Australia's Geothermal Energy Rush With Six Companies Reporting Massive Energy Reserves And Govt. A$4.5Bn Clean Energy Initiative
Australia's Geothermal Energy Rush
Melbourne, June 5, 2009 (ABN Newswire) - In the face of the current economic downturn, the Australian geothermal industry has experienced significant growth in the number of companies that have joined the search for "Hot-Rock Energy", fuelled by the rapidly increasing demand for renewable energy. In the nine months since the Australian geothermal industry launched the world's first Geothermal Reporting Code, six companies have reported massive geothermal energy reserves. In addition, earlier this week, the South Australian gold explorer Southern Gold (ASX:SAU) added to the tally with a significant resource at it's Torrens Geothermal Project in South Australia, and Hot Rock Limited (ASX:HRL) is expected to release its maiden resource in coming months.
In the May 2009 federal budget, the government announced a A$4.5 billion Clean Energy Initiative which involves investing heavily into renewable energy sources with the objective of reducing carbon emissions. Putting the politics of an emissions trading scheme aside, Australia remains the world's biggest carbon polluter on a per capita basis, contributing almost 1.5% of the world's total carbon emissions.
Geothermal energy is considered an ideal renewable energy, for its potentially attractive production costs over other renewable sources and because it is the only major renewable energy source that is capable of providing baseload power - that is non-stop power, 24 hours a day, rain, hail or shine.
Recently, Resource Minister Martin Ferguson told Reuters:
"Geothermal energy which is sometimes known as hot rocks has got a huge potential for Australia, both as a solution to climate change and in terms of national energy security."
Huge potential maybe, but how much energy are these hot rock explorers targeting? Well, according to Geoscience Australia's Anthony Budd, "One percent of reserves would produce 26,000 years of energy supplies". The actual Geoscience Australia report by Budd, Holgate, Gerner & Ayling goes on to say, "future drilling and extraction technologies will undoubtebly allow extraction of heat at depths greater than 5 km, meaning that the above figure is conservative".
Although there are about 50 geothermal exploration licence holders across Australia which have collectively committed to spending in excess of $1 billion on geothermal exploration and development, only 8 companies have declared geothermal resources since the launch of the Geothermal Code in August last year.
The reporting of geothermal resources in Australia needs to be compliant with the Australian Code for Reporting of Exploration Results, Geothermal Resources and Geothermal Reserves (2008 Edition), which outlines the methods for geothermal energy classification. The broadest category of energy is referred to as inferred resource, and the classifications of indicated, measured, probable and proven are used in cases of increasing geological and economic certainty.
Australian Geothermal Resources
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ASX Company Project Geothermal Category*
Code Resource*(PJ)
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GDY Geodynamics Innamincka &
Ltd Hunter Valley 244,680 various
GER Greenearth Geelong &
Energy Ltd Gippsland 263,600 inferred
GRK Green Rock Olympic
Energy Dam Region 120,000 inferred
PAX Panax Limestone
Geothermal Ltd Coast 332,000 various
PTR Petratherm Ltd Paralana 230,000 inferred
TEY Torrens Energy Parachilna 780,000 inferred
SAU Southern Torrens TBA - 1st
Gold Ltd Geothermal week June'09
Project inferred
HRL Hot Rock Ltd Penola Trough Undisclosed various
http://www.pir.sa.gov.au/geothermal/ageg/geothermal_reporting_code
The geothermal energy resource estimates reported by this handful of predominantly South Australia focussed companies is simply mind-blowing. Between them, they have identified in excess of 2 million Petajoules of geothermal energy. Not all the geothermal energy identified will be recoverable due to complex geology, economics and the temperatures of source rocks. Geologists put the economically recoverable proportion of the heat at 15-20%. The energy expected to be recoverable is still massive. To put it into context, 1 Petajoule of recovered thermal energy is equivalent to 172,000 barrels of oil.
The magnitude of Australia's geothermal resources is expected to increase significantly in coming months, with numerous projects progressing with drill rigs and geophysical data acquisition. Assuming only 20% of the 2 million Petajoules of discovered geothermal energy is recoverable, that equals 400,000 Petajoules - one-thousand times Australia's total projected residential energy consumption for 2009!
"In the last 9-months, a handful of Australian Geothermal companies have discovered significant geothermal resources potentially sufficient to provide all of Australia's residential energy requirements for a thousand years."
With massive energy resources in place, it's no surprise the geothermal sector has attracted Australian energy majors including Origin Energy (ASX:ORG), AGL Energy (ASX:AGK), Stuart Petroleum (ASX:STU) and Beach Petroleum (ASX:BPT). Offshore investors include the Asian parent company of Australian electricity retailer TruEnergy (CLP Group) and India's largest power company, Tata Power.
Despite, the increasing interest in the geothermal sector the industry has not been immune to the widespread deterioration in capital markets. A benchmark used to measure the performance of the stockmarket listed geothermal companies, The Australian Geothermal IndexTM, has fallen 39% since the start of July last year.
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http://www.abnnewswire.net/press/en...s_And_Govt_A45Bn_Clean_Energy_Initiative.html