geothermal plant planned for the west flank of the monument has been stalled since October when two test wells revealed enough heat, but not enough water, for a commercial geothermal plant.

Developer Davenport Power now is investigating ways to advance the project, including drilling a handful of smaller wells and applying for federal grants for an experimental enhanced geothermal technique to get energy from the type of warm, but dry, wells that Davenport drilled near Newberry.

While traditional geothermal power comes from underground reservoirs of hot water, enhanced geothermal harnesses dry heat by pumping water deep into man-made reservoirs, where it's warmed by natural heat, then pumped back to the surface to create power.

Davenport President Doug Perry said his company has long been interested in enhanced geothermal, but the method is too expensive and unproven to test without government aid, the Bulletin newspaper of Bend reported.

"We have been waiting on this announcement," Perry said. "The payoff is too far out and the dollars are too high to get the private sector to realistically foot the bill for that."

The company had hopes to build a power plant that could power about 100,000 homes.

Perry said the company needs to learn more about the grants and the area's potential for enhanced geothermal before deciding whether to pursue a test project on one or both of the wells it has already drilled.

"We're a long ways from actually receiving a grant but we're taking a serious look at it," Perry said. "We remain hopeful there will be (hot water) there, but at the same time, we clearly have areas where there is not water and Newberry, because of the heat and other factors, may turn out to be an excellent situation for (Enhanced Geothermal Systems)."

In 2007 a report sponsored by the U.S. Department of Energy identified the Sisters area as one of six possible test sites for enhanced geothermal, where rocks are naturally heated to 400 degrees less than three miles deep.

Enhanced geothermal power is still in its infancy in the United States. In Australia companies have applied for nearly 300 permits to develop it.

Meanwhile Davenport may drill one or more very small wells to better map temperatures around Newberry. The wells would be only 2-3 inches wide and not as deep as the 10,000-foot wells that turned up dry last year. Each would cost less than 1 million.

In a recent speech in Nevada President Barack Obama urged development of renewable geothermal and solar power.

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