Geodynamics' Day Of Reckoning Approaches  

Posted by Big Gav in , , , ,

Giles Parkinson at The Climate Spectator has an article on a key development point for Australian geothermal energy company Geodynamics, with their latest well due to be tested in the coming weeks - Geothermal's pressure test.

Geodynamics has spent an estimated $300 million over the past decade on the development of its cutting edge hot dry rocks geothermal technology in the Cooper Basin. Some time in the next month or so it might find out if it has all been worth it.

It may seem overly dramatic to label the fracturing tests that will be undertaken at a single well over the next few weeks as a “make or break” for the company.

But that is the way it is being viewed by Geodynamics and its backers. Success will deliver the key to an estimated 6,500MW of clean, base-load power that could be brought to the grid over the next 10 to 15 years; failure will cause the company to undergo a major rethink of its ambitions.

The rest of the geothermal industry also has a lot at stake on what unfolds nearly 5 kms beneath the surface at the Jolokia 1. A good result will bring much needed investor confidence, a disappointing or inconclusive result may have the opposite effect. And proponents of other technologies will be looking on with interest, too. None more so, perhaps than nuclear, which has a weaker case to argue in Australia if geothermal looks likely to deliver on its promise.

Next week, Geodynamics is scheduled to begin a “hydraulic fracture stimulation program” at the Jolokia well near Innamincka. Water will be injected to a depth of 4.9kms with the aim of finding natural faults in the super-heated granite and opening these up to create a flow of high pressure hot water which can then be exploited to drive a turbine on the surface via a heat exchanger.

It is not the first time such fracture stimulations have been carried out, but no one has done this at the same depth, temperature (280C) and under such extreme pressure (9,000 PSI). It’s cutting edge stuff and the team at Geodynamics (many of them ex-oil drillers) are clearly excited. Last week they got their first photos of the deep fractures (sent before the specially created imaging tool melted). No one seems to have sat down since and there is every confidence that this will be a “make” rather than a “break” for the company.

Jolokia is located nearly 10kms from the company’s previously successful fracturing activities at Habanero. If that success can be repeated at Jolokia, the company argues that this will demonstrate its ability to create heat exchangers at will across its tenement areas – unlocking up to 6,500MW of geothermal resources in the Geodynamics tenements and opening up a new energy province in central Australia.

That would lead to a flurry of activity. The company would return to Habanero to drill two more wells and commission the 1MW pilot plant that was delayed by the blow-out in the Habanero 3 well last year. If the pilot plant is successful, the company can then move to make an investment decision on its proposed 25MW commercial demonstration plant, for which it has federal government support to the tune of $90 million, and gain the confidence to tap the market for funds to pay for an expanded drilling program.

The commercial plant would probably not be up and running till around 2015. In the meantime, Geodynamic’s partner in the Innamincka “Deeps” project, Origin Energy, will lead its own drilling campaign to see if it can unlock energy from the Innamincka “Shallows” – geothermal heat lying in sedimentary acquifers which are considered easier to exploit. The partners believe there might be around 100MW-200MW of “shallow” resources in the immediate area. Exploiting these would provide early revenue and be a complimentary energy play to the larger project. But without the longer-term value of the “Deeps” it is uncertain if this shallow reserve could be economically exploited.

Failure at Jolokia, however, will be a devastating blow. Geodynamics is by far the best funded of Australia’s growing brigade of geothermal aspirants, with a cash balance of around $70 million, but it needs to tap the market for more money within the next six months to continue its ambitious program.

2 comments

A little more history would put things in a clearer light. All details come from

Geodynamics' website under ASX announcements:

Drilling for Habanero #1 started in 2002 and after numerous problems was completed in

Sept 2003.

Habanero #2 ran into problems when the drill bit jammed and had to be cut from the

drill string. A side-track was drilled, and a small circulation test was done, but

after the first attempt at hydraulic stimulation, #2 became "essentially blocked off"

and a sidetrack was started in March 2006. This had numerous problems too and drilling

was suspended in June 2006 and finally abandoned.

Habanero #3 was commenced in August 2007 and completed in Feb 2008.

The first flow test between #1 and #3 was completed in April 2008. A six-month "proof

of concept" circulation test was completed in March 2009.

Four weeks later the system suffered a blow-out in #3, which took 3 weeks to bring

under control. It was subsequently determined that salts in the water had made the

steel piping brittle. After numerous delays it was decided to abandon #1 and #3 and

instead to drill two more wells, #4 and #5.

Drilling #4 is expected to commence in November 2010 and #5 is expected to be

completed in December 2011. This circulation is intended to power a 1 MW generator by

March 2012.

Given this track record, talk of 6,500 MW of geothermal resources is just fantasy.

Dave - this just sounds like the usual process you'd expect from a company trying to develop a complex new technology.

Sure - its risky and may not work, but they seem to be making progress...

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