The SMH reports that geothermal power company GeoDynamics (which has greatly disappointed me over the years) is still working hard to progress their plant at Innamicka in South Australia - Hot rocks power company seeking customers.

Geodynamics, the developer of Australia’s first deep hot rocks energy project, aims to secure customers for its Cooper Basin site within six to 12 months, allowing it to proceed to a larger commercial plant, said chief executive Geoff Ward.

The company has spent more than $400 million since listing in 2002, including buying equipment and drilling. Its 1-megawatt Habanero pilot plant was commissioned on April 30 and has been operating in excess of expectations since, said chief executive Geoff Ward. "We're delighted by how stable and reliable" the operation has been, he said.

The geothermal plant at Innamincka in north-eastern SA taps salty water heated at 210 degrees more than 4.2 kilometres below the surface, extracting the heat to generate electricity. The cooled brine is then pumped back down a separate well where it is reheated by the hot rocks, creating an energy loop. Only two other sites now operate so-called enhanced geothermal systems, at Soulz in France and Landau in Germany.

Geodynamics will only proceed with a 5-10 megawatt commercial plant if it can secure customers. Potential clients include Santos, which operates its own gas and oil hub at Moomba, about 70 kilometres away. Beach Energy and Chevron, meanwhile, are exploring for unconventional shale gas within 5-15 kilometres of Geodynamics's wells.

GeoDynamics' competitor Petratherm seems to be losing confidence in their proposed alternative project, with the company looking to explore for shale oil in Tasmania.

After years of trying to commercialise geothermal energy in the South Australian outback, ASX listed Petratherm announced plans to diversify into shale oil and gas in Tasmania. ''This decision by Petratherm to extend into unconventional shale oil and gas exploration leverages our core areas of expertise that include basin geology and deep drilling,'' the company said.

Petratherm managing director Terry Kallis sought to reassure environmentally conscious investors that the company had not abandoned its geothermal project, which is planned to be about 75 per cent smaller than previous plans. But funding is hard to come by, and a $13 million government grant can be used only if Petratherm can raise millions of its own, a task that will be even more difficult under a lower carbon price.

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.

The Climate Spectator has an update on events in the geothermal energy industry in Australia - Geothermal hot spots.

Geodynamics has completed the first stage of its crucial fracture stimulation at the Jolokia well in the Cooper Basin, but it hasn’t been able to decide yet whether the results are good news or bad. The Jolokia wells are important to ascertain the extent of the hot dry rock resource in the Cooper Basin – a successful result would indicate that up to 6500MW of emissions-free, baseload energy capacity could be brought to the grid over the next 10 to 15 years.

However, the two fracture tests conducted at 4400m and 4700m – the deepest ever in Australia – indicated different geological behaviour to its Habanero well, with the fractures in the super-heated granite at a steeper angle and needing higher pressure to create a flow. On the plus side, the flow rate increased three-fold during the testing.

“Nature is what nature is,” said Geodynamics CEO Jack Hamilton. “Now we’ve got to take the results away and analyse what that actually means.” The most likely conclusion is that further stimulations will be required before the company can conclude that it can stick a commercial heat exchanger at the location and generate energy. “We are not there yet,” Hamilton admitted.

Meanwhile, the company’s giant rig is moving to the so-called Innamincka “shallows”, where its partner in the “deeps”, Origin Energy, will conduct drilling in the hope of identifying a commercial resource in the nearby hot sedimentary aquifers, which are only 2000-3000m deep and less hot, but also less technically challenging. The partners believe that, if drilling is successful, this resource is likely to be brought to commercial operation sooner than the deeps. Geodynamics will resume drilling at the Habanero 4 well next year, with the hope of installing a 1MW pilot plant to power the village of Innamincka installed in early 2012.

Greener pastures

Greenearth Energy has struck an agreement with aluminium giant Alcoa that could be pivotal for the development of its Geelong geothermal project. The memorandum of intent announced on Monday, and negotiated over several years, will allow Greenearth to site its production wells and generating plant on or near Alcoa’s coal mining leases, plug into Alcoa infrastructure to gain connection to the grid, and secure an off-take agreement.

Greenearth managing director Mark Miller described the MOI as a “tremendous outcome” for the company and could help it overcome significant hurdles, not least of these being financing for the proof of concept, and demonstration phases, when it will build a 12MW energy plant. “This is not a financial deal but it should make financing easier down the track,” Miller said.

Miller said he viewed the MOI with Alcoa as a further endorsement of the potential of Greenearth’s project to deliver zero emissions, base load renewable energy to the state. It hopes drilling can go ahead in the second half of 2011, with production possible in late 2012. Alcoa says it has cut emissions from its Victoria operations by 60 per cent over the last two decades and its agreement with Greenearth is part of its “big picture” response to climate change.

The Economist has a look at developments in the world of geothermal power - Hot rocks and high hopes.

OVER the course of the next ten years a company called Geodynamics, based in Queensland, Australia, is planning to drill as many as 90 wells, each 4,500-5,000 metres deep, in the Cooper Basin, a desert region in South Australia with large energy reserves. But the company is not drilling for oil or gas. It is looking for an energy source that is far cleaner and more abundant than any fossil fuel: heat emanating from hot rocks deep beneath the Earth’s surface, a promising emerging form of geothermal energy.

Conventional geothermal power exploits naturally occurring pockets of steam or hot water, close to the Earth’s surface, to generate electricity. (Heat from the water is used to boil a fluid and drive a steam turbine connected to a generator.) Because such conditions are rare, the majority of today’s geothermal power plants are located in rift zones or volcanically active parts of the world. In Iceland, around one-quarter of the country’s electricity is produced by geothermal power stations; at the Svartsengi power station, the naturally occurring hot water also flows into a lagoon, which is a popular (and photogenic) bathing spot.

Geothermal power stations can also be found along the “Ring of Fire” around the Pacific, in Indonesia, the Philippines and on America’s west coast. Conventional geothermal power stations worldwide have a total capacity of 10.7 gigawatts (GW) and will generate 67.2 gigawatt hours (GWh) of energy this year—enough to supply power to more than 52.5m people in 24 countries, according to America’s Geothermal Energy Association.

Engineered geothermal systems (EGS) are based on a related principle, but they work even in parts of the world that are not volcanically active, by drilling thousands of metres underground to mimic the design of natural steam or hot-water reservoirs. Wells are bored and pathways are created inside hot rocks, into which cold water is injected. The water heats up as it circulates and is then brought back to the surface, where the heat is extracted to generate electricity. Because the Earth gets hotter the deeper you drill, EGS could expand the reach of geothermal power enormously and provide access to a virtually inexhaustible energy resource.

“The beauty of the concept is that if it works, it can work anywhere in the world,” says Subir Sanyal, president of GeothermEx, a consultancy based in California. According to “The Future of Geothermal Energy”, a report issued by the Massachusetts Institute of Technology (MIT) in 2007, the thermal energy available in America in rocks 3-10km (1.9-6.2 miles) beneath the Earth’s surface is nearly 140,000 times greater than its annual energy consumption. Conservative estimates suggest just 2% of that energy could be tapped by EGS in practice, but even that would be far more than is needed to supply all of America’s electricity. Tapping it will, however, require both technical and economic hurdles to be overcome.

At the moment only a few EGS plants exist worldwide, including a pilot plant in Soultz, France, and a small commercial plant in Landau, Germany. But Geodynamics and other companies around the world are hoping to change that. Over the next decade Geodynamics plans to build ten 50 megawatt (MW) power stations in Cooper Basin, and that may just be the beginning. According to Doone Wyborn, the company’s chief scientist, the area’s resources could support hundreds of power stations with a total generating capacity of up to 12.5GW—more than all the geothermal power stations now operating worldwide. There are also plans for new EGS projects in America, Britain, France and Germany. Those in the field have high hopes for future expansion: the International Geothermal Association predicts that there will be 160GW of geothermal capacity installed worldwide by 2050, about half of which will be EGS. ...

But man-made earthquakes are not unique to EGS; they also occur as a result of oil-and-gas drilling, and damming and mining operations. The question is whether they can be controlled. Ernie Majer, a seismologist and deputy director of the Earth Sciences Division at Lawrence Berkeley National Laboratory, who is working on refining EGS seismicity guidelines for America’s Department of Energy, believes they can. “With proper study and implementation, you can guarantee that there won’t be big ones,” says Dr Majer, who sees small quakes as a nuisance rather than a danger. Still, many in the industry agree that EGS should be developed in remote areas first, rather than in densely populated cities such as Basel.

And the risks associated with EGS must be balanced against the drawbacks of other energy technologies, such as fossil fuels, which produce carbon-dioxide emissions and occasional oil spills, and nuclear power, which produces radioactive waste. Wind power, meanwhile, is criticised for causing noise pollution, killing birds and despoiling landscapes. The real question, in the end, is what people are ready to put up with in return for a secure energy supply. “It’s a trade-off,” says Dr Majer. “You have benefits and hazards. There’s no perfect technology.”

Whether EGS can overcome the obstacles it currently faces, and go on to play an important role in the world’s renewable-energy portfolio, should become clear in the next decade. “The well failure has set us back,” acknowledges Dr Wyborn of Geodynamics. But he is certainly not giving up. According to the MIT report, the first 100MW of installed EGS capacity should be the most difficult and costly to achieve, but after that it should get easier and cheaper. Scarcer and more expensive oil would certainly help. “There are thousands of wells being drilled for oil across the world every year,” says Dr Wyborn. “I imagine that in a couple of decades all of those drilling rigs that are now redundant, because we’ve run out of oil, will be drilling geothermal wells instead.”

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.

The SMH has an update on Australian geothermal power hopeful Geodynamics progress out in the desert - Geodynamics set to prove hot rocks model.

High-profile geothermal hopeful Geodynamics Ltd says it's moving closer to creating an operating heat exchanger and validating the geological model of its joint venture Innamincka project in South Australia.

Operations have started at Jolokia 1, a joint venture with Origin Energy in the Cooper Basin, to complete the well, fracture the granite and create a geothermal reservoir, Geodynamics said in a statement on Friday.

Rig 100 has re-entered Jolokia 1 and successfully drilled through the cement plug set in September 2008, the well has been cleaned and Geodynamics is undertaking scheduled logging to check the condition of the well.

A simulation program is expected to start in late July and run through August.

Geodynamics will then return to Habanero for the drilling of two more wells and the commissioning of the one megawatt Pilot Plant, with the aim of being in a position to make the final investment decision regarding development of the 25 megawatt Commercial Demonstration Plant.

Giles Parkinson at the Climate Spectator reports that cleantech stocks haven't done too well in Australia in recent times, with geothermal energy companies being the worst performers of all - CLIMATE SPECTATOR: The cleantech bubble blowout.

Australia’s first cleantech bubble has well and truly burst. The geothermal energy industry has lost practically all support from the investment community, and share prices are just a fraction of what they were just a year or two ago. Hundreds of millions in market value has been wiped from the board.

In the history of market bubbles, this event might have passed unlamented. But geothermal energy is not a mere passing fad, or a cool iPhone app – it forms a crucial part of the government’s renewable energy strategy, and is supposed to be the centre of $15 billion of investment over the next decade.

As things currently stand, that looks impossible, and the government, in danger of another embarrassing debacle in its renewable energy policy, is under increasing pressure to take action to help de-risk the sector.

Cleantech and renewable energy investments as a whole are in a sorry state in this country. The 75-company Australian Cleantech Index, a basket of renewable, environmental, waste and biofuel stocks with a combined market value of $10 billion, slumped 32 per cent in fiscal 2010, compared to an 11.8 per cent gain for the ASX200 and a 10.5 per cent gain for the ASX Small Ords.

Cleantech Australia managing director John O’Brien blames “weak and inconsistent political leadership” on environmental issues for this fall. “The story of environmental investments in Australia is a depressing one compared to global cleantech stock performance,” he says.

The geothermal index was the weakest component, losing 57 per cent in the last 12 months, following a 34 per cent loss the year before. Even the two market leaders, Geodynamics and Petratherm, who share $153 million in government grants between them – if they can advance their projects far enough – have slumped by two thirds in the last six months.

Yet, according to the federal government’s own estimates, geothermal energy could provide more than one quarter of 41,000 gigawatt hours required to meet its 20 per cent renewable energy target. And the government’s own Energy Resource Assessment rates geothermal as the likely cheapest and cleanest form of baseload energy (including “clean” coal and nuclear) by 2030.

But in its current state, the industry fears it will be unable to deliver. It simply doesn’t have the support of the market to raise funds for the relatively expensive task of drilling.

The ABC has a report on the latest timetable for GeoDynamics' pilot geothermal power plant in South Australia - Geothermal plant to be commissioned 2012.

Residents of Innamincka will have to wait until early 2012 for the commissioning of a geothermal power plant, set to replace diesel generators as their power source.

The geothermal company, Geodynamics, plans to develop a one-megawatt power plant to supply the town's 12 residents and prove that it can harness hot-rock energy for general use.

An explosion at a well that was to power the plant delayed commissioning last year and managing director, Gerry Groves-White, says recent rains and flooding have halted work until June. "But as those floods recede and we're watching it daily we will look for our opportunities to start earlier," he said. "What I can offer them is now certainty that by early 2012 we will be powering up the transmission lines into Innamincka.

The ABC has a report on Origin Energy and GeoDynamics' search for shallow geothermal energy sources in outback Australia - Big potential seen in outback hot rocks.

A major Australian energy company says it believes geothermal resources in parts of the outback have enormous potential to meet the nation's future energy needs.

Origin Energy has established a new joint venture with Geodynamics Limited to explore for shallow geothermal resources in the Eromanga Basin in south-west Queensland and parts of far north South Australia.

The exploration will focus on developing renewable energy generation.

Origin spokesman Andrew Stock says geothermal could play a significant role in providing Australia's future energy needs if its potential can be realised.

"It is another significant investment and commitment by Origin to its belief that in the medium term this is a huge resource that if we can - in a sense - crack the nut as to how it can be developed, it is worth staying the course," he said.

"That's what we're doing in opening up this new opportunity with Geodynamics."

Mr Stock says the initial work will include drilling and testing two wells at a cost of about $10 million.

New Scientist has a report on the latest setback for Geodynamics' pilot geothermal power plant in South Australia (continuing the company's two steps forward, one step back routine) - Geothermal explosion rocks green energy hopes. More at the SMH and WSJ.

The bid to produce green power on a commercial scale using heat mined from subterranean rocks – or "hot rocks" – has suffered a major setback, with the breach of a four-kilometre-deep well on Friday in the Cooper Basin in South Australia.

Mining heat from subterranean rocks could one day provide continuous, affordable energy anywhere on Earth, and Geodynamics, the Brisbane-based company that operates the South Australia well, is widely tipped as being closest to making the technology cost effective.

Geodynamics holds the rights to a potential power supply of up to 10 gigawatts trapped in a 1000-square kilometre slab of hot granite deep under the town of Innamincka in South Australia.

The company was in the final stages of commissioning a demonstration one-megawatt power plant for Innamincka when the rupture occurred, and steam started to escape from the well.

Drilling deep wells into hot rocks and circulating water to mine heat is technically challenging, and the cause of the breach is still unknown.

The Adelaide Advertiser has an article on a company aiming to have Australia's first grid-connected geothermal power plant operational by 2011, ahead of front-runner GeoDynamics - Geothermal explorer reveals inferred resource at Penola.

HOT rocks explorer Panax Geothermal has revealed 41,000 petajoules of inferred resource at its Penola tenement in the State's South East. The company said 5 per cent of the inferred resource could be classified as a measured resource - sufficient to operate a 200 MWe geothermal base-load power plant for 30 years, subject to a full feasibility study.

Panax aims to have Australia's first grid-connected geothermal power plant operational by 2011. Its application for a $7 million drilling grant from the Federal Goverment also had been upgraded to a full merit assessment, executive director Kerry Parker said.

Mr Parker said the company was "quietly confident'' of grant approval which would see drilling at Salamander 1 in the advanced Penola Project, part of the company's limestone Coast geothermal project in SA, start by mid 2009. He said Panax was the only hot sedimentary aquifer project in Australia to reveal a measured resource highlighting Panax's advanced status.

Hot fractured rock explorer Geodynamics has Australia's most advanced project near Innamincka in the State's far north.

The ABC reports that a geothermal energy plan has been launched in Australia to make it a baseload power source (this is different to schemes to make wider use of low temperature geothermal power) - Geothermal industry plan launched.

The development of geothermal energy in Australia is a step closer with the launch of an industry framework today. Geothermal energy is produced by harnessing the heat of so called 'hot rocks' buried kilometres underground.

The framework has brought together industry, researchers and governments to work out how to make geothermal a genuine baseload power alternative. Geoscience Australia estimates it will take five to 10 years before geothermal energy is commercially available.

PACE reports that geothermal power hopeful Hot Rock is trying to get a 50 MW plant up and running in Victoria - Geothermal energy planned for 2012.

Local company Hot Rock Limited is preparing developments for its first geothermal exploration power station next year, in a quest to provide a cleaner, greener energy source for Australia by 2012.

Hot Rock is the largest single holder of geothermal exploration permits in Australia, and its four permits in the area have a total area of 18,294 square kilometres and extend for approximately 270 kilometres along the South Australian coastline and inland.

Locations within Hot Rock’s reach include Portland, Hamilton, Warrnambool, Terang and Colac, some of which have hot springs related to the Otway Basin Geothermal Province.

Geothermal energy is a process of generating clean electricity from naturally-occuring hot water under the ground. The heated water is pumped from below the surface via a network of production wells, and its heat is extracted to produce electricity. Cool water is then pumped back into the hole for use next time.

An independent review by engineering consultants, SKM, showed that the area in which Hot Rock holds permits has the scope to generate up to 1,750MWe or approximately 35 per cent of Victoria’s electricity needs.

Fully developing this area could position Victoria as one of the cleanest states of Australia for electricity generation, says Hot Rock.

The four permit areas held by Hot Rock have already been explored for oil and gas, with over 180 wells drilled. Four of these wells have been shown to offer geothermal resources with water heated to 145 degrees C at depths of 2,400 to 3,600 metres below the ground, which is relatively shallow, according to the company.

Hot Rock is in discussions with electricity generation and retail companies on a joint venture power development in the Koroit Project, which is a 250 square kilometre area within the permitted locations, within the vicinity of two previous drill holes that encountered hot water.

“The [joint venture] comprises an initial proof on concept phase involving the drilling and testing of two wells followed by development of a 50MW power plant,” the company said in a recent quarterly report to the Australian Stock Exchange.

Adelaide Now reports that Geodynamics is looking to expand into the Hunter Valley, with the NSW government giving them some financial encouragement - Cooper Basin hot rocks explorer Geodynamics gets $10m grant. Geodynamics' first pilot plant is South Australia is due to be operational in March next year.

COOPER Basin hot rocks explorer Geodynamics has been given a $10 million grant by the NSW Government to develop a commercial geothermal project in the Hunter Valley, NSW. The NSW government will invest $27 million in seven renewable energy projects, with Geodynamics' the largest player.

Managing director Gerry Grove-White said the funding would be for commissioning of a small geothermal power plant in the Hunter Valley in 2012. "The first stage of this will be the drilling of a 2km exploration well in early 2009 to confirm temperature gradients,'' he said. Geodynamics Hunter Valley tenements at Bulga and Muswellbrook may also hold significant geothermal resources, he said.

Meanwhile the company was close to a major milestones at its key project in the Cooper Basin near Innamincka, South Australia. A 1 MW pilot plant to power the company's joint venture operations with Origin Energy in the outback town of Innamincka is planned to be commissioned from February 1 and the town powered by geothermal energy by March 31.

Mr Grove-White said the knowledge and expertise Geodynamics has achieved in the Cooper Basin over the past five years will be used in the development of the Hunter Valley project.

Adelaide Now also reports that Petratherm is looking to start drilling at Paralana in May next year - Hot rocks fire up investors.

INVESTORS have bought into South Australian geothermal energy explorers in response to renewed Federal Government support for the sector, says Petratherm managing director Terry Kallis.

Federal Resources and Energy Minister Martin Ferguson reinforced the Government's commitment to a $50 million geothermal drilling program at a CEDA speech in Adelaide on October 24. Shares in SA-focused geothermal energy stocks have since climbed a combined 34 per cent despite turbulent market trade.

"The Federal Government is reinforcing the fact that they're still committed to the renewable energy sector . . . I think people are starting to see what the quality stocks are in each sector,'' Mr Kallis said. ...

Drilling at Petratherm's Paralana project begins in May, 2009 under its $57 million TRUenergy farm-in agreement. Its shares have climbed 37 per cent since October 24, up 13c to 48c. ...

Mr Kallis said Petratherm had costed its Paralana Project at $6 million per megawatt (MW) for a 30MW base-load plant operating around the clock. A typical wind project would cost $2 million per MW of installed capacity, but would only operate for one third of the time, making geothermal as cost competitive as wind, Mr Kallis said.

He said Petratherm planned to generate revenues as early as May, 2010 when its Geo-Madrid District Heating Project is expected to be on stream.

Google.org has generated plenty of publicity with its recent announcement about investing in geothermal energy companies - Enough geothermal energy to power the globe -- now that's hot!.

Today, as part of our Renewable Energy Cheaper than Coal initiative, Google.org announced more than $10 million in investments and grants in Enhanced Geothermal Systems (EGS) technology. EGS expands the potential of traditional geothermal energy by orders of magnitude. The traditional geothermal approach relies on finding naturally occurring pockets of steam or hot water. The EGS process, by comparison, replicates these conditions by fracturing hot rock, circulating water through the system, and using the resulting steam to produce electricity in a conventional turbine.

EGS has the potential to provide clean renewable electricity 24/7, at a cost cheaper than coal. The ability to produce electricity from geothermal energy has been thought exclusive to locations such as California and Iceland. However EGS could allow us to harness the heat within the earth almost anywhere. To see see the massive size of the US geothermal resource accessible by EGS, check out our Google Earth layer. For more on EGS, watch [the] video [below], featuring Dr. Steve Chu, Director of the Lawrence Berkeley National Laboratory, and Dr. Jefferson Tester, professor of Chemical Engineering at MIT and lead author of a major recent study on EGS.

Our EGS partners to date include:

* AltaRock Energy: $6.25 million investment to develop innovative technologies to achieve significant cost reductions and improved performance in EGS projects
* Potter Drilling: $4 million investment in two tranches, to develop new approaches to lower the cost and expand the range of deep hard rock drilling, a critical element to large-scale deployment of EGS
* Southern Methodist University Geothermal Laboratory: $489,521 grant to improve understanding of the size and distribution of geothermal energy resources and to update geothermal mapping of North America

Working with Geodynamics, one of the world's leading EGS development companies, we modeled Geodynamics' first 50 MW system at the Cooper Basin in SketchUp, Google's 3D modeling technology. To see how EGS works, check out the animation of the SketchUp model or download it.

The SMH has a report on the geothermal industry in Australia - Australia's hot rocks may generate power

Australia is sitting on an "inexhaustible" source of energy, scientists say - and they're not talking about coal. "Hot rocks" energy is being touted as the latest solution to climate change. Australia's first hot rocks power station moved a step closer on Wednesday when the federal government launched a $50 million fund to commercialise the technology. Resources Minister Martin Ferguson said Australia's first hot rocks power plant could be built within four years.

Also at the SMH - Hot-rock industry stakes a claim

USING just 1 per cent of Australia's so-called "hot rocks" supply could produce 26,000 times the amount of energy that is now used each year. The figures, compiled by Geoscience Australia, were such a surprise to the office of the Minister for Resources, Martin Ferguson, that staff had them checked six times before releasing them. "The potential of the geothermal industry in Australia is truly staggering … It provides clean baseload power and is potentially a very important contributor to Australia's energy mix in a carbon-constrained world," Mr Ferguson said.

Bloomberg also has a report on the latest surge in enthusiasm about geothermal energy - Geothermal Energy May Supply 5% of Australia's Power.

Geothermal energy could supply as much as 5 percent of Australia's electricity requirements by 2020 with an investment of about A$12 billion ($10.4 billion), helping reduce greenhouse gas emissions, an industry group said.

Producing power from underground heat could provide a maximum of 2,200 megawatts of continuous generating capacity by 2020, the Australian Geothermal Energy Association said today in an e-mailed statement, citing a study by economic modeling firm McLennan Magasanik Associates. That would be up to 40 percent of the nation's 2020 target for renewable energy use.

Geodynamics Ltd. and Petratherm Ltd. are among companies seeking to tap super-hot granites lying as deep as 5 kilometers (3.1 miles) underground in South Australia state to produce low- emissions electricity. Twenty-three companies will invest more than A$701 million in geothermal exploration in the state in 2002-2013, the South Australian government said this month.

``This report highlights that the Australian geothermal energy industry has a potentially significant contribution to solving Australia's long-term climate change challenges,'' Gerry Grove White, chairman of the group, said in the statement.

The cost of generating power from geothermal sources is expected to decline to become the cheapest form of renewable energy by 2020, the study found.

The SMH has a enthusiastic report on the growing interest in geothermal energy - Renewable energy just got hotter.

The world is watching a hot rocks plant with massive potential in South Australia. It is clean, renewable and quiet, writes Phil Cornford. By the end of the year, the diesel-fuelled generators in Innamincka will fall silent when Australia's first power plant fuelled by hot rocks, four kilometres below the Earth's surface, supplies electricity to the sun-scorched Cooper Basin outpost 1100 kilometres north-west of Adelaide.

"It'll be a lot quieter without the generators running 24 hours a day," says Kym Ford, owner of the Innamincka Hotel, one of only a half dozen buildings in the hamlet, which was not there when explorer Charles Sturt rode past in 1845. It will also save the hotel an annual diesel bill of $150,000.

Innamincka, which has a population of 12, is a long way from everywhere, and the power plant will generate only 1 kilowatt of electricity, a modest beginning. But it will be the first exploitation of deep-earth geothermal energy in what is known as the South Australian Heat Flow Anomaly, a vast area of subterranean fractured granite with estimated potential to produce 60 times more electricity than the Snowy Mountains hydro-electric scheme.

In these times of climate change, it is significant that geothermal power replenishes itself and is clean, producing none of the carbon dioxide gases that contribute to global warming. Geothermal power figures as a major contributor in Federal Government plans to drastically reduce greenhouse emissions, with predictions that hot rocks will supply 6.8 per cent of Australia's total energy by 2030.

The Innamincka power plant is being developed by Geodynamics Limited, which plans to expand it to 50megawatts in 2012. That is enough capacity to supply up to 50,000 households, but it will send electricity 110 kilometres to the Moomba oil and gas field. The company plans a 500 megawatt plant by 2016, when it expects to supply power down a 500-kilometre, high-power transmission line to the national electricity grid in Port Augusta, and another transmission line to BHP Billiton's Olympic Dam mine, 490 kilometres away. The estimated cost is $2 billion.

Petratherm Limited will drill two four-kilometre wells later this year and early next year at its Paralana site, 320 kilometres north-east of Port Augusta and 180 kilometres south of the Geodynamics tenements. Petratherm plans a 7.5 megawatt power plant by 2010, supplying electricity to the nearby Beverley uranium mine, expanding to 30 megawatts in 2012 and 260 megawatts in 2020, with transmission lines to Port Augusta, and 300 kilometres east to Olympic Dam. The estimated cost is $2 billion.

One of the advantages of hot rocks energy is that, unlike coal and gas which are consumed in generation, the heat and water resources are recirculated, giving them life expectancies of 50 years and more.

To produce 50 megawatts, the explorer Geodynamics will drill nine wells four kilometres down into fractured granite, heated to more than 250degrees by the radioactive decay of uranium, thorium and potassium.

Broken by horizontal fractures, the granite becomes a conduit for a reservoir of superheated water which is thrust up five wells at great pressure, surfacing at 210 degrees as steam to drive electricity turbines. When it is used and cooled, it is pumped down four wells to be used again.

Each well costs $10 million and takes about 110 days to build, although Geodynamics expects to reduce this to 70 days after spending $32 million buying the biggest drilling rig in Australia, capable of drilling down to six kilometres. But to expand its power plant to a 500 megawatts capacity, it will have to drill 81wells in four years, a task needing at least six drilling rigs.

But there is a worldwide shortage of deep drilling rigs, and Geodynamics, Petratherm and other explorers will all want them at the same time. Where to get them? "It's a problem we're working on," a spokeswoman from Geodynamics says.

By the end of last year, four other geothermal companies had drilled in the Cooper Basin - Green Rock Energy Limited, Geothermal Resources Limited, Torrens Energy Limited and Scopenergy-Panax. Thirty-three companies have taken exploration licences in the Cooper Basin, where the Heat Flow Anomaly has the world's greatest and hottest reservoir of hot fractured rocks within a depth of five kilometres.

Geodynamics estimates the potential of its 2500 square-kilometre exploration area to be 11,000 megawatts. Petratherm estimates its resources will provide 13,000 megawatts. The potential of the entire Cooper Hot Rocks Flow Anomaly is estimated to be 100,000 megawatts. These are enormous resources when compared to Australia's 2006 production of 44,000 megawatts from mostly coal-fired power plants.

Geodynamics also has exploration tenements south of Muswellbrook where seismic tests suggest there are hot rocks granite deposits, not yet confirmed by deep drilling. If there is potential for geothermal energy, it has the enormous advantage of being close to big markets, unlike the isolated South Australian tenements.

Petratherm has geothermal projects in Spain, the Canary Islands and China. Geothermal developments are under way in France, Germany, Switzerland and California, where hot rocks generate 1.6 per cent of total United States energy, the most in the world. But it is the Cooper Basin which has the greatest prospects, with geothermal potential estimated to be sufficient to meet Australia's total electricity demand for 450 years.

Another report today talks about GeoDynamics' other geothermal venture - this one near Singleton in the Hunter Valley - nice and close to Sydney and to existing transmission lines.

A company proposing to tap into a geothermal energy source in the upper Hunter Valley will drill deeper, with tests showing temperatures are hot enough for the project to be viable. GeoDynamics' Hot Rocks project involves pumping water down boreholes onto hot underground granite and using the steam that is generated to drive power station turbines. The company has been conducting shallow test drills near Singleton for eight years.

The latest results show temperature gradients of up to 58 degrees Celcius per kilometre, which are comparable to those in the company's larger Cooper Basin project in South Australia. Executive director Doone Wyborn says the next step is deeper drilling to between four and five kilometres underground.

Mr Wyborn believes temperature gradients at that depth would exceed 100 degrees Celcius per kilometre. "We've got pretty reasonable temperature gradients, not as good as in South Australia," he said. "But they're pretty reasonable considering we're right in the middle of the energy capital of Australia, if you like, with all the coal fired power stations. There's powerlines virtually running overhead from our site so we are keen to start looking a bit deeper down."

Kurt Kleiner at Nature has a good summary article on geothermal industry - "Promise Boiling Over" (focusing on Iceland, the US and Australia rather than trying to survey the whole planet like I did in "Geothermia Revisted").

Iceland is famously rich in geothermal energy. The country sits on a geological hot spot that provides enough power to generate one-quarter of its electricity and heat 90% of its homes.

Now, the Icelandic bank Glitnir has decided that the time is ripe to take advantage of geothermal opportunities elsewhere. In September, the bank opened an office in New York to pursue what it boldly predicts will be $40 billion worth of geothermal investment in the United States over the next 20 or so years.

Glitnir's move is one of a growing number of signs that geothermal energy is ready to become a more significant player in world energy production. "If you're a utility, your first choice of renewable energy is geothermal," says Thomas King, managing director of the US Renewables Group investment fund in New York. "It's the cream of the crop."

King's bullishness reflects a growing belief among energy analysts that although the technology hasn't received as much attention as wave or solar power, geothermal companies have outstanding long-term potential. Robert Wilder, chief executive of Californian clean-energy consultancy WilderShares, points to Ormat Technologies, a maker of geothermal plants based in Reno, Nevada, as a sign of the trend: its share price has risen from about $16 a share in April 2005 to $50 this week. Nevertheless, with just 9 gigawatts or so of installed capacity, geothermal energy accounts for only about 0.2% of all electricity produced around the world. In theory, geothermal heat can be found anywhere in the world if you dig deep enough. But in practice, it has only been worth harnessing in regions where water is found in combination with hot, porous rock close to the surface.

For instance, just north of San Francisco, a geothermal field called The Geysers generates 760 megawatts of electric power. The plants there take advantage of a large, naturally occurring underground steam reservoir that can be tapped by drilling relatively shallow wells.

The Geysers are examples of 'dry-steam' power plants: the steam that comes out of the reservoir contains little or no liquid water, and can therefore be routed directly to a turbine to create electricity. However, most plants are of the 'flash-steam' variety. These plants use water that has been heated to about 180 °C, but remains liquid because it is highly pressurized underground. The water is then pumped to the surface. Because the pressure there is lower, most of the water 'flashes' into steam, which can be used to operate a turbine. ...

Even in favourable geological locations, geothermal power has a high capital cost, mainly because it costs a lot to dig the wells. Balancing that are its low fuel costs. Overall, conventional geothermal plants in the United States deliver electricity for between 5 cents and 8 cents per kilowatt-hour: not much more than the average of 4 cents per kilowatt-hour for electricity from a coal-fired power plant.

In Australia, a firm called Geodynamics is trying to develop a new technique that can take advantage of geothermal energy in the absence of a ready-formed reservoir of water. "We believe that our area is probably the best location in the world to make this approach economically viable," says Doone Wyborn, a founder and executive director of Geodynamics in Queensland. The firm plans to use the Cooper Basin, a geological feature of the Australian interior, in which rocks with a temperature of about 270 °C are available quite close to the surface.

Geodynamics aims to drill two wells to a depth of 4.3 kilometres, and to fracture the hot granite in the rocks by pumping down cold water. Once the rock is permeable enough, the system will act as a heat exchanger — water will be pumped down one well, migrate through the rock to the other well, from which it will be extracted and used to generate electricity.

The company plans to have a 50-megawatt power plant in operation by 2010. It estimates the potential capacity of the Cooper Basin at 10,000 megawatts of power, which could be realized by drilling hundreds of wells.

The Geodynamics project is an example of a technology called 'hot-dry-rock' or 'hot-fractured-rock' geothermal. A report by the Massachusetts Institute of Technology (MIT) in Cambridge published in January concluded that this type of 'enhanced' geothermal power generation could greatly enhance our ability to tap geothermal energy. "I feel it's been an ignored option," says Jefferson Tester, the chemical engineer at MIT who headed the panel that wrote the report, The Future of Geothermal Energy. "But I'm very optimistic about the possibility if a lot of things come into place."

Eventually, geothermal energy could be available almost everywhere, the report contends. Deep drilling from any location will eventually hit hot rock. In the United States alone, the report says, the amount of energy available by drilling up to 10 kilometres below the surface is a stunning 13 yottajoules (1024 joules), or 130,000 times the annual energy consumption of the entire country.

Only a fraction of that is economical to exploit. Even so, the report concluded, in the United States alone, enhanced geothermal electrical capacity could reach 100 gigawatts in the next 50 years — enough to fill about 10% of the country's electricity needs.

An important benefit of such systems is their flexibility, Tester says. They could prove to be economical from a very large scale, all the way down to a relatively small, 1-megawatt plant that also provides direct heating to buildings. As in Iceland, this combined heat-and-power approach greatly enhances the economics of geothermal power. But it requires building communities that can make use of the heat. ...

Tester says that geothermal power will make economic sense even without special incentives or restrictions on carbon emissions. As governments move to restrict greenhouse-gas emissions, geothermal power is set to look even better.

King adds that the standards for renewable energy being set by individual states have kicked off a flurry of interest in geothermal power. "It's clean, it's close to zero emissions, and it's baseload power that runs 24 hours a day, 7 days a week. And a well-managed reservoir can keep going practically forever," he says.

Australian geothermal energy company Geodynamics was an unusual subject of attention in the energy press last week, after cornerstone shareholder Origin Energy expanded their stake in their Cooper Basin hot rocks project, including Geodynamics' giant Lightning drilling rig, Australia's biggest onshore rig.

Origin is hoping to leverage its experience in gas exploration, production and power generation and exposure to geothermal power generation in New Zealand.

I've been following the (slow) progress of this endeavour for a number of years now, as the field has the potential to supply a large amount of clean energy over a considerable period of time.

Geodynamics was floated on the stock exchange back in 2002 and has been drilling in the Cooper Basin ever since. Origin believes the company had the best potential of the several Australian geothermal proposals and that "geothermal energy will play an increasing role in the security the world's future for clean energy".

The company has been working towards tapping heat from granites buried up to 5km underground between Innamincka and Moomba to generate electricity. Geodynamics aims to bring in a pilot one megawatt generator at the site within 12 months. Further drilling should enable a decision in 2009 to invest in a 50 megawatt demonstration plant. If successful, that would be followed by a 500-megawatt plant operating by 2016.

The project has been delayed by heat and pressure problems, which have caused drilling difficulties and led to the construction of the specialised drill rig - and to the departure of founding CEO Bertus de Graaf, who is now with uranium company Uranoz and looking to develop the Limestone Coast geothermal energy project elsewhere in South Australia and prospects in the India state of Maharashtra and in Kyrgyzstan.

The Kyrgyzstan development is reported to have very hot granites at relatively shallow depths - estimated to be between 2km and 3km compared to the 4km to 5km depth of the Geodynamics project.

Geothermal energy is unusual compared to other large renewable power sources, in that it provides "baseload" power (thus placating those suffering from the "baseload fallacy") unlike other more intermittent sources like solar, wind and ocean power.

Tim Flannery dubbed this region of South Australia "geothermia" last year, pondering a future where a large proportion of the nation's power supply comes from the region, with an industrial and mineral processing hub developing to exploit the large quantities of energy available.

Imagine an Australia that decides to build on this natural wealth, creating a centre for minerals processing and natural gas conversion by using emissions-free power. Imagine linking the north-south railway with Queensland and Western Australia in order to bring bauxite and other minerals to the processors, and then to market them through the Port of Darwin. Imagine the exports of gas and of processed minerals from the mammoth Olympic Dam mine, which is nearby. And finally, imagine Australia with a fully linked and freight rail and electricity grid, all powered from zero-emissions sources. If you can do this, then you can imagine a nation transformed from climate-change pariah to leader in the fight for the survival of our planet.

All of this would require a new city in the desert - let's call it Geothermia. What might it look like? I imagine a solar collector towering over a low-rise city, providing shade and conserving soil moisture. Perhaps the infrastructure would be underground. Geothermia would be a city not of thousands but of hundreds of thousands - a place with its own critical mass. And most importantly it would be a fully sustainable city - Australia's very first.

Flannery appeared on "Democracy Now" recently to talk about global warming, geothermal energy and the geothermia vision.

AMY GOODMAN: Talk about geothermia and the hot rocks.

TIM FLANNERY: Well, look, it is so important that we get this new industrial revolution happening and move from the dirty fossil fuels to clean sources of energy. One of the most promising is geothermal energy. You know, it’s an old source, really. We’ve had some geothermal plants around the world for a long time. But recently there’s been astonishing discoveries of massive reserves of heat energy in the earth's crust. One of the biggest is in Australia. And I’ve proposed to our government that we try to exploit this clean and sustainable energy resource to run a lot of our heavy industrial needs, such as mineral processing. We could have a new city in central Australia that I’ve sort of called Geothermia, you know, based around the use of this resource, and use our national rail system to bring in minerals to be cleanly processed and then shipped out.

AMY GOODMAN: Now, explain how this was discovered, where it is in the earth.

TIM FLANNERY: Look, it’s in the most dismal spot in Australia. It’s right in the dead center of our continent, near Lake Eyre, which is a huge salt pan, and it’s four kilometers down in the earth. And it was discovered by an oil and gas company, who had discovered a ring of oil-bearing rocks and then a ring of gas-bearing rocks and, in the middle of this, really hot rocks.

They spent hundreds of millions of dollars drilling. And being an oil and gas company, they thought, “We like the oil, we like the gas, but these hot rocks, we can just post that information publicly.” And, of course, someone else came up and said, well, the amount of energy in the hot rocks is actually probably a hundred times greater than the energy in the oil and gas they discovered, so this is the real gem. And so, they got a free ride. They got a couple hundred million dollars worth of free drilling, and now they're going out trying to exploit this resource.

And we’ll know by Christmas, I think, whether this can be successfully done. The second drill bit is now deep in the earth. It’s getting close to those hot rocks. And if we can get circulation happening of the hot fluids, as projected, then we will have unlocked an enormous energy resource at about the price of coal. And that will change everything for Australia.

AMY GOODMAN: And how long would it last?

TIM FLANNERY: If you run the whole Australian economy on it, it will last at least a century. And that’s the one deposit, you know. This is -- there’s ten companies looking for more of these hot rocks in Australia now. And in China there’s great prospects, as well. There’s prospects in Europe and, doubtless, in parts of the US. So as we shift away from coal and take a medium to long-term view, we can’t just imagine the choices between clean coal technologies and nuclear power. There are other very formidable sources of power that can deliver large volumes of what’s called baseload electricity, you know, the stuff you need twenty-four hours a day, at low cost.

AMY GOODMAN: Let's talk about your proposals around a green electrical grid, green transportation.

TIM FLANNERY: Yeah, look, we know that in order to beat this problem we have to reduce our emissions on the order of 80% in the next forty years. Now, forty years might sound like it’s a long way off, but it isn’t really, you know. I suppose just to drive home to people what that means, it means that in forty years from now we can’t be driving cars that are fueled with fossil fuels, with oil. We can’t be generating our electricity by burning coal and natural gas. We have to have shifted decisively from those polluting sources of power to clean sources of power. So that’s why the race is on now for new affordable takes to harness energy of the sun, which is massive, to harness wind energy, wave energy, geothermal energy, all of these sources that will drive this new clean and prosperous economy of ours, if we can reach out, make the investments and push forward to avoid dangerous climate change.

The idea of shifting energy intensive industries to areas where there is abundant renewable energy (which is a good way to hedge against rising fossil fuel prices) is one which has started being put into practice already, with aluminium (sometimes called "congealed electricity") producers looking to set up smelters close to hydro power stations in Canada, Iceland, Greenland, and the Congo.

If HFR geothermal turns out to be practical on a large scale, South Australia may be a big beneficiary of this trend, as it also has high potential for generating power from solar and ocean (wave) energy - not to mention the world's largest uranium mine and some residual (albeit declining) oil and gas production. Another region which may have large scale generation potential is the Hunter Valley region, conveniently located next to a lot of existing coal fired power stations.

Other companies looking to development geothermal energy in Australia include:

• Petratherm - looking to develop another HFR resource in northern South Australia, initially to power the Beverley uranium mine. Managing Director Terry Kallis expects the cost of power "to consumers would be somewhere between $50 to $60 a megawatt hour or five to six cents per kilowatt hour". The company is also looking to develop projects in China.
• Green Rock Energy - operating in the area around the Olympic Dam mine and in Hungary
• Scope Energy (now part of Uranoz) - looking to develop a 100MW plant near Millicent in the south-east of South Australia. Principal Roger Massey-Greene expects the cost of power to be "very competitive with combined-cycle gas power plants"
• Torrens Energy
• Pacific Hydro
• Greenearth Energy
• Osiris
• Eden Energy
• Geopower

The industry is already fighting against "clean coal" backers for government funding and has formed the Australian Geothermal Energy Association, representing at least 16 companies operating in the sector. The organisation will have its inaugural meeting on November 21.

More data about geothermal resources in Australia is being gathered by Geoscience Australia's Geothermal energy project and the Research Institute for Sustainable Energy (RISE).

Background

Geothermal energy has been used for centuries for heating, cooking, and medicinal bathing. The first geothermal power generation plant was constructed in 1904 in Larderello, Italy, followed by Wairakei, New Zealand in the 1950's then the Geysers in California in the 1960’s.

There is currently an estimated 12,000 MW of direct use and over 8,000 MW of power generation using geothermal resources around the world. This generation capacity represents about 0.4% of the world total. The US is the largest producer, followed by the Philippines, Mexico, Indonesia, Italy, Japan and New Zealand.

If heat recovered by ground heat pumps is included, the non-electric generating capacity of geothermal energy is estimated at more than 100 GW (gigawatts of thermal power) and is used commercially in over 70 countries.



Existing geothermal power generation is sometimes called "wet" geothermal power - using natural hot water sources close to the surface to generate power using energy conversion technologies like dry steam, flash steam and binary cycle systems.

Hot Dry Rock / Hot Fractured Rock (HFR) power is still at the experimental stage, with the Geodynamics project being the most advanced in terms of commercial development. Besides the various projects underway in Australia, Swiss company Geopower Basel has tried drilling under the city of Basel - however this has been halted due to concerns about the drilling causing earthquakes - and other experiments are being performed in Germany and the french village of Soultz-sous-Forêts.

An MIT led study (funded by the US Department of Energy) last year said that if 40 percent of the heat under the United States could be tapped, it would meet demand 56,000 times over. The report estimated that an investment of $800 million to $1 billion could produce more than 100 gigawatts of electricity by 2050, equaling the combined output of all 104 nuclear power plants in the US.

The report noted that geothermal energy is important for several key reasons:

* fossil fuels (coal, oil and natural gas) are increasingly expensive and consumed in ever-increasing amounts
* oil and gas imports from foreign sources raise concerns over long-term energy security
* burning fossil fuels dumps carbon dioxide and other pollutants into the atmosphere

Herman Kahn was also very enthusiastic about the potential of geothermal energy, rating it as by far the largest available power source we have, dwarfing any demand for energy we are likely to have even with a massively increased population.

Technology Review had an interview with the MIT report author Jefferson Tester last year which noted that the amount of energy available is "thousands of times more than we now consume each year".

The figure for the whole world is on the order of 100 million exojoules or quads [a quad is one quadrillion BTUs]. This is the part that would be useable. We now use worldwide just over 400 exojoules per year. So you do the math, and you know you've got a very big source of energy.

How much of that massive resource base could we usefully extract? Imagine that only a fraction of a percent comes out. It's still big. A tenth of a percent is 100,000 quads. You have access to a tremendous amount of stored energy. And assessment studies have shown that this is thousands of times in excess of the amount of energy we consume per-year in the country. The trick is to get it out of the ground economically and efficiently and to do it in an environmentally sustainable manner.

A recent report from the Geothermal Energy Association (pdf) showed that the amount of geothermal power being generated is already increasing significantly.

"The number of countries producing geothermal power and total worldwide geothermal capacity under development appear to be increasing significantly in the first decade of the 21st century," according to the report. "The number of countries producing power from geothermal resources could increase 120 per cent, from 21 in 2000 to as many as 46 in 2010. Total geothermal capacity online could increase over 55 per cent, from 8,661 megawatts in 2000 to 13,500 megawatts or more."

New Zealand

New Zealand’s geothermal generating capacity (as of 2000) of over 400 MW (far exceeding that of Australia currently). The coutry has significant expansion plans for new geothermal power generation. New permits have been approved for a 60 MW power station in the Wairakei-Tauhara geothermal field and a 70 MW plant at the Kawerau field, with more permits expected to be issued in the future as part of the country's move to be the world’s first carbon neutral nation. Rod Oram reports the country could easily increase geothermal generation by a factor of 4.

Iceland

Byron King at The Rude Awakening recently had a look at the prime mover towards the use of "hot and steamy" geothermal energy - Iceland. Byron notes that the country is now energy self sufficient and is a good example of locations with large renewable energy supplies attracting energy intensive industries (one recent case in point is companies like Microsoft and Cisco considering using the country to host "green server farms").

When it comes to harnessing geothermal power, the go-to place on the planet right now is the Republic of Iceland. Yes, Iceland. It is a large island at high latitude, composed mostly of dense basalt lava flows. Iceland straddles the Mid-Atlantic Ridge, which provides that country with an almost direct link to the primordial heat energy within the mantle of our planet. And that is one all-but-immeasurable store of energy. Thus, Iceland is the world’s leading nation in terms of exploiting its local geothermal power resources. In Iceland, the insiders refer to the process of extracting geothermal energy as “heat-mining,” and they are getting rich from the effort.

Recently, the president of Iceland, Olafur Grimsson, visited the U.S. to speak at a number of events and testify before the U.S. Senate Committee on Energy and Natural Resources. In a speech delivered at Harvard on Sept. 26, President Grimsson emphasized the importance of geothermal energy to the economy and society of Iceland. He stated that Iceland has undergone a “radical transformation” from dependence on coal and oil in the past 30 years. As recently as the 1970s, Iceland was among the poorest countries within what was then known as the European Common Market (now called the European Union). That is, by most measures of gross domestic product and other economic output, Iceland was an economic laggard.

But then Iceland made a conscious, strategic commitment to develop its domestic geothermal energy resources. From large industrial projects down to the level of family housing, Iceland focused its public and private energy investment on making a geothermal energy vision into an energy reality. Now, according to what President Grimsson told his Harvard audience, Iceland is one of the most affluent nations in the world. Fully 100% of Iceland’s electricity now comes from renewable sources, geothermal and hydroelectric, and almost all buildings in Iceland are heated with geothermal energy. On the whole, about 72% of Iceland’s total energy usage is tied to geothermal sources, which eliminates essentially all carbon emissions and dramatically reduces reliance on imported fossil fuels of any type.

According to President Grimsson, Iceland has “turned this [geothermal power production] into an extremely profitable business.” For example, electricity is so inexpensive in Iceland that there is a booming business on the island that imports bauxite from the Caribbean area for the purposes of refining aluminum, a highly energy-intensive process.

In comments after his prepared speech at Harvard, President Grimsson expressed his “astonishment” at the utter paucity of geothermal power generation in the U.S., merely 0.3% of all electricity generated across 50 states. And much of that power comes from one location in California, called the Geysers. President Grimsson noted that the U.S. sits atop “the second largest geothermal resources in the world, following only Indonesia.”

President Grimsson concluded that by harnessing the “fireball on which we sit,” mankind could revolutionize energy production across the globe.

Iceland is not only making extensive use of its own geothermal resources but is looking to export technology and expertise to other promising regions, including Indonesia, the Philippines and the US - particularly a new company called Reykjavik Energy Invest.

Indonesia

With its hundreds of active and extinct volcanoes, Indonesia has the potential to produce an estimated 27,000 MW of electricity from geothermal sources. Reuters recently reported that Chevron is looking to expand its geothermal generation capacity in the country as part of the country's efforts to tap alternative energy sources to meet rising power demand and to cut consumption of crude oil as its own reserves dwindle.

Simon Sembiring, the Indonesia director general of geothermal and mineral resources, said earlier this year many foreign firms were interested in investing in geothermal energy projects in Indonesia, with the Icelandic invasion now underway - Reykjavik Energy Invest have already signed a preliminary deal to develop a geothermal power plant with Indonesian oil company Pertamina.

The Philippines

Another country astride the 'ring of fire" is The Philippines, where Chevron also run a number of geothermal power plants (including Tiwi, which is currently impacted by water shortages). The country currently generates around 8% of its electricity from geothermal energy - and another 15% from hydro power - making it the world's second largest producer of geothermal power.

The Icelanders are also looking to help expand the local industry here, with officials from Reykjavik Energy Invest visiting recently to discuss partnering in the development of other geothermal areas and bidding for a stake in power company PNOC-EDC (along with 23 other groups).

Papua New Guinea

Another country in the Asia-Pacific region looking to exploit geothermal energy is PNG, where gold miner Lihir Gold already has a geothermal plant powering mine operations. Bismarck Energy managing director Karl Yalo recently appealed to the PNG government to encourage geothermal power as high and rising fossil fuel prices hit the local economy hard.

“Several developing countries have well-entrenched geothermal plants complimenting traditional energy sources, thereby increasing energy output and enhancing economic growth. In PNG, we have seen the Lihir Gold Mine increase its base load capacity through geothermal energy, thereby reducing substantially use of fossil fuel and consequently converting the savings to sound profit,” Mr Yalo said.

Mr Yalo said numerous naturally occurring hot steams throughout New Britain and New Ireland showed the abundance of these opportunities and that serious consideration had to be given to examining the commercial development of geothermal as an alternative energy source particularly given the present high crude oil prices.

He appealed to the National Government to support the project as it will contribute meaningfully to the national economy through fiscal and other benefits. “With world crude oil price now trading at a record US$90 per barrel, there is no price relief in sight. “I believe fossil fuel prices will not come down to the late 90’s prices. The end result is that countries like PNG whose economies depend entirely on fossil fuel, will continue to face economic hardship, particularly people in the rural communities where bulk of them reside,” Mr Yalo said.

United States

While the US today makes only limited use of geothermal energy, it has a number of areas containing large energy resources, particularly Alaska and western states like California and Nevada. The Intermountain West Geothermal Consortium estimates geothermal resources of around 13,000 MW in the western states.

Producing geothermal power from oil and gas wells in the Gulf of Mexico is also being considered.



The largest geothermal plant in the US (and the world) at present is in Northern California, generating enough power for 800,000 homes, with the plant currently undergoing further expansion.

Iceland's Glitnir Bank plans to invest $1 billion in U.S. geothermal energy projects over the next five years in order to exploit some of the $40 billion market that they predict will develop over the next 25 years.

Another company from Iceland, Iceland America, plans to develop geothermal plants in the Salton Sea area in California.

While geothermal power generation is relatively limited in the US so far, passive use of geothermal energy in the form of ground heat pumps appears to be quite widespread, with estimates ranging between 500,000 and 1 million units already installed - Oklahoma is apparently leading the way in this regard.

Mexico

Mexico is currently producing around 950 MW - about 3% of the country's annual electricity consumption. By 2010 it is expected that an addition 220 MWe will be available - the total capacity of known resources is estimated at around 8,000 MW.

Germany

Hochtief and Exorka are looking at opportunities in the Molasse Basin of Bavaria.