Techno-Economics of Direct Use Geothermal Energy in Gippsland, Australia

Abstract

The highly productive Lower Tertiary Aquifer (LTA) underlies 6000 square kilometers of the Gippsland region in southeast Australia. Hundreds of meters of lignite and marl of low thermal conductivity cause high thermal gradients above the aquifer, raising the aquifer temperature to above 70°C at less than 1000 meters depth in some locations. The LTA therefore represents a world-class geothermal energy source which could provide low-grade heat for a wide range of industrial processes currently consuming natural gas in Gippsland. But only one geothermal heating system is currently drawing energy from the LTA. The University of Melbourne has been working with state and municipal governments to investigate the cost, value and barriers to replacing natural gas with geothermal energy for low-grade heat, and to identify potential users and uses for geothermal energy. A techno-economic assessment framework developed by UoM incorporates an assumption of 100% reinjection of cooled groundwater, bespoke drilling cost estimation, pump and (if necessary) heat pump selection, predicted migration of the injected cool plume, likely electricity consumption by pumps and heat pumps, load-following system models, and anticipated maintenance costs to predict the lifetime levelized cost of geothermal heat for comparison against natural gas supply contracts. Results to date indicate that the only operating geothermal heating system—at a municipal aquatic center where the aquifer is 68°C—provides heat at significantly lower cost than natural gas, and that credible engineering solutions incorporating heat pumps could provide geothermal energy at a levelized cost lower than natural gas at another aquatic center where the aquifer may be only 25°C. The results furthermore demonstrate the techno-economic viability of multi-client heating systems with shared production and injection bores. One barrier to greater uptake is a prevailing regulatory framework that did not anticipate large-scale reinjection of cooled groundwater.