Converting Geothermal Plays to Projects in Australia--A National Review

Abstract

Geothermal is new technology to Australia, and requires successful technical and commercial demonstration before gaining widespread acceptance. The Australian Commonwealth and state governments are supporting the development of the industry during this Research, Development and Deployment phase. A series of grant programs are in place with emphasis now being on the conversion of identified geothermal resources into proven reserves via proof-of-concept and demonstration projects. Australia’s geothermal projects are focused on developing both Engineered Geothermal System (EGS) (or Hot Rock systems) and Hot Sedimentary Aquifer (HSA) plays to generate electricity, power large scale air conditioning and industrial-scale direct use applications (including coal drying, mine water recycling and desalinization processes). Nationally, over the January 2000 through March 2010 term, 55 companies have applied for 404 license areas (covering 491,000 km2) to progress proof-of-concept amagmatic EGS and HSA projects. In the term 2002 through 2009, more than AU$468 million (US$427 million) has been spent on studies, geophysical surveys, drilling, reservoir stimulation and flow tests which comprise the work programs required to sustain tenure in geothermal licenses areas. In the term 2002-2014, investment for Australian proofof- concept geothermal projects is forecast to exceed AU$2,104 million (US$1,922 million). Progress towards large-scale commercial deployment of Australian geothermal resources is underpinned with more than AU$290 million (US$265 million) in Australian Commonwealth and state government grants, which meets up to half of the cost of the private sector’s field efforts. This includes AU$50 million (US$45million) under the Australian Government’s Geothermal Drilling Program available to support new deep drilling for proofof- concept EGS and HSA projects and AU$188 million (US$171 million) for pre-competitive, commercial-in-scale geothermal energy demonstration projects. Additional potential grant programs might be implemented in the future. These collateral efforts are all directed at achieving the Australian Geothermal Energy Group’s (AGEG) aspirational targets of at least 10 successful research and proof-of-concept geothermal projects, and at least 3 power generation demonstration projects in distinctly different geologic settings by the end of 2013, with the results providing compelling evidence to justify investment in the development of Australia’s vast EGS and HSA plays (IEA-GIA, 2008). The shared vision of Australia’s peak representative organisation for the geothermal industry (the Australian Geothermal Energy Association, AGEA) and the AGEG is to see geothermal energy providing the lowest cost, emissions-free, renewable base load energy for centuries to come. This paper summarizes: (1) proof-of-concept amagmatic EGS and HSA geothermal projects co-funded by investors and governments in Australia; and (2) policies, programs and alliances put in place to support the development of geothermal plays. Success in Australia will have positive implications for similar projects, world-wide.