Energy heavies back geothermal sources  

The Australian's Green Chips column this week references almost the full gamut of large scale Australian clean energy proposals - central Australian geothermal power, Desertec's solar thermal power proposal, and Wilson Tuckey's tidal power plan for the Kimberly - Energy heavies back geothermal sources.

ENERGY giants Origin and AGL have been busy beefing up their wind-farm portfolios in recent months in preparation for the upgraded Renewal Energy Target -- should it make its way through parliament. But perhaps the most revealing aspects of presentations both companies made last week was their faith in geothermal energy as a significant source of base-load power in the future.

Wind power is expected to dominate the early years of the RET scheme, which will require that 20 per cent of Australia's power generation comes from renewable sources by 2020.

But Origin told the UBS Energy and Utilities Conference that geothermal energy, developed at scale, could be a superior long-term solution to meet its RET targets, while AGL said geothermal would likely play a key role in base-load generation, even if some projects -- not its own -- faced significant transmission costs.

Origin is a joint venture partner with Geodynamics, while AGL has a 10 per cent stake in another aspiring geothermal producer, Torrens Energy, and the right to take up to a 50 per cent stake in its project in exchange for funding.

Geothermal producers believe they can have 2200MW of capacity generating power by 2020. The Australian Geothermal Energy Association and World Wide Fund for Nature say this would create 3800 full-time jobs by 2020. Their report said direct employment in the industry could more than double by 2030 and jump to more than 17,300 by 2050.

Another report released last week by WWF, this time in conjunction with ocean energy producer Carnegie Corp, predicted a further 3200 jobs would be created if Carnegie met its goal of 1500MW of ocean energy capacity by 2020.

However, both reports argued that for those technologies to meet their potential in the shortest period, the RET would need to be strengthened, possibly through banding, where extra credits are allocated to emerging technologies, direct assistance for drilling and an expansion of early development programs.

CSR renews itself

THE timing of the long-awaited announcement on the demerger of CSR -- coming as the government plans to bring its new renewable energy target into force -- may not be entirely coincidental.

One of the key concerns about splitting off a pure-play sugar business had been that it would be largely hostage to volatile commodity prices. But earnings are being stabilised -- partly through hedging, partly through high-margin refining for third parties, but also through its renewable energy businesses, which are emerging as the sugar division's biggest growth opportunity.

CSR has been building up its biofuel and biomass energy operations in recent years. It is the second-largest producer of ethanol in the country and the largest generator of renewable energy from biomass.

Last year, these two businesses accounted for about 30 per cent of the sugar division's $84 million earnings before interest and tax, and internal growth plans suggest they could account for more than half of earnings in the future, meaning it will have as much exposure to the price of fuel, electricity prices and renewable energy certificates as it will to raw sugar.

Much will depend on the government's policies on biofuels and renewable energy. CSR will soon complete a near doubling of its ethanol capacity to 60 million litres a year. The ethanol -- made from molasses, a sugar bi-product -- produces less than half the CO2 emissions of petrol, and the feedstock does not affect food prices.

The co-generation operation uses bagasse -- waste fibre from the cane crop -- to power the mills. But 100MW of the 175MW produced by the company is sold into the grid, and CSR sees the potential of adding 300MW of capacity in coming years -- with bagasse and cane trash. This will largely depend on the final structure of the RET, which is due to come into force from January 1, with CSR's demerger scheduled for the early part of next year.

CSR Sugar now proudly pitches itself as a closed-cycle operation, one of the latest buzzwords for sustainable businesses: it grows and cuts and refines its own cane, using the molasses waste product as a feedstock for ethanol and the fibre for bio-energy. And it generates its own fertiliser, the Liquid One Shot, to inject back into the crops.

Desert plan for Europe

THE search for clean energy solutions has sparked some big ideas, and one of the biggest is the Desertec concept: massive solar thermal generation capacity in the north African desert to meet up to 15 per cent of Europe's energy needs.

Desertec was an idea of the Club of Rome think tank and the German Aerospace Centre, with an original goal of finding an alternative to importing Russian gas.

Its bold vision to invest up to $US554billion ($682bn) in solar thermal has gained the support of insurance giant Munich Re, which is encouraging other firms such as Siemens, Deutsche Bank, and German utilities RWE and E.on to join a consortium. These and 15 other companies have agreed to meet on July 13 to discuss the project.

Desertec is part of a grand plan to create a "super grid", linking this and other renewable sources in Europe, Middle East and Africa with super-efficient high voltage direct-current transmission lines.

Desertec also has an Australian chapter, which envisages a similar super grid here, linking the solar and geothermal resources in Australia with Asia. It is not unlike a concept promoted by Tim Flannery, who spoke of the creation of "geothermia", an energy province that could use Australia's geothermal resources to support major emissions-free manufacturing, refining and processing industries.

Maverick Liberal MP Wilson Tuckey has a major proposal of his own: investing $9bn to exploit the tidal energy resources of the northwest coast of Western Australia to generate energy to provide a more efficient, lower-emission source of energy that would support the establishment of an LNG processing industry, and even an aluminium industry in the north of the state.