Government Initiatives

Australian Federal and South Australian State government expenditure on geothermal research (exploration), proof-of-concept (appraisal), demonstration and development initiatives, including grants to industry, totalled just over A$3.92 million (US$3.1 million) in 2006.

There has been a total of just more than A$28 million in Australian Federal and South Australian State grants for the period 2000 to end February 2007. A list of the grants recipients, projects and amounts is given in Federal and State grants awarded for geothermal RD&D.

The Geothermal Industry Development Framework and the Geothermal Technology Roadmap were launched by The Minister for Resources and Energy on 1 December 2008.
The Geothermal Industry Development Framework works to accelerate the development of geothermal energy in Australia.
The Geothermal Technology Roadmap examines in detail the research and technology development needs of the geothermal industry in Australia.
For more information and to download the documents please visit the homepage of the Department of Resources, Energy and Tourism.

The Australian Federal Government's $50 million Geothermal Drilling Program (GDP) supports "proof-of-concept" projects for the geothermal industry. The GDP aims to:

  • accelerate the development of the geothermal industry;
  • encourage growth and successful innovation by Australian geothermal companies by increasing the numbers and variety of proof of concepts;
  • accelerate the capacity to produce electricity from a variest of sources of geothermal heat energy;
  • increase investor or private sector confidence in the geothermal industry;
  • firmly establish Australia as the world leader in enhanced geothermal systems; and
  • generate national benefit for the Australian economy
For details visit: www.ret.gov.au/energy/Documents/GDP_factsheet_20080813.pdf

NOTE: For independent commentary on the Geothermal Drilling Program and the AGEG-AGEA Geothermal Resource and Reserve Code - visit www.aar.com.au/pubs/res/foressep08.htm

Support Initiatives and Market Stimulation Incentives

There are a number of Federal and State government support initiatives designed to support and accelerate commercialisation of renewable energy technologies and R&D in general including geothermal energy.

The following projects have been supported so far.

START Program The R&D Start program was introduced in 2002 by the Federal government to assist Australian industry to undertake research and development and commercialisation. In 2002, Geodynamics received an R&D Start grant of $5 million to develop a deep underground heat exchanger to harness hot dry rock geothermal energy.

Greenhouse Gas Abatement Program (GGAP) In 2005, Geodynamics Power Systems Ltd received A$2.079 million under the Greenhouse Gas Abatement Program (GGAP) to demonstrate the application of the Kalina Cycle to produce 13 MW from waste heat at the Mt Keith Nickel Mine in Western Australia. This project awaits the instigation of related work by the operator (BHPB) of the Mt Keith Mine.

Renewable Energy Commercialisation Program (RECP) A grant of $0.79 million was awarded to the Australian National University (ANU) and Pacific Power in March 2000 for shallow drilling in NSW Hunter Valley. More information about the project to explore geothermal resources for conversion into green energy base-load power is given in 'Validation of hot dry rock resources in the Hunter Valley, New South Wales' (external site).

Renewable Energy Certificates (RECs) The Mandatory Renewable Energy Target (MRET) Scheme operates through a system of tradable RECs that are created by renewable energy generators at the rate of 1 REC for each MWh of electricity generated from an eligible renewable source.

Renewable Energy Development Initiative (REDI) Program This Federal government initiative is a competitive, merit-based grants program supporting renewable energy innovation and its early stage commercialisation. The A$100 million program commenced in 2003 and will provide individual grants from A$50 000 to A$5 million over seven years. The following geothermal companies have been supported so far under the REDI scheme:

  • In 2005, Geodynamics received A$5 million for the construction and operation of a high efficiency Kalina cycle generation plant based on existing geothermal wells near Innamincka, South Australia
  • In 2005, Scopenergy Limited received A$3.98 million for a proof-of-concept geothermal energy project on the Limestone Coast
  • In 2006, Geothermal Resources Ltd received A$2.4 million to identify (with geophysical methods and drilling) and map the composition of granites in the Curnamona Craton region of South Australia
  • In 2006, Proactive Energy Developments Limited received A$1.22 million under REDI for the development of a novel regenerator for adapting supercritical cycles to geothermal power applications
  • In February 2007, Petratherm Ltd received A$5 million under REDI for its Paralana project to supply electricity to the Beverley mine in South Australia.

Low Emissions Technology Demonstration Fund (LETDF) The A$500 million LETDF is a merit-based programme designed to demonstrate break-through technologies with significant long-term greenhouse gas reduction potential in the energy sector. Key criteria for this award are the potential to reduce Australia’s total carbon dioxide emissions by at least 2%. The Fund was announced by the Federal government in June 2004 and will leverage at least A$1 billion in additional private investment in new low emission technologies. The Fund will operate over the period 2005–06 to 2019–20.

Renewable Energy Equity Fund (REEF) The REEF program was introduced by the Federal government in 1997 and is a specialist renewable energy technology research fund. In 2002, Geodynamics Ltd received a A$1.8 million grant from this fund to develop a deep underground heat exchanger to harness hot dry rock geothermal energy at its Habanero site in the Cooper Basin, South Australia.

PACE The Plan for ACcelerating Exploration was launched in April 2004 by the South Australian government and includes funding for collaborative exploration programs that will address critical uncertainties in mineral, petroleum and geothermal exploration. The A$22.5 million program (of which A$10 million has been designated for direct drilling initiatives) will be operative until at least 2009. A total of A$759 000 in South Australian PACE drilling grants has been provided to seven geothermal explorers: Scopenergy (A$130 000), Petratherm (A$140 000), Green Rock (A$68 000), Geothermal Resources (A$100 000), Eden Energy (A$21 000) and A$100 000, Geodynamics (A$100 000) and Torrens Energy (A$100 000). More information about the PACE initiative can be found on the PIRSA Minerals site. 

Renewable Energy Support Fund Sustainability Victoria offers a Renewable Energy Support Fund (external site) that helps to pay 50% of the capital cost for new operations (such as fish farms, horticulture and swimming pool heating).

Federal Government Grants

Since 2000 the Federal Government has provided over $27 million in grants under a range of energy technology support programs.

A part of the Federal Government’s A$58.9 million (US$46 million) funding over five years for Australia’s Onshore Energy Security Program will be directed towards the advancement of geothermal energy projects. This program is discussed in greater detail under Current Research. As the program only started in late 2006, there was minimal financial outlay during this reporting period.

A list of Federal and State grants recipients, projects and amounts is given in Federal and State grants awarded for geothermal RD&D.

State Government Grants

South Australia
A total of A$759 000 in South Australian PACE drilling grants has been provided to seven companies exploring for geothermal energy since the PACE initiative commenced in July 2004. In December 2006, three PACE Round 4 grants totalling A$300 000 were granted to Geodynamics Ltd, Eden Energy Ltd and Torrens Energy Ltd. These grants assist in addressing critical uncertainties in frontier geothermal exploration regions and include partial funding of drilling, temperature logging and thermal conductivity analyses.

The South Australian Department of Primary Industries and Resources (PIRSA) also allocated A$40 000 (US$28 000) for The Centre for International Economics cost benefit analysis on Australia’s Hot Fractured Rock (HFR) industry (pdf) and another A$50 000 (US$39 500) for the Australian School of Petroleum at University of Adelaide research of potential hazards associated with the
fracture stimulation of EGS reservoirs in Australia’s Cooper Basin.

Western Australia
The Department of Industry and Resources, Geological Survey has undertaken a study project on 'Geothermal Energy Potential in Selected Areas of Western Australia' through consultant Earthinsite Pty Ltd. The aim of this project is to map and identify the most suitable areas within the Canning, Carnarvon and Perth Basins that may have potential for Hot Dry Rock (HDR) geothermal energy development as well as to develop a reliable dataset for further detail studies.

The study has evaluated the quality and quantity of available subsurface temperature data for the purpose of evaluating the potential for HDR geothermal energy in portions of the Perth, Carnarvon and Canning Basins. Calculations have been made of the true formation temperature where sufficient suitable temperature data exist. By combining these results with estimates of mean annual surface temperature at each well location, estimates of the equilibrium geothermal gradient at each location have been derived.

The estimates of equilibrium geothermal gradient have then been used, together with Geological Survey of Western Australia (GSWA)-furnished estimates of depth to basement, to predict the temperature at the top of the basement and the depth at each well location to the 200°C isotherm. A compilation of published in situ stress data for the relevant parts of the Perth, Carnarvon and Canning Basins has also been made and the relevance of these results have been assessed in terms of possible HDR developments.

Calculations have also been made of the heat generation capacity for a range pf geochemistries likely to characterise basement rocks in the study areas. The study has been completed and awaits publication.

Industry Expenditure on Geothermal Research (Exploration), Proof-of-Concept (Appraisal), and Demonstration (Pre-competitive Development) Projects

All Australian geothermal industry field expenditure to date is classed as research and is estimated at A$29.1 million (US$23 million) for the calendar year 2006. This represents an 11% increase of A$3million (US$2.4 million) from the previous year. A 97% increase to A$45.4 million (or US$35.9million) is forecast to be expended in 2007. Historical, current and projected expenditure for 2007 are shown in the diagram below.

 Graph showing growth in geothermal licences and expenditure in Australia 2000 to 2007