PROCEEDINGS, Thirty-Fifth Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, February 1-3, 2010 SGP-TR-188

AUSTRALIAN GEOTHERMAL INDUSTRY ADVANCES

Alexandra Long, Barry Goldstein, Tony Hill, Betina Bendall, Michael Malavazos, Anthony Budd

Primary Industries and Resources SA, Petroleum and Geothermal Group GPO Box 1671

Adelaide, SA, 5000, Australia e-mail: alexandra.long@sa.gov.au

ABSTRACT

The Australian Geothermal Industry has made some exciting advances in the last year. Developments have been made in terms of company Engineered Geothermal System (EGS) and Hot Sedimentary Aquifer (HSA) projects, research projects and both state and national government initiatives. Australian federal and state governments have provided more than AU$290 million (US$264 million)1 in grant funding for targeted geothermal company projects and geothermal research. This past year has seen the announcement of more Federal Government grants, which will be described in this paper as well as details of the successful grant recipients. The Australian Geothermal Energy Group (AGEG) has also seen significant changes and developments, moving to become incorporated in 2009, and with its Technical Interest Groups undergoing some restructuring to align with international priorities under the International Partnership for Geothermal Technologies. A number of AGEG-initiated geothermal project reports have beneficial findings for the industry. Additionally the joint AGEG – Australian Geothermal Energy Association (AGEA) Geothermal Reporting Code Committee have completed useful revisions to the Australian Geothermal Code that will be formally released in 2010. Key geothermal research centres have also been established. These include the Queensland Geothermal Energy Centre of Excellence at the University of Queensland, the Western Australian Geothermal Centre of Excellence which officially opened in December 2009, combining the

1 US$1=AU$0.91094 as at 20 January 2010 is used throughout this paper.

strengths of the University of WA, Curtin University and the CSIRO, and the newly established South Australian Centre for Geothermal Energy Research at the University of Adelaide which was announced in June 2009. Other Universities such as the University of Newcastle, Melbourne University and the University of New South Wales also have strong geothermal programs. The collective research, exploration, demonstration and early deployment efforts in Australia will both be founded on, and contribute to progress by the global geothermal sector. Key lessons learnt in Australia are related in this paper.

LICENCES AND REGULATION

The growth in the uptake of geothermal licences in Australia continues. To the 18th of January 2010 there were a total of 54 companies with 409 licenses and licence applications in Australia covering an area of over 432,000 km2. Figure 1 shows a map of current geothermal exploration licenses, exploration licence applications, and acreage releases. The forecast expenditure on geothermal exploration, geological and geophysical surveys and project development for the period 2002 – 2014 is over AU$2.1 billion (US$1.91 billion). A chart showing the growth in licenses and expenditure from the year 2000 is shown in Figure 2. All Australian states and the Northern Territory now have enabling legislation in place to make geothermal energy exploration possible, and most also have legislation concerning development and production. Changes in legislation have occurred in the Northern Territory and South Australia, and are expected in Queensland. Each is described in more detail.

Figure 1: Australian geothermal licence areas and acreage releases, January 2010. Geothermal exploration licenses

are shown in green, exploration licence applications in orange and acreage releases in pink.

Figure 2: Growth in expenditure on Australian geothermal projects and in the number of licenses and licence

applications.

Table 1: Australian federal and state government grants to end 2009.

Ratio Grant Year Recipient Project AU$ Amount US$ Amount

$:$ Fed. RECP 2000 Pacific Power/ ANU Hunter Valley Geothermal $790,000 $719,643

$:$ Fed. REEF 2002 Geodynamics Habanero Project $1,800,000 $1,639,692

$:$ Fed. START 2002 Geodynamics Habanero Project $5,000,000 $4,554,700

$:$ Fed. GGAP 2005 Geodynamics Kalina Cycle from waste heat, WA $2,080,000 $1,894,755

$:$ PACE 2 2005 Petratherm Paralana, SA $140,000 $127,532

$:$ PACE 2 2005 Scopenergy Limestone Coast, SA $130,000 $118,422

$:$ PACE 2 2005 Eden Energy Witchellina Project, SA $21,000 $19,130

SA Grant 2005 U Adelaide Induced seismicity, Cooper Basin $50,000 $45,547

$:$ Fed. REDI 2005 Geodynamics Cooper Basin, SA $5,000,000 $4,554,700

$:$ Fed. REDI 2005 Scopenergy Limestone Coast, SA $3,982,855 $3,628,142

SA Grant 2005 Geodynamics Cost: benefit of EGS to reduce emissions $40,000 $36,438

$:$ SA PACE 3 2005 Geothermal Resources Curnamona Project, SA $100,000 $91,094

$:$ SA PACE 3 2005 Green Rock Olympic Dam Project, SA $68,000 $61,944

$:$ Fed. REDI 2006 Geothermal Resources Frome Geothermal Project $2,400,000 $2,186,256

$:$ Fed. REDI 2006 Proactive Energy Supercritical power cycles $1,224,250 $1,115,218

$:$ SA PACE 4 2006 Torrens Energy Heatflow expl., Adelaide Geosyncline $100,000 $91,094

$:$ SA PACE 4 2006 Eden Energy Renmark Project, SA $100,000 $91,094

$:$ SA PACE 4 2006 Geodynamics High T borehole imaging, Cooper Basin $100,000 $91,094

$:$ Fed. REDI 2007 Petratherm Paralana Project, SA $5,000,000 $4,554,700

$:$ SA Grant 2007 U Adelaide Induced seismicity protocols – SA $50,000 $45,547

$:$ SA Grant 2007 U Adelaide AGEG Research $250,000 $227,735

$:$ Fed. REDI 2007 Torrens Energy 3D modelling, hot rocks, SA $3,000,000 $2,732,820

Qld Grant 2007 U Queensland Qld Geothermal Research Centre $15,000,000 $13,664,100

$:$ Fed. REDI 2008 KUTh Tamar Conductivity Zone $1,800,000 $1,639,692

$:$ SA PACE 2008 Petratherm S-wave splitting for Hot Rock exploration $100,000 $91,094

$:$ SA PACE 2008 Torrens Energy 2D seismic, Adelaide Plains $100,000 $91,094

$:$ WA Grant 2008 U WA WA Geothermal Centre of Excellence $2,300,000 $2,095,162

$:$ SA Grant 2008 U Adelaide AGEG Research $250,000 $227,735

$:$ NSW Grant 2008 Geodynamics Drilling in Hunter Valley $10,000,000 $9,109,400

Vic Grant Bids closed Feb 09 Direct Use Geothermal Support Pilot $100,000 $91,094

SA Grant 2009 U Adelaide Remote EGS Use to Produce Syn-fuel, H2 $10,000 $9,109

$:$ Fed GDP 2009 Petratherm GDP - Paralana, SA $7,000,000 $6,376,580

$:$ Fed GDP 2009 Panax GDP - Penola, SA $7,000,000 $6,376,580

$:$ SA RDIF 2009 Geodynamics Transmission: Habanero to Innamincka $560,000 $510,126

80% SA REF 2009 U Adelaide SA Centre Geothermal Energy Research $1,600,000 $1,457,504

$:$ Fed GDP 2009 Geodynamics GDP - Hunter Valley, NSW $7,000,000 $6,376,580

$:$ Fed GDP 2009 Torrens Energy GDP - Parachilna, SA $7,000,000 $6,376,580

$:$ Fed GDP 2009 Green Rock & U WA GDP - Perth, WA $7,000,000 $6,376,580

$:$ Fed GDP 2009 Greenearth GDP - Geelong, Vic $7,000,000 $6,376,580

$:$ Fed GDP 2009 Hot Rock GDP - Koroit, Vic $7,000,000 $6,376,580

Vic ETIS 2009 Greenearth Geelong Geothermal project pilot plant $25,000,000 $22,773,500

$:2$ Fed REDP 2009 Geodynamics REDP - Cooper Basin $90,000,000 $81,984,600

$:2$ Fed REDP 2009 Petratherm REDP - Paralana $62,762,000 $57,172,416

Total Grants $290,008,105 $264,179,983

The most recent legislation relating to geothermal energy that has been introduced is the Northern Territory’s Geothermal Energy Act 2009, which commenced operation on 1 December 2009. Under this Act, over-the-counter applications for geothermal exploration licences are possible, with applications considered based on: the proposed work programs over the application area; technical and financial ability of the applicant; and the geothermal play type being proposed. The industry has responded positively to the introduction of geothermal exploration in the Northern Territory. On the first day that the Act came into operation, 17 over-the-counter applications were lodged, with the current application areas spread across the Northern Territory. Some areas of the Territory have been designated reserved blocks and prevent over-the-counter licence applications within these reserves unless the Minister invites applications for those blocks. After extensive consultation with industry, amendments were made to South Australian legislation such that the South Australian Petroleum and Geothermal Energy Act 2000 was promulgated in October 2009. The key amendments relating to geothermal matters is an increase in the maximum size of geothermal exploration licences (to 3000km2), retention licences (to 1000km2), and production (to 1000km2) licences. Exploration for geothermal energy in Queensland has been governed by the Geothermal Exploration Act 2004, an interim legislation to enable the exploration for geothermal energy whilst a new legislative framework covering both geothermal exploration and production is developed. The Geothermal Energy Bill 2009 and consultation paper were released for comment in 2009 (Queensland Mines and Energy, 2009), and the Queensland Government propose to commence the new geothermal legislative framework in 2011.

GOVERNMENT INITIATIVES AND PROJECT DEVELOPMENTS

Federal and state government grants towards geothermal energy projects announced to year end 2009 exceed AU$290 million (US$264 million). A list of these grants and the projects are displayed in Table 1. Grant outcomes announced in 2009 include the successful recipients of the Australian Federal Government Geothermal Drilling Program (GDP) grants. The GDP is an important initiative as it provides matching funds up to AU$7 million (US$6.38 million) per proof of concept project to support the cost of drilling deep geothermal wells. The total funding available under the program was AU$50 million (US$45.5 million), allocated in two

rounds, as part of the Federal Government AU$4.5 billion (US$4.1 billion) Clean Energy Initiative. Under the first round of the GDP announced in April 2009, Petratherm’s Paralana project near the Flinders Ranges in South Australia and Panax Geothermal’s Penola project in the Limestone coast region in south east South Australia both received AU$7 million (US$6.38 million) grants for their first deep ‘proof of concept’ geothermal wells. Drilling is already completed for Petratherm’s first deep well (Paralana 2), and Panax Geothermal expect to start drilling Salamander 1 in the first quarter of 2010. The five successful applicants from the second round were announced on the 13th of December 2009. Grants of AU$7 million (US$6.38 million) were made to Greenearth Energy’s Geelong Geothermal project in Victoria, Torrens Energy’s Parachilna project near Port Augusta in South Australia, Green Rock’s Perth metro area project in Western Australia, Hot Rock’s Koroit project in the Otway Basin in Victoria and Geodynamics’ Hunter Valley project near Bulga in the Hunter Valley, New South Wales. These successful projects are summarised under the Geothermal Company Updates section. In addition to the GDP, two geothermal companies have been awarded grants under the Renewable Energy Demonstration Program (REDP). This competitive grants program aims to advance the demonstration of renewable energy technology development, by offering grants for up to one third of project costs. Large scale renewable energy technologies including wind, biomass, hydro systems, ocean energy, geothermal and combinations of these technologies for power generation are all eligible for grants from the REDP. In late 2009 four companies were awarded a total of AU$235 million (US$214 million) in grants under the REDP. Included are two geothermal projects were selected, which are in different geological settings and have different play concepts. The other two successful projects were an ocean energy project located off the coast of Victoria and a project integrating wind, solar and biofuels in Tasmania. The two geothermal projects are based in different areas in South Australia. Petratherm Ltd were awarded AU$62.8 million (US$57.2 million) for their 30MW Paralana Geothermal Energy Project. Geodynamics Ltd were granted AU$90 million (US$82 million) for their 25MW Cooper Basin Geothermal Demonstration Project. Further details of these two projects will be described in the Geothermal Company Updates section.

Greenearth Energy received an AU$25 million (US$22.5 million) grant for its Geelong Geothermal Power Project from the Victorian State Government under its Energy Technology Innovation Strategy (ETIS). The ETIS is designed to support meritorious large scale, pre-commercial, sustainable energy demonstration projects Geodynamics have also been granted AU$560,000 (US$510,126) under the South Australian Regional Development Infrastructure Fund, to assist with the construction of the power line between their 1MW pilot plant and the town of Innamincka

GEOTHERMAL COMPANY UPDATES

There are now 54 Australian geothermal companies that have geothermal licences or have lodged geothermal licence applications. Where a few years ago activities were mainly in South Australia, now the licence areas (including current applications) are spread across Australia in all states and the Northern Territory as shown in Figure 1. Company expenditure on exploration and proof-of-concept activities is forecast to exceed AU$2.1 billion (US$1.91 billion) in the term 2002 to 2014. Company activities include extensive geological and geophysical surveys, exploration drilling, reservoir enhancement (in EGS projects) and proof-of-concept flow testing. An exciting development in 2009 was that a second company (Petratherm) has completed their first deep geothermal well. A third company will follow in early 2010. It is hoped that the GDP grants and the REDP grants will indeed achieve their objectives for the advancement of geothermal energy in Australia. The GDP is enabling the successful grant recipients to move past the first hurdle of drilling deep geothermal wells. With the REDP grants focussed on demonstrating power generation, successfully completed projects will not only be good news for the companies but also for Australia and for the renewable energy industry as a whole. As the Australian geothermal industry develops, growth will follow in employment and also for related service providers. The AGEA and World Wildlife Fund-Australia commissioned a study on the projected workforce required by the geothermal industry by 2020. Based on estimates that 2,200MW could be the installed generation capacity by 2020, (AGEA, 2008), industry is projected to reach 3,800 full time equivalent jobs by 2020, from a base of approximately 318 in 2008 (AGEA, 2009). The following companies have the most advanced projects in Australia, with each having at least undertaken exploration drilling and/or geophysical surveys. The companies described in this section are presented in alphabetical order.

Eden Energy Eden Energy is a diversified clean energy company with interest in geothermal energy projects in South Australia. Their geothermal energy projects include: the Witchelina Project, located between Leigh Creek and Roxby Downs; the Renmark Project, Moomba North Project; Bollards Lagoon Project and the Mungeranie Project. Their licence areas cover a range of geothermal play types ranging from EGS to HSA projects. With information from drilling undertaken to acquire temperature data, the company are assessing their options for a deeper test well.

Geodynamics Limited Geodynamics are well known for their Hot Fractured Rock (HFR) project located near Innamincka in the Cooper Basin region of South Australia. The recently awarded grant under the Australian Federal Government’s REDP represents one third funding for the company’s 25MW Cooper Basin Geothermal Demonstration Project. Geodynamics has drilled five deep wells in their Cooper Basin project area and have achieved ‘proof of concept’ after continuously circulating fluid between two wells, Habanero 1 and Habanero 3. A 1MW pilot plant has been constructed at the Habanero site to supply zero emissions power to Innamincka, as well as powering the company’s camp. However, a casing integrity incident involving the release of water and steam from the Habanero 3 production well has delayed the commissioning of the 1MW power plant. Geodynamics has been proactive in relating lessons learnt from Habanero 3 incident to other geothermal licensees, and this will assist industry in avoiding similar incidents in future. As well as the three Habanero wells, Geodynamics’ other two wells, Jolokia and Savina respectively, drilled at locations 9.5 km and 19 km away from Habanero 3. The granites at both Jolokia and Savina have been shown to be hotter at shallower depths than encountered in the Habanero wells. These five deep wells help to define the extent of the resource within Geodynamics licence areas and further drilling will be undertaken before making a final decision on the location of the 25 MW Commercial Demonstration Project (CDP). The CDP aims to demonstrate EGS technology is cost effective at a commercial scale, and to gain support for further expansion. Commissioning of the 25 MW CDP geothermal power plant is expected to occur in late 2013. A market for this power is currently under investigation by the company and the capacity of this first commercial plant meets the needs of potential local power users (Geodynamics, 2009a).

Geodynamics have also been granted AU$7 million (US$6.38 million) from the GDP for their Hunter Valley project in NSW. This project involves the drilling of two 4,500m holes followed by stimulation and flow testing (Geodynamics, 2009b). Geodynamics were also awarded AU$10 million (US$9.1 million) from the New South Wales Government for this project, under the NSW Climate Change Fund Renewable Energy Development Program, to develop a geothermal power plant. Geodynamics has three key cornerstone investors, Origin Energy, Sentient/Sunsuper and Tata Power. Origin Energy has extensive upstream petroleum interest and Tata Power has extensive power station development interests. Origin also has equity in the Geodynamics operated geothermal licences in the Cooper Basin.

Geogen Victoria Geogen Victoria have licence areas in Victoria and New South Wales and are the preferred tenderer for 29 licence areas in Queensland. In 2009 they concluded a 18 well drilling program in their licences in the central highlands of Victoria. Each of these 18 wells were fully coring to 320m. Geogen are using their own logging unit up to three months after drilling each well to measure equilibrated temperatures and conductivities. In 2010 Geogen Victoria plan to begin reconnaissance work in their NSW tenements including an 8 to 12 well shallow exploration drilling program. A further deeper drilling program is planned for Victoria, with plans to drill 14 wells to 600m.

Geothermal Resources Geothermal Resources have licence areas in South Australia in three project areas; Frome, Crower and the Otway Basin. With the assistance of a AU$2.4 million (US$2.1 million) Federal Government REDI grant and a AU$100,000 (US$91,094) PACE 3 grant2 by the South Australian Government, the company completed four holes to approximately 500 metres depth on its Frome Project during 2007. Temperature logging indicated abnormally high temperatures within the sediments above the interpreted buried granite body, with geothermal gradients comparable to the Cooper Basin, thus vindicating the buried granite heat source model. Geothermal Resources drilled three wells in 2008, providing encouragement to locate and drill deeper (<2km) wells, Frome 12 and 13, in 2009. These wells will be tied to existing seismic data to select a deep well location.

2 Plan to ACcelerate Exploration (PACE)

Greenearth Energy Limited Greenearth Energy have three Geothermal Exploration Permits in Victoria covering 18,795 km2 over prospective Hot Sedimentary Aquifer and EGS plays in the Latrobe valley, Gippsland, Bellarine Peninsula, Surf Coast Shire, Geelong and Daylesford Areas. Greenearth Energy have been granted AU$7 million (US$6.38 million) under the second round of the GDP (Greenearth Energy, 2009), and aim to drill two wells into a Hot Sedimentary Aquifer (HSA) to a depth of up to 4 kilometres. The two wells would be co-located at the surface and directionally drilled to reach the target. The company intends to start stage one of their projects in the second half of 2010. This proof of concept phase includes drilling their first deep well, to demonstrate the extraction and reinjection of hot fluids. Upon successful completion of stage one, stage two will be to build a geothermal demonstration power plant, with the intention to begin this construction in 2012. Greenearth Energy are also the successful recipients of funding under the Victorian Government Energy Technology Innovation Strategy (ETIS). This two part funding comprises AU$5 million (US$4.55 million) for stage one, and if stage one is successful, AU$20 million (US$18.2 million) for the geothermal demonstration plant.

Green Rock Energy Green Rock Energy has licence areas close to Olympic Dam and in the Cooper Basin in South Australia, in the Western Australian Perth Basin, and projects in Hungary. In 2005 Green Rock drilled Blanche-1 in its licence areas close to Olympic Dam. This was their first exploratory well drilled to 1,935 m (including 718 m of sedimentary rocks and 1,216 m of homogenous hot granite). Cores and wireline logs from Blanche-1 suggested natural fractures exist. In 2008, Green Rock undertook a mini-fracture stimulation program in Blanche-1 to inform the design of a deep well stimulation. Thirteen zones were tested and the well bore was imaged with a slim-hole acoustic televiewer to enable the analysis of fractures, post fracture stimulation. Green Rock was awarded a AU$68,000 (US$61,944) South Australian PACE Grant to advance its Blanche project. Green Rock Energy have been granted funding from the GDP for their joint project with the University of Western Australia in the Perth metropolitan area (on the University of Western Australia campus). This projects aims to demonstrate the use of medium temperature geothermal resources for commercial

applications. Two wells to depths of three kilometres will be drilled to access the target 100°C (212°F) geothermal water and then used to power an absorption chiller. Geothermal energy would be used to replace fossil fuels for the heating and cooling of buildings, replacing over 50 per cent of a building’s energy use (Green Rock Energy, 2009). With success in this first project Green Rock would replicate the concept through the Perth metropolitan area in residential and commercial projects.

Hot Rock Limited Hot Rock have exploration permits in Victoria in the Otway Basin and in Queensland. Hot Rock have been granted AU$7 million (US$6.38 million) under the second round of the GDP for their Hot Sedimentary Aquifer project at Koroit in the Otway Basin (Hot Rock Limited, 2009). They plan to drill and test two deep deviated production appraisal wells, with drilling planned to commence in 2010. The well locations are selected on the basis of information from existing well and reflection seismic data, and a magneto-telluric survey completed by Hot Rock Limited in mid 2008. With successful results from these two deep wells, drilling will be followed by the construction of a pilot plant, built using standard, proven, binary power plant technology. The company is also investigating direct use markets for its geothermal energy.

Inferus Resources Inferus Resources, a wholly owned subsidiary of Southern Gold, a gold mining company, have geothermal exploration licences and licence applications in South Australia between Port Augusta and Olympic Dam. Their project, the Roxby Geothermal Project, aims to develop an underground heat exchanger (EGS) within sedimentary rock above a heat source. The company’s interest in geothermal energy exploration was initiated after discovering high heat flows when drilling two ~1 km deep mineral exploration wells. The company aims to follow a three stage development of the project, completing proof of concept before validation and optimisation, leading to commercial scale-up (Southern Gold, 2009).

KUTh Energy KUTh Energy have licence areas across eastern Tasmania and two licence areas in Queensland. KUTh’s projects focus on both EGS plays and direct use applications. The company has completed extensive and systematic exploration drilling program in Tasmania, completing 37 drill holes to depths of 250 – 300m in a 20km x 20km grid, to develop a reliable heat flow map of the region. Temperature measurement and heat flow estimates have been completed for nearly all holes. This data will be used

to develop a 3D geological model which will assist in locating a deep (>4 km) well to test and refine their model and determine the future plan.

Panax Geothermal The Penola project in the Limestone Coast area of South Australia is a conventional Hot Sedimentary Aquifer (HSA) geothermal project, targeting permeable reservoirs in a Cretaceous to Tertiary in age deep sedimentary basin. Sedimentary rocks provide both insulation and reservoirs heated by conduction from the underlying basement rocks. This area is also proximal to the National Electricity Market transmission grid and energy customers. Panax Geothermal was able to make use of an extensive pre-existing database of petroleum well and seismic data to define hot wet sedimentary rock targets in the Limestone Coast area. In April 2009, Panax was one of the first two successful recipients of a AU$7 million (US$ 6.38 million) GDP grant from the Federal Government. Panax expect to spud their first deep well, Salamander 1, early in 2010, making it the third company to drill a deep geothermal well in Australia. Salamander l is designed as a production well and is part of the Penola Project, a stage of the larger Limestone Coast Geothermal project. The company aim to develop the project in stages, beginning with a demonstration plant of 5.9 MW net based on one production well, the Phase 1 Plant based on a total of three production wells having a net power output of 17.7 MW and the Phase 2 Plant with a 59 MW net output based on a total of ten production wells. The power output estimations are based on each production well producing geothermal brine at 175kg/s, at a temperature of 145°C (293°F) (Panax Geothermal, 2009). Panax Geothermal also has a HSA-style project in the Cooper Basin.

Petratherm The Paralana project is an EGS project based on Petratherm’s Heat Exchanger Within Insulator (HEWI) model. By creating a reservoir in the insulating sedimentary layers overlying the hot granite, Petratherm hope to minimise drilling costs, and more easily create a reservoir enabling earlier more profitable Hot Rock geothermal power generation. Petratherm were successful recipients of both a AU$7 million (US$6.38 million) GDP grant and a AU$62.762 million (US$57.172 million) REDP grant. The GDP grant has gone towards drilling their first deep well, Paralana 2, which has been drilled and successfully cased and cemented to a depth of

3.725km (Petratherm, 2009a and 2009b). Petratherm intend to implement a mini-fracture stimulation followed by a multi-zone fracture stimulation in 2010. The plans for the second deep well, Paralana 3, will depend on the results from those activities. These activities form part of the first stage of the Paralana Geothermal Energy Project, with a pilot plant of 3.75 MW planned for completion in 2011. The funding from the REDP will go towards Petratherm’s second stage ‘scale up’ to a commercial power plant of 30 MW. The longer term aim for the Paralana project is to develop a large scale base load geothermal power station of greater than 260 MW capacity which would supply power to the National Electricity Market. Petratherm have two significant Joint Venture partners for the Paralana Project. In early 2007, Beach Energy Ltd entered an agreement with Petratherm to contribute up to AU$30 million (US$27 million) for a 36% interest in the Paralana project. In August 2008, TRUenergy (a wholly owned subsidiary of China Power and Light) agreed to pay up to AU$57 million (US$51.9 million) to earn 30% equity in the Paralana Project. Petratherm have three other geothermal projects in Australia: in South Australia the Callabonna project also in the northern Flinders Ranges; and the Ferguson Hill and Stuart Shelf projects near Olympic Dam; and in Victoria a Hot Sedimentary Aquifer play in the East Gippsland Basin. The company are also actively involved in projects in Spain and China, and are leading the development of conventional, EGS and direct heat energy projects in Spain. Most advanced of the Spanish projects is the Geo-Madrid 8 MW District Heating project.

Torrens Energy Limited Torrens Energy have geothermal licence areas located in South Australia and Victoria separated into three projects: the Adelaide Project; the Barossa Clare project; and the Torrens project. All of Torrens’ licence and licence application areas are located close to the National Electricity Market transmission grid and energy markets. Torrens Energy have completed an extensive shallow drilling program to delineate heat flow trends through the company’s project areas. The Parachilna project, an EGS project north of Port Augusta in South Australia, will be the site of the first deep well drilled by Torrens Energy, with the assistance of its AU$7 million (US$6.38 million) GDP grant (Torrens Energy, 2009). Torrens was awarded a AU$3 million (US$2.73 million) REDI grant in 2007 to develop, demonstrate and refine a 3D modelling method for the prediction of Hot Rock plays, and also a AU$100,000

(US$91,094) South Australian PACE grant in 2006 for heat flow exploration in the Adelaide Geosyncline. In 2008, Torrens Energy entered into an agreement with Australian Gas & Light (ASX Code: AGL) to jointly develop geothermal resources for generation into the National Electricity Market (NEM). This agreement resulted in AGL: owning 10% of Torrens shares; having a first right of refusal to earn 50% of any Torrens geothermal project by funding the completion of a deep confirmation well, and act as a joint venture to find new geothermal opportunities through mid 2012. In drilling their first deep well Torrens aims to prove the expected temperatures of the geothermal resource and the suitability as an enhanced geothermal system for generating power.

THE AUSTRALIAN GEOTHERMAL ENERGY GROUP

The Australian Geothermal Energy Group (AGEG) was formed in 2006 to bring together all parties involved in geothermal development in Australia, in order to work together and cooperatively advance the industry as a whole. Its 103 member organisations are geothermal licensees and service providers, research centres such as Universities and the CSIRO and both federal and state government departments. The vision of the AGEG is for geothermal resources to provide the lowest cost emission free renewable base load and direct-use energy for centuries to come. The AGEG became an incorporated body in 2009 which is a milestone in the existence of the Group. Amongst other things, incorporation allows the AGEG to enter into agreements, and in 2010, the AGEG will affiliate with the International Geothermal Association. The AGEG has 12 Technical Interest Groups (TIGs) which cover the stages of a geothermal project from land access and exploration, through development to power generation systems and direct-use. The Technical Interest Groups are briefly described in Table 2.

Table 2: The AGEG's Technical Interest Groups

TIG 1 Land Access TIG 2 Reserves & Resources TIG 3 Policy TIG 4 Outreach TIG 5 Getting to Markets TIG 6 Power Plants TIG 7 Direct Use TIG 8 Information & Data TIG 9 Reservoir Development & Engineering TIG 10 Exploration & Well Log Technologies TIG 11 Drilling & Well Construction TIG 12 Education

TIGs 5 to 12 cover geothermal industry technologies and methodologies (outlined in red) and now closely align with the priorities of the International Partnership for Geothermal Technologies (IPGT). The AGEG TIGs provide support for the IPGT through feedback to the priority topic reference groups. The Joint AGEG-AGEA Geothermal Reporting Code Committee was formed through the work of TIG 2.

The Geothermal Reporting Code Committee released and now administers the first uniform geothermal reserves and resources reporting code, the Geothermal Reporting Code (AGCC, 2008) referred to as the Code. A number of operating companies have reported their geothermal exploration results according to the Code since its release in 2008, and the AGEA, the national industry association for the Australian geothermal energy industry, requires its members to comply with the Code. The Code is intended as a living document and will be updated as required. A second edition of the Code has been completed, with changes that address issues that arose during the use of the first edition. One of the significant issues was the definition of a ‘resource’, when it was found there was a need to clearly differentiate between a Geothermal Resource which is the estimated Recoverable Thermal Energy (PJth or MWth-years relative to defined base and cut-off temperatures) as opposed to the thermal energy in place (PJth or MWth-years).

The Australian Geothermal Energy GroupAGEG Members (Industry, Government & Research Organisations)AGEG Associate Members (People and Organisations)AGEG Student Members (People)AGEG Distinguished Members (People)

AGEG Executive Committee (Indicative Member Representatives)Chair (Australia’s Exec. Comm. Member - IEA Geothermal Implementing Agreement) Chief Executive - Australian Geothermal Energy Association (AGEA)Australia’s Representative to the Board of the International Geothermal AssociationAustralia’s Industry Representative to the International Partnership for Geothermal TechnologiesChair of AGEG-AGEA Code CommitteeAGEG Sub-Committee Representative – provide alignment with technologic R&DAGEG Sub-Committee Representative – provide alignment with technologic R&DAGEG Sub-Committee Representative – provide alignment with technologic R&DAGEG Sub-Committee Representative – provide alignment with technologic R&DEx-Officio Members (Secretariat, outreach / program coordinators, etc)

Technology and Methodology Research with:Companies (Australian and International)Australian Geothermal Energy AssociationInternational Energy Agency Geothermal Implementing AgreementInternational Partnership for Geothermal Technologies (IPGT)International Geothermal Association; andGeothermal research centres / key universitiesOther National and International For a

Linkages designed to foster the sharing of information – including but not limited to:

AGEG organizational structure & linkages to national and international geothermal foraTo be modified as the focus of AGEG Technical Interest Groups may change

Land access

Include seismic risk, sustainability, consultation

Reserves & Resources

AGEG-AGEA Reporting Code Committee

Policy

AGEA provides industry positions

Outreach

Includes conferences & web-postings

Getting to Markets

Includes economic models and cost benchmarks. AGEA provides positions on National Electricity Market

Power Plants

Includes- CO2 cycles- Efficiency- Consensers for hot, dry climates

Direct Use

Foci incl ground-source pumps, other heating, cooling & novel non-electic uses

Information & Data

- Databases- Standards- Accessibility- Lexicon- etc

Reservoir development & engineeringFoci include reservoir characterisation, reservoir modelling, geochemistry and reservoir stimulation

Exploration & Well Log TechnologiesFoci include geophysical methods, pre-drill play prediction & high T logging

Drilling and Well Construction

Foci include temp. fracture sealing, zonal isolation, packers, pumps and excl well logs & stimulation

Education

Includes courses. lectures, content for curriculum, student work experience and internat'l post-grad exchange

TIG # 1 TIG # 2 TIG # 3 TIG # 4 TIG # 5 TIG # 6 Include TIG # 8 TIG # 9 TIG # 10 TIG # 11 TIG # 12

Australian Geothermal Energy Group (AGEG) Technical Interest Groups (TIGs)TIG Participants are people representing themselves or AGEG Member organisations or non-AGEG member organisations with aligned interests

Communication, Consultation and Community Issues

AUSTRALIAN PARTNERSHIP FOR GEOTHERMAL TECHNOLOGIES (APGT)a Joint Venture of the

Australian Geothermal Energy Group (AGEG - Industry, Government & Research Organisations)and the Australian Geothermal Energy Association (AGEA - the peak industry representative body)

Novel geo-fluids and cycles

Direct useEducation

Database and data accessAir cooling

Reduce exploration costsTemporary sealing

Rock – water interactionPumps

Reduce plant costsSeismic risk

Reservoir modelling / characterisationHigh temp. logging

Stimulation methodsZonal isolation

Exploration technologiesLower cost drilling

Novel geo-fluids and cycles

Direct useEducation

Database and data accessAir cooling

Reduce exploration costsTemporary sealing

Rock – water interactionPumps

Reduce plant costsSeismic risk

Reservoir modelling / characterisationHigh temp. logging

Stimulation methodsZonal isolation

Exploration technologiesLower cost drilling

Figure 3: Diagram showing the structure of the AGEG, including the Technical Interest Groups and linkages to

national and international geothermal groups.

The AGEG and the AGEA have agreed to coordinate research efforts through the AGEG’s Technical Interest Groups, and will ensure priorities are well aligned with the IPGT and the International Energy Agency (IEA) Geothermal Implementing Agreement (GIA). The AGEG structure and linkages are shown in Figure 3. This will facilitate Australian companies, research experts and government agencies (including regulators) to convey and take note of international best practices for the full-cycle of below-ground and above-ground geothermal energy operations and stewardship.

KEY RESEARCH AND LESSONS LEARNT

A number of reports have been published from AGEG TIG research projects, funded by the Department of Primary Industries & Resources – South Australia (PIRSA) and geothermal companies through tied grants. A summary of these research projects can be found in the proceedings of the 2009 Australian Geothermal Energy Conference (Long et al., 2009).

GEOTHERMAL RESEARCH CENTRES

Key research centres that are dedicated to geothermal research have been established or begun operation in earnest. These include the Queensland Geothermal Energy Centre of Excellence at the University of Queensland, the Western Australian Geothermal Centre of Excellence which officially opened in December 2009, combining the strengths of the University of WA, Curtin University and the CSIRO, and the newly established South Australian Centre for Geothermal Energy Research at the University of Adelaide which was announced in June 2009. Other Universities such as the University of Newcastle, University of New South Wales and Melbourne University also have strong geothermal programs. While the centres are competitive each has complimentary strengths which are to the advantage of the industry.

CONCLUSION

Geothermal activity in Australia has continued strongly over the last year. This paper has highlighted that there is strong government support for geothermal energy, and increasing industry activities and achievements with the combined goal of overcoming the challenges on the path to commercialisation of large scale, base load, and emission free geothermal energy in Australia.

REFERENCES

Australian Geothermal Energy Association (AGEA) (2008), “Installed capacity and generation from geothermal sources by 2020” report by

McLennan Magasanik Associates Pty Ltd for AGEA, August 2008.

AGEA (2009), “The Power to change,” see: http://www.agea.org.au/media/docs/power_to_change_1.pdf

Australian Geothermal Code Committee (AGCC) 2008, “The Geothermal Reporting Code,” Australian Geothermal Energy Group, Adelaide Australia.

Geodynamics (2009a), “Federal Government Awards $90 million in Funding to Cooper Basin 25 MW Geothermal Demonstration Project,” see: http://www.geodynamics.com.au/irm/Company/ShowPage.aspx?CPID=2060&EID=84470685

Geodynamics (2009b), “$7 million awarded under the Geothermal Drilling Program,” see: http://www.geodynamics.com.au/irm/Company/ShowPage.aspx?CPID=2085&EID=82000707

Greenearth Energy (2009), “$7M Grant Awarded to Geelong Geothermal Power Project,” see: http://www.greenearthenergy.com.au/downloadfile.php?filename=files/announcements/GER%20GDP%20R2%20Announcement%20Final%2014122009%5B1%5D.pdf

Green Rock Energy (2009), “Green Rock Energy offered $7 million Geothermal Drilling Program Grant,” see: http://www.greenrock.com.au/media/2009_12_14___GRKGDPGrant.pdf

Hot Rock Limited (2009), “Hot Rock Offered $7m Government Grant,” see: http://www.hotrockltd.com/IRM/Company/ShowPage.aspx?CPID=1179&PageName=Hot Rock Offered $7m Government Grant

Northern Territory of Australia (2009), “Geothermal Energy Act 2009,” accessed online: http://notes.nt.gov.au/dcm/legislat/Acts.nsf/84c76a0f7bf3fb726925649e001c03bb/3049cc0938e9139a6925750e000a0a4c?OpenDocument

Panax Geothermal (2009), “Penola Project – Limestone Coast, South Australia: 59 MW “Stand Alone” Case, Project Evaluation,” see: www.panaxgeothermal.com.au/Images/File/20090910%20PANAX%20SCALE%20UP%20CASE%20WEBSITE%20VERSION.pdf

Petratherm (2009a), “$62.8 million grant awarded to Paralana Geothermal Energy Project,” see: http://www.petratherm.com.au/LiteratureRetrieve.aspx?ID=56413

Petratherm (2009b), “Paralana Joint Venture Project Update,” see: http://www.petratherm.com.au/_literature_59178/Paralana_Joint_Venture_Project_Update

Southern Gold (2009), “Roxby Geothermal Project - information memorandum and detailed scoping study,” see: http://www.southerngold.com.au/pdf/RGP_IM_20090821.pdf

Torrens Energy (2009), “$7m GDP-R2 Grant Awarded to Torrens Energy,” accessed online:

http://www.torrensenergy.com/announcements/091214_grant.pdf

Queensland Mines and Energy (2009), “Geothermal Energy Bill 2009 Consultation Paper,” webpage: http://www.dme.qld.gov.au/Energy/geothermal_energy_bill_2009_consultation_paper_2009.cfm