South Australia's south-east is one step closer to becoming the birthplace of clean, geothermal power in Australia after the official opening of the Salamander-1 geothermal well in the Otway Basin near Penola.

The federal Minister for Resources, Energy and Tourism, Martin Ferguson, unveiled a plaque commemorating the pioneering status of the well on Friday.

He says it will test the potential of the region for geothermal development, with expectations that up to 1,500 megawatts could be available.

"The central importance of this project is that it is not only potentially base load power, it's also in such close proximity to the grid, which also reduces the cost of actually putting it into the energy system of Australia," Mr Ferguson said.

"So I simply say that the potential breakthrough here in the next 18 months is so important."

Panax Geothermal's managing director, Dr Bertus De Graaf, says the Salamander-1 drilling rig continues to meet all expectations and is on schedule to meet its March target depth of 4,000 metres.

He says testing will then take place to determine the quality of the resource.

"The tests comprise a number of short flow tests as well as injection tests," Dr De Graaf said.

"The combination of that flow in the well and injecting the well, with certain measurements you make on the pressures or whatever, eventually is going to determine the quality of the reservoir."