Interest in developing geothermal energy resources also is growing in Australia. In June, the Australian government opened the second round in the call for applications for the government's Geothermal Drilling Program. That round closed on Aug. 4.
Funding will provide grants of up to AUD$7 million (US$5.8 million) on a matching-funding basis to support the drilling of deep geothermal wells. Funding will also help finance geothermal proof-of-concept projects.
Minister for Resources and Energy Martin Ferguson said, "Geothermal energy is an exciting low-carbon, renewable energy source, especially for Australia. There is enormous potential but the initial costs are high. Because of these costs, the Australian Government is supporting drilling at the first stage of development under the auspices of the $500 million Renewable Energy Fund."
Panax Geothermal Ltd. has received the first two milestone payments relating to its GDP Grant from the Department of Resources, Energy and Tourism in the first round of the government's call for applications. The grant was awarded in April 2009 to Panax's Penola Project for drilling Salamander-1, located in the Limestone Coast area of South Australia.
Panax received a payment of AUD$2.45 million (US$2.06 million). An additional AUD$1.75 million (US$1.5 million) is expected to be received prior to the spudding of the Salamander-1 well in late September/early October 2009.
The Penola Geothermal Project (part of the larger Limestone Coast Geothermal Project) is a hot sedimentary aquifer (HSA) project, targeting the Pretty Hill Formation in the Penola Trough. The temperature and the quality of the target reservoir are both well known, a legacy of more than 20 deep petroleum exploration wells as well as substantial 2D and 3D seismic data coverage.
The merit of the Penola Project is underpinned by the occurrence of an independently assessed Measured Geothermal Resource totaling 11,000 PJ, sufficient for generating hundreds of MW's of power. The aim of drilling Salamander-1 is to establish Australia's first geothermal reserve.
According to Panax, the Penola Project has an excellent infrastructure location, being within sight of both the state and national grids as well as within approximately 5 kilometers (3.1 miles) of a major national grid connected substation. Panax believes the project has the potential to be the first grid-connected, base load geothermal generation project in Australia.
MNGI Pty Ltd, a unit of Petratherm, also was awarded a $7 million (US$4.9 million) grant subject to successful offer negotiations for its Paralana Geothermal Energy Project in South Australia.
Paralana is an engineered geothermal system (EGS) project which aims to demonstrate a successful, robust and innovative geothermal heat exchanger in the Adelaide Fold Belt met sedimentary rocks at Paralana. It aims to prove EGS technology with the innovative heat exchanger within insulator (HEWI) model that will bring forward geothermal development and investment across Australia by considerably lowering drilling costs and risks.
Petratherm launched the project on Aug. 7, when Petratherm partners Beach Petroleum and TRUenergy began drilling the Paralana-2 deep well using a AUD$40 million (US$33.7 million) custom-made contract drilling rig commissioned from Weatherford International in Dubai.
The company will use the rig to drill approximately four kilometers (2.5 miles) below the earth's surface to create a deep injection well that, in tandem with a second drilled well, will establish an underground "heat exchanger" capable of circulating super-heated water exceeding temperatures of 200 degrees Celsius (392 degrees Fahrenheit.
The launch is a "major milestone for the project and keeps us on track to deliver Australia's first commercial geothermal energy supply by 2011," said Petratherm Managing Director Terry Kallis.
"We believe the Paralana site, which has one of the highest recorded heat flows in Australia, has enormous potential for the future," Kallis noted.
Ferguson said, "Geoscience Australia estimates that if just one per cent of Australia's geothermal energy was extracted it would equate to 26,000 times Australia's total annual energy consumption. This extraordinary potential is one of the reasons the Australian Government is making this investment in geothermal energy as part of the A$500 million (US$353.3 million) Renewable Energy Fund.
"In addition to being a low-carbon energy source, geothermal energy also has the potential to add baseload power to the Australian energy grid. This would diversify Australia's energy supply and add to our overall energy security."
While South Australia features the best known EGS resources in Australia, with 90 percent of geothermal development activity taking place in South Australia, according to a presentation by Petretherm, geothermal development also is taking off in other parts of Australia.
Green Rock Energy Ltd. and the University of Western Australia (UWA) have been formally offered the Geothermal Exploration Permit in the Perth Metropolitan Area, including the UWA's Crawley Campus, enabling the development of the first geothermal energy project under Western Australia's (WA's) recently enacted geothermal legislation.
The UWA Geothermal Energy Project is designed to replace a significant portion of the UWA's Crawley Campus' electricity powered compression chillers that produce cold water for air-conditioning with geothermal power absorption chillers. This commercial demonstration project will replace about 5 MW thermal, or one third, of the electricity presently used to power the university's central air-conditoning plants. Absorption chillers are proven technology widely used for commercial air conditioning in the U.S.
Green Rock Energy's Managing Director, Adrian Larking, said, "This UWA based renewable energy project will be the first geothermal energy project undertaken under Western Australia's new geothermal legislation, the first geothermal powered absorption chiller in Australia and the first major geothermal project in Western Australia. We aim to be the first major geothermal project in production in Australia."
Green Rock Energy will drill two geothermal wells to a depth of approximately 3,000 meters (9,842 ft), to provide the 100 degrees Celsius (212 degrees Fahrenheit) geothermal water to power a 5 MW absorption chiller. One well, a production well, will be used to access and obtain the hot geothermal water and the other, an injection well, will be used to return the cooler geothermal water following the extraction of the geothermal energy (in the form of heat) by the absorption chiller.
By replacing conventional compression chiller plants that use electrical energy, large commercial buildings, including universities, hospitals, hotels, airports, data centers and shopping centers, can be air-conditioned using geothermal water as the principal power source. This is particularly so in Perth which sits on a deep sedimentary basin up to 15 kilometers (9.3 miles) deep with multiple heated aquifers.
Following completion of the UWA Geothermal Energy Project the aim is to replace further air-conditioning capacity at the Crawley Campus and replication of the concept throughout the Perth metropolitan area.
In addition to its Perth Geothermal Exploration Permit, Green Rock Energy has been formally offered permits in both the Collie and Perth Basins where the company considers there is geothermal potential for electricity production as well as the direct use of the geothermal energy for air-conditioning and water desalination which will displace electricity as their energy source.
In particular, it is proposed to apply the know-how developed in the UWA Geothermal Energy Project to a geothermal powered district heating and cooling system at Alkimos, the next major Perth suburban development 40 kilometers (25 miles) north of Perth CBD, being planned for development in 2011.
The replacement of a significant portion of electricity demand with geothermal powered district heating and cooling will be a major driver for the intended move to carbon-neutral living at Alkimos. Up to 50 MW of electricity generation capacity may be eliminated. District heating and cooling systems, which distribute hot water and chilled water to multiple buildings for air-conditioning, have been used in commercial buildings for decades.
To date they have been mainly used in business districts and institutional settings, such as university campuses like UWA's Crawley Campus.
District heating and cooling has proven to be a major contributor to green house gas reduction in many European and North American countries. As energy costs and community concerns about green house gas reductions increase, industry is finding new ways to use the technology. As a result, geothermal energy is becoming an important source of energy for district heating and cooling.
Heating, ventilating and air-conditioning typically account for more than 30 percent of the energy consumed in commercial buildings. Geothermal powered district cooling systems in particular benefit the local power grid by being always a constant and reliable source of energy, available when needed, reducing peak power demand and alleviating power congestion due to transmission limitations. District cooling not only helps cool cities; it helps alleviate the challenges posed by high and peak electric consumption.
Chile heats up
Chile's Ministry of Mines has received 59 bids for exploration projects under the ministry's fifth geothermal bidding process.
Nine geothermal companies, including subsidiaries of five companies not based in Chile that have expertise in developing geothermal resources, participated in the tender process for 20 new areas offered for geothermal exploration.
Companies participating in the round include Magma Energy Chile Ltd., Polaris Energy Chile Ltda., Ormat Andina SA, Colbun SA, Energy Andina SA, Origin Energy Child SA, Geothermal Empresa Nacional SA, Serviland MINERGY SA and Hotrock Chile SA.
"The strong growth in energy demand and the opportunity to use clean energy sources indicate that generation power based on geothermal energy will play a significant role in the growth of electricity generation capacity in the medium and long term," the Ministry said in a statement.
"Today, the government of Chile has the challenge of promoting the exploration of geothermal energy in the country, attracting businesses to invest in this sector and create conditions for the exploi
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