www.theaustralian.news.com.au
October 19, 2009
THE geothermal industry is becoming frustrated that amid renewed talk of nuclear being the only emissions-free baseload option for Australia, the opportunity to prove its own credentials has been stalled by a lack of funding. Australia is estimated to have a geothermal resource that could provide 20,000 times its annual energy needs, at relatively low cost, but the country now accounts for less than 1 MW of the world's current capacity of 10,000MW, which comes mostly from volcanic sources.
Australia's resources lie in more challenging deep aquifers, and the even deeper and more experimental hot rocks. Despite this, the industry believes up to 2000MW of capacity could be installed by 2020, but progress has been slowed by the impact of the global financial crisis, drip-feed funding from governments, and, more importantly, the lack of drilling rigs. A well blow-out that has caused lengthy delays at the most-advanced project owned by GeoDynamics has also clouded the future of the hot-rock technology.
However, the hydrothermal developers say hot aquifers are not nearly as complicated as hot rocks. Birdsville has been partly powered by one such aquifer since 1992, and Greenearth Energy last week released a report highlighting the fact that hydrothermal plants of 70MW to 120MW had been operating in the US for the past 20 years and in Europe for the past decade.
Greenearth Energy believes it could deliver energy from the first stage of its planned 140MW project near Geelong within three years of starting to drill. Panax Geothermal sees an even shorter time frame for its project on the Limestone Coast in South Australia. However, neither company can move forward because they are in a queue to use the one suitable and available drilling rig in Australia, currently being used at Petratherm's Parlana hot-rock project, which is several months behind schedule.
The investment community has largely snubbed geothermal in the past 18 months, but activity in some stocks in recent weeks suggests a return of interest. That will be tested before Christmas when New World Energy seeks to raise $10million in the first geothermal IPO for nearly two years. New World has geothermal licences around the Perth Basin and hopes to finalise similar licences in the Pilbara, where it sees opportunities for large-scale geothermal developments to support, at a competitive price, the massive iron ore and LNG developments. "(Once) you drill a successful proof of concept, that will cascade the market," says Greenearth Energy chief executive Mark Miller.
Morgan Stanley analysts issued a report this month noting that there were already 10 listed entities pursuing geothermal energy opportunities in Australia. All are relative minnows, but could be sharing up to $4billion in annual revenue by 2020. "From somewhere on the list of tiny companies in this space, we expect a giant to emerge," Morgan Stanley said.
Ready to ride the next wave
AUSTRALIA'S first commercial-scale wave-energy plant - - and the world's largest - - is to be located at Garden Island, 50km south of Perth. The first unit of Carnegie Corporation Energy's 5MW plant will be installed next year, with construction of 25-30 units complete by 2011.
The technology, invented by Australians, comprises a series of underwater buoys that use wave energy to drive pump units tethered to the seabed. High-pressure water is then used to drive hydro-electric turbines for emissions-free energy. The $50m project will be support by a $12.5m grant from the West Australian government, and Carnegie Corporation hopes it will be followed by a 50MW plant should its application for funding under the federal government's Renewable Energy Demonstration Program be successful.
Although capital costs for the initial project are high - - about $10m per MW - - this is expected to come down to between $6m and $7m for the second project, and will fall further in subsequent projects. "By project three, four or five it will be a cost-competitive technology," Carnegie Corporation chief executive Michael Ottaviano says. "We reckon that we will be cheaper than wind." It will certainly be cheaper than diesel, which is why Carnegie Corporation has also been asked to conduct a feasibility study for a wave-energy facility to power a naval base near Exmouth, north of Perth.
The base is currently off-grid and powered by diesel. Ottaviano says such island locations should be a prime market for the technology, although he also insists it has the potential to provide energy on a large scale. Ottaviano says that, like geothermal and solar thermal, wave energy's up-front capital costs are likely to be higher than wind, but its reliability will make it a cheaper source overall.
Carnegie Corporation's second project is likely to be in South Australia or Victoria, because its funding deal with Investec requires it to be located near the national grid. Carnegie Corporation is one of several ocean-energy groups competing for funds under the REDP - - expected to be announced soon - - with the losing bidders expected to seek opportunities overseas. Ottaviano says Garden Island was chosen over rival sites such as Albany because it was close to the pilot plant at Fremantle, and could sell energy into the local grid or to the neighbouring naval base.
Waste proves the way to go
INTERNATIONAL waste-to-energy specialist Global NRG Energy is to announce a major program to generate energy in Australia from wheat stalk waste, in its first major foray into this country. Global NRG Energy has extensive operations across the globe converting municipal solid waste, sewage, wood wastes and a whole range of crop wastes into energy. This is mostly done by transforming it into high-value energy pellets which are then used to create heat for use in the generation of energy, gasification or industrial heating.
Chief executive Mike Bartlett estimates that harnessing just over a quarter of the various wastes in Australia could generate 15 per cent of the country's total electricity needs. He says there is more than 16million tonnes of wheat straw waste each year that could be used to create energy pellets and that wheat straw has a calorific value higher than brown coal. Bartlett also says Australia is particularly suited to the technology because it makes no sense to transport waste over long distances to central processing plants. Instead, he proposes rural and regional communities could install small-scale pelletising units, which could generate supply for export or for sale for local power generation.
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