| Abstract |
Australia has large geothermal energy potential, however the use of geothermal energy is a relatively new technology to Australia and requires successful technical and commercial demonstration before gaining widespread acceptance. Australia’s current geothermal projects are focused on developing both Engineered Geothermal System (EGS) and Hot Sedimentary Aquifer (HSA) plays to generate electricity, power large scale air conditioning and industrial-scale direct use applications. At this point the Australian geothermal industry remains largely at a pre-competitive exploration stage. The high expectations of the sector have been tempered in the last 18 - 24 months by the impact of the Global Financial Crisis (GFC) broadly reducing equity investment in projects that have multiple, technical risks. Difficulty in accessing capital for projects in the current market has slowed the sectors’ anticipated progress and hampered access to more than Aus$296 million (US$296 million) in allocated Australian Federal and State government grants, which include a matching funding component, although equity markets continued their support of the geothermal sector by participating in individual companies’ capital raisings. Rather than a large-scale retraction however, the trend has been for the companies to re-negotiate their work programs and try to minimise their capital outlay while continuing to hold onto their licences and plan their future work activities, while vigorously seek additional funding for this future work. Currently 56 companies hold 361 exploration licences distributed across the nation covering over 441,000 square kilometres. In the 9 year term 2002 - 2011, more than Au$750 million (US$776 million) has been spent on studies, geophysical surveys, drilling, reservoir stimulation and flow tests which comprise the work programs required to sustain tenure in geothermal license areas. The Australian Government has been working with companies to assist the progress of projects and has recently implemented substantial changes to Federal policy on renewable energy and climate change over the last 12 months, culminating in the introduction of a comprehensive series of policy initiatives. These include the introduction of a carbon price, expansion of the National Renewable Energy Target, promoting innovation and investment in renewable energy, encouraging energy efficiency and the establishment of two new funding bodies which will be key to the emergence of the Renewable Energy Sector generally and geothermal energy specifically. This paper summarizes: (1) policies and programs put in place to support the development of the geothermal sector; and (2) a synopsis of progress of key EGS and HSA geothermal projects in Australia. |