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Green Rock Energy Optimistic About Geothermal Project At Olympic Dam





The United States Department of Energy estimates that geothermy has the potential to exceed the energy of all known reserves of oil and gas by 50,000 fold, but a geothermal resource in the vast Australian continent is of little or no value without a proximal market. Green Rock Energy's Olympic Dam project in South Australia is not only situated conveniently on the national power grid, but an independent study of the site by Australia's Commonwealth Scientific and Industrial Research Organisation recently found “ideal” geography for long-term energy production.
Green Rock aims to develop a 3MWe to 5MWe pilot plant by 2011 but, further down the line, the potential exists for a 500MWe-plus base load electricity plant supplying power to the national grid. The neighbouring Olympic Dam iron oxide-copper-gold-uranium mine owned by BHP Billiton will be one major consumer.

Geothermy is the harnessing of the earth's extreme natural subsurface heat to generate energy and is one of only two renewable energy sources to provide base load electricity – hydro-power being the other. Potentially exploitable sites are characterised by high temperature dry granites at moderate depths beneath a layer of insulating sedimentary rock. Cold water is pumped down, opening up existing stress fractures in the granite, and heated water returns to the surface for the generation of energy.

Green Rock executive director Alan Knights said the CSIRO study of the 1.9km deep exploration well, Blanche No.1, revealed a horizontal fracture system which greatly improved the economics of the Olympic Dam project. “The work undertaken by the CSIRO confirms the hot granites should fracture horizontally rather than vertically as a result of the geological stress regime at Olympic Dam,” he said. “With horizontal fractures the production and reinjection wells can be spaced further apart, thus increasing the size of the potential generated reservoir and improving the economics of the project.”

The next phase is to undertake a mini-fracturing test at Blanche No.1 in order to determine the specific design and depth of deeper wells to be drilled at the site in late 2008. “Because our project is located right next to the national power grid we can commence development as soon as we complete the evaluation phase,” Knights said. “We can therefore commence development at the rate that matches market demand.”

But whilst the immediate focus is undoubtedly the Olympic Dam project, Green Rock also has an interest in an ongoing Eastern European venture. The company holds a 32 per cent interest in an alliance that aims to develop several geothermal power stations in Hungary in the geologically prospective Pannonian Basin. Its partners are Hungary's largest oil and gas producer MOL (36 per cent) and as Icelandic geothermal consulting company Enex (32 per cent).

Unlike Olympic Dam, which requires water to be pumped below ground, the Hungarian projects will concentrate on generating power from hot geothermal water trapped naturally in sedimentary rocks. Short term testing commenced at the first project, Ortahaza, early this year but following the release of uninspiring results the alliance opted to retain its funds for other Pannonian Basin prospects.

Green Rock managing director Adrian Larking said the temperature and chemical properties of the water tested at Ortahaza were fine, but a flow rate of 2,200 cubic meters per day was required to support a geothermal power plant; Ortahaza's two most promising wells only offered up to 1,200m3/ day and could therefore only support direct heat sales. But Larking said he was convinced of future success in the region because “the joint venture already possesses substantial data from existing petroleum wells which point to the geothermal prospectivity of certain parts of the Pannonian Basin.”

Green Rock contributed A$2.2 million to Ortahaza, though most will be refunded by Geofund, which provided technical risk insurance to the project.

With 99 per cent of the earth exceeding temperatures of 1000°C the theory behind harnessing natural subsurface heat to satisfy the world’s rapidly growing energy requirements is comprehensible, if seemingly futuristic. But geothermal energy is a clean, renewable, low-cost energy source with huge economic potential, according to Knights.

Geoscience Australia estimates the first 5kms (depth) of the continent has enough contained heat to supply Australian electricity needs for the next 22,000 years at current consumption rates. Green Rock will continue in its quest to be one of the world's first to commercialise the process. The company intends to remain open to geothermal opportunities worldwide, stating prospective geography and a stable political environment as must-haves.

Both Knights and Larking said geothermal energy was appealing for both its environmental and economic benefits.“Engineered geothermal projects, of the form we are progressing at Olympic Dam in South Australia, produce zero emissions,” Knights said. “What's more, the cost of production of geothermal energy is reducing whereas fossil fuel sourced power plants are increasing.”