Australia's Geothermal Industry to Heat Up

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The Australian government said today that it’s awarded A$14 million ($9.8 million) to two geothermal power projects in an effort to spur development of the geothermal power industry in the country. MNGI, a unit of Petratherm, will receive A$7 million for an enhanced geothermal system project in Paralana, South Australia. Panax Geothermal is also getting A$7 million, but for a traditional geothermal project in the Limestone Coast area of South Australia.


The funding for both companies is subject to negotiations, but they could start drilling this year. Right now, there’s very few geothermal power plants in the country, just one that we know of — a 120-kilowatt Birdsville Geothermal Power Station in tiny Birdsville, Queensland — as well as some geothermal heating and cooling operations. But according to a report released last year from the Australian Geothermal Energy Association, the nascent Australian industry could provide up to 2,200 megawatts of baseload capacity by 2020, although it would cost some A$12 billion to get it all up and running.

The enhanced geothermal project from MNGI uses similar technology to one that’s been backed by Google (s GOOG) in the U.S., and holds the promise of lowering the cost and expanding the geographical limitations of geothermal. Instead of searching for naturally occurring pockets of steam underground, enhanced geothermal fractures hot rocks and pumps water through them to make steam. MNGI is aiming to build a plant that can initially produce around 7.5 MW of power, and up to 30 MW over time.

Panax, which is going with traditional technology, could end up pumping out a lot more power. The company said its Limestone Coast project has an estimated generating potential of 1,500 MW — enough power for more than 1 million homes, according to Panax.

These two projects are the first funding awards in a A$50 million Geothermal Drilling Program launched last year. The program is itself part of a larger, A$500 Renewable Energy Fund in the country. Australia is targeting a 60 percent reduction of greenhouse gas emissions from year 2000 levels by 2050.

Image courtesy of Panax

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