Australian Geothermal industry defends its record  

The SMH reports that geothermal energy industry in Australia is responding to criticism of its slow pace of development - Geothermal industry defends its record.

Australia's geothermal sector has responded to criticism it is not progressing fast enough, saying major new geothermal projects can take as long to develop as a liquefied natural gas plant.

Opposition resources spokesman Ian Macfarlane said recently the geothermal industry had stalled. He singling out Geodynamics Ltd as being "no further advanced than it was five, ten years ago".

Criticism of the largely South Australia-based geothermal sector has focused on a string of geotechnical problems encountered during well drilling in recent years. There is also a perception the sector is favoured by government funding.

However, Geodynamics chief executive Geoff Ward says the criticism is unwarranted, especially considering technical issues that have plagued the projects are being overcome. "There is a view that the industry exists through government funding alone," Mr Ward told AAP. "We've raised in excess of $400 million over ten years and spent nearly $300 million in the ground but only $11 million has come from government funding."

Panax Geothermal Ltd managing director Kerry Parker said talk of the sector surviving on grants was "rubbish". "It's an industry that, you've got to be honest, is suffering at the moment," Mr Parker said. "It's not got anywhere near the level of support, either at grant level or at policy level, at carbon tax level and at feed-in tariff level, to get it up and going."

Panax had switched its focus from SA to Indonesia, where geothermal projects have been running for about 35 years.

Mr Parker said Panax, listed in Australia Australia, expected to soon list in Asia where there was a greater appreciation of the benefits of geothermal energy.

In Indonesia, Panax is working on conventional geothermal projects, which target volcanic-based hot aquifers. They don't require fracturing rocks, like projects in SA, and are hence easier to develop. "It's a simple model that's been working in the US for the past 25 years," Mr Parker said.

Indonesia was a ready market for Panax, given the nation's goal was to expand geothermal energy production by about 4,000 megawatts (MW) by 2015, from 1,400 MW currently, to meet an energy shortfall.

Both Geodynamics and Petratherm Ltd still remain committed to SA, with Petratherm expecting to deliver Australia's first commercial supplies of hot rock power from its Paralana project by the end of 2012.

This would be three years later than initially expected, following drilling problems at the project including fluids flowing into the well.

Mr Ward said unlocking SA's geothermal potential was a matter of understanding the state's unique geology through experience, then overcoming engineering and development challenges.

He said the greatest risks were principally financial. "It's a technology which, as emerging technologies are, started out as high price and has the potential to come down very significantly." Other than deep pockets, patience was needed as a geothermal development was similar in scope to a large LNG project, Mr Ward said.