GIBRALTAR, Iceland, Sept. 15, 2003 -- Newly designed solid-state thermal conversion devices may make it possible to harness more power from geothermal energy.

The devices are the subject of a paper presented Monday to the International Geothermal Conference in Reykjavik, Iceland, by Sean Kilgrow of Power Chips plc.

Power Chips are solid-state thermal conversion devices that allow direct conversion of heat into electricity at 60-70% of Carnot efficiency. This is achieved by letting electrons tunnel across a gap of a few nanometers employing a process called quantum mechanical electron tunneling.

Incorporating these devices into special-purpose heat exchangers made by Varmaraf ehf, based in Reykjavik, Iceland, allows large scale harnessing of geothermal and waste heat by increasing the efficiency of existing plants and making new plants feasible at lower temperatures than currently possible.

Sean Kilgrow, Vice President for Geothermal Energy at Gibraltar-based Power Chips plc, outlined the advantages of using Power Chips in a low temperature environment in a paper delivered at the conference.

Geothermal heat is a huge potential energy resource, the paper concludes, and says: "It has been estimated that the total power that can be harnessed using turbines (steam greater than 150 degrees C) is about 1,300 GWe (Gigawatts-electric) and that lower temperature geothermal resources may provide about twice that using binary systems. Power Chips mounted in a suitable heat exchanger extend this even further.

"Therefore, the total geothermal power that can potentially be generated with this technology is on the order of 4,000 GWe. For comparison, the total installed power of all electricity generators in the world is about 3,300 GWe. Even if a small fraction of this potential is realized, the economic and environmental implications are huge. Naturally, geothermal energy is only available in certain geologically active places. However, with hydrogen emerging as an energy carrier, the transport of energy from geothermal areas to other regions becomes a realistic option."

For geothermal applications, the paper reports, Power Chips should provide increased power output for existing plants, and enable power production where it is not currently practical. By building arrays of these devices, installations can be scaled to match available heat sources ranging from a few kilowatts to many megawatts.

Sean Kilgrow said: "There is enough potential energy in the earth's crust to meet many of the world's energy needs. Applying Power Chips in a geothermal environment is going to open up the industry to further development and further generation potential."

Geothermal plants dedicated to Power Chip arrays will be much different than existing plants. No magnetic induction is required to generate electricity. Power Chips require no moving parts -- just heat. The Power Chip geothermal plant of the future will possibly make turbine-powered plants, driven by flash steam cycle and binary Rankine cycle, inefficient and obsolete.

"We expect these (Power Chip geothermal) plants to run at 60% - 70% of the Carnot-defined maximum possible efficiency," says Kilgrow. "Operating at these efficiencies changes the economics of geothermal development, giving developers more electricity to sell per unit of geothermal heat. The increase in monetary return will have a ripple effect, creating a greater demand for exploration and field service work. Power Chips will allow for the exploitation of geothermal resources with temperatures below 95 degrees C. This changes many of the rules we as an industry have previously lived by. With the ability to produce power at these relatively low temperatures, "Hot Dry Rock" power production becomes a much more realistic endeavor" said Kilgrow.

In addition, there are very substantial environmental benefits as the added power generated is clean and replaces fossil fuel-based generators. With deployment of the generator in the form of a fluid/fluid heat exchanger, substantial opportunities open up in retrofitting existing thermal plants of various designs for higher efficiency, as well as in building new plants, particularly in lower temperature geothermal areas.

The paper, titled "Harnessing of Low-Temperature Geothermal and Waste Heat Using Power Chips in Varmaraf Heat Exchangers," was prepared by Kilgrow and by Dr. Arni Geirsson of Varmaraf ehf and Dr. Thorsteinn Sigfusson of the University of Iceland.

Power Chips plc is a majority-owned subsidiary of Borealis Exploration Limited (BOREF). Power Chips had 7,751,589 shares outstanding at 31 March 2003. Borealis Exploration Limited has 5,000,000 shares outstanding. Another Borealis subsidiary, Cool Chips plc (COLCF) also plans to use devices employing quantum mechanical electron tunnelling in cooling systems. Cool Chips plc had 7,997,138 shares outstanding at its fiscal year-end, 31 March 2003. The technology is protected by an extensive portfolio of patents, both issued and pending. More information, including the full text of issued patents, is available on the Power Chips plc web site at http://www.powerchips.gi, the Cool Chips plc web site at www.coolchips.gi, and the Borealis Exploration Limited web site at www.borealis.gi.