Australia’s hot rock and hydrothermal resources have the potential to fuel competitively-priced, emission free, renewable baseload power for centuries to come. This potential and the risks posed by climate change are stimulating geothermal energy exploration projects in Australia. Extracting just 1 percent of the estimated energy from rocks hotter than 150°C and shallower than 5,000m would yield ~190 million PJ or about 26,000 times Australia’s primary power usage in 2005. This figure neither takes account of the renewable characteristics of hot rock, nor the resource below 5,000m.

To year-end 2007, thirty-three companies have joined the hunt for geothermal energy resources in 277 licence application areas covering more than 219,000 km2 in Australia. Companies are targeting resources that fall into two categories: (1) hydrothermal resources in relatively hot sedimentary basins; and (2) hot rocks. Most exploration efforts are currently focused on hot rocks to develop Enhanced Geothermal Systems (EGS) to fuel binary power plants. Roughly 80 percent of these projects are located in South Australia. The basic geologic factors that limit the extent of hot rock plays can be generalised as:
• source rocks in the form of high heat producing basement rocks;
• traps defined by favourable juxtaposition of low (thermal) conductivity insulating rocks to radiogenic heat producing basement rocks;
• heat-exchange reservoirs under favourable stress conditions within insulating and basement rocks; and
• a practical depth-range limited by drilling and completion technologies (defining a base) and necessary heat exchange efficiency (defining a top).

A considerable investment (US$200+ million) is required to prove a sustainable hot rock play, and demonstrate the reliability, scalability and efficiency of EGS power production. The proof-of-concept phase entails the drilling of at least two deep (>3,500m) hot holes (one producer and one injector), fracture stimulation, geofluid flow and reinjection and heat exchange for power generation. Compelling demonstration projects will entail up-scaling, including smooth operations while drilling and completing additional Hot Rock production and injection wells and sustained power production, most probably from binary geothermal power plants.

Australian government grants have focused on reducing critical, sector-wide uncertainties and equate to roughly 25% of the cost of the private sector’s field efforts to date.

A national hot rock resource assessment and a road-map for the commercialisation of Australian hot rock plays will be published in 2008 by the Australia federal government.

Play and portfolio assessment methods currently used to manage the uncertainties in petroleum exploration can usefully be adapted to underpin decision-making by companies and governments seeking to respectively push and pull hot rock energy supplies into markets. This paper describes the geology, challenges, investment risk assessment and promising future for hot rock geothermal energy projects in Australia.

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