Geothermal gains ground at dead centre of the energy debate

Courier Mail
Monday 27/10/2008 Page: 30

THE knock on John Osborne's door is the sound of worldwide hopes for a clean, reliable alternative to polluting power plants starting to turn into reality. Brisbane company GeoDynamics is working toward harnessing deep underground heat sources to build a network of enhanced geothermal system (EGS) power plants (see box) on the largest scale ever seen. Its project location couldn't be more remote: in the Cooper Basin, across Queensland's most southwestern border, where three deserts meet.

But its plans are high on the radar of governments, scientists and investors in the US, Europe and Asia, all looking for the holy grail: clean sources of electricity, given scientific advice that the developed nations must cut green-house gas emissions by 80-90 per cent by 2050 to give a reasonable chance of avoiding catastrophic rises in temperature and sea levels.

Barclays Capital says investors should think seriously about putting policies to combat climate change and growing energy scarcity "at the centre" of their investment decisions. UBS analysts in London say they don't expect a global economic downturn will derail governments' climate change policy developments, though how they are implemented may change.

UBS says moves in China, Japan, Europe, the US, Canada and Australia toward adopting or expanding emissions trading means that "we expect what happens or does not happen in the area of globally co-ordinated climate change policy (at a key meeting in Copenhagen late next year) will be much less important than what is already happening on the ground".

A Lowy Institute poll last month showed the Australian public's top concerns when thinking of the next 10 years are increased water scarcity, climate change and then terrorism. The Murray Darling river system, the source of much of Australia's food supply, is now in crisis due to a drought that has the "fingerprints" of climate change "all over it", says Wendy Craik, who heads the government- appointed management agency of the river network.

The challenge of curbing carbon emissions is rapidly growing worse. Data from Global Carbon Project last month showed that global output of carbon dioxide the most prevalent of planet warming greenhouse gases has grown four times as fast since 2000 as during the prior decade. John Osborne is now part of a hoped-for energy "revolution" to find environmentally friendly alternatives to burning coal and gas. He is one of 12 permanent residents of Innamincka, the desert-hugged South Australian town about 8km from GeoDynamics' small 1-MW EGS pilot plant due to be launched early next year.

Mr Osborne and other townsfolk will say goodbye to collective monthly diesel generator bills of about $15,000 and hello to free, continuous, baseload power from the GeoDynamics plant. "In fact, I've just had the power subcontractor crews at the door to start arrangements for linking up, so we know it's definitely moving ahead. We are joining the experiment," Mr Osborne says. The EGS process is technically proven already. There are EGS plants in Germany and France but they are tiny the largest is about 3.5MW compared with the scale GeoDynamics is on course for.

GeoDynamics chief scientist and executive director Doone Wyborn, pictured, says the company is on course for an early 2009 launch of the 1MW demonstration plant to provide free power to Innamincka as proof EGS works. It will soon after make a final investment decision on the go-ahead for a 50MW plant and thereafter aims to start a massive expansion involving a total of 90 wells tapping heat from Australia's hot granite heart. It is looking at potentially up to 10,000MW of generating capacity enough to run New South Wales on a high consumption day.

Would other EGS plants need to be up and running in order to provide mainstream investors with the confidence to plough billions into EGS plants? "No, we can do it," Dr Wyborn says. "I'm hopeful others are able to get plants up and running. But we've got the best place in the world to do it. "When we can show EGS can be done economically, other projects will follow in slightly less favourable conditions. Some of those will be in Australia and some in other countries in the US, Europe and Asia. "Scaling up is the critical thing.

We're trying to show we can build a 50MW plant every 2km in every direction for 1000sq km. When does that show it's commercially viable? I think we can say that after our first 50MW power plant is up and running in 2012, we will be able to show it is economically viable on a large scale." The addition of the costs of carbon capture and storage for both coal and gas-fired plants and the costs of nuclear waste makes EGS plants the cheapest long-term baseload-capable energy source around, according to GeoDynamics' calculations.

The company is in "constant" talks with government on building connecting infrastructure to Adelaide and to Brisbane, given the Cooper Basin is about 500km from the existing national electricity grid. But Dr Wyborn says there are still longterm savings of "billions" when costs are calculated per-head of those densely populated cities.

The eyes of the world are on Australia's EGS industry. In the US, lawsuits brought on environmental grounds have blocked scores of proposed new coalfired power plants. The US federal energy department is now close to releasing $43 million in funding specifically to boost the development of EGS plants. An R&D alliance has also just been formed of US, Icelandic and Australian government energy department officials, companies and scientists to ramp up EGS development.

University of Queensland geothermal Energy Centre director Professor Hal Gurgenci said once that funding is released, likely after the November 4 presidential election, US interest in EGS technology is likely to "come with a vengeance". Australian geothermal Energy Association chief executive Susan Jeanes says it underlines how Australia is a world leader in new geothermal technology. "How to fracture granite layers to produce underground reservoirs for power sources is where we do lead the world," Ms Jeanes says.

But she says that while GeoDynamics has succeeded in securing powerful private investors such as Origin Energy and Tata Steel, other Australian developers will face problems in sourcing funds due to the financial crisis. While Australian EGS developers have lined up to show that when the climate change problem knocks, there is someone there to answer, Ms Jeanes says the industry's development could be stalled if government policy doesn't help now.

"If the Government doesn't introduce the emissions trading scheme, hurry up and get its renewable energy legislation through, hurry up and get its renewable energy fund guidelines out and the money available it's going to set back the course of our industry by decades," Ms Jeanes says.