Hydrothermal and hot rock energy resources are tipped to be one of Australia’s most promising clean energy resources.

While conventional volcanic geothermal resources are not found in Australia, the country’s engineered geothermal system (EGS), or hot fractured rock systems (HFR), have attracted significant attention for their potential to supply clean, base load power.

The geothermal sector in Australia is growing rapidly with almost 400 geothermal tenements nationwide and around $850 million in work programs underway. Every Australian state has now put in place the required legislation or regulations to enable the industry to develop.

Australia has rich geothermal resources in the Cooper-Eromanga Basin in South Australia and Queensland, the Otway and Gippsland Basins in Victoria, and the Perth Basin in Western Australia. In New South Wales, the Hunter Valley has potential geothermal resources, while Tasmania also offers hot rock opportunities.

The growth in activity in the past few years led to the establishment of the Australian Geothermal Energy Group (AGEG) as a broad association of people and organisations involved in the industry. Companies working in the sector have also formed the Australian Geothermal Energy Association (AGEA) to represent their interests. The Geothermal Reporting Code, the world’s first uniform code to guide the public reporting of geothermal data, was released in August 2008 by the AGEG and AGEA.

In a further significant development, the Federal Government recently launched the Geothermal Drilling Program. Federal Government policies and initiatives have also been favourable to the geothermal industry, including a $50 million geothermal drilling program.

“Geothermal energy is predicted to be the lowest cost source of large scale, emissions free, base load power within the next two decades,” AGEA Chief Executive Susan Jeanes has said.

An independent report to the AGEA, conducted by McLennan Magasanik Associates found that the emerging geothermal industry can be expected to provide at least 1,000 megawatts (MW) and potentially up to 2,200 MW of base load capacity by 2020 into the National Electricity Market.

The report also predicts that the cost of generating electricity from geothermal resources is expected to move rapidly down the cost curve through to 2020, as a result of learning, experience and economies of scale outcomes. Estimates commence at approximately $120 per megawatt hour (MWh) at small scale (10–50 MW) and decrease to around $80/MWh at large scale (300 MW or greater) by 2020.

South Australia

The Cooper Basin

The Cooper Basin, which spreads over the northeast of South Australia and into southwest Queensland, is the most prolific geothermal region in Australia and is the source of the most advanced projects in the industry, including the Geodynamics’ Habanero project near Innamincka.

The Habanero project has recently achieved Proof of Concept following the completion of closed loop testing. According to independent analyst GeothermEx, the project has the ability to extract heat from hydraulically stimulated HFR to create power.

Geodynamics and its joint venture partner Origin Energy expect to be supplying electricity to the South Australian town of Innamincka by mid-2009. A commercial scale power plant is expected to be operational by 2012. See page 64 for an extensive review of current Geodynamics projects.

Elsewhere in the Cooper Basin, Green Rock Energy is conducting its Patchawarra Geothermal Energy project comprising three exploration licences that cover 1,438sqkm of land over the Patchawarra Trough in the Cooper Basin. Green Rock plans the future construction of a high voltage electrical transmission line linking the Cooper Basin to the national power grid.

Still in the Cooper Basin, Clean Energy Australia has secured 22 tenements covering a total area 11,000 sq km, with plans to develop integrated geothermal and solar thermal power. This is in addition to its eight tenements in the Great Artesian Basin, which are subject to Native Title.

Pacific Hydro is also exploring in this area, and holds 18 Geothermal Exploration Licences (GELs) covering 9,000 sq km in the Cooper Basin. Temperature logging in existing water bores confirmed thermal gradients of 50°C per km, with an indicative resource temperature of about 133°C at a depth of 2 km.

South Australian central

In central South Australia, Green Rock Energy aims to develop a 400 megawatt electric (MWe) power plant for its Olympic Dam Geothermal Energy Project. The company expects to drill two wells in the area surrounding BHP Billiton’s Olympic Dam copper and uranium mine in 2009. Inferred resources of 120,000 petajoules (PJ) of heat in place have been estimated for a 420 sq km section of the 2,899 sq km licence area.

Another geothermal exploration company, Torrens Energy, is currently undertaking an exploration heat flow drilling program in its South Australian tenements. Testing will initially be conducted at the Adelaide Plains Project, approximately 75 km north of Adelaide, and then move north to the Port Augusta Project once governmental approvals are in place. The drilling program is expected to run through to April 2009.

Further north

Heading north, Petratherm is conducting drilling programs at its Paralana and Callabonna tenements in the Arrowrie Basin, and together with joint venture partners TRUenergy and Beach Petroleum, will drill two new deep wells to confirm the expected thermal resource, undertake circulation tests and establish an underground heat exchanger at Paralana. Drilling is expected to commence in the middle of June following final certification of Weatherford Drilling International’s 2000HP Le Tourneau 828 ‘Lightning Rig’.

Petratherm is also undergoing exploration and development activity in the nearby Mount Painter region, as well as in its Stuart Shelf and Ferguson Hill tenements in the Olympic Dam area. Close by, Eden Energy has secured licences to undertake exploration projects at Witchelina, Renmark, Moomba North, Bollards Lagoon and Mungeranie.

Meanwhile, drilling work completed by Geothermal Resources’ Frome Project, located in the Frome basin region of northeast South Australia, has recorded high temperature gradients, including a bottom of hole temperature of 93.5°C recorded for Frome 12. Frome 13, a second 1,800metre deep hole, located approximately 26 km north northeast of Frome 12, is currently underway. The company is also looking to develop several GELs located on the northern margin of the Otway Basin in the southeast of South Australia.

Moving south towards the Victorian border, Panax Geothermal has identified three target areas in its South Australian Limestone Coast Project: the Rivoli Trough, the Tantanoola Trough and the Rrendelsham Trough. It is estimated that temperatures of 170°C or higher will occur at depths of 3,300 metres to 3,700 metres. The company is now defining locations for deep well tests; securing a rig for drilling a deep geothermal test well; and searching for a joint venture partner.

Victoria

Exploration of Victoria’s geothermal energy resources is still emerging, though there is a growing awareness of their potential value. The state’s geothermal exploration activity is centred on the Otway Basin, which spills over the South Australian border, and the Gippsland Basin.

In the Otway Basin, Green Earth has found significant HFR and Hot Sedimentary Aquifer potential in its Geothermal Exploration Permit 10, southwest of Geelong, and expects to commence drilling there this year. The resource is split between 40,000 PJ in HSA and 220,000 PJ in Basement Engineered Geothermal System (HFR). The presence of dual geothermal resources will create the opportunity for HSA to be targeted in the short term and EGS geothermal prospects to be targeted in the longer term.

The company has also conducted heat flow mapping in its two Gippsland Basin licences (GEP 12 and 13) to calculate an inferred geothermal resource of 3,600 PJ. This estimate is based on a HSA geothermal system, and is confined to approximately a 28sq km area, which is the area of the Wombat 3D seismic survey conducted early in 2008.

Meanwhile, Hot Rock Ltd has completed a Proof of Concept program consisting of drilling and testing two production appraisal wells into the Koroit HAS reservoir in the Otway Basin. The company is currently in discussion with electricity generation and retail companies on a joint venture power development for the Koroit Project.

Western Australia

While studies have predicted significant geothermal potential in the Canning, Carnarvon and Perth Basins in Western Australia, the first exploration licences were not released until 2008.

Green Rock Energy has applied for a number of GEPs in the Collie and Perth Basins, with the intention of commencing a drilling program in late 2009. The company hopes that a commercial geothermal powered heating and air-conditioning unit will be commissioned in 2011.

Tasmania

KUTh Energy’s drilling of its shallow heat flow program in eastern Tasmania is complete, and the company is now looking to increase its permit area. Other companies involved in exploration of geothermal resources in Tasmania include Geopower, which has application to explore an area covering 4,892sq km, and Geothermal Energy Tasmania, which has three licenses covering 8,495 sq km.

Powering up Australia’s hot rocks

Geoscience Australia has estimated that if we were able to extract just one per cent of Australia’s geothermal energy, it would be equivalent to 26,000 times Australia’s total annual energy consumption.

The challenge for Australia, as has been noted by the peak industry bodies, state and federal government and the entire ensemble of exploration companies involved in the geothermal industry, will be to develop the technologies, infrastructure and frameworks that will allow viable delivery to the market.