Australian Geothermal Industry Technology Roadmap porosity by mikeholy

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									                      Geothermal Technology Roadmap




    Australian Geothermal Industry
    Technology Roadmap



   June 2008
Contents
1.     Introduction and Objectives                                                   5
1.1. Purpose and structure                                                               5
2.     Key Technological Recommendations                                             7
2.1. First priority                                                                      7
2.2. Second priority                                                                     8
3.     Background – setting the scene                                                9
3.1. A brief history of geothermal development                                           9
3.2. Current status of geothermal development globally                                   9
3.2.1. Electricity generation                                                       10
3.2.2. Direct use                                                                   10
3.3. Nature of geothermal resources                                                 11
3.3.1. Worldwide status of ―conventional‖ geothermal developments with magmatic heat
       sources                                                                       12
3.3.2. Worldwide status of Hot Rock geothermal developments                          13
3.3.3. Worldwide status of Hot Sedimentary Aquifer geot hermal developments         13
3.4. Status and potential of Australia’s geothermal resources                       14
3.4.1. Geothermal exploration and development in Australia                          14
3.5. Need for cooperation and data availability                                     16
3.6. Australian Geothermal Energy Group (AGEG)                                      16
3.7. The cost of geothermal electricity generation                                  18
4.     Issues and Status: Geothermal exploration                                    20
4.1. Basic objectives                                                               20
4.2. Availability of and access to geoscience and associated information            21
4.2.1. Types of data                                                                22
4.2.2. The value of pre-competitive geoscienc e information                         22
4.2.3. Role of Government – acquisition and dissemination                           23
4.2.4. Pre-competitive geoscience for furt her development of the industry          24
4.3. Tectonic setting of Australia                                                  24
4.4. Geological structure                                                           25
4.4.1. Heat sources                                                                 26
4.4.2. Thermal insulation                                                           26
4.4.3. Potential res ervoir units                                                   26
4.4.4. Geophysics                                                                   27
4.5. Thermal structure                                                              28
4.5.1. Borehole temperatures                                                        28
4.5.2. Heat flow                                                                    29
4.5.3. Chemical Geothermometry                                                      29




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4.6.   Porosity and permeability                                                               30
4.7.   Stress regime                                                                           30
4.8.   Emerging technologies                                                                   31
4.9.   Defining “Geothermal Resources” and “Geothermal Reserves”                               32
5.     Issues and Status: Drilling and Stimulation Technologies                                34
5.1. Drilling technologies                                                                     34
5.1.1. Current status                                                                          34
5.1.2. New developments required                                                               35
5.1.3. A vailability of drilling rigs/experienced crew                                         36
5.2. Reservoir technology                                                                      37
5.2.1. Permeability and stimulation                                                            37
5.2.2. Proof of concept demonstration of fluid circulation                                     38
6.     Issues and            Status:      Reservoir        modelling,       assessment   and
       management                                                                              39
6.1. Reservoir modelling                                                                       39
6.2. Determining and modelling stress field                                                    40
6.3. Imaging and modelling underground flow paths                                              40
6.3.1. Microseismic monitoring                                                                 40
6.3.2. Underground chemical trac ers                                                           41
6.4. Reinjection fluid loss and short circuiting                                               41
6.5. Fluid chemistry                                                                           42
6.6. Availability of working fluids                                                            42
7.     Issues and Status: Power conversion technology                                          43
7.1. Different power plant types                                                               43
7.1.1. Steam turbines                                                                          43
7.1.2. Binary plants                                                                           45
7.1.3. The Kalina system                                                                       46
7.2. Adaptation to Australian conditions                                                       47
7.2.1. Need to minimise technological risks for rapid deployment                               48
7.3. Downhole pumps                                                                            48
8.     Issues and Status: Environmental                                                        50
8.1.   Gaseous emissions                                                                       50
8.2.   Radioactivity                                                                           50
8.3.   Water pollution                                                                         51
8.4.   Effects on springs                                                                      51
8.5.   Land subsidence                                                                         51
8.6.   Induced seismicity                                                                      52
8.7.   Competition for water                                                                   52



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8.8. Other issues                                                         53
9.    Emerging Technologies and New Uses for Geothermal                   54
9.1. New power generation technologies                                    54
9.2. Energy source for other industries                                   54
9.3. Potential new uses for geothermal energy                             54
9.3.1. Direct Use                                                         55
9.3.2. Geothermal Heat Pumps                                              56
9.3.3. Secondary use                                                      57
9.4. Australian Research into Direct Use                                  57
9.4.1. Western Australian Geothermal Centre of Excellence                 57
9.4.2. CSIRO                                                              59
10. Issues, Solutions, Goals and Timeline                                 60
10.1. Summary of Australia’s situation                                    60
10.2. Industry Goals and Timeline                                         79
10.2.1.      Notes to Timeline                                            82
11. Conclusions and Recommendations                                       83
11.1. General conclusions                                                 83
11.2. Priority recommendations                                            84
11.2.1.      Highest Priority                                             84
11.2.2.      Second Priority                                              87

12. References                                                            88
Appendix A       Glossary and Abbreviations                               89
A.1   Hydrothermal systems, features and physical processes               89
A.2   Hydrothermal fluid physics and chemistry                            90
A.3   Systems, projects, power plants and processes                       92




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1.         Introduction and Objectives
1.1.       Purpose and structure

―The objective of this project is to develop a Geothermal Industry Development Framework – including a
Geothermal Technology Roadmap – that aims to support the growth of Australia’s geothermal industry
through strategies agreed b y stakeholders from government, industry and the research community.‖ – DITR,
2007.

Geothermal energy is one of the few technologies capable of contributing to Australia's future needs for large -
scale low-emission baseload power at a competitive cost. As such the development of this industry has
strategic importance for all Australians.

This document, the Technology Road Map, is an integral component of the Development Framework and
explores technology research and development needs. The Terms of Reference for this part of the project are
as follows:

The Roadmap will b e an integral component of the Framework and will explore technology, research and
development needs in, among other things, at least the following b road areas:

      geothermal resource identification;
      exploration techniques;
      drilling and stimulation technologies / well casings;
      reservoir modelling, assessment and management;
      uses of geothermal energy other than commercial electricity generatio n (for example desalination),
       including cascaded use;
      inhibition of scale deposition;
      improvement of thermal efficiency of geothermal power station technologies, especially at the low
       temperature and high pressure frontiers and selection of technically and commercially appropriate
       equipment;
      technology integration b etween related industries;
      emerging technological developments;
      research gaps;
      current state of geothermal technologies in Australia and worldwide;
      technology strengths and weaknesses; and
      assessment of global and Australian geothermal research and research capabilities.

The Roadmap will also explore possibilities of establishing international research partnerships and potential
pub lic/private research partnerships, again to facilitate information sharing and technology transfer/diffusion.‖

Source: DITR 2007.

There are overlaps between technological and other constraints on commercial geothermal development that
cannot be divorced. Some problems such as the need for development of improved downhole packers and
measurement tools are straight technical constraints that will have to be overcome for the industry to be




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feasible. Other requirements, such as improving power plant efficiencies, are not absolute technical
constraints in a strict sense, but improvements which will change the economic feasibility of projects and so
have a large impact on what can be considered resources. Other issues are in the proof of concept category:
for example, the industry is confident that power can be generated from ho t rock (HR) geothermal energy in
Australia and in that sense the technical feasibility of power generation is assumed by the developers, but it
will have a large impact on the ability to finance projects once a HR demonstration is up and running. In
practical terms all of these categories of constraints need technological inputs to address them.

In addition to the HR concept and its future impact on a long timescale this document lays out the emerging
challenge of direct heat use and electricity production from Hot Sedimentary Aquifers (HSA). Because of its
lower scale of operation and associated lower risk this technology allows immediate action. The presently
operating geothermal power plant at Birdsville capitalises on heat from HSA. Because of its widesp read
availability HSA is particularly suited to the concept of displacing conventional electrically powered
applications (refrigeration, air-conditioning, desalination and so on) through direct heat use. It is thereby
possible to address peak capacity shortage through a local scale distributed energy concept.

Not addressed in detail in this document are constraints which are resource dependent rather than
technological. Shortages of skills and drilling rigs fall into that category and whilst important are addressed
elsewhere in the Framework.

The structure of this document is to first present in Section 2 key technological recommendations. Section 3
includes a succinct summary of geothermal energy development, the issues which potentially affect
geothermal development in Australia, and the extent to which those are unique to this country or unique to the
Geothermal Industry generally.

Sections 4 to 8 then consist of an assessment of the current state of domestic and international geothermal
technology, research and infrastructure. It follows a logical sequence through the course of a typical
geothermal development, from surface exploration, to drilling and delineation to power plant development
along with associated technological issues of an environmental nature. Section 9 covers new and emerging
technologies both for power generation and other applications which may be relevant to Australia. Section 10
outlines goals and a timeline for technology research, development and demonstration. Section 11 expands
on recommendations for actions arising from Section 10 as determined through the consultation process
undertaken, though the practical implications of those in terms of institutional, regulatory and financing matters
is addressed separately in the wider-ranging Framework.

A Glossary is provided in Appendix A.




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2.         Key Technological Recommendations
Given the need and desire to develop a more secure and sustainable Energy Sector, the growing Australian
Geothermal Industry has the potential to become a significant future Australian energy provider, particularly in
terms of electricity generation. That having been stated, there are challenges on the path toward the
realisation of this potential, both technological, and otherwise.

The following key recommendations represent findings, established during the industry consultation and work
shopping processes, regarding technological advancements that are required in order to maximise the
industry‘s potential for success. These recommendations form the essential core of the Roadmap.

The findings have been divided into those recommendations which were thought to require the highest level of
attention, or ―First Priority‖, in order to enable industry success, and ―Second Priority‖ recommendations.

The order generally corresponds to the order in Table 9.1 for ease of reference: it is not an order of relative
priority.

Further discussion regarding the priority recommendations of this process appear in section 11.2.

2.1.       First priority

      Develop an agreed methodology and standards for defining and reporting ―geothermal resources‖ and
       ―geothermal reserves‖.
      R&D into improved means of downhole pressure isolation for fracture stimulation and production
       including packer, sliding sleeve and multilateral technologies .
      Compile a short and medium term forecast of geothermal and other competing drilling requirements
       relative to the availability of drilling rigs and crews.
      R&D into fracture stimulation mechanics and avoidance of unwanted seismic events in HR reservoirs.
      A programme of trials to build up a database of practical experience in drilling, well casing, well
       completions and fracture stimulation in a variety of geological settings.
      Establish a proof of concept demonstration of fluid circulation and energy extracti on in several HR
       geological settings.
      R&D into improved methods of power plant cooling in hot arid environments without excessive water
       usage.
      R&D into adaptation of existing geothermal power plants to the high pressure and possibly corrosive
       fluids in Australian HR projects and achieving commercial solutions at affordable cost is a prerequisite to
       successful development of the industry.
      Establish proof of concept demonstration power plants in several geological settings.
      Expand the existing capabilities of Geoscience Australia and the State and Territory geological surveys
       for the acquisition, capture, manipulation, interpretation and dissemination of pre -competitive geoscience
       data and geothermal production data.
      R&D to better assess and quantify environmental impacts including water use of geothermal
       developments in the Australian context, for a range of project types and environments.




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2.2.       Second priority

      R&D into improved downhole measurement tools. There is a wide range of very useful downhole tools
       available to the petroleum industry which cannot currently be used in geothermal wells because of
       temperature limitations.
      Carry out a programme to build a library of case studies in HR reservoir modelling, and then as data
       become available, calibrate and refine models to better address long tem energy recovery. Also maintain
       a database of all geothermal production data in Australia.
      Carry out a programme to build a library of case studies in HR and HSA geochemistry in Australia,
       addressing issues of scaling and its inhibition, corrosion, potential environmental emissions, and
       application of chemical geothermometry.




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3.         Background – setting the scene
3.1.       A brief history of geothermal development

Hot springs have been used for bathing and other domestic purposes in many parts of the world from the
earliest recorded history.

In the early part of the nineteenth century geothermal fluids were already being exploited for their energy
content. A chemical industry was set up in that period in Italy (in the area now known as La rdarello) to extract
boric acid from the boric hot waters emerging naturally or from specially drilled shallow boreholes. Exploitation
of the natural steam for its mechanical energy began at much the same time. The geothermal steam was used
to raise liquids in primitive gas lifts and later in reciprocating and centrifugal pumps and winches.

Between 1910 and 1940 the low-pressure steam in this part of Tuscany was brought into use to heat the
industrial and residential buildings and greenhouses. Other countries also began developing their geothermal
resources on an industrial scale. In 1892 the first geothermal district heating system began operations in
Boise, Idaho (USA). In 1928 Iceland, another pioneer in the utilisation of geothermal energy also began
exploiting its geothermal fluids (mainly hot waters) for domestic heating purposes.

In 1904 the first attempt was being made at generating electricity from geothermal steam: again at
Lardarello. Several countries were soon to follow the example set by Italy. The success of this experiment was
a clear indication of the industrial value of geothermal energy. In 1919 the first geothermal wells in Japan were
drilled at Beppu, followed in 1921 by wells drilled at The Geysers, California, and USA. In 1958 a small
geothermal power plant began operating in New Zealand, in 1959 another began in Mexico, in 1960 in the
USA, followed by many other countries in the years to come.

The Hot Rock concept was conceived at Los Alamos in the 1970s. The first Australian commercial geothermal
exploration licences (GEL) were issued in 2001 and the first commercial geothermal power plant in Australia
was commissioned at Birdsville, Queensland, in the early 1990s.


3.2.       Current status of geothermal development globally

―The numb er of countries producing geothermal power and the total worldwide geothermal power capacity
under development appear to b e increasing significantly in the first decade of the 21st Century. The numb er of
countries producing power from geothermal resources could increase 120%, from 21 in 2000 to as many as
46 in 2010. Total geothermal capacity on-line could increase over 55%, from 8,661 MW in 2000 to 13,500 MW
or more‖.1

Geothermal resource uses can be divided into three categories:








Resources can be broadly classified as low temperature (less than 90 °C), moderate temperature (90 °C –
150 °C), and high temperature (greater than 150 °C). Low temperature resources at economically drillable


1
    http://www.geo-energy.org/publications/reports/GEA%20World%20Update%202007.pdf




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depth are not only much larger, in terms of the absolute volume (km 3) of resource, than high temperature
resource, but, geographically much more widely distributed. At the same time high temperature resources can
generally be utilised, thermodynamically, more efficiently and economically. It is for these reasons that large
scale use of geothermal resources for electricity generation has traditionally been restricted to countries where
high temperature resources occur close to the surface, usually related to magmatic activity. Technological
developments have now reached the point where such restrictions on depth, temperature and the natural
occurrence of fluid may no longer be so critical.

3.2.1. Electricity generation

Conventional geothermal energy developments provide 9,700 MWe of electricity generation world-wide and
have a track record of over 100 years of successful development and a 3% growth rate (Lund, 2007). There is,
at present, something of a ―boom‖ in geothermal electrical development worldwide. It can be conservatively
predicted that over 1000 MW e of new generation will be installed worldwide within the next five years using
current technology. A recent major study for the US Go vernment by MIT (2006) has pointed out that a
relatively modest investment in research and development (R&D) (equivalent to the cost of building one large
coal-fired power plant) could lead to technical breakthroughs whereby geothermal could provide a substantial
proportion of the USA‘s non-transport energy needs.
The majority of power generation is typically undertaken with high temperature resources (220 -340 °C) and
the most economic results are from higher temperatures and shallower resources. However, the lowest
temperature power plant in the world is currently operating at only 74 °C in Chena, Alaska. The Birdsville plant
in Australia operates on 99 °C fluid.

3.2.2. Direct use

Direct heat use is one of the oldest, most versatile and also the most common form of geothermal energy
utilisation by mankind. Examples include bathing, district heating, agricultural applications and
desalination. The classical Lindal diagram (Figure 3-1; Lindal, 1973) shows many of the possible uses of
geothermal fluids at different temperatures, with the addition of electricity generation from binary cycles.




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      Figure 3-1 Utilisation of geothermal fluids2




The Lindal diagram emphasises two important aspects of the utilisation of geothermal resources
(Gudmundsson, 1988): (a) with cascading and combined uses it is possible to enhance the feasibility of
geothermal projects and (b) the resource temperature may limit the possible uses. Cascading of geothermal
fluids to successively lower temperature applications may increase the overall thermodynamic efficiency of the
resource use, and can thereby improve the economics of the entire system, however care needs to be taken
not to decrease the long-term sustainability of the system. As an example, uses of geothermal resources, after
being used for power generation, can include space or district heating, greenhouse heating, and aquaculture
pond and swimming pool heating, or by use of absorption chillers, district cooling. The site specifics are a
major factor in achieving the cascading of the resource, with the various applications required to be proximate
to each other.

Other uses being developed include        the use of geothermal resources for water desalination, via an
evaporation and condensation loop        process. With the increasing requirements for energy intensive
applications (standard reverse osmosis   desalination plants, hydrogen fuel development) and a preference for
sustainable and clean energy sources,    there is increasing scope for the use of geothermal energy in many
applications.

3.3.        Nature of geothermal resources

The accessible geothermal energy in Australia exists in two forms which present different technical and
economic opportunities and challenges.


2
    deriv ed from Lindal, 1973




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The first type is Hot Fractured Rock (HFR) or Hot Dry Rock (HDR). These geothermal resources, when
developed, are also variously known as Enhanced, or Engineered, Geothermal Systems (EGS). However
none of those terms are entirely satisfactory. Some degree of consensus has been gained within the
Australian Geothermal Energy Group (AGEG), that the term ―Hot Rock” (HR) be adopted3 ,

The second type is Hot Sedimentary Aquifers (HSA) .

Both HR and HSA differ from the ―conventional‖ geothermal energy developments based largely on magmatic
related heat sources and naturally convecti ve fluid systems. There is much valuable background information
available worldwide in ―conventional‖ geothermal developments, and to a lesser extent in HSA developments,
but the nature of Australia‘s geothermal resources means that not all of it is dire ctly applicable. On the other
hand it is fair to say that in some respects the Australian industry is still climbing a learning curve in terms of
knowledge and understanding of what has been achieved overseas.

Both HR and HSA geothermal energy is considered ―renewable‖ in that when extraction of heat ceases, the
resource regenerates, albeit at different time scales in different resources.

3.3.1. Worldwide status of “conventional” geothermal developments with
        magmatic heat sources

These ―conventional‖ geothermal energy systems are undoubtedly the simplest and cheapest to
develop. They currently provide 9700 MWe of electricity generation world-wide and have a track record of over
100 years of successful development. The leading countries in terms of installed capacity are the USA, the
Philippines, Italy, Indonesia, Mexico, Iceland, Japan and New Zealand, though in terms of percentage
contribution to the total electricity supply they vary considerably.

Such historical developments have been and are characterised by:

      low electrical energy prices, which have severely limited the ability to make use of the lower grade (lower
       temperature) resources, and has in turn impacted the types of power plants used;
      high temperatures close to the surface. Coupled to economic limitations this has meant that the majority
       of wells are shallower than will be required for Australian HR projects, though drilling to 3.5km is now
       considered unexceptional in ―conventional‖ systems;
      high resource temperatures. Many ―conventional‖ geothermal developments worldwide encounter
       temperatures over 300 °C. In that respect the temperatures at which the first generation of Australian HR
       reservoirs will operate is unexceptional. This is a point which has perhaps not been sufficiently promoted
       by the Australian industry;
      high formation permeabilities, which coupled with the high temperatures means that wells freely
       discharge large quantities of two-phase fluid without the need for pumping;
      relatively large power schemes with individual unit sizes up to 130 MWe. The largest power scheme
       based on a single resource is over 1000 MWe, with developments over 100 MWe, being quite common.


The ―conventional‖ Geothermal Industry can be characterised as mature - while there is on-going research
and development, it is generally of an incremental rather that a revolutionary nature. At the same time recent
sharp increases in fossil fuel costs and thus electrical energy prices and incentives for renewable energy in

3
    The terminology Hot Rock (HR) has been adopted throughout this paper .



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some countries have promoted renewed interest in geotherma l development, leading to technological
developments especially at the lower temperature end.

There are a number of specialised institutions and service providers around the world with capability for
research in ―conventional‖ geothermal systems, much of which can be applied to the Australian situation.

3.3.2.   Worldwide status of Hot Rock geothermal developments

HR projects are focussed on certain rocks, mainly granites that produce heat via radioactive decay of naturally
occurring radioactive isotopes, (primarily) uranium, thorium and potassium. Thermal insulation in the form of
low thermal conductivity sediments is considered by most involved in Australia to be a critical feature, though
there is some debate about that. Depths within the 3 to 5 km range are typically considered as the exploration
target to achieve desired temperatures. The rocks generally require fracture stimulation to provide pathways
for fluids to migrate from injection to production well and become heated as they do so.

Temperatures of approximately 250 °C have already been encountered in this style of resource in
Australia. Because of the costs of deep drilling and economies of scale, this type of development is likely to
have a minimum economically viable size, in terms of electricity pro duction, especially when located in remote
regions, for example due to the cost of grid connection.

Although there has been considerable research into the development of HR projects over the past 35 years,
notably in Europe, the USA and Japan, such systems have yet to be brought into large scale commercial
production. Hence with limited relevant overseas experience to draw upon, there are both technical and
economic challenges to overcome. In many respects Australia is now leading the world in developing an d
commercialising this technology.

A feature of the Australian HR resources, in the Cooper Basin at least, is extremely high fluid pressures. It is
not yet clear whether this will apply in other locations in Australia. Similar pressures have not been
encountered in other HR projects elsewhere in the world. In some respects this is a positive feature since it
means that wells will self-discharge and no fluid has to be added, but it does present some unique challenges
for well and surface plant design.

3.3.3. Worldwide status of Hot Sedimentary Aquifer geothermal developments

HSA resources tend to be shallower and cooler than the HR systems, but will yield large volumes of hot water
without stimulation. The challenges in these systems are more economic and evolution ary rather than ones
requiring any major technological breakthroughs. Systems of this type are being brought into production
elsewhere in the world, especially Germany, and there is a good deal of technology development taking place
which can be drawn on. These differences suggest that the industry will face more technical challenges and
probably lead to larger calls on investment in the HR type of system than the HSA type. However, for both
types of system there is also considerable work required on resource location and definition.

The only existing geothermal power plant in Australia, at Birdsville, is based on a resource of this type. As
known aquifers are likely to have already been made use of for water supply for other purposes, there is
perhaps more likelihood that geothermal developments utilising these aquifers will be close to existing power
demand, but that demand in these areas will not necessarily be of sufficient size to take all potential power
output. Because these aquifers are generally shallow, drilling costs are lower and they are better suited to
small scale modular development. This does not mean however, they cannot also be scaled up. The




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distribution and character of shallow aquifers are mostly well known throughout the country, and it is unlikely
that many areas of previously unknown prospectivity will be identified. However, there is a high probability that
there are deep aquifers that have not yet been identified, and this presents opportunities for multi -commodity
studies (potable water + energy). This is significant as there are likely to be regulatory challenges in the future
usage of HSA resources, as water rights are further tightened in response to the ongoing national drought.
Exploratory work by geothermal companies could be seen to assist in the search for new aquifers.

3.4.          Status and potential of Australia’s geothermal resources

Geothermal energy has so far not played a significant role in Australia‘s energy mix, nor has Australia been
significantly involved in the global geotherm al community. In the last decade however, interest in geothermal
energy has increased significantly due to the combination of two major drivers. Firstly, further research into
HR and HSA resources has provided a better understanding of Australia‘ large geo thermal potential, and
secondly due to the imminent risks posed by climate change and the widely accepted necessity to reduce
Australia‘s carbon footprint, which are increasingly being reflected in Government policy.

Australia‘s vast HSA and HR resources have the potential to become a significant, secure renewable base
load power for the future. Preliminary work carried out by Geoscience Australia has suggested that by
extracting 1% of the a vailable geothermal energy that exists between a maximum 5km depth and the upper
depth at which a temperature of 150 °C occurs could yield ~1.2 billion PJ which is equivalent to 26,000 times
Australia‘s primary electrical energy usage over the 2004-2005 financial year.

It is envisioned that there will be proof of concept HR development in Australia by 20084 , demonstration of the
capacity for power generation by 2012 and projections of at least 6.8% of base load requirements supplied by
hot rock geothermal resources by 2030 (Energy Supply Association of Australia 2007). Further discussion of
possible goals and timeline is given in section 10.2.

3.4.1. Geothermal exploration and development in Australia

Exploration and development of geothermal resources requires a partnership between industry and various
levels of government. As well as the role of governments in legislation and policy, there is also a clear role in
the ongoing technological development of the industry. In terms of onshore exploration, primary responsibility
lies with the states and territories, but close co-operation between the states/ territories, the Commonwealth
and industry can ensure a more co-ordinated approach. Likewise, development requires this ongoing
partnership. Competition between states to attract exploration and developme nt is also healthy if carried out
within a mutually agreed framework to benefit all Australians.

In response to increased interest in the industry, and with new State and Australian Government legislation,
and escalating levels of public and private investment, a number of new companies have formed that are
dedicated to the identification and development of geothermal energy. As a consequence, a growing number
of commercial projects aimed at geothermal power generation have emerged. This has subsequently led to
growth in geothermal exploration (drilling) seen in Australia over the last few years and which may to lead to
proof-of-concept (flow tests) and demonstration power generation projects in the near future (forecast for mid
2008).




4
    Geodynamics is targeting having a proof of concept 1 MWe plant running by mid 2008




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The majority of current and forecast investment for the future exploration and demonstration of geothermal
energy in Australia is focussed on HR prospects; however some companies are pursuing HSA resources in
the Great Artesian, Otway and Gippsland Basins. Most holders of rights to explore for, demonstrate, develop,
deploy and produce geothermal energy, are focussed on the use of binary plants to meet base -load electricity
demand as well as demand from niche markets, such as pre-heating water for coal and gas -fired power
plants, desalination and local direct use for heating (AGEG, 2007).

   Figure 3-2 Area s covered by geothermal exploration licences in Australia




                                                                                Petroleum wells in
                                                                            Greenearth GEPs in ‗07
                                                                                                     KUTh pattern drilling




Figure 3-2 shows geothermal exploration licences, licence applications and geothermal gazettals. The
enlarged inset map highlights the state of South Australia where the majority of geothermal exploration
interest has been taking place.

Nationwide as of February 2008, nine projects operated by eight companies have already entered the drilling
phase (though not all to the full eventually planned production depth).

They are:
   Geodynamics‘ Innamincka geothermal HR power project. Three deep Habanero wells have been drilled
    and tested, including one commercial scale well. A fourth well, Jolokia 1, is now being drilled about 9 km
    north of the Habanero wells. In that respect it can be regarded as the most advanced HR project in
    Australia, and forms a benchmark;
   Petratherm‘s Paralana and Callabonna projects. A Paralana well was drilled to approximately 1,800
    metres, to confirm temperatures and heat flow at intermediate depths, in advance of a deep well test;




                                                                                                                    PAGE 15
                                                  Geothermal Technology Roadmap




      Green Rock Energy‘s Blanche project. Blanche 1 was drilled to 1,935 metres and was the subject of a
       small-scale fracture stimulation program, to assist in the design of fracture stimulation for a planned deep
       well test;
      Panax Geothermal‘s Limestone Coast project in the southeast of South Australia (previously owned by
       Scopenergy Limited);
      Torrens Energy‘s Adelaide Geosyncline project;
      Eden Energy‘s Riverland project near Renmark, South Australia (to rename to Terratherma);
      KUTh Energy‘s Tasmanian project; and
      Geothermal Resources‘ Curnamona project.


3.5.       Need for cooperation and data availability

So far, the Australian Geothermal Industry has been marked by a high degree of collaboration. The key
drivers for collaboration are:

a) all companies are small with limited financial resources, and

b) the industry is only just emerging so that there is much to learn.

While individual companies may undertake beneficial activities, which include technological development, it is
unrealistic to expect the information arising to be freely publicly a vailable other than that which is mandatory to
report as part of State government licensing conditions. The work of Geoscience Australia and State and
Territory geological surveys is becoming increasingly important for the industry, in this respect. These
agencies' contributions include geoscience and geothermal data acquisition, capture, manipulation,
interpretation and dissemination.

3.6.       Australian Geothermal Energy Group (AGEG)

Australian companies, researchers and government agencies with an interest in the development of
Australia‘s geothermal resources formed the Australian Geothermal Energy Group (AGEG) in early 2006. The
AGEG‘s purpose is to foster the commercalisation of Australia‘s hot rock resources at minimum cost and
maximum pace. As Australia‘s geothermal sector wide alliance, AGEG benefits from, and provides intellectual
input into the International Energy Agency‘s geothermal research cluster, under the Geothermal Implementing
Agreement (GIA).

The AGEG‘s vision is for geothermal resources to provide the lowest cost emissions -free renewable base load energy f or
centuries to come. At year-end 2007, a total of 65 organisations have named representatives to the AGEG. This includes
companies, governments and research organis ations.




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                                                    Geothermal Technology Roadmap




To foster the achievement of its vision, in 2007, the AGEG established 10 Tec hnical Interest Groups (TIGs) listed below.



         AGEG Technical Interest Group                                             Purpose


     1       Land Access Protocols (induced          Management of environmental concerns and potential impacts
             seismicity, emissions, native title,    of geothermal energy and devises protocols to avoid or
             and so on)                              minimize impacts.
     2       Reserves and Resource                   Align with similar International forums.
             (Definitions)
     3       Policy Issues                           Ad vice to Go vernments and other Stakeholders.
                  Industry (AGEA)
                  Whole-of-Sector (AGEG)
     4       Engineered Geothermal Systems Investigate technologies for enhancing geothermal reservoirs
                                                     for commercial heat extraction.
     5       Interconnection with Markets            Transmission, distribution, network, NEM issues.
                                                              AGEA has lead for commercial matters.
                                                              AGEG has role in technology research.
     6       Geothermal Power Generation             Develop scenarios as a basis for comparison of cycles, plant
                                                     performance and availability, economics and environmental
                                                     impact and mitigation. The output would be a database and
                                                     guidelines of best practice.
     7       Direct Use of Geothermal Energy Direct use for heating and cooling, with emphasis on improving
             (including geothermal heat      implementation, reducing costs and enhancing use .
             pumps)
     8       Outreach (Including Website)            Create informed public through accessible information. Provide
                                                     educational kits for media, K-12 and university education.
     9       Data management                         Database design, contents and ongoing enhancements.
    10       Wellbore operations                     Cover drilling, casing, logging, fracture stimulation, testing, and
                                                     so on.



The AGEG and the AGEA have since agreed to coordinate research efforts through the AGEG‘s Technical
Interest Groups (TIGs). This will facilitate Australian companies, research experts and government agencies
(including regulators) to convey and take note of international bes t practices for the full-cycle of below-ground
and above-ground geothermal energy operations and stewardship

The industry policy forum under AGEG‘s TIG 3 has evolved into the AGEA. AGEA will take on responsibilities
for the commercial aspects of connecting to market (transmission and distribution issues) under AGEG TIG 5.

The AGEG's TIGs will have active links to the International Energy Agency's (IEA's) research annexes, and
will aim to attain strong linkages to all other reputable international geothermal research clusters, to ensure
that Australia's comparative advantages in hot rock geothermal resources can be leveraged into international
leadership in geothermal technologies, methods and development. On this basis, the AGEG and the AGEA
have agreed that the AGEG should become the Australian affiliate for the International Geothermal
Association. This will foster links to reputable international research.



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                                              Geothermal Technology Roadmap




3.7.     The cost of geothermal electricity generation

In traditional Australian power economics, coal has proven to be the most financially viable resource for base
load generation, and gas for use in the intermediate and peaking generation roles.

It is generally accepted that currently, the sustainable low emission technologies cannot, or would not be in a
position to, compete financially with coal and gas fired generation, without the renewables receiving financial
credits for emission abatement, or alternatively, without coal and gas requiring to purchase certificates for their
own CO2e emissions.

This situation explains why Australia currently relies on coal for base load generation with some gas for mid -
merit and peaking plant.

A number of recent studies have sought to estimate the cost of renewable energy generation.

McLennan Magasanik Associates (MMA) 2006 noted that:

   A number of new technologies can provide emission abatement competitively for base load power at
    $30/tCO2e post 2020

   Some of these resources such as geothermal may be limited by transmission cost and available resource

   Coal with carbon capture can compete with nuclear for base load generation on currently projected cost
    profiles

   Gas in NSW and Victoria and brown coal IDGCC in Victoria can compete for intermediate role

   Other renewables (PV, solar thermal) should be able to compete if the full cost of carbon emission
    exceeds $40/tCO2e.

The 2006 MIT study concluded that an industry learning curve will drive down the cost of geothermal
generation in the US through deployment of a series of modest sized binary power plants. The modelling
suggested that geothermal generation would be cost competitive with 100 MWe installed at US$0.060/kWh
(AUD$67/MWh at AUD$=90c). Over 10 years, with the installation of a total of 200 MWe, the cost was
modelled to drop to US$0.045/kMh (AUD$50/MWh).




In its 2007 annual planning report, the Electricity Supply Industry Planning Council (ESIPC) calculated the cost
of geothermal generation to lie in the region of $70 - $130 per MWh.




                                                                                                          PAGE 18
                                               Geothermal Technology Roadmap




    Figure 3.3 ESIPC Generation Pricing




ESIPC reported that; ―In this figure cost variations, shown as horizontal error b ars, represent the range of
potential long run cost recovery requirements that would b e expected to occur across the normal annual
operational range. The vertical b ars represent the variation of emissions that might be expected from a
reasonab le range of the generator efficiencies. Where possible the colour of the series is consistent for a
particular fuel and b asic technology. For example: the colour for [a] steam b ased generation projec t fuelled b y
Brown Coal is kept the same and the symbol changed to represent the [sic] a supercritical generation process
(BrC Sup Crit), a different symbol for the addition Carb on Capture and Storage (CCS) and another different
symbol for the addition of Oxygen Firing (OXY).‖




                                                                                                          PAGE 19
                                              Geothermal Technology Roadmap




4.       Issues and Status: Geothermal exploration
4.1.     Basic objectives

The operational sequence of steps in the exploration process involves:

    Acquiring tenements. The process of acquiring tenements varies from state to state.
    Carrying out low-cost exploration that will lead to inferring that a resource exists. This will be based on
     low-cost indirect methods involving geophysics and usually shallow drilling and heat flow modelling.
    Proving the existence of the resource and defining it, always base d on direct measurement of the
     resource, for example through drilling into the resource. Such work will normally lead to an assessment of
     indicated or measured resources.

The two technical factors that drive geothermal projects, and are the focus for explo ration, concern:

    Temperature, and;
    Well productivity

There is thus an increasing exploration focus on identifying geological formations able to produce fluid (natural
or supplementary) at a temperature and flow rate sufficient to supply thermal energy at the surface adequate
for the intended purpose.

The early stages of geothermal exploration in many parts of the world involve:

            1.     identifying high temperature settings;
            2.     identifying the tectonic setting of a location including the structural analysis of geologi cal
                   faults and fracture systems;
            3.     identification and categorisation of surface geothermal features such as fumaroles, geysers,
                   hot mud pools and hot springs (if any);
            4.     geochemical and isotopic analyses of surface discharge water and gases (if any); and
            5.     geophysical measurements, including electrical soundings methods, magnetics, gravity,
                   heat flow and seismic surveys.

These steps are intended to identify optimal exploratory drilling sites, with drilling intended to intersect a
potential geothermal resource. Such exploration strategies are effective at identifying and enabling an
understanding of high temperature hydrothermal convective systems that bring heat rapidly from deep in the
crust to shallow levels. However, they will need to be adapted for the different geological environment in
Australia.

Australia has very little surface evidence of geothermal energy. With the exception of a small number of warm
to hot springs, the continent is effectively free of surface emissions of geothermal heat, making item s 3 and 4
above of limited application. Similarly, apart from some possible potential for lateral transfer of heat in the
Great Artesian Basin, little evidence has been found for convective hydrothermal systems within
Australia. Heat may be transferred with ground water at shallow levels, but these systems are more likely to
redistribute heat laterally rather than vertically. Hence, geothermal exploration in Australia is focussed on
identifying those areas where conductive heat flow results in elevated temperatures at accessible
depth. Identifying these locations requires a different exploration strategy to that employed for convective




                                                                                                         PAGE 20
                                                 Geothermal Technology Roadmap




systems. Certain geological and geophysical aspects become of more importance, along with temperature
data from shallow drillholes.

Exploration requires an understanding of:

      the tectonic setting of the exploration area;
      the three dimensional geological and geochemical structure of the area;
      the three dimensional thermal structure of the area;
      the three dimensional stress structure of the area; and
      the permeability and porosity structure of the target formation.
The current state of knowledge, and technological and knowledge gaps, are discussed under each of these
headings in the following sections.



4.2.       Availability of and access to geoscience and associated information

Throughout, a distinction needs to be made between activities which are carried out on a regional or national
scale by agencies such as Geoscience Australia and the State and Territory geological surveys (known as
pre-competitive) for the benefit of the whole industry, and those which are carried out by individual companies
over much more limited areas for their own benefit. These activities are fundamentally different not only in
their scope and perhaps methodology but also in their objectives. It is assumed that individual companies will
continue to work at a prospect scale. While they may quite reasonably request Government support for some
of those activities, the emphasis in this document is on wider-ranging activities which will not happen without
Government initiation.

Government does intervene where it recognises that certain information may help firms improve their
efficiency and competitiveness, but where private sector firms believe that the cost of accessing that
information is too high. In specific circumstances, the Government may determine that such information is
vitally important and decide to meet the cost of both collecting and disseminating the information to relevant
firms. The work of Geoscience Aus tralia is an example of goods and services that are directly provided by the
Department of Resources, Energy and Tourism.

Public provision of government-funded pre-competitive high-resolution integrated modern geoscience data is
generally seen to have significant benefits including:

      reduced risk associated with greenfields exploration;
      reduced expensive re-acquisition of data;
      catalysed research, remapping and refinement;
      leveraged increased exploration spending;
      expedited discovery of new resources;
      reduced duplication of surveying and hence decreased environmental impacts;
      established sophisticated information systems to provide data delivery to the exploration industry; and
      promoting Australia as an internationally competitive resource destination.
As well as having a promotional function, pre-competitive geoscience data collection initiatives undertaken by
the Commonwealth and the States act to correct a number of market failures. These include:




                                                                                                         PAGE 21
                                              Geothermal Technology Roadmap




   positive externalities, whereby the geological knowledge of a new resource may increase the probability
    and reduce the costs of the discovery of an analogue;
   public provision of geoscientific data, which acts to redress any advantage to a ―free rider‖ deriving from
    another explorer‘s work;
   public good that underpins policy-making decisions;
   reduction of risk and uncertainty right across the resources exploration industry, which may prevent
    exploration activity falling to inefficiently low levels;
   harmonising of the data at provincial and continental level; and
   equality of access to information, and efficiency of data distribution.


4.2.1. Types of data

Of relevance to geothermal exploration, Geoscience Australia provides geological mapping and
interpretations; geophysical surveys including seismic reflection survey and magneto-telluric, gravity,
magnetic, airborne electromagnetics, radiometric, thermal conductivity and thermal gradient; drilling data;
geochemistry and geochronology; groundwater studies; basin architecture and porosity and permeability;
seismic monitoring, stress mapping and hazards assessment. In addition to the geological data above,
Geoscience Australia provides satellite data including ALOS, MODIS, R ADARSAT, NOAA and Landsat and
digital elevation models; bathymetry; and national topological and cadastral m apping.

Each State and Territory provides similar geoscience data to that mentioned above. In addition to their own
work programs, the State and Territory surveys collaborate with universities, the CSIRO and Geoscience
Australia. As Australia is a Federation, Geoscience Australia works in conjunction with each State and
Territory via the umbrella of the National Geoscience Accord. This ensures work programs are complementary
and avoid duplication.

Much of the geoscience data that Geoscience Australia holds was originally acquired for minerals and
petroleum exploration and survey purposes – as is the case for the State and Territory geological surveys.
Geoscience Australia will seek to submit a New Policy Proposal to government for additional funding solely for
the purpose of acquiring geothermal specific geoscience data prior to the end of the current Onshore Energy
Security Program in 2011.

4.2.2. The value of pre-competitive geoscience information

An interesting aspect which has emerged through the workshops is that there is a difference in opinion within
the industry as to the need for further wide-ranging data acquisition by Government agencies. Some of the
more advanced geothermal companies, do not see the need for such data acquisition as critical (though it is
―nice to have‖), as they already hold concessions and are now focussed on commercialising identified targets.
In contrast the more junior companies see the need for data to help them identify targets as vital. Both of
these points of view are understandable, however often when the matter is investigated it is realised that even
those companies not wanting further pre-competitive geoscience information have in fact benefited greatly
from it themselves in taking up their current ground positions. Several e xamples that quantify the value of
government-acquired pre-competitive geoscience data include:




                                                                                                      PAGE 22
                                                           Geothermal Technology Roadmap




     Panax Geothermal estimated that the information freely available to them in the Limestone Coast project
      area was $50 million5 .
     It is estimated that for every dollar that the Victorian Government has spent on the Victorian Initiative for
      Minerals and Petroleum program since 1993 there has been $15 spent by industry over a ten year
      period6 .
     The South Australian Government estimates that its investment in the acqu isition of pre-competitive
      geoscientific data directly stimulated private exploration investment by a factor of 3 -5 times the cost of
      providing core data. There is evidence based on a variety of measures, of increased exploration activity
      in that state directly attributable to the release of certain initiative datasets that detailed aeromagnetic
      targets and the extent, under cover, of potential host rocks for a variety of minerals 7 .
     The Queensland Government estimates that for every dollar spent on initiati ve work, explorers spent
      another $15.40 8 .
     Geoscience Australia cites studies that each pre-competitive dollar generated on average $5 of private
      exploration expenditure 9 .
     Published and unpublished information from Australia and overseas indicate that eac h $1 of government
      expenditure on new pre-competitive data generates, on average, $5 (range $2.5 -10) of exploration
      expenditure by the private sector and over time results in discovery on average of in -ground resources
      worth $100-150 10 .
It is important to note that quality geoscience data doesn‘t age and so its value increases with time.

4.2.3. Role of Government – acquisition and dissemination

Pre-competitive geoscience information is generated in three ways. Principally it includes data and information
gathered by Government during Government-led activities – this may include data from industry collaborative
or multi-client surveys. It also includes data and information gathered by Government from companies
provided as part of each State‘s regulatory tenement regime, or the Commonwealth for offshore licensing.
Lastly, it includes information which is placed into the public domain (for example in science journals) as a
result of research by universities, CSIRO and government.

Many resources industry submissions and witnesses concurred that the government geoscience agencies
were highly competent (where excellence has been established), and hence were logically best suited to
undertake the pre-competitive geoscientific surveys most efficiently and expeditiously7.

Government surveys are not constrained by tenement boundaries. Hence, it is possible for government-run
programs to capture operational efficiencies and scale economies in the performance of pre-competitive
regional work. Also, being independent of market competition, government agencies are able to broker broad


5
  Panax Geothermal Lim estone Coast Report
    http://www.panaxgeothermal. com.au/documents/20080131%20final%20lim estone%20coast%20report. pdf.pdf
6
  A submis sion to the Strategic Leaders Group on the draft recommendations for the Mineral Exploration Action Agenda prepared by the Victorian
    Minerals & Energy Council Inc. http://www.minerals.org.au/__data/assets/pdf_file/0015/7521/VMEC_Expln_AA_Submis sion_300403.pdf
7
  Parliament of Australia House of Representativ es Standing Committee on Industry and Resources, Ex ploring: Australia's Future - impediments to
    increasing investm ent in minerals and petroleum exploration in Australia, Report, 2003, page 51-53.
    http://www.aph.gov.au/House/committee/is r/resexp/contents.htm
8
  Ex ploring: Australia's Future page 54 (see footnote 7). http://www.aph.gov.au/House/committee/is r/resexp/contents.htm
9
  Ex ploring: Australia's Future page 54 (see footnote 7). http://www.aph.gov.au/House/committee/is r/resexp/contents.htm
10
   Submission by Geoscience Australia to the House of Representativ es Standing Committee inquiry into Resources Exploration Impediments July
    2002 page 18. http://www.aph.gov.au/House/committee/is r/resexp/subs.htm




                                                                                                                                     PAGE 23
                                                            Geothermal Technology Roadmap




applications of new exploration technologies, concepts and methodologies without compromising companies‘
proprietary information.

In addition to being best-placed to acquire pre-competitive geoscience data, Government geoscience
organisations are also the best-placed to compile, collate and disseminate this information. Making pre -
competitive geothermal geoscience data readily and easily accessible at low cost to the Geothermal Industry
requires further collaborative work. Geoscience Australia has taken a lead in this area as part of its Onshore
Energy Security Program and also by taking the chair of the AGEG TIG 9 – Databases. A first part of this work
is the formulation of agreed heat flow data interchange standards. Geoscience Australia intends to apply for
funding as a National Data Repository for geoscience and national mapping information.

4.2.4. Pre-competitive geoscience for further development of the industry

This Roadmap attempts to take geothermal development in Australia to the point where it is making a
significant contribution to the energy economy as a whole. It is considered therefore that the need for wider
ranging data acquisition programmes for the continued development of a viable industry b eyond the presently
known resource areas remains high.

4.3.         Tectonic setting of Australia

The impression of Australia as a ―cold‖ continent derives from its position in the middle of the Indo -Australian
Tectonic Plate, and the fact that the continent has large areas of exposed Archaean and Proterozoic
crust. There are no plate margins, active volcanoes or surface geothermal activity (with the exception, as
mentioned, of a handful of warm to hot springs) on the Australian continental land mass. However, in spite of
the lack of surface signs there is a significant body of geological evidence to suggest that the continent may
not be as cold as it initially appears. This evidence includes:

       The existence of Tertiary eruptive centres. The eastern side of the continent, from Queensland in the
        north to Tasmania and South Australia in the south, is host to a large number of relatively young basaltic
        eruption centres. The most recent event, at Mount Gambier just over the border in South Australia, has
        been dated at less than 5000 years ago (Sheard, 1995). It is tempting to conclude that there may be
        young intracrustal igneous bodies or areas of elevated mantle heating, though, to date, no direct
        evidence of such phenomena has yet been found. The most tantalising evidence th at young volcanic
        features are associated with geothermal energy sources lies in the northern part of Queensland. A
        number of hot springs in the area of the Atherton Tablelands discharge water at temperatures in excess
        of 70 °C. The same area hosts some very young volcanic rocks (with an age on the order of 10,000
        years);
       The Great Artesian Basin (GAB) is the world‘s largest artesian groundwater basin, underlying about 22%
        of the Australian continental landmass. Groundwater from the GAB comes out at wellhea ds at
        temperatures ranging from 30 °C–100 °C. The sheer size and temperature of the underground water
        resource makes it an attractive geothermal target (Habermehl and Pestov, 2002); and
       The database of temperatures recorded at the bottom of deep drill holes (i.e. the Austherm04 database
        of Chopra and Holgate 200511 ) provides direct evidence of numerous areas of the Australian continent
        having above normal temperatures.



11
     Geoscience Australia and the Australian Greenhouse Office have jointly purchased this dataset from Dr Chopra w ith the intention of making it
     publicly av ailable from mid-2010.




                                                                                                                                      PAGE 24
                                                Geothermal Technology Roadmap




The tectonic setting of Australia with respect to its position within the plate tectonic s cheme is reasonably well
understood. Several broad questions about the tectonic regime in Australia remain, however, and developing
an enhanced understanding of these issues could indirectly impact geothermal energy exploration strategies.
Such questions include:

      What is the cause and extent of the so-called Central (or South) Australian Heat Flow Anomaly (CAHFA)
       The CAHFA is a vaguely defined region through the centre of the country with elevated surface heat flow.
       It incorporates most of the Proterozoic aged provinces in Australia. The edges of the zone are poorly
       defined, as is the homogeneity or otherwise of the heat flow anomaly. The distribution and magnitude of
       elevated surface heat flow is directly influenced by the expected temperature distribution in the crust.
       Likewise, the depth distribution of heat producing elements in the crust also impacts on the temperature
       distribution with depth. Elevated heat flow from widely distributed radioactive granites at relatively shallow
       depth in the crust results in a different temperature distribution to that expected of elevated heat
       generation throughout the entire thickness of continental lithosphere. Understanding the distribution of
       extra heat generated upper-crustal granites by mapping their occurrence in three-dimensions and their
       composition could lead to new exploration targets.
      What is the thermal consequence of neotectonic activity in Australia? Parts of Australia, notably the south
       central section, are undergoing current uplift and compression. There is reason to believe that these
       tectonic motions are intimately linked to the thermal structure of the crust and lithosphere. Better
       understanding these links could input to new exploration strategies.
      What is the cause of the Tertiary volcanism in eastern Australia? The age and distribution of the Tertiary
       volcanic centres in eastern Australia appear to suggest a temporal relationship to the history of break -up
       extensional rifting events. The exact relationship is far from clear, however, with relatively yo ung volcanic
       events in several locations up and down the east coast. Theories of underlying hot spots continue to be
       discussed, and seismic tomography lends some credibility to such suggestions. Understanding the
       genetic cause of the Tertiary volcanism is of importance for identifying new geothermal energy targets in
       these areas, but mapping heat distribution in the crust overlaying the volcanic centres is a more direct
       approach.
These and similar issues can be addressed within the existing capability of re search institutions and
geological settings in Australia. There is a need for funding research projects and data acquisition, but no
specific need to import new skills or develop new technology.

4.4.       Geological structure

Geothermal exploration in a setting with conductive heat flow involves identifying heat sources, thermal
insulation, and potential reservoir units. The parameters of most relevance to geothermal exploration include
the nature and total thickness of sediment (thermal insulation); the nature of the basement and deeper
sections of the earth (heat sources or reservoirs); the natural permeability and porosity of deep units (potential
reservoirs); the location of major fault systems (heat source or reservoir); and the present-day stress regime
(how reservoir rocks will react to hydraulic fracture stimulation).

These components of geothermal systems are intimately linked to the geological structure of a region, so a
regional geological assessment is an important step in any exploration program.




                                                                                                           PAGE 25
                                              Geothermal Technology Roadmap




4.4.1. Heat sources

The most attractive areas for geothermal investigation are those areas of the crust that transmit an anomalous
amount of heat. In the case of convective geothermal systems, the heat source is generally a relatively
shallow cooling magmatic body. Such sources cannot be entirely ruled out in the Australian context, but the
majority of geothermal systems in Australia are expected to be conductive with heat being generated by the
decay of radioactive elements dominated by uranium, thorium and potassium. Some granites have unusually
elevated abundances of radiogenic elements, and these are referred to as high -heat producing granites.
Some sediments, typically those derived from the weathering of high -heat producing granites, also have
anomalous abundances of radiogenic elements, and it is possible that some sediments may serve as both an
insulator and heat source at the same time. The only geothermal heat source so far positively identified in
Australia is the granitic body beneath Geodynamics Limited‘s Haban ero project, but such high-heat producing
granites are thought to occur beneath most geothermal prospects in Australia. Therefore, predicting the
composition of deeply buried granites is a key step in locating geothermal plays.

Other potential heat sources in Australia may include deep seated fault controlled fluid pathways bringing hot
mid- to lower-crust fluids closer to the surface; sections of crust under-plated by basaltic magma at an optimal
time and rate in the past; or mantle plumes.

4.4.2. Thermal insulation

High heat flow is a preferred prerequisite for a geothermal energy target, but without adequate thermal
insulation temperatures may not reach the desired elevated levels at an economically attractive depth.
Identifying thermally insulating layers, therefore, is an important part of an exploration program. Identifying
where the low conductivity units are thickest is a strategy for locating optimal temperature at depth. Low
conductivity formations typically include coal, mudstone, shale and basalt. High conductivity formations (i.e.
poor insulators) include dolomite, quartzite and anhydrite.

4.4.3. Potential reservoir units

To extract the thermal energy at a sufficient rate, a geothermal system must ultimately include a producing
reservoir. The production rate from a geothermal reservoir is related to the reservoir‘s porosity and
permeability, as well as the quality of the h ydraulic connection to the borehole.

Potential reservoir units include shallow permeable sandstone or limestone; deep, naturally permeable
sandstone; fractured basement rocks; artificially engineered reservoirs created through the hydraulic
stimulation of natural fracture systems faults; and critically oriented natural fault systems.

Sedimentary basins occupy a large proportion of the Australian landmass. Basins are an attractive place to
explore for geothermal resources as they potentially provide both thermal insulation to trap heat flow from
depth, and permeable reservoir formations. When combined in an optimal way, these properties of basins
provide potential for warm to hot natural aquifers at economically drillable depths. The natural temperature,
porosity and permeability of sedimentary aquifers may be sufficient to provide usable geothermal power
without the requirement of stimulation, or, alternatively, the reservoir units may be susceptible to permeability
enhancement. Even if no natural reservoir units exist, the geology associated with basins can provide
adequate thermal insulation to generate attraction engineered geothermal system ta rgets in the underlying
basement. Basins presently being explored for geothermal potential by various companies include the Cooper




                                                                                                        PAGE 26
                                                               Geothermal Technology Roadmap




Basin, Otway Basin, Sydney Basin and Gippsland Basin and the WA government has called for bids for the
Perth Basin.

Detecting or predicting suitable reservoir units is undertaken by some combination of borehole geological
data, litho-stratigraphic facies mapping/sedimentary basin modelling, and geophysics.

4.4.4. Geophysics

Geophysical techniques are the main tools employed in assessing the three dimension geological structure of
a region. The interpretation of most geophysical techniques, however, is prone to ambiguity. Therefore, the
more robust the techniques that can be brought to bear on a particular area, the greater the confidenc e will be
in the interpretation of the data. Ultimately however only testing by drilling can provide unequivocal
information. Some of the geophysical techniques most commonly used to investigate regional geological
structure include aeromagnetic surveys, gravity surveys, radiometric images, electromagnetic soundings (for
example magnetotellurics, time-domain electromagnetics), reflection and refraction seismic surveys, seismic
tomography, and synthetic aperture radar. These techniques are each sensitive to particular properties of
crustal rocks, some of which are more directly related to geothermal phenomena than others. Arguably,
though, their greatest value comes from shedding light on the broad geological structure of a region.

Such techniques have been extensively applied to naturally convective high temperature geothermal systems
elsewhere in the world. Similarly they have been applied in Australia to exploration for petroleum and
minerals. Adapting these techniques to geothermal exploration in the Australian geological context will require
some dedicated geophysical survey programs and coordinated research on correlation of data in areas of
known high heat flow.

There are a number of geological structure issues that may be addressed at a larger scale. Th ese specific
issues and questions may include:

       Are there any cooling magmatic intrusions associated with the Tertiary volcanic events in eastern
        Australia?
       Where do potential heat sources coincide with adequate thermal insulation? This requires a coordinat ed
        project to identify potential heat sources in the mid to upper crust, and to map the thermal resistance
        (thickness over thermal conductivity) of overlying units, followed by a systematic correlation analysis and
        presentation of data, preferably geographic information system (GIS) based.
       Which geological formations are conducive to hydraulic fracture stimulation? Not every hot geological
        formation can have its permeability artificially enhanced. In particular, clay rich or soft units are likely to
        resist attempts to enhance permeability. A database of ―fracture-able‖ geological formations will be of use
        as would a good understanding of the crustal stress regime.
       What is the depth and nature of the basement in many Australian basins? These parameters are po orly
        constrained for many of the attractive basin areas in the country. The OzSEEBase 12 database is a good
        first-pass assessment of sediment thickness across the country, but details at the basin scale sometimes
        do not correlate well with local data. The task might be addressed by more detailed ―SEEBase-style‖
        assessments on a basin-by-basin basis, and again this information is of greatest value when it is
        available in the public domain.

12
     The OZ (Australian) SEEBASE™ Compilation represents many years of geologic al mapping work in Australia in the petroleum, mineral and coal
      sectors. The result is a model of the geological evolution of the Phanerozoic (and Neoproterozoic ) Australian Basins, which is summarised in a GIS
      and report, and whic h has now been released into the Public Domain.




                                                                                                                                            PAGE 27
                                                Geothermal Technology Roadmap




4.5.       Thermal structure

Direct temperature measurements in boreholes are the most reliable indicators of rock temperature, although
raw temperature measurements are prone to significant errors and uncertainty. Temperatures at depth may
also be estimated through a combination of assumptions of conductive heat transfer and surface he at flow
measurements.

The variations found in temperature gradients due to changes in rock type and so ultimately temperature at a
certain depth, are intimately associated. On a prospect scale unless a good geological model exists and
thermal conductivity information can be ascribed with confidence, predicting temperature is, at best, a risky
business. Such risk is exacerbated further by poor temperature data. Hence a significant issue is the lack of
knowledge regarding the thermal properties of rocks at depth and at different temperatures.

The thermal structure of the Australian continent is poorly understood. The amount of heat flow data is
insufficient to characterise the thermal structure of anywhere outside a small number of localities. Thus there
is a need for a new, systematic collection, collation and evaluation of temperature data across the continent.
Geoscience Australia has already made some steps in this direction and is to publish revised maps, but much
remains to be done. This includes a dedicated program of drill holes to >300 m depth specifically for heat flow
measurements. Other issues and questions that need addressing include:

      Of what quality is the present dataset of borehole temperatures?
      What is the temperature of the crust in regions outside areas of previous drilling?
      What is the thermal conductivity of significant geological formations around Australia?
      To what extent does the assumption of conductive heat flow hold true in different parts of Australia?
       Aquifer systems in regions such as the Otway and Eromanga Basins have the potential to redistribute
       heat laterally. This means that surface heat flow measurements may not be a reliable indicator of
       temperature at depth in those (or other) regions. Certainly where the Great Artesian Basin discharges hot
       water at the surface the local thermal regime is not purely conductive. The regional extent of these
       thermal disturbances is presently unknown but impacts on models of crustal temperature.
      What can be determined from fluid geochemistry in terms of heat resources and scaling?


4.5.1. Borehole temperatures

An assessment of the thermal resource beneath the Australian continent is hampered by the fact that there
are relatively few published conductive heat flow measurements for the continent. Chopr a and Holgate (2005)
published a GIS analysis of temperatures reported from over 5700 boreholes across the continent, using an
extrapolation method that includes estimation of basin/basement depths to predict the temperature of the crust
at a depth of 5 km. The results suggest that relatively hot rocks underlie large sections of the continent.
Temperatures in excess of 200 °C have been intersected by petroleum exploration wells at depths little more
than 3 km in the Cooper Basin in central Australia. In addition, Geodynamics Limited has reported
temperatures approaching 250 °C at a depth of about 4400 m in the geothermal exploration well Habanero 1
in the same region. Rocks of similar temperature may underlie large tracts of the continent, although wells to
appropriate depth have not yet been drilled in any of the other areas.

Temperature data reported from petroleum, water or mineral exploration activities are often relied upon for
geothermal assessments. However, these data were often recorded under unknown conditions, and an
assessment of the reliability or possible error margins on the reported values is problematic. If taken at face



                                                                                                       PAGE 28
                                              Geothermal Technology Roadmap




value, many of the data may underestimate the true temperature of the ground. Given this uncertainty, many
existing data mus t be disregarded.

Raw temperature data contained in petroleum reports are prone to systematic errors. These errors are
primarily due to the thermal disturbance of fluid circulating during drilling operations, but may also be due to
other factors (for example the expansion of gas into the borehole during drill stem tests.) Chopra and Holgate
(2005) filtered the petroleum temperature dataset to remove much of the unreliable data. Hence primary
temperature data from outside their dataset may be unreliable.

While Chopra and Holgate (2005) focussed on temperature data from petroleum boreholes, temperature data
are also available from other sets of boreholes. Several state and federal regulatory bodies maintain
databases of borehole data from mineral and water bores, and a number of private companies hold
temperature data from mineral holes (particularly bores drilled by the coal industry). These datasets provide
additional information about the temperature conditions in the shallow parts of the crust, but are also prone to
errors due to drilling disturbances and logging procedures inappropriate for accurate temperature
measurements.

This is an area that Geoscience Australia is initiating some work using thermal gradient and rock conductivity
equipment recently purchased. However there is a need for a significantly larger program in this area.

4.5.2. Heat flow

―Heat flow‖ is a direct measure of thermal energy emanating from the earth. Heat flow is the product of thermal
gradient (change in temperature with depth) and thermal conductivity. Thermal gradient is an inverse function
of thermal conductivity. In the same region, or the same borehole, thermal gradient within rocks
of low thermal conductivity will generally be higher than thermal gradient in rocks of high               Establishing a
thermal conductivity. Heat flow is determined from an accurate thermal gradient and thermal                   database of
conductivity measurement within the same geological unit. Surface heat flow can be used to                conductivities of
estimate temperature at any arbitrary depth if the thermal conductivity structure of the rock          typical stratigraphic
units is understood. Heat flow is assumed to remain constant with depth, and thermal gradient            units would be of
(heat flow divided by thermal conductivity) is determined for each geological unit. A synthetic                       value.
temperature profile is constructed, accounting for changes in gradient with depth.

There are literally hundreds of geological formations in prospective geothermal regions around Australia for
which no thermal conductivity data are presently available. Thermal conductivity has a dominant effect on
temperature distribution with depth but requires careful preparation of rock samples and specialised
equipment to measure. There are far fewer reliable measurements of thermal conductivity in Australia
available than temperature or temperature gradient measurements. Establishing a database of conductivities
of stratigraphic rock units would be of value.

4.5.3. Chemical Geothermometry

In high temperature convective geothermal systems developed for power generation in other countries,
extensive use has been made of chemical and isotopic analyses of waters and gases to determine subsurface
temperatures at greater than accessible or drilled depth. Such methods are less applicable where there is no
natural fluid flow, but could be useful in Australia for HSA‘s, including from petroleum wells. There are
relatively few chemical analyses in Australia where the sampling has been appropriate and where the analysis
is sufficiently detailed to make best use of these techniques.




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                                               Geothermal Technology Roadmap




A systematic programme of sampling, analyses and interpreta tion based on analogies with overseas
convective systems would be of value. There are service providers and research institutions available that
could undertake the work to compile existing data for some tens of thousands of dollars, though cooperation
from geothermal and petroleum companies would be needed to get access to drillholes. If downhole fluid
sampling was required it would add significantly to the cost.

4.6.     Porosity and permeability

The rate at which thermal energy can be extracted from a geothermal system depends largely on the flow rate
than can be achieved from the production bores and the temperature at which it is extracted. The achievable
flow rate is controlled mainly by the permeability of the formation. The total volume of geothermal fluid in the
reservoir is controlled by the porosity of the rock. It is therefore important to understand the relationship
between flow rate and permeability; the relationship between porosity and permeability; natural controls on
porosity and permeability; and the means and conditions under which permeability can be
enhanced.
                                                                                                               A good
Porosity and permeability can be preserved to considerable depth under some geological
                                                                                                understanding of the
conditions. Under other conditions, the combination of stress direction and fracture
                                                                                              regional tectonics, the
orientation can open new permeability pathways. It is likely, however, that many of the
                                                                                                   local geology and
projects currently underway in Australia will require some degree of permeability stimulation
                                                                                                       stress field will
in order to achieve adequate flow rates for geothermal power production.
                                                                                                   naturally highlight
                                                                                                those areas with the
A good understanding of the regional tectonics, the local geology and stress field will
                                                                                                      best chance for
naturally highlight those areas with the best chance for achieving adequate permeability.
                                                                                                 achieving adequate
Porosity and permeability data are often recorded for particular geological formations in               permeability.
petroleum reports. These data are a valuable resource for identifying naturally permeable units at depths that
may also have attractive temperatures. Some states (notably South Australia) have collated these data into
easily accessible databases.

Some advanced geophysical techniques (for example seismic shear wave splitting) are able to shed light on
variations in fracture permeability within formations. These techniques invariably require local calibration and
are better at revealing relative, rather than absolute, permeability, but offer a way to investigate permeability
structure prior to deep drilling.

Field data are required to construct reservoir models and validate geophysical models, and these data can
only be collected from deep exploration boreholes. What is more, a number of technically successful projects
are required in a number of different geological settings in order to build statistically reliable predictive models.
Building up a systematic data set of such measurements would be of considerable valu e.

4.7.     Stress regime

In situ stress when combined with the system of natural fractures in the reservoir (magnitude and direction) is
the dominant control over the process of hydraulic fracture stimulation for reservoir enhancement. This means
that a comprehens ive understanding of the stress regime is the single-most important geological aspect for
any engineered geothermal system. It controls the hydraulic pressures required for stimulation, the orientation
of the stimulated fracture network, and the risk of induced seismicity. Even for projects planning to utilise
existing fluid pathways, reservoir permeability and porosity at depth is principally controlled by the local stress




                                                                                                           PAGE 30
                                                                Geothermal Technology Roadmap




regime. However, in spite of the overriding importance of stress, the general degree of understanding about
rock mechanics, in-situ stress and its orientation, and fluid pressures presently appears elementary. Stress
orientation can be determined easily and can be extrapolated. Stress magnitudes are more variable.

Some public domain data exists for tectonic stress determinants, but stress magnitude and direction data are
poorly accessible at a regional and local scale. In some areas (for example NSW coal bores) a considerable
volume of stress data exists but only some is in the public domain by nature of the acti ve licence status for
coal bed methane exploration. Stress data from coal mining and coal bed methane exploration is concentrated
in the near surface depth zone with most of the data being from tests carried out at 500m depth or sha llower.

Direct (downhole) stress measurement, such as by hydraulic fracturing, remains the most reliable source of
data. However the process of hydraulic fracturing at 3,000 to 5,000m depth requires deployment of relatively
expensive equipment. Only larger (and more expensive) service companies have the necessary equipment
available, which puts such measurements out of reach of geothermal companies in the early stages of most
project developments. Equipment exists in Australia that is capable of testing to about 1,000m depth as used
in the coal basins. In addition, one small Australian company offers a biaxial overcore type stress
measurement tool that can, in principle, be used at 1,000m depth. Equipment exists overseas for the
measurement of stress in deeper (to more than 2,000m) in NQ and HQ-size bore holes. The availability of
such equipment in Australia could increase the number of stress measurements made in the early stages of
exploration. Indirect stress measurement methods, such as core disking assessments and breakout analysis
or core-based acoustic emission testing, strain relaxation, and differential strain curve analysis, have lower
reliability but are more readily obtainable at lower cost.

In addition, porosity and permeability and pore pressure field data are required to construct models of the
reservoir, and these data can only be collected from deep exploration boreholes. What is more, a number of
technically successful projects are required in a number of different geological settings in orde r to build
statistically reliable predictive models. Direct injection-falloff or production-buildup testing provides the highest
quality data and also gives an estimate for the pore pressure existing in the reservoir, which would be of
considerable value.

4.8.         Emerging technologies

In Australia the majority of companies are exploring for deeply buried resources, at the limits of capability for
many techniques. No technique other than direct drilling has yet successfully located a new HR geothermal
target.

Varieties of techniques, aimed at improving the success of geothermal exploration, are emerging or are at a
research level. Some of these include shallow temperature measurements on a prospect (tens of km) to
regional scale (hundreds of km)13 ; thermal infra-red image processing to remove solar irradiation effects; the
application of 3D seismic surveys to geothermal exploration; soil gas emissions in geothermal areas, the
application of magnetotellurics 14 to HAS or HR type projects; and 3D thermal field mapping15 .




13
     Sladek et al; 2007
14
     Measurements of the electrical resis tiv ity of the sub-surface formations using natural fluctuations in the Earth‟s electro-magnetic field. This is the
     most common geophysical technique used in “conventional” geothermal systems overseas, but it has rarely been applied in Australia.
15
     Torrens Energy REDI grant




                                                                                                                                                PAGE 31
                                              Geothermal Technology Roadmap




Many companies are presently testing a range of geophysical, geological and geochemical            A more coordinated
techniques designed for other applications, in order to assess their applicability for             approach with some
geothermal energy exploration. A more coordinated approach with some central direc tion,              central direction,
collation of data and publication of results would be useful. In particular it would be useful     collation of data and
for novel techniques to be applied in areas of known characteristics such as the Cooper            publication of results
Basin, but doing so would presumably not be a high priority for the companies that already             would be useful.
hold the concessions there and that have already drilled successful wells.

This can be a long term programme, but it requires some short-term input if it is to have an impact on the
direction of the industry. The cost of the programme could vary depending on the approach taken and the
scale adopted, from relatively inexpensive up to many hundred thousand dollars.

4.9.     Defining “Geothermal Resources” and “Geothermal Reserves”

A significant theme which has emerged through the workshop process is the need to standardise
methodologies and definitions for geothermal resources and reserves. This is of great interest to the
investment community, but it also has practical implications when deciding what reservoir volumes should be
considered as part of the resource, and hence the economic depths to which casing and drillings should
extend.

Unlike most minerals and oil which have an internationally defined dollar value, electrical energy prices can
vary by an order of magnitude from place to place both because of physical alternative sources of supply and
regulatory policies. The value of electrical energy is also influenced by the proximity of load centres to
generation centres. Therefore the ―cut off grade‖ for geothermal resources cannot be defined as a single
internationally applicable number for certain ―mining criteria‖. It is highly country and region specific.

Furthermore, in the case of electricity generation, the ―cut off grade‖ has to take into account the practical
limitations and cost of the conversion process. It is technically feasible to generate power from fluid at 100 °C
or less, but it is only economic to do so in a few locations. Some consideration also has to be given to the
scale of the proposed development as there are economies of scale in geothermal projects especially as they
need to be based on a finite number of wells.

The value of a geothermal resource is intimately related to the rate at which the embedded heat of the
resource can be extracted for useful purposes. Estimating the recoverability rate of any underground resource
is inherently speculative, whether it is for geothermal energy, petroleum, ground water or minerals. Typically, a
reservoir simulation model is used to estimate the optimal extraction rate, but until some production data are
available the value of the input parameters are speculative, and must be ―educated guesses‖, guided by
analogy with existing successful developments.

The cost of a geothermal project incorporates the exploration, development, oper ation and decommissioning
phases of the project, including the cost of data, labour, materials, and capital. Apart from the very small scale
plant at Birdsville, no commercial geothermal generation development has yet been completed in Australia,
and those commercial projects developed overseas have utilised resources and economic conditions different
to the Australian context.

Standardised reporting conventions are required if the relative values of competing geothermal projects are to
be properly compared. Development of a standardised code for reporting of geothermal resources and




                                                                                                          PAGE 32
                                          Geothermal Technology Roadmap




reserves has separately been a focus area of the Australian Geothermal Energy Group (AGEG) 16 Technical
Interest Group 2, the International Geothermal Association, and the Toronto Stock Exchange. A discussion
paper on Guidelines for Geothermal Reserves Definition is currently available from AGEG, with final
recommendations for a geothermal resource/reserve reporting code approaching completion. The Geothermal
Code is based on the Joint Ore Reserves Code with the Committee‘s permission.




16
     www.pir.sa.gov.au/geothermal/ageg




                                                                                               PAGE 33
                                             Geothermal Technology Roadmap




5.       Issues and Status: Drilling and Stimulation
          Technologies
5.1.     Drilling technologies

5.1.1. Current status

Drilling in HSA presents no unusual technical challenges, though because the economics are marginal, any
technological improvements which lead to economies will be of benefit. Nevertheless, the remarks in this
section apply mainly to HR systems.

Much of the existing drilling technology employed in Australia today utilises technology from the petroleum
drilling sector exhibiting high temperatures and pressures, or from ―conventional‖ geothermal drilling. Over a
thousand geothermal wells have already been drilled elsewhere in the world. Outreach of the Australian
Geothermal Industry to participate in projects in the rest of the world will help with acquiring that knowledge
and experience. But the nature of the environments in which HR geothermal resources are found provide a
number of challenges that can increase the comparative cost and risks of drilling.

Depth

Exploiting convective hydrothermal systems elsewhere in the world today rarely requires or justifies drilling to
depths deeper than 3 km. However, HR systems in Australia may require drilling to significantly greater
depths, possibly to as much as 6 km. Geothermal HR drilling in the Cooper Basin has already extended down
to 4.5 km. While the technical limit for today‘s petroleum drilling technology is to depths greater than 10 km,
the cost of drilling rises sharply with increasing depth.

Temperature

Ma ximum temperatures at the depths to which it is currently considered economic to drill within HR systems in
Australia are unlikely to exceed 300 °C, and the maximum measured temperature so far encountered is
believed to be no more than 250 °C. Drilling reservoirs in excess of 300 °C is considered routine in
―conventional‖ geothermal developments. So from that perspective, temperatures expected in Australia are
well within the range of current technology.

However, high temperatures in combination with other factors may present difficulties. For example the
pressure rating of wellheads and casing is significantly degraded at higher temperatures. The depth and lack
of permeability while drilling in Australian HR wells means that fluid circulation and hence cooling of drilling
bits is less than in shallower ―conventional‖ geothermal wells which are often drilled with ―lost circulation‖,
meaning more fluid passes through the drill bit. This means that the cooling of the drilling bit is much less
effective in the HR s ituation, leading to more rapid failure of seals and bearings.

Pressures

Pressures encountered in HR wells in the Cooper Basin are greatly in excess of those encountered in
―conventional‖ geothermal wells of a similar temperature or depth (though they are deeper than almost all
other geothermal wells worldwide). It is not clear whether similar pressures will be found in other HR
resources in Australia. Similar high pressures are encountered in some petroleum wells, but not usually at
such high temperatures . The combination of pressure and temperature places unusual demands on well



                                                                                                       PAGE 34
                                              Geothermal Technology Roadmap




design, casing and wellheads and complicates the drilling process, for example in controlling pressures while
running casing.

Other Issues

HR environments can create conditions where there is lost circulation, excessive drill bit wear and corrosive
fluids.

These conditions have meant that the correct design of drill bits, corrosion resistant casing, drilling muds, and
cement slurries, is critical in achieving successful geothermal well completion.
                                                                                                   There are a number
To some extent geothermal-specific drilling technologies have been developed in other             of unique features to
countries in high temperature convective geothermal systems. While these routinely                           geot hermal
encounter temperatures as high as those anticipated in Australian HR projects, they do not                 exploration in
encounter pressures as high as those in the Cooper Basin, nor are the wells as deep.
                                                                                                         Australia which
Formations encountered elsewhere are also generally not as hard and abrasive as the                    prohibit the direct
Australian granites. The high horizontal stress environment that exists at many Australian HR      transfer of overseas
sites is a benefit to forming the geothermal reservoir but can lead to wellbore failure during       technology without
drilling and production. Thus there are a number of unique features to geothermal exploration              some form of
in Australia which prohibit the direct transfer of overseas technology without some form of         adaptation applied.
adaptation applied.

5.1.2. New developments required

Developments in geothermal drilling technologies, allowing for faster penetration rates and competent hole
completion technologies (for example wellheads, well casing and cements) for longevity of service will aid in
the progression of deep geothermal system exploitation.

Both evolutionary improvements building on conventional approaches to drilling such as more robust drill bits,
innovative casing methods, better cementing techniques for high temperatures, improved sensors, and
electronics capable of operating at high temperature in downhole tools; and revolutionary improvements
utilising new methods of rock penetration will lower production costs. These tech nological improvements will
enable access to deeper, hotter regions in high-grade formations, and economically acceptable temperatures
in lower-grade formations.

Ad vances in hole completion technology, in terms of improved casing and cements to resist degr adation from
down hole environments, will also be important factors. High costs can be incurred in undertaking replacement
and repair of degraded in-hole infrastructure, such as damaged casings and breached cement sections,
leading to loss of pressure and impaired production capabilities.

New polymer technologies are aiding in the development of high temperature muds, more abrasion resistant
drilling bits, and more competent cement slurries for the purposes of long term downhole functionality in the
geothermal environment.

Environmental considerations as well as drilling technology are also being developed, with issues such as
noise, water use, land occupation of geothermal operations and waste disposal (returned drill cuttings) being
some of the major considerations (Lazzarotto & Sabatelli, 2005).




                                                                                                         PAGE 35
                                              Geothermal Technology Roadmap




However, these issues are common to the petroleum industry and in many of these matters geothermal drilling
practice in Australia will be a follower rather than a leader in technology development. The sheer size o f the
petroleum industry overseas means that solutions to these common problems will most often come from
elsewhere. However, Australia supplies leading R&D results to the domestic and overseas petroleum industry
and direct access by the Geothermal Industry to this local research should be encouraged. There are also
specialist service companies who will need to be involved in related operations such as well stimulation,
downhole logging, well testing and so on. The Geothermal Industry will need them to deve lop specialist
services and equipment that the oil and gas/mining/coal sectors may not require.

In these instances the main role of the Australian Geothermal Industry will be to work with the equipment
suppliers and service companies to make sure their needs are met. Government support will be required not
so much in R&D as in communications and networking, for example in facilitating trade shows or international
collaborations.

It is only in issues that are specific to the Australian geothermal environmen t that technological development
specifically by or for the industry, will be necessary and/or cost effective in this country, as follows:

   Probably the biggest issue facing HR systems is the lack of reliable means of temporarily isolating
    sections of the drillhole to allow the stimulation of multiple zones. This is expanded upon in the following
    section.
   Real-time downhole communication technologies, including logging -whilst-drilling, will          Real time downhole
    be important to the Geothermal Industry. There is a clear advanta ge in having real-time              communication
                                                                                                        technologies are
    downhole data while drilling; bit performance, sudden pressure changes, temperature
    spikes, and other imminent problems can be sensed and either mitigated or avoided               relatively mature in the
    (Blankenship et al., 2007). These systems have been developed and a re being refined.              oil and gas industry;
    These technologies are relatively mature in the oil and gas industry; however, the high               however, the high
                                                                                                               temperatures
    temperatures encountered in the geothermal sector often cause major problems for the
                                                                                                         encount ered in the
    electronics.
                                                                                                   geot hermal sect or often
   Supplies of drilling water can be restrictive in many of the prospective areas in Australia.
                                                                                                    cause major problems
    There is scope for further development of techniques which minimise the consumptive
                                                                                                         for the electronics.
    use of water during drilling.


5.1.3. Availability of drilling rigs/experienced crew

Currently there is a high demand for experienced dril ling crews for the oil and gas exploration industry. This
subsequent shortage of people and equipment has meant that rigs are not always readily available for
exploration and development of geothermal projects and costs are high. This situation is not limi ted to
Australia, so the potential to obtain rigs and crew from overseas is also restricted.

This is not strictly a technical issue, and, as such, it is discussed in the Geothermal Industry Development
Framework.




                                                                                                          PAGE 36
                                              Geothermal Technology Roadmap




5.2.     Reservoir technology

5.2.1. Permeability and stimulation

For a geothermal resource to be viable, in addition to having sufficiently high temperature, in situ hydrologic
and lithological conditions need to be favourable. In existing vapour- and liquid-dominated hydrothermal
systems (including HSA systems), this amounts to having a rock system (reservoir) that has high permeability
and high porosity filled with steam or water, preferably either with enough enthalpy or enough pressure for
wells to self-discharge. If such conditions do no exist naturally, which can generally be expected to be the
case in the Australian HR settings, then the rock formations must be stimulated to generate or modify a
reservoir to make it sufficiently productive.

Stimulation operations will vary with geology and may include chemical stimulation for more reactive
lithologies such as carbonates. Hydraulic fracturing methods, which typically involves injection of water at high
pressure but below the pressure that would directly open and propagate a fracture remain the most common
form for downhole HR reservoir stimulation. Both the stimulation of existing fractures/faults and the creation of
new fractures will enhance permeability. Downhole pumping of large volumes of heavy brine and water
(between 30-50 l/s) at high pressures is required to mobilise shear deformation on critically oriented natural
fractures. Shearing is thought to be the dominant, and often the most desirable stimulation process, although
tensile fracturing can also occur. Tensile fracturing that is not carefully desig ned and accounted for in the
reservoir design can lead to the creation of a few dominant fractures that cause short circuiting. For this
reason, stimulation is not as simple as just pumping the maximum possible fluid volume at the maximum
possible pressures; this can lead to initiation of axial fractures along the wellbore that may then turn to
become horizontal away from the well. Such a fracture geometry can significantly increase the pressure
required to continue the fracturing operation and be inefficie nt in connecting the wellbore to the reservoir.
Better methods of isolating sections of the well so that the stimulation can be directed into these sections will
result in improved and more complete and uniform stimulation of the reservoir.

Poorly controlled seismic events, such as at Basel, Switzerland, can have an adverse impact on the overall
exploration program. Within the Australian context, maximising fracture permeability whilst minimising
seismicity, especially in populated areas, will require a de tailed understanding of stress and rock mechanics
as well as access to equipment and expertise for hydraulic fracturing, and seismic monitoring.

Stress regime, the location of injection wells with regards to stress orientation and
magnitude and the processes of fracturing (for example fracturing at alternated depths and        Success is highly
from multiple wells and developing a program that combines opening mode fracture                      dependent on
stimulation with mobilisation of shear fractures by more uniform pressure increase) will all      knowledge of the
have bearing on the ultimate production index and the ability to control seismic events.           prevailing stress
Success is highly dependent on knowledge of the prevailing stress regime and of the                         regime.
existing natural fracture system.

If reservoirs of large heat exchange capacity are to be created and accessed with a sufficiently small number
of wells to be economic, it will generally be necessary to produce multiple fracture zones from each well. The
ability to do this has not yet been demonstrated. A key missing element in being able to do so is a high
temperature recoverable packer for isolating one zone at a time or to use a cased wellbore completion method
over the reservoir interval.




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                                                          Geothermal Technology Roadmap




Increasing production flow rates by targeting specific zones for stimulation and improving downhole lift
systems for higher temperatures, and increasing swept areas and volumes to improve heat-removal
efficiencies in fractured rock systems, will lead to immediate cost reductions by increasing output per well,
allowing for increased well spacing, reduced drilling cos ts to develop the reservoir and extending reservoir
lifetimes.

Theoretical rock mechanics studies, reservoir modelling and practical experimentation will be required. As the
latter will involve the use of deep drillholes which are expensive, it will be most advantageous for the technical
work to be directly funded by a central agency, but it will require cooperation from individual companies to get
access to drillholes as these become available. Nevertheless, heavy equipment is needed and this is an area
where total investment required to carry out a suite of experiments in a range of different geological settings is
likely to be in the order of millions of dollars.

5.2.2. Proof of concept demonstration of fluid circulation

Probably the next most critical step, related to the above issue, that the Australian
Geothermal Industry requires to gain investor confidence in HR, is a proof of concept                                  Government assist ance
demonstration of fluid circulation and energy extraction. This need not involve power                                        or private sector
                                                                                                                          investment may be
generation in the first instance. In practical terms it appears possible that Geodynamics will
be in a position to carry this out during 2008, but they are not necessarily under any                                  required, if appropriate,
                                                                                                                       to support a programme
obligation to make data from that trial public17 , and it will only demonstrate success in one
                                                                                                                         of circulation trials in a
particular location. Geodynamics has been successful in obtaining significant Government
                                                                                                                            variety of geological
support for their current programme. It is by no means clear that other companies will be in
                                                                                                                          settings, with the data
a position to carry out similar trials across a suitably wide range of geological settings
                                                                                                                            being made publicly
without similar support, nor is it clear when the next company might be ready to do so.
                                                                                                                               available. This will
Government assistance or private sector investment may be required to support a                                                 inevitably involve
programme of circulation trials in a variety of geological settings, with the data being made                           significant expenditure.
publicly available. This will inevitably invol ve significant expenditure.




17
     While acknowledging that Geody namic s and other Australian geothermal companies have so far v oluntarily demonstrated a large degree of
     transparency and cooperation.




                                                                                                                                  PAGE 38
                                               Geothermal Technology Roadmap




6.       Issues and Status: Reservoir modelling,
          assessment and management
6.1.     Reservoir modelling

Geothermal reservoir modelling is a necessary process for resource definition and project design. Reservoir
numerical simulation is a well developed technology in convective high temperature
geothermal systems. The need to allow for fluid phase changes and the very large                          The lack of
differences in relative permeability of steam and water mean that software codes have had to established well data
be adapted from those routinely used for petroleum or groundwater reservoirs. This work has for calibration is likely
already been undertaken to a level of detail sufficient to permit the use of reservoir modelling
                                                                                                        to be the key
to predict the long term performance of geotherm al reservoirs that comply with the underlying constraint rather than
assumptions used in developing the simulator. It is possible to assess critical aspects such          the underlying
as energy and fluid recovery factors, phase changes, pressure drawdown, ingress of cool              methodology or
groundwater short-circuiting of re-injected fluid, and so on, provided there is sufficient data             software.
available to calibrate the models. However model calibration will not be able to provide a
definite set of reservoir properties given the large numbers of parameters involved.
Confidence in the model predictions will often be a concern given the uncertainties involved in dealing with a
formation at depth about which information is limited. In the Australian context, the lack of such data for
calibration is likely to be the key constraint rather than the underlying methodology or software.

Some important complications not considered with existing geothermal simulators exist; one complication is
the strong coupling of flowing pressure to permeability via the effective stress. This coupling between flow and
geomechanical behaviour requires a different modelling approach for HR projects to that used with existing
geothermal codes. In addition, in a geothermal reservoir the changing temperature will also affect
permeability. Another complication is the geochemical behaviour associated with changing pressures,
temperatures and the injection of possibly contrasting fluids. The potential for precipitation of minerals in the
vicinity of production or injection wells is a definite possibility and would h ave significant implications for the
geothermal operation and simulation tools are needed that can represent this behaviour. Advanced and
improved models that consider these and other coupled processes are needed to design and operate HR
reservoir systems.

The current level of understanding is generally sufficient for HSA projects but not HR projects. What is lacking
in relation to the proposed Australian HR systems is a sufficient number of reservoir models that have been
calibrated against actual production histories, to serve as a sound basis for resource reservoir prediction in
analogous systems.

It can be expected that individual companies will undertake reservoir models for individual          Support is needed to
projects, but understandably will regard that data as commercially sensitive and, given the           build up a library of
sensitivity of their funding sources, will be reluctant to make public any results which lead         publicly accessible
to negative outcomes. For those reasons, it is recommended that support is needed to                 geot hermal reservoir
build up a library of publicly accessible geothermal reservoir models covering the range of           models covering the
project types to be encountered in Australia, with a suitable range of input parameters to          range of project types
permit some sensitivity analysis. A probabilistic approach, following for example the              and geological settings
methodology of Parini and Riedel (2000) or Hoang et al (2005) may be advisable.                      to be encountered in
                                                                                                                Australia.




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                                               Geothermal Technology Roadmap




At present there are not many institutions within Australia offering geothermal numerical reservoir simulation,
with the exception of some consultancies, universities and the CSIRO, but as the technology is readil y
commercially available overseas that is not seen as a major constraint that needs to be addressed. The
number of institutions capable of performing research to address the complications to reservoir simulation
described is even smaller. CSIRO has well es tablished reservoir simulator development capability, particularly
in the coupled flow and geomechanical area, which could address some of the issues identified.

A further impediment, which also applies to the use of reservoir models in convective systems , is the
availability of codes linking 3-D fluid modelling with 3-D geomechanical modelling. Such a model would be
useful both for predicting effects such as subsidence and the coupled pressure -temperature-permeability
processes that ultimately control how the injected fluid passes through the HR reservoir. Models with this
capability, specifically for geothermal situation, are under development within CSIRO and overseas academic
institutions. A few are commercially available but are also still being active ly improved and verified. Funding
some collaborative development and calibration would be worthwhile

As with all modelling, outcomes are highly dependent upon the quality of geological inputs, in particular:
boundary conditions; porosity; permeability; thermal conductivity; and fluid chemistry. Modelling is an iterative
process and considerable skill and knowledge is needed to produce reliable outcomes. This has already been
discussed under exploration.

6.2.     Determining and modelling stress field

Predictions of the stress regime within a potential reservoir are largely dependent upon the quality and
quantity of inputs. Ideally, available well hydraulic fracture data can be used in numerical stress models.
However the paucity of such data in many Australian geothermal settings means that either new data must be
acquired and/or less direct sources of data must be used. Indirect sources of stress data may include core
disking measurements, borehole breakout analysis, core-based acoustic emission and strain change
measurements and the use of earthquake focal solutions and limit equilibrium considerations on geologic
structures. Reservoir modelling data should also be considered with regards to stress modelling as
preferential fluid flow will be strongly influenced by the stress state interacting with the natural fracture system
for both HR and HSA systems. Acquiring and collating such data has already been discussed above under
exploration. The cost of doing so would be modest, provided it is based on existing boreholes only.

6.3.     Imaging and modelling underground flow paths

6.3.1. Microseismic monitoring

Sub-surface fluid flow (and fluid sampling) can be assessed in a number of ways and incorporated with
available stress and reservoir models. Surface seismic monitoring during fracture stimulation and reservoir
production can provide detailed information regarding the level of connectivity within the reservoir. This
technology is well developed, but there is on-going development of monitoring hardware and interpretative
software which the Australian industry needs to keep abreast of. A lack of capability within Australia to
undertake this work has been identified as an issue but given the ready availability of the technology overseas
it is not regarded as a significant constraint that requires intervention.




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                                               Geothermal Technology Roadmap




Geoscience Australia and the State/Territory geological surveys maintain a geophysical network for purposes
such as Comprehensive Test Ban Treaty monitoring and earthquake hazard and neotectonic studies. The
network includes surface seismic stations. There is considerable overlap between the work that Geoscience
Australia and the State/Territory surve ys do in this area, and the monitoring that geothermal companies will do
during exploration, development and production, and there are possibly areas of mutual benefit that could be
further investigated. To better service geothermal companies, the network needs to be upgraded with more
sensitive equipment and also a closer network of stations.

6.3.2. Underground chemical tracers

There is a long history in natural convective reservoirs of the use of chemical tracers to assess flow direction
and magnitude through the reservoir. This will become important in Australia as projects move into long term
circulation trials. Experience in interpreting tracer test results and linking them to reservoir models is well
developed overseas, but of limited availability in Australia. Some work will be required to adapt tracer systems
to the specific reservoir rocks and fluids that are present in Australia. Tracers must be monitored to reduce
any risks of groundwater contamination. There may be a need to acquire certification for their use.

It is recommended that issues are addressed as a research project. The cost would be modest.

6.4.       Reinjection fluid loss and short circuiting

Re-injection enables:

      the disposal and reuse of water;
      the maintenance of reservoir pressure; and
      the addition of mobile thermal mass to the reservoir.
Key factors with re-injection include the ability to control both fluid temperature decline , and the associated
risks of short circuit, fluid loss (leakage) and seismicity. Re-injection rates and pressures will have a strong
control on the behaviour of the reservoir and producing well(s), in particular the need to manage draw down
pressure at producing wells, which has a significant impact on overall production index.

All geothermal reservoirs, in constant production, will undergo some cooling. This reduction in enthalpy can
reduce the production index of wells over the lifetime of the field, but if it can be managed such that it occurs
at a slow and steady rate, a reasonable proportion of the energy contained in the reservoir can be recovered,
and the project will have a commercially acceptable lifespan.

Cooling may be enhanced where reinjected fluids follow a few dominant fracture paths rather than spreading
slowly through a complex mesh of finer fractures. Cooling can also result in the thermal contraction of existing
fractures and the initiation of new fractures such that a ―short circuit‖ occu rs in the reservoir.

Predicting and managing such short circuits is a major task for reservoir management in natural convective
geothermal systems. The same may well apply in HR projects. It appears on a theoretical basis that the
fracture density can be controlled by appropriate orientation of boreholes and stimulation practices, but there
is limited practical experience to back this up.

This issue and the question of fracture stimulation for reservoir development, as discussed in the previous
section, present two of the areas requiring the greatest need for support regarding investigations and trials.




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                                              Geothermal Technology Roadmap




6.5.     Fluid chemistry

The economic extraction of geothermal fluids is influenced by the phase of the fluid (gas or liquid) which in
turn is controlled by the pressure, temperature and chemistry (PTX) of the fluid. PTX conditions can influence
scale formation, corrosion, and potential gas emissions. Risks associated with geothermal fluid extraction may
be mitigated through predicting the likely PTX outcomes at surface, and modification of the power scheme
process accordingly. This is typically done via geofluids computer modelling. In Australia the skills base and
software for geofluids modelling are limited to a few institutions, but they are readily available over seas.

What is currently lacking within the Australian Geothermal Industry is data on the specific fluids to be found in
Australian reservoirs, and theoretical and practical studies on how they behave when produced and used for
power generation.

There is considerable experience in the use of chemical inhibitors to control scale deposition in high
temperature natural convective geothermal reservoirs both using downhole injection tubing and in surface
facilities. Once again, there is a need to adapt this technology to the Australian environment.

Both issues can be dealt with initially by way of a desk-top study and then as samples of the geofluids become
available some bench scale trials.

6.6.     Availability of working fluids

In hot dry rock HR systems, water will have to be added to reservoirs as a working fluid. In arid areas this
could present problems. There will also be a strong need to avoid underground fluid losses, and there is a lack
of practical experience in that regard. That information will come out of o ther reinjection and reservoir
modelling studies and trials rather than requiring specific separate research.

The use of carbon dioxide, including possibly supercritical CO 2 from fossil-fuel fired power plants, has been
suggested (for example Pruess, 2006), but is still a long way from technical or commercial realisation. It
appears to have some promise but also has potential challenges such as corrosion and scaling. Tracking
developments in this area would be worthwhile but no specific action within Australia is recommended.




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                                              Geothermal Technology Roadmap




7.       Issues and Status: Power conversion
          technology
Several different plant types have been used for geothermal electricity generation worldwide, with the most
appropriate type depending on the specific fluid characteristics. Generally speaking, the capital, and, to a
lesser extent, the operating costs will increase as the enthalpy of the resource decreases, in a more than
linear fashion.

There are also some economies of scale in geothermal power plants, though once over a certain size, plan ts
effectively become modular and further economies are limited. That point will be at about 100 MWe for
condensing steam turbines, and 10 MWe for binary plants. This is by no means a hard and fast relationship,
and there are notable exceptions.

7.1.     Different power plant types

7.1.1. Steam turbines

Initially, electricity generation from natural high temperature resources was mainly produced by conventional
condensing Rankine cycle steam turbines. These systems still represent the largest proportion of generation
worldwide and remain the lowest cost option per MWe at sizes generally above 10 MWe , provided the resource
characteristics are suitab le, which will rarely be the case in Australia. Condensing steam turbine plants require
a supply of relatively high pressure steam, which implies a high reservoir temperature (generally over 240 °C
unless dry steam is present), abundant fluid, and the use (in this part of the scheme) of the flashed fraction
only. In a sense these plants work by ―high grading‖ the resource, and so c oupled with factors such as very
shallow wells, have permitted the use of geothermal generation in the face of extremely low electrical energy
prices in countries such as New Zealand. However, this will not be the case in Australia where, due to the
nature of the resources, the economics of geothermal generation are more marginal.




                                                                                                        PAGE 43
                                               Geothermal Technology Roadmap




                                           Single Flash Operation
             SEPARATOR


                                                                      GAS EXTRACTION


                                                                                     COOLING

                                                                                       TOWER
                                                              G



                             CONDENSER




                                                                                                 INJECTION

                                                                                                     WELL

   Figure 7-1 A plant utilising a condensing steam turbine



Most often such plants use direct contact condensers with evaporative wet cooling towers, and surplus
condensate going to reinjection wells. Again this will not be appropriate for use in arid areas in Australia where
there is a requirement for full injection. Such systems can be air cooled, but this results in a significant loss of
efficiency. Research and development is needed, possibly including diurnal thermal storage.

Nevertheless, there may be some scope for use of back pressure steam turbines as part of more complex
combined cycle schemes, such as in the Ormat GCCU system, provided temperatures are high enough to
provide flash steam. It could also be the case that to get a demonstration plant up and running quickly, some
companies may wish in the short term to buy an ―off-the shelf‖ or even second-hand 1 – 5 MWe back pressure
plant from elsewhere in the world. Such plants can be supplied skid -mounted and are readily re-locatable.
This has been common practice for getting an immediate return during well testing in some countries
especially Mexico and more recently in Nicaragua. While this would be relatively thermodynamically inefficient
it could be the fastest and most economic way to get power generation underway in a demonstration mode
and it should not be discouraged.

Incremental improvements in efficiency will be carried out by plant manufacturers, principally Japanese, as
part of the normal course of commercial development. Apart from the cooling circuit (which is common to any
power plant type) there are no particular technology developments on steam turbines required for use in




                                                                                                          PAGE 44
                                             Geothermal Technology Roadmap




Australia and so no technological development on this power plant type has been recommended in the
Roadmap.

7.1.2. Binary plants

Binary plants utilise a secondary working fluid, usually an organic fluid (typically n -pentane: hence the name
Organic Rankine Cycle or ORC), that has a low boiling point and high vapour pressure at low temperatures
when compared to steam. The secondary fluid is operated through a conventional Rankine cycle: the
geothermal fluid yields heat to the secondary fluid through heat exchangers, in which the secondary fluid is
heated and vaporises; the vapour produced drives a normal axial flow turbine, is then cooled and condensed,
and the cycle begins again.




    PRODUCTION



                                                                  BINARY


                                                                 TURBINE



                                                                                              COOLING

                                                                                            WATER / AIR




     INJ ECTION




    Figure 7-2 A Simple Binary Plant



Generating electricity from low-to-medium temperature geothermal fluids (85-170 °C) and from the waste hot
water coming from separators in water-dominated geothermal fields, has made considerable progress since
improvements were made in binary fluid technology.




                                                                                                      PAGE 45
                                             Geothermal Technology Roadmap




The most common type of geothermal binary plant uses a hydrocarbon working fluid, as at Birdsville. Such
plants are available from several manufacturers worldwide, of which the largest and best known is an
Israeli/USA company, Ormat Industries, though there are other suppliers in Europe and the USA. Many
hundreds of MWe of these plants have been installed worldwide, sometimes in combination with back
pressure steam turbines. The standard Ormat configuration is to use air cooling which is suited to Australian
conditions but may lose efficiency when ambient air temperatures are high. The maximum size ORC turbine,
which is commercially available, is about 15 MWe capacity but smaller units are more common and larger
plants are built up from numerous smaller modules.

Turboden from Italy (www.turboden.it) offers ORC technology but has much less of a track record. Although it
has designed, manufactured and supplied a number of ORC plants, it has produced only one geothermal
power plant, being a 1 MWe development at Altheim, Austria. Plant capacities are in the 0.3 to 1.5 MWe
range.

Barber-Nichols has also been in the business of binary geothermal power plants. In the late 1970's and early
1980's Barber-Nichols produced numerous ORC systems for converting solar and geothermal energy to
electrical power and air conditioning. These plants generally have a capacity less that 1.5 MWe. Refer:
http://www.barber-
nichols.com/capabilities/engineering_capabilities/thermodynamic_power_cycles/default.asp.

United Technologies (part of the Carrier Corporation) is a newcomer to the geothermal ORC market. They
have a 400kW demonstration plant at Chena Hot Springs in Alaska. United Technologies are actively pursuing
larger plant sizes and hope to have a 1 MWe package available in the near future. Refer to:
http://www.utcpower.com/fs/com/bin/fs_com_Page/0,11491,0167,00.html. These are based on adapting
Carrier air conditioning units, using a commercial refrigerant. Th ey may be applicable to lower temperatures
ranges than typical ORC units and so be particularly suitable for HSA applications in Australia, provided a
suitable means of cooling is available.

The widespread use of binary plants overseas, market competition and their ready commercial availability
mean that there is probably little point in undertaking fundamental R&D on such systems in Australia.

7.1.3. The Kalina system

A recent variation on the binary plant is the Kalina scheme. The Kalina power cycle is claimed to be a more
thermodynamically efficient technology for converting mid to low temperature heat sources into electricity. In
simple terms, the Kalina cycle is a Rankine cycle that uses an ammonia -water mixture as its working fluid in
instead of organic hydrocarbons used in conventional organic Rankine applications. The key points of
differentiation of the Kalina cycle are:

   the varying boiling temperature of the working fluid when heated at constant pressure;
   the ability to vary working fluid composition within the cycle and hence optimise heat transfer; and
   the ability to operate more efficiently on low temperature fluids. This makes it of particular interest for
    HSA projects in Australia, or others where a high degree of efficiency is required.




                                                                                                       PAGE 46
                                              Geothermal Technology Roadmap




 PRODUCTION



                                                AMMONIA / WATER
                                                   TURBINE
           SUPERHEATER




                                                                  RECUPERATOR


                                                                  PREHEATER
            EVAPORATOR

                                                                         COOLING
REINJECTION                                                             WATER / AIR
                                                                  CONDENSER




   Figure 7-3 The Kalina configuration


Kalina cycle generation is not yet in widespread commercial use. The system is currently more expensive per
MW e installed, but whether this translates to being more or less expe nsive per MWh generated has not as yet
been demonstrated, and is the subject of some controversy.

In Australia, Geodynamics Limited, through its 46% owned associate Exorka International Limited (EI), has
access to the Kalina power cycle technology. EI is a global sub-licensee for the Kalina power cycle
technology. EI has exclusive rights in Australia and New Zealand for technology transfer related to Kalina and
non-exclusive rights to use the Kalina patents in all countries. EI is working to commercialise K alina with
prospective customers, both in waste heat and geothermal applications. There is one 2 MWe plant in
operation in Iceland, and EI is working on delivering a demonstration plant at the San Jacinto geothermal
project in Nicaragua.

As the market is leading to rapid developments in this area there is probably little point in undertaking
fundamental R&D on such systems in Australia.

7.2.     Adaptation to Australian conditions

In this context, conditions refer to both the physical and economic environments:

In terms of economics, there are three hurdles to overcome in Australia: the low temperature of the HSA
resources, the high ambient air temperatures and lack of cooling water in most locations, and the high cost to
access the HR resources, all of which are com pounded by the remote location of some sites which means
high losses in conventional electricity transmission systems. Therefore, in order for projects in Australia to be
economically viable, it will be necessary to push the frontiers of power plant techno logy in terms of cost and
efficiency, especially at the low temperature end. To some extent these developments in technology will occur
overseas, and can be tracked through strong international linkages, but there is also scope for development in




                                                                                                        PAGE 47
                                                Geothermal Technology Roadmap




this country. It would be logical for that development to be focussed mainly on the most ―Australia specific‖
issues, namely the heat rejection circuit.

In terms of physical conditions, the most unusual aspect of the Australian resources is the high fluid pressure
encountered at the Cooper Basin project, which could well prevail elsewhere. Because of the need to avoid
massive scaling if flashing occurs, high pressures will have to be maintained through the surface plant. This
will require R&D to adapt existing plant to those conditions, and such work is unlikely to be carried out
elsewhere in the world. This is a key requirement for the industry, and is a focus of research at the Universities
of Queensland and Newcastle.

Technology for dealing with high pressure and corrosive fluids already exits in the petro-chemical and power
(coal and nuclear) industries. Adapting these to geothermal applications in an economical way is therefore a
matter of applied development rather than high technology fundamental research. It would nevertheless be
reasonably expensive since at least a pilot-scale plant would have to be built and preferably tested using real
geothermal fluid which requires cooperation from the industry if the cost of drilling a dedicated well is not to be
added.

7.2.1. Need to minimise technological risks for rapid deployment

A point which has emerged from the workshops is that the greatest barrier to commercialisation of geothermal
energy in Australia is the current lack of a demonstration plant generating electricity from a HR resource.
Although not a technological barrier per se, the sooner this can be achieved, the better. There is consequently
a tension between the desire to adopt leading edge technology which is as efficient as possible to improve the
overall economics of the scheme, and the need to both get a plant working as soon as possible and to
eliminate any avoidable technical risks.

It may well be the case, therefore, that the first one or two HR demonstration plants in Australia make use of
existing technology, even if it is not particularly efficient or economic, and that it is only later plants that are
optimised. There are advantages in making incremental gains rather than putting the whole project concept at
risk through trying to achieve too much.

It is therefore worth pointing out the possibility of utilising second -hand or surplus plant for the first generation
of HR projects in Australia, even if these are not optimally suited to the conditions. In recent years there have
been geothermal projects in New Zealand, Nicaragua and Lihir which makes use of surplus plant (both used
and new). In the case of Poihipi in New Zealand, the plant was designed for geothermal service at The
Geysers in the USA. The plant has been re-furbished by the original manufacturer and comes with a warranty.
In the case of Nicaragua, second hand used back-pressure turbines from El Salvador were re-located at the
San Jacinto project and at Lihir (and several locations elsewhere), use has been made of unused surplus
turbines originally designed for marine service with US Navy several decades ago, and then modified for
geothermal use. Quite apart from the advantageous cost this can offer significant advantage in terms of
delivery time.

Therefore Government assistance to support a dem onstration plant should not be precluded on the basis that
it does not include leading edge technology.

7.3.     Downhole pumps

There are currently limits on the temperature at which downhole pumps can operate, with a maximum of
around 180 °C.




                                                                                                            PAGE 48
                                             Geothermal Technology Roadmap




This is not an issue for HSA systems that are artesian. But it will be an issue for non -artesian systems, or in
systems which are currently artesian but where pressure may become drawn down in the future. Note that
pressure declines can occur even with full reinjection, because of the cooling effects.

In HR systems, in many cases downhole temperatures are far above the limits of current technology and
reinjection pumping will have to take place on the surface. There may be applications for current downhole
pumps for production in lower temperature or shallower situations. In the longer term downhole pumps may
become more applicable to hotter resources as the technology develops.

Technology in this field is developing rapidly and the Australian Geothermal Industry needs to both keep
abreast of developments and adapt systems to the Australian setting.




                                                                                                       PAGE 49
                                             Geothermal Technology Roadmap




8.       Issues and Status: Environmental
Some environmental issues have already been covered in the above sections. In this section remaining and
more generic environmental issues which require technical input are presented.

Geothermal energy development is not without environmental impacts. Although geothermal projects
generally present much lower overall environmental impact than conventional fossil -fuelled and nuclear power
plants, they nonetheless pose concerns for a variety of stakeholders in the public domain. In some cases
there are impacts reported from power schemes in naturally convective geothermal systems elsewhere, which
will not be applicable to Australia, that nevertheless need to be addressed. The main environmental impacts,
real and perceived, broadly include the following:

8.1.     Gaseous emissions

All naturally convective hydrothermal and geo-pressured systems contain steam and/or water phases with
dissolved gases (CO2, H 2S, NH 3 etc) and minerals (silica, carbonates, metallic cations, sulphides, sulphates
and so on) present in varying concentrations. Depending on in situ conditions, there is a possibility of
enhanced release rates over those naturally present. There are however, techn ologies that exist to separate
and isolate most components in gaseous or liquid streams to control concentrations within regulated
guidelines.

The residual non-condensable gases may represent a small level of greenhouse gas emissions per MWh, but
usually much less than the equivalent quantity from a fossil fuel fired plant. Nevertheless, there are a few
geothermal projects worldwide where the greenhouse gas emissions approach those of combined cycle gas
turbine plant operating on typical natural gas sources (around 0.40 tCO2/MWh). Where there is a high
percentage of hydrogen sulphide present they may cause an odour nuisance but generally not high enough
concentrations to cause health hazard to the general populace. This is less of an issue for amagmatic sys tems
such as those in Australia.

The likelihood of major problems arising from these issues is not considered high enough that any significant
technological development is required. Rather it is a matter of the issues being quantified and assessed. It
would be efficient for this to be done on an Australia–wide basis (but with reference to the range of project
types likely in Australia and Australian environmental regulation) and sets of standard guidelines, permitting
conditions established rather than having to be repeated for each individual project, and some investment to
do that would be useful. Some data gathering would be needed but this is mainly a desk -top study.

8.2.     Radioactivity

There are small levels of natural radioactivity present in all rocks due to the decay of potassium (K), thorium
(Th) and uranium (U), which are responsible for the generation of geothermal heat. The likely impact of these
isotopes on human and environmental health in an HR energy generation system appears to be negligible.
The same applies to gaseous radon emission from granitic areas. These can pose a minor radiation hazard in
certain locations if gases are trapped, for example in a basement. The potential for this type of hazard to be
exacerbated by geothermal development is unknown, and will need to be assessed for each type of
development.




                                                                                                      PAGE 50
                                             Geothermal Technology Roadmap




Quantifying these issues could be done as part of a desk top study, but a more extensive and rigorous
assessment including sampling from producing wells would provide a more robust understa nding and may
benefit the industry by increasing confidence if it is shown not be a significant risk.

8.3.     Water pollution

Liquid streams from well drilling, stimulation and production may contain a variety of dissolved minerals, some
of which (for example boron and arsenic) could contaminate surface or ground waters and also harm local
vegetation. Recycling of drilling and stimulation water discharges, and hence removal of harmful elements
would also mitigate such impacts. In the case of HR operations there is little chance for surface contamination
during plant operation because all the produced fluid is re -injected (MIT, 2006), apart from short term well
testing. However the possibility of leakage from corroding underground pipes causing aquifer contamination
will require ongoing monitoring and reporting.

Fluid spills remain an occurrence of low probability and impact. It is principally a matter of management using
existing technology, and no research into this issue is considered necessary,

8.4.     Effects on springs

Elsewhere in the world, geothermal development has had large effects on natural surface thermal activity,
leading to the loss of thermal features. This is not so much of a concern in Australia where there are few
natural thermal features.

It is conceivable but improbable, that some HSA projects could have an effect on hot springs, since the
temperatures required for power generation in this setting mean that the water will have to be sourced from
much greater depth (kilometres) than in volcanic areas where high temperatures occur close to the surface (a
few hundred metres) and are much more directly connected with hot springs. HR projects are unlikely to have
any effect on surface thermal activity as they are well isolated from groundwater aquifers.

The use of Great Artesian Basin water for geothermal energy has the potential to impact on springs. However,
the potential impact would be taken into account before a water allocation was given by the management
authorities. Allocations that would have a significant impact on mound springs would be unlikely to be granted.

Quantifying these effects could readily be done on a case by case basis using existing reservoir modelling and
no specific research is considered necessary.

8.5.     Land subsidence

Land subsidence can occur due to geothermal fluid extraction causing reservoir pressure declines, as has
happened on a large scale at Wairakei in New Zealand (White et al., 2005), and also due to withdrawal from
some petroleum reservoirs. For this to occur to a significant degree, not only do the reservoir pressure
changes have to be large (perhaps tens of bars) and comparatively shallow, but geological formations have to
be present which are susceptible to consolidation. These conditions are very unlikely to be met in HR
systems. They could occur in HSA systems though usually the fluid withdrawal will be too deep to have much
effect on the surface.

It would be possible to demonstrate at a generic level that the effects will be small through some
geomechanics modelling using exis ting technology and doing so is recommended, though this would not
obviate the need for further investigation on a case by case basis. It would also be useful to support research




                                                                                                      PAGE 51
                                              Geothermal Technology Roadmap




into linking geomechanics and reservoir modelling methods. That is a technolo gy gap that also needs to be
closed for a better understanding of the fracture stimulation process.

Carrying out case studies to define the amount of possible subsidence to some extent is being addressed
overseas and there is good scope for international collaboration.

8.6.     Induced seismicity

Injection of fluid under high pressures, especially during fracture stimulation of HR systems, can cause felt
(but not usually damaging) earthquakes on the surface. The maximum magnitude recorded from this source in
a geothermal project is about 4 on the Richter scale, though that is exceptional and events over 3 are
uncommon. In the extreme case at Basel in Switzerland, this has led to the suspension of a HR project which
was taking place within an urban environment. It is known that water lubrication of fracture planes and
hydraulic stimulation to exceed the minimum principal stress (assumed to be vertical in most of Australia) can
cause felt earthquakes, but other mechanisms are not fully understood.

As the earthquakes are not large enough to cause damage to project facilities, this is more an issue of public
concern than a technical constraint. In remote areas in Australia very small earthquakes are unlikely to be of
concern. Nevertheless, it is considered of sufficiently high impact in terms of negative publicity that it should
be investigated. A research project into fracture simulation mechanisms and their control could usefully
include a component on induced seismicity. This is an area actively being researched overseas and there is
good scope for international collaboration.

The problem is complex, and it would involve practical field trials and monitoring and require industry
cooperation in terms of access to deep boreholes. However, since producing such a risk assessm ent is of
direct benefit to all HR commercial companies, it is likely that the Australian industry will cooperate actively
with any activity in this area.

8.7.     Competition for water

Due to extensive drought conditions in Australia, the introduction of geotherma l energy systems has raised
concerns over the competition for limited water resources. Geothermal projects in general, require access to
water during several stages of development and operation. Water is required during well drilling to provide bit
cooling and rock chip removal. It is also expected that in most HDR (but not HFR) applications, surface water
will be needed to stimulate and operate the underground reservoir and produce the circulation patterns
required as it is likely that the hydrothermal fluids contained within the formations will not be adequate. In
areas of low water supply and high water demand, water for geothermal applications will therefore require
careful management and conservation practice. Water consumption can subsequently be contr olled by using
total reinjection, non-evaporative cooling and general pressure management in closed -loop circulating cycles.
HR projects may not be able to achieve 100% return of injected fluid to the need for water in production wells
and some leakage into the surrounding strata is possible. Makeup water will be required to replace that which
is lost – the question will be, what percent recovery can be achieved and what will this mean in terms of
makeup water requirements. As mentioned earlier, research is being conducted into using liquid CO2 as a
heat transport medium – if successful in this, HDR projects may obviate the need for make up water.

In HSA projects, geothermal power generation can have positive effects by making water available for other
uses and by cooling it, but that in turn can lead to issues of reservoir pressure decline if the water is used for
example for irrigation rather than being re-injected.




                                                                                                         PAGE 52
                                               Geothermal Technology Roadmap




These are principally management issues but may require some technological input in terms of hydrology and
modelling, on a case-specific basis. No particular technical intervention is seen as necessary.

8.8.       Other issues

Other effects of very low likelihood or impact, which it has nevertheless been suggested in previous public
submissions on geothermal projects around the world could result from geothermal development include:

      solid emissions;
      noise;
      cooling of the Earth;
      induced landslides.
None of these other issues are considered of sufficient likelihood or severity in Australia to justify any rese arch
input.




                                                                                                          PAGE 53
                                                Geothermal Technology Roadmap




9.         Emerging Technologies and New Uses for
            Geothermal
Some of these have already been addressed in previous sections. Others include the following:

9.1.       New power generation technologies

Improvements in power generation from low temperature geothermal sources such as the Kalina cycle and the
UTC, Turboden and Barber-Nichols plants have already been described. Further developments in that area
can be expected both specifically for geothermal applications and more generally for waste heat recovery from
other industries.

Another type is thermo-electrical systems which convert heat directly to electricity using a solid state device,
known as a Peltier device, somewhat analogous to Photo -Voltaic (PV) systems. Small scale models of such
systems have been developed in Iceland and the USA, but are as yet a long way from commercialisation.
They may in the future be of some interest for small scale use at remote sites in Australia.

9.2.       Energy source for other industries

Where locations are appropriate, geothermal energy may provide a source of off-grid power for mines,
potentially at a much lower cost than the alternatives such as oil. In Iceland for example geothermal and hydro
power have been developed specifically to produce low cost, low impact power for aluminium smelting. That
could well be feasible in Australia if geothermal resources can be located close to the coast. Otherwise such
developments require fortuitous coincidence of resource locations. An example of the latter is the geothermal
development being considered near the Olympic Dam mining project in South Australia.

Process heat may also be available, for example for preheating/drying for coal power. Geothermal heat has
been used to assist heap leach operations for gold and copper mining in Nevada. These possibilities could
lead to co-location of projects in the future to take advantage of synergies.

It would be worthwhile therefore not only inventorying Australia‘s potential resource locations, but cross
correlating them with other resource types. Numerous resources are already available for this, including the
Minerals Resource Atlas (http://www.australianminesatlas.gov.au/). GIS tools are ideally suited to that
purpose.

9.3.       Potential new uses for geothermal energy

There are a number of conceivable uses for geothermal energy, supplementary to direct electricity generation.
Several of these have already been adopted elsewhere in the world, but not yet in Australia, as described in
Section 3.2.2. These additional uses can be broadly divided into three separate topics:

      Direct-Use: – resource then used in recreation, agriculture, & industry.
      Geothermal Heat Pumps: involving drilling merely tens of metres – resource then utilised for building
       heating & cooling.
      Secondary use: involving the use of geothermal energy, already utilised in electricity generation, for
       additional direct-use type applications.




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                                               Geothermal Technology Roadmap




9.3.1. Direct Use

Further investment and development may occur in Australia especially within the direct use applications of
geothermal resources to enhance agricultural and aquacultural productivity and with the expansion of
geothermal resource utilisation (including space heating/cooling applications) in new building projects, as
introduced in Section 3.2.2.

As a means to assist Australia‘s increasing efforts to reduce its carbon emissions, there is a potential for the
direct use of low temperature geothermal hot water for drying coal, prior to its combustion during electricity
generation. As an example, it is believed that water temperatures of around 150 °C may be available at depths
of 3 to 4 km in Victoria‘s Latrobe Valley. This resource could be utilised to dry coal at existing brown coal fired
power stations in the vicinity, a process that increases the coal‘s efficiency in energy release during
combustion, ultimately lowering the absolute requirement for coal combustion.

The envisaged coal drying process was originally intended to utilise condenser water as the source of energy
to heat air that in turn would be used to dry the coal. Due to the low water temperature the equipment was
going to be very large and expensive. The use of approximately 150 °C geothermal source water would
drastically reduce the size and cost of coal drying plant, and thereby increase its efficiency. Once proven, this
coal drying process could then be retrofitted to existing power stations in the region.

This positive contribution towards reducing greenhouse gas emissions at coal fired power stations would be
significant, as it could continue for the remainder of the power stations operational life, which in many cases,
including the dirtiest power station, Hazelwood, is expected to be several decades.

A pilot plant and a geothermal bore are required to test the patented coal drying process, and determine its
capabilities. Should it prove to be successful, it could be fitted to the existing power stations relatively quickly.
Should it prove unsuccessful, the geothermal hot water coul d still be used for power generation via a Kalina
Cycle, or other similar technology, if water flows are as high as expected. This scenario allows geothermal
heat to start providing solutions to the greenhouse gas problem in the very short term, while othe r geothermal
technologies, such as hot rock, are perfected and brought into commercial operation.

With increasing demands for potable water, the use of geothermal resources for the desalination of water will
also be an area of focus. Further development of existing prototypes is expected to allow feasible use of this
technology. That could either be applied to seawater, if geothermal resources are located close to the coast,
or to the hot saline groundwaters themselves, provided issues such as subsidence du e to fluid withdrawal can
be satisfactorily addressed.

Material recovery from geothermal brines remains an intriguing possibility. That has been done on varying
scales and with varying degrees of success elsewhere in the world to recover substances as diverse as dry
ice (Turkey), zinc (USA), boric acid (Italy) sodium and potassium chloride and other salts (Mexico). Gold and
lithium have been recovered on an experimental scale. With the complex chemistry and possibly high degree
of mineralisation of fluids that may occur in deep Australian HR resources, recovering other minerals or
elements may be feasible.

Such projects are unlikely to be the prime driver for geothermal developments in Australia, but could provide a
valuable economic boost to otherwise marginal projects.




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                                              Geothermal Technology Roadmap




A significant limitation to recovering minor constituents such as gold from geothermal fluids has been the co -
precipitation of the major constituents such as silica. Preventing silica and other scales depositing on flashing
or cooling is however the focus of research for enhancing energy extraction, which could have the synergistic
effect of making mineral recovery more feasible.

Existing examples of direct use of geothermal energy in Australia, include building and district heating system s
(for example: Portland, Victoria), spa developments (Mornington Peninsula, Victoria and Mataranka, Northern
Territory), artesian baths (Moree, Lightning Ridge artesian baths, and Pilliga Hot Artesian bore, inland New
South Wales) and swimming pool heating (Challenge Stadium, Western Australia). Australia's installed
capacity for direct geothermal heat use was 110 MWth or 830 GWh/yr in 2000.


9.3.2.    Geothermal Heat Pumps

Using up to 75% less electricity than conventional systems, Geothermal Heat Pumps (GHPs) are a cost-
effective and highly efficient alternative for space heating, cooling, and water heating, in various building
applications. GHPs operate reliably and quietly, providing better humidity control and improved zone -level
temperature control than conventional forms of building heating and cooling.

GHPs achieve this high level of energy efficiency by using the ground rather than ambient air as a heat source
and sink, as ground temperatures are cooler than the air during summer and warmer during winter.



    Figure 9.1 Household Geothermal Heat Pump




A typical vertical, closed-loop GHP, as depicted through Figure 9.1, requires less than two square meters of
ground space for installation, and can be retrofitted to existing heating & cooling installations.


In non-residential buildings, GHPs typically save 15.40% of total building energy use; in residential buildings
savings can be as high as 45%. In a U.S. study in volving 4000 houses retro -fitted with GHPs, annual electrical




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                                             Geothermal Technology Roadmap




energy savings of approximately 6,400 kWh per house or 32.4% were recorded. Summer peak electric
demand for the area was reduced by 6.7 MW, or o ver 40%.

In Australia, GHPs have been installed at several non -residential locations, including Geoscience Australia's
office building in Canberra, the Integrated Energy Management Centre and the Antarctic Centre in Hobart, and
the Hobart Aquatic Centre.

Geoexchange Australia, founded in 1988, has installed water-loop GHPs in 200 residential and about 30
commercial and government projects. Australia‘s current GHP capacity is estimated to be 5.5 MWth or 10
GWh/yr.

Direct Exchange (DX), refrigerant-based, closed-loop GHP systems are now available in Australia through
EnergyCore Australia (Dandenong, Victoria) and Earth-to-Air Systems (Lane Cove, NSW). DX systems are
more viable for the residential market because instead of 6-inch, 100-metre bore holes (as required for water-
based systems), only 2- inch, 15-30 metre bore holes are required. The drilling cost is about $8,000 for the
average, 20-square household. Once the ductwork, compressor, heat exchanger, airhandler, all required for
conventional air-conditioning, are included, the average price is $20,000.

However, nationally Australia's GHP capacity is only 5% of its total geothermal direct-heating capacity,
compared with 54.4% internationally.18

9.3.3.      Secondary use

In addition to its utilisation as a source of energy for electricity generation, a geothermal resource has the
potential to be utilised for any number of secondary or tertiary applications, such as those described in the
sections immediately above. However, with water being such a scarce commodity throughout Australia, it
would require substantial planning of the geothermal production to re -injection loop, in order to ensure the
optimal utilisation of the resource is realised.

9.4.        Australian Research into Direct Use

9.4.1. Western Australian Geothermal Centre of Excellence


On the 29th of February 2008, the Western Australian State Government announced a ne w $2.3 million WA
Geothermal Centre of Excellence. The Centre comprises three participants: CSIRO, the University of Western
Australia, and Curtin University of Technology. Because of Perth's geological setting, the Centre focuses on
direct heat use technologies (for example geothermally powered air conditioning and desalination) for use in
population centres where there is shallow groundwater of moderate temperature. Geothermal groundwater
convection in settings such as the Perth basin provides a natural underground heat exchanger. Owing to the
high natural permeability there is no need for artificial hydraulic fracturing. For 3-D modelling of these
geothermal systems the Centre will harness the supercomputers now being set up in Perth, and will make it
possible to drive geothermal research into computationally intensive directions that had previously been out of
reach in Australia. The Centre will also offer geothermal training to students and industry. The research is
organized in three interlinked Programs:



18
     AGEA 2008




                                                                                                      PAGE 57
                                                Geothermal Technology Roadmap




1) Assessment of Perth Basin Geothermal Opportunities using presently available data;

2) Optimal use of geothermal resources;

3) Identification of future potential by going deeper.

The Centre is collaborating with the University of Auckland‘s Geothe rmal Institute.

This structure is illustrated in Figure 9.2 .



    Figure 9.2 Structure of Research




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                                              Geothermal Technology Roadmap




9.4.2. CSIRO

The Energy Transformed Flagship of the CSIRO will invest $3.47 million into the Western Australian
Geothermal Centre of Excellence over its lifetime. This initiative is initially incorporated into the Flagship‘s –
Low Emission Distributed Energy Theme. This is a first step in consolidating a number of CSIRO capabilities
in the geothermal arena. These areas of expertise include: Geomechanics, Subsurface Heat Exchange,
Surface Heat Exchangers/Multi-Phase fluid flow, Permeability Enhancement by Hydraulic Fracturing,
Geochemical Thermal History Analysis, Optimal Design of Renewable Systems, Fluid -rock interaction
analysis, Novel Low/Medium T Geothermal Uses, Remote Sensing, Exploration geophysics, and Integration of
Geothermal Technology with Public Perception and Awareness. In addition to the investments into the WA
Geothermal Centre of Excellence, CSIRO plans to respond to and develop Geothermal Industry relationships
and to co-fund research projects. In the longer term CSIRO plans to assist the ―hot rock‖ sector by expanding
its geothermal initiatives into the Low Emission Electricity renewable energy stream of the Energy
Transformed Flagship.




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                                              Geothermal Technology Roadmap




10. Issues, Solutions, Goals and Timeline
10.1.    Summary of Australia’s situation

The following table presents a summary of the technical challenges facing the Geothermal Industry, an
assessment of whether the issues are unique to Aus tralia or to geothermal generally, and where Australia‘s
capabilities to research and develop solutions sits relative to the rest of the world. That gives an indication of
where it is simplest for Australia to be a technology follower, and where Australia will need to take the lead in
developing solutions. In some cases Australia already has the technical capacity to produce solutions and
industry is well down the path to them, so little intervention by Government is necessary. In other cases both
the capacity and means to solve them is not adequate and support is needed.

In this section of the Roadmap, all significant technical challenges, and possible solutions are identified
regardless of their priority and whether any intervention by Government is considered necessary. This is not a
table of recommendations. However an indication of which issues are considered the most critical is included.
Issues which do not have a technical component are not generally included as they are addressed in the
Geothermal Industry Development Framework, though a few related matters such as international technical
linkages are touched upon.

A summary of the most critical technical issues and possible timing to address them is given in a following
section.




                                                                                                         PAGE 60
      Table 1 Technical Challenges and Possible Actions
Action                                Related issue/s        Im pact on Success of   Likelihood of               Is the issue             Does the            Urgency to          Stakeholder/s
                                                                    Industry       occurrence/ Status             Industry/              capability to         address        responsible for initiative
                                                                                                               Australia specific      address exist in
                                                                                                                                         Australia or
                                                                                                                                         worldw ide?
Geothermal Exploration

1.1 (a) Collect and collate        What fundamental          Medium                    High. Some data is      Yes to both for        Capability exists in   Immediate and A central independent
geological/ hydrological data      reservoir parameters                                already being           most crucial data,     Australia.             on-going.     data/information repository
from deep exploration              are appropriate for                                 collected, but not      though some                                                 is needed to ensure data
boreholes in a number of           modelling flow rates                                necessarily             relevant data w ill                                         is made publicly available.
different geological settings in   from HR and HAS                                     systematically          come from                                                   This is principally
order to build reliable            resources?                                          collated for this       petroleum and                                               Geoscience Australia's
predictive models.                                                                     purpose. Collecting     minerals drillholes.                                        role, but cooperation from
                                                                                       data systematically                                                                 industry and other
                                                                                       will increase                                                                       research institutions is
                                                                                       likelihood of project                                                               needed.
                                                                                       success.

1.1 (b) Set up a central           An extension of 1.1       Medium.                   High.                   Yes to both.           Capability exists in   Medium to        Industry or government20
repository of geothermal           (a), whic h could                                                                                  Australia.             long term.       body. Companies must
resource data19 / information.     include, for example,                                                                                                                      report to State regulators.
                                   information on drilling
                                   and well production.

1.1(c) Data needs to be both       Data needs to be          Medium.                   High                    Yes to both.           Capability exists in   Medium to        A central independent
collected and interpreted and      presented in GIS                                                                                   Australia.             long term.       repository is required to
transformed into information       format to help in                                                                                                                          ensure data is made
useful to the industry.            application by                                                                                                                             publicly available.
                                   industry.                                                                                                                                  Geoscience Australia and
                                                                                                                                                                              each State/Territory
IDENTIFIED AS A KEY                                                                                                                                                           geological survey have
ISSUE                                                                                                                                                                         key roles to play in the
                                                                                                                                                                              provis ion of precompetitive
                                                                                                                                                                              geothermal geoscience
                                                                                                                                                                              data.


19
     TIG 9 (Data management) primary activity of TIG 9.
20
     Government does have a role in collating production data, for example http://www.psims.gov.au/, http://www.ga.gov.au/oceans/ss_PIStats.jsp and http://www.ga.gov.au/minerals/index.jsp

                                                                                                                          PAGE 61
                                                       Geothermal Technology Roadmap



Action                               Related issue/s       Im pact on Success of   Likelihood of           Is the issue             Does the            Urgency to         Stakeholder/s
                                                                  Industry       occurrence/ Status         Industry/              capability to         address       responsible for initiative
                                                                                                         Australia specific      address exist in
                                                                                                                                   Australia or
                                                                                                                                   worldw ide?

1.1.(d) Location of prospective Location of                As for 1.3.             Geoscience            Yes to both for        Capability exists in   Already under   Research institutions,
areas at a regional scale from prospective target                                  Australia and         most crucial data,     Australia.             way, has a      Geoscience Australia and
geological data, for example: areas.                                               State/Territory       though some                                   long term       States/Territories. A
                                                                                   geological surveys    relevant data w ill                           component but   central independent
(1) Where do potential heat       Requires a GIS                                   are already           come from                                     will need to    repository is required to
sources coincide w ith            resource mapping                                 undertaking some of   petroleum and                                 produce         ensure data is made
adequate thermal insulation?      exercise in parallel                             this.                 minerals drillholes.                          medium-term     publicly available.
                                  with data collection.                                                                                                results to be
(2) Which geological
formations are sufficiently                                                                                                                            most useful.
conducive to hydraulic
fracture stimulation?
(3) What is the depth and
nature of the basement in
Australian basins?

1.1 (e) Collection, collation     Location of              To some extent as for   Medium.               Yes to both for        Largely exists in      Already under   Principally Geoscience
and evaluation of temperature     prospective target       1.3, but more                                 most crucial data,     Australia but some     way but long    Australia, but cooperation
and related data from             areas, but more          immediate.                                    though some            overseas input         term.           needed from other
boreholes around Australia,       specif ically than ( d).                                               relevant data w ill    needed for the                         research institutions,
including thermal conductivity    Prediction of depth to                                                 come from              chemical                               industry, and State
measurements and chemical         achieve sufficient                                                     petroleum and          geothermometry                         science agencies.
geothermometry 21 .               temperatures.                                                          minerals drillholes.




21
     TIG 9 (Data management) is active in this area.


                                                                                                                    PAGE 62
                                                       Geothermal Technology Roadmap



Action                                 Related issue/s     Im pact on Success of   Likelihood of              Is the issue            Does the            Urgency to         Stakeholder/s
                                                                  Industry       occurrence/ Status            Industry/             capability to         address       responsible for initiative
                                                                                                            Australia specific     address exist in
                                                                                                                                     Australia or
                                                                                                                                     worldw ide?

1.1 (f) Collection, collation andLocation of               High.                     High - already an      Not entirely. May     Capability exists in   Immediate to    Principally Geoscience
evaluation of in-situ stress     prospective target                                  issue.                 draw on data from Australia.                 medium term.    Australia, but cooperation
data from boreholes around       areas, but also                                                            other industries,                                            needed from other
Australia22 .                    important to                                                               some of whic h may                                           research institutions,
                                 understanding the                                                          currently not be                                             industry, and State
Criteria for selecting areas for mechanics of the                                                           open file. Also has                                          science agencies.
further investigation should be stimulation process.                                                        overlaps with risk
developed. Identify what                                                                                    research activ ities.
additional precompetitive
information would be needed
by industry.

1.1 (g) Location of prospective     Location of              To some extent as for   HIGH, Geoscience       There is             Capability exists in    Has a long      Principally Geoscience
areas at a regional scale from      prospective target       1.3, but more           Australia is already   opportunity to       Australia.              term            Australia, but cooperation
geophysical data, for               areas, but more          immediate               undertaking much of    advance through                              component but   needed from other
example:                            specif ically than items                         this.                  other research                               will need to    research institutions,
                                    ( d) and ( e).                                                          activities in the                            produce         industry, and State
       Seismic                                                                                             short term, but for                          medium-term     geoscience agencies. On
       Gravity                                                                                             next generation of                           results to be   a more local scale similar
       Magnetic                                                                                            geothermal targets                           most useful.    work w ill be carried out by
       Resistivity surveys                                                                                 this should be                                               individual companies.
                                                                                                            undertaken as a
       Magneto-tellurics                                                                                   dedicated activity.`




22
     TIG 9 (Data management) is active in this area.

                                                                                                                       PAGE 63
                                                    Geothermal Technology Roadmap



Action                              Related issue/s       Im pact on Success of   Likelihood of          Is the issue          Does the          Urgency to       Stakeholder/s
                                                                 Industry       occurrence/ Status        Industry/           capability to       address     responsible for initiative
                                                                                                       Australia specific   address exist in
                                                                                                                              Australia or
                                                                                                                              worldw ide?

1.2 Develop standards for         Standardised           High, in that lack of   High - already an     Yes. Will benefit    Capability to       Immediate.    AGEG is currently taking
defining and reporting            reporting conventions this item could stifle   issue.                from international   produce this exists               the lead, but may require
―geothermal resources‖ and        are required if the    investment.                                   collaboration and    in Australia, but                 input and sign on from the
―geothermal reserves‖23 .         relative values of                                                   agreement.           also some need for                investment community.
                                  competing                                                                                 international
IDENTIFIED AS A KEY               geothermal projects                                                                       collaboration.
ISSUE                             are to be properly
                                  compared and
                                  projects are to be
                                  credible to investors.
                                  This issue has both a
                                  technical and a
                                  financing component.




23
     Australian Geothermal Energy Group (AGEG) Technical Interest Group (TIG) No. 2 (Reserves and resources (definition)) is working on this.


                                                                                                                  PAGE 64
                                                       Geothermal Technology Roadmap



Action                              Related issue/s        Im pact on Success of   Likelihood of          Is the issue            Does the            Urgency to         Stakeholder/s
                                                                  Industry       occurrence/ Status        Industry/             capability to         address       responsible for initiative
                                                                                                        Australia specific     address exist in
                                                                                                                                 Australia or
                                                                                                                                 worldw ide?

1.3 Foster geological &           Location of              Low at present, in that Low but increasing   Yes to both for       Capability exists in   Already under   Research institutions/
tectonic research on issues       prospective target       a sufficient number of with time.            most crucial data,    Australia.             way but long    Universities.
related to heat sources and       areas.                   targets have been                            though some                                  term.
deep permeability, for                                     identified for                               relevant data w ill
example:                          GIS presentation of      immediate                                    come from
                                  data is an important     requirements to                              petroleum and
(a) What is the cause and         consideration.           develop demonstration                        minerals drillholes
extent of the Central                                      plant, but in the longer                     and datasets .
Australian Heat Flow                                       term more important
Anomaly?                                                   especially for locating
(b) What is the thermal                                    resources closer to
consequence of neotectonic                                 demand centres.
activity in Australia?
(c) What is the cause of the
Tertiary volcanism in eastern
Australia and are there any
cooling magmatic intrusions
associated?
(d) What is the permeability of
the deepest units in all
sedimentary basins in
Australia?

1.4 Carry out a research          Better and more cost     Medium, could          Medium.               Yes to both, but      Some capability        Immediate.      Geoscience Australia,
programme to evaluate             effective location and   significantly improve                        some overlap with     exists in Australia,                   State and Territory
geophysical exploration           delineation of           project economics, but                       other industries .    but more                               geological surveys, other
methods w hic h have not so       resources .              not essential.                                                     experience in                          research institutions,
far been common practice in                                                                                                   certain techniques                     industry. Cooperation from
Australia (for example                                                                                                        overseas.                              individual companies
magneto-tellurics, shear wave                                                                                                                                        needed. International
splitting). This should include                                                                                                                                      collaboration helpful.
calibration surveys over
know n resource areas such
as the Cooper Basin and
Mount Painter.



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Action                             Related issue/s        Im pact on Success of   Likelihood of            Is the issue             Does the               Urgency to           Stakeholder/s
                                                                 Industry       occurrence/ Status          Industry/              capability to            address         responsible for initiative
                                                                                                         Australia specific      address exist in
                                                                                                                                   Australia or
                                                                                                                                   worldw ide?

1.5 Carry out programmes of      Location and             Medium. Could            Medium.              Yes to both.            Technical                 Medium term.     Government, research
shallow drilling and deep        delineation of           significantly improve                                                 capability exis ts in                      institutions, industry and
exploration drilling.            resources .              project economics and                                                 Australia but lack                         companies needed to
                                                          provide a means for                                                   of sufficient drilling                     cooperate.
                                 Provide a location for   solving other technic al                                              resources.
                                 field trials of
                                                          challenges .
                                 equipment and
                                 methodologies .
                                 This is an important
                                 potential source for
                                 data.




Action                          Related issue/s            Im pact on     Likelihood of      Is the issue Industry/      Does the capability to          Urgency to      Stakeholder/s responsible
                                                           Success of     occurrence/          Australia specific          address exist in               address              for initiative
                                                            Industry         Status                                          Australia or
                                                                                                                             worldw ide?

 Drilling and Stimulation Technologies 24

2.1 Develop a database Improve drilling success           Medium.         High - already Yes to both but could build Some capability exists in Medium                 Industry body . Need to contact
of geothermal drilling    rate and reduce time and                        an issue       on international data.      Australia but good scope term.                   IEA to establish link in data
parameters, time and      cost.                                                                                      for international                                with Australian HR
cost (extension of 1.1(b)                                                                                            collaboration. IEA (AEA                          requirements.
above) .                                                                                                             ANNEX 7) is already
                                                                                                                     doing something similar
                                                                                                                     internationally, but not
                                                                                                                     specif ically focussed on
                                                                                                                     HR drilling. Connect w ith
                                                                                                                     DoE Deep Trek.



24
     TIG 4 Enhanced Geothermal Systems is undertaking work in this area


                                                                                                                      PAGE 66
                                                    Geothermal Technology Roadmap



Action                          Related issue/s             Im pact on        Likelihood of       Is the issue Industry/       Does the capability to   Urgency to     Stakeholder/s responsible
                                                            Success of        occurrence/           Australia specific           address exist in        address             for initiative
                                                             Industry            Status                                            Australia or
                                                                                                                                   worldw ide?

2.2 R&D into improved     Improve drilling success         High.              Essential that    Some aspects specif ic to     Limited capability w ithin Immediate    Many larger-scale aspects w ill
drilling methodologies,   rate and reduce time and                            action is taken   geothermal, but can also      Australia, overseas input and on-       be addressed by international
drill bits and related    cost.                                               to avoid          draw on oil and gas           essential. But some        going.       equipment suppliers, and in
equipment, casing,                                                            industry          exploration. Not              world leading R&D                       that respect Australia will be a
wellheads, cements,       Industry needs to attract                           failure.          particularly Australia        exists in CSIRO w hich                  technology follow er. Scope for
drilling fluids for HR    overseas equipment                                                    specif ic .                   can be directly accessed                research on specif ic aspects
drilling.                 manufacturers to undertake                                                                          by Australian                           by research institutions, drilling
                          trial studies in Australia and                                                                      Geothermal Industry.                    service companies, equipment
                          to Trade Show / Industry                                                                                                                    suppliers. Industry cooperation
                          Conference.                                                                                                                                 needed. Govt Support for trial
                                                                                                                                                                      Australian study to ensure
                                                                                                                                                                      results become publicly
                                                                                                                                                                      available.

2.3 R&D into improved
                    Ability to create reservoir s          Essential that     High – already Largely specif ic to             Limited capability w ithin Immediate.   Research institutions, drilling
means of downhole   in HR w ith appropriate                action is taken    an issue.      geothermal. Not specific to      Australia, overseas input               service companies, equipment
                    permeabilities and fracture
pressure isolation for                                     to avoid                          Australia but need most          essential. Problem has                  suppliers. Industry cooperation
                    orientations for long term
fracture stimulation.                                      industry failure                  pressing in Australia so         not been fully solv ed                  needed. Good scope for
                    sustainable energy                     – possibly                        will have to take the lead.      anywhere as yet.                        international collaboration.
IDENTIFIED AS A KEY extraction.                            most important                                                     Alternativ e casing
ISSUE (Potentially                                         single issue.                                                      approaches may prove
most critical to                                                                                                              more useful.
industry success)




                                                                                                                            PAGE 67
                                                      Geothermal Technology Roadmap



Action                          Related issue/s            Im pact on       Likelihood of     Is the issue Industry/      Does the capability to   Urgency to     Stakeholder/s responsible
                                                           Success of       occurrence/         Australia specific          address exist in        address             for initiative
                                                            Industry           Status                                         Australia or
                                                                                                                              worldw ide?

2.4 R&D into improved Ability to quantify and             Medium.           High – already Largely specif ic to        Limited capability w ithin Immediate.     Research institutions, drilling
dow nhole measurement understand reservoirs in                              an issue.      geothermal. Not specific to Australia, overseas input                 service companies, equipment
tools.                HR      and    track     the        Could                            Australia.                  essential.                                suppliers. Industry cooperation
                      stimulation process. Basic          significantly                                                                                          needed. Good scope for
IDENTIFIED AS A KEY concepts        exist       but       improve project                                                                                        international collaboration.
ISSUE (2nd order)     problems w ith high temps.          economics .
                      Include, temp, flow sonic,
                      neutron, porosity and so
                      on. So need to upgrade
                      temp ratings of existing
                      technology           Imaging
                      fractures when hole is full
                      of mud is important.



2.5 R&D into low water    Reduce time, cost and           Medium. Could High.               Partially specific to         Some capability exists in Medium       Research institutions, drilling
usage drilling.           environmental impact.           avoid                             geothermal. Not specific to   Australia, but scope for  term.        service companies, equipment
                                                          significant                       Australia but need most       international                          suppliers. Industry cooperation
                                                          project delays                    pressing in Australia so      collaboration also.                    needed. Good scope for
                                                          and reduce                        will have to take the lead.                                          international collaboration.
                                                          costs .



2.6 Compile a short-      Availability of drilling rigs   Could avoid       High.           No to both.                   Capability exists in     Short term.   Industry, some input needed
and medium term           and crew s.                     significant                                                     Australia.                             from Government and other
forecast of geothermal                                    project delays                                                                                         related industries (i.e.
and other competing Relates to setting overall            and reduce                                                                                             Australian Drilling Industry
                    goals for industry and                                                                                                                       Association).
drilling requirements .                                   costs .
                    understanding what the
IDENTIFIED AS A KEY drilling requirements are.
ISSUE
                    But not principally a
                    technical issue.




                                                                                                                       PAGE 68
                                                          Geothermal Technology Roadmap



Action                             Related issue/s             Im pact on      Likelihood of     Is the issue Industry/      Does the capability to   Urgency to     Stakeholder/s responsible
                                                               Success of      occurrence/         Australia specific          address exist in        address             for initiative
                                                                Industry          Status                                         Australia or
                                                                                                                                 worldw ide?

2.7 Industry resourcing      Availability of drilling rigs    Medium Could     High.           Yes to both.                 Capability to do the                    Industry consortium /
                             and crews affecting              avoid                                                         analysis exis ts in                     collaboration needed.
a) Facilitate an industry    development of the               significant                                                   Australia.
―POOL‖ that purchases        industry. But not principally    project delays
or signs a long-term         a technical issue.               and reduce
lease for a dedic ated                                        costs .
geothermal drilling rig or
rigs for the Australian
Geothermal Industry .

b) Industry pool to          Availability of materials        Medium. Could High.              Yes to both, but these       Capability to specify and Medium        Industry consortium /
procure a stockpile of       causing delays / likely to       avoid                            items come from              procure exists in         term.         collaboration needed.
geothermal w ell             cause delays to industry         significant                      international markets .      Australia.
casings, drill bits,         development.                     project delays
wellheads, especially                                         and reduce
specialised items in         But not principally a            cost.
short supply worldwide       technical issue.
that can be bought by
any pool member upon
actual requirement.

2.8 (a) R&D into    Ability to create reservoir s             Essential that    High.          Specific to geothermal.      Limited capability w ithin Immediate.   Research institutions, CSIRO,
                    in HR w ith appropriate
fracture stimulation and                                      action is taken                  Not specif ic to Australia   Australia, overseas input               service providers. Industry
                    permeabilities and fracture
avoidance of unwanted                                         to avoid                         but need most pressing in    essential. Problem has                  cooperation needed. Good
seismic events .    orientations for long term                industry failure.                Australia so w ill have to   not been fully solv ed                  scope for international
                    sustainable energy                                                         take the lead as other       anywhere as yet. CSIRO                  collaboration but info needs to
IDENTIFIED AS A KEY extraction, without undue                                                  areas w ill not.             has existing R&D in this                be publicly available.
ISSUE               environmental impact,                                                                                   area that is leading other              Geoscience Australia and
                    water loss or fluid short-                                                                              groups around the world.                State Surveys have an interest
                    circuiting.                                                                                                                                     with Seismic Monitoring
                                                                                                                                                                    Netw ork and from the
                                                                                                                                                                    perspective of seis mic risk
                                                                                                                                                                    monitoring and GEL regulation.




                                                                                                                          PAGE 69
                                                Geothermal Technology Roadmap



Action                        Related issue/s            Im pact on     Likelihood of       Is the issue Industry/      Does the capability to      Urgency to    Stakeholder/s responsible
                                                         Success of     occurrence/           Australia specific          address exist in           address            for initiative
                                                          Industry         Status                                           Australia or
                                                                                                                            worldw ide?

2.8 (b) Programme ofAbility to create reservoir s       High.           High.           Specific to geothermal.         Some capability exists in   Urgent but   Individual companies w ill carry
                    in HR w ith appropriate
practic al trials to build                                                              Not specif ic to Australia      Australia, but scope for    would take   out some of this work, but may
up a database of    permeabilities and fracture                                         but need most pressing in       international               some time    not want to or be able to afford
                    orientations for long term
practic al experience in                                                                Australia so w ill have to      collaboration also.         to set up.   to support a suffic iently large
                    sustainable energy
fracture stimulation in a                                                               take the lead. But note         CSIRO have stimulation                   programme of public-domain
                    extraction, without undue
variety of geological                                                                   that some of this work          R&D and coupled                          data. Government funding and
settings .          environmental impact,                                               may be better carried out       reservoir-geomechanical                  support from research
                    water loss or fluid short-                                          using exis ting drillholes in   modelling R&D activities.                institutions may be needed.
IDENTIFIED AS A KEY circuiting.                                                         other countries (for
ISSUE                                                                                   example NZ shallow er
                                                                                        [1500m] holes, similar
                                                                                        environment to Australian
                                                                                        HR = more cost effective
                                                                                        trials).




Action                                 Related issue/s          Im pact on      Likelihood of Is the issue Industry/       Does the capability      Urgency to    Stakeholder/s responsible
                                                                Success of      occurrence/     Australia specific         to address exist in       address            for initiative
                                                                 Industry          Status                                      Australia or
                                                                                                                               worldw ide?

Reservoir modelling, assessment and management

3.1 Carry out a research            Better locate and           Moderate.       Moderate.       No to both.               Some capability exists Moderate         Research institution or
programme to build capability and   quantify basinal                                                                      in Australia but scope term.            service provider .
apply Stratigraphic Forward         resources .                                                                           for international
Modelling and its application to                                                                                          collaboration also.
geothermal.




                                                                                                                     PAGE 70
                                                    Geothermal Technology Roadmap



Action                                     Related issue/s        Im pact on      Likelihood of Is the issue Industry/     Does the capability   Urgency to     Stakeholder/s responsible
                                                                  Success of      occurrence/     Australia specific       to address exist in    address             for initiative
                                                                   Industry          Status                                    Australia or
                                                                                                                               worldw ide?

3.2 (a) Carry out a programme to      Ability to create and      High. Could       High.        Geothermal specific .     Some capability exists Medium         Individual companies w ill
build a library of case studies in HR manage reservoirs in       improve                        Reservoir modelling       in Australia, adequate term.          carry out some of this work,
reservoir modelling.                  HR for long term           project                        methodology is            methodology exists                    but to support a sufficiently
                                      sustainable energy         economics                      international, (also in   elsewhere.                            large programme of public-
(b) As data become available,         extraction, without        and avoid                      Australia) but                                                  domain data, Government
calibrate and refine models to                                                                                                                   Both a short
                                      undue environmental        costly failures .              production of                                    and a long     funding and support from
better address long tem energy        impact, w ater loss or                                    Australian specif ic                                            research institutions and
                                                                                                                                                 term
recovery .                            fluid short-circuiting.                                   examples is needed.                                             service providers may be
                                                                                                                                                 component.
                                                                                                                                                                needed. Good scope for
IDENTIFIED AS A KEY ISSUE (2nd                                                                                                                                  international collaboration.
Order)

3.3 Carry out a programme to build     Ability to create and     Medium.           High.        Geothermal specific .     Limited capability     Medium         Individual companies w ill
a library of case studies in HR and    mange reservoirs in HR    Could                          Geochemical               within Australia,      term.          carry out some of this work,
HSA geochemistry in Australia,         for long term             improve                        methodology is            overseas input                        but to support a sufficiently
addressing issues of scaling and its   sustainable energy        project                        international, but        essential.                            large programme of public-
inhibition, corrosion, potential       extraction, without       economics                      production of                                                   domain data, Government
environmental emissions,               undue environmental       and avoid                      Australian specif ic                                            funding and support from
application of chemical                impact.                   costly failures .              examples is needed.                                             research institutions and
geothermometry (could be broken                                                                                                                                 service providers may be
into separate sub-programmes).                                                                                                                                  needed. Good scope for
Both theoretical and practic al                                                                                                                                 international collaboration.
issues to address .
IDENTIFIED AS A KEY ISSUE (2nd
Order)

3.4 R&D into linked 3D reservoir       Manage reservoirs to      Medium.           Medium.      Not specif ic to          Some capability exists Medium         Research institutions, CSIRO
fluid and geomechanics modelling       predict and avoid         Could                          Australia -some w ork     in Australia. An       term.          and service providers. Good
methodology and its application to     environmental impacts     improve                        is already underway       adequate methodology                  scope for international
Australia in a variety of geological   especially subsidence     project                        overseas.                 has not been fully                    collaboration.
settings .                             and unwanted seismic      economics                      Methodologies require     demonstrated
                                       events. More              and avoid                      adaptation to             anywhere as yet.
                                       importantly better        costly failures .              geothermal situations .
                                       understand the fracture                                                            Good scope for
                                       stimulation process.                                                               international
                                                                                                                          collaboration.




                                                                                                                    PAGE 71
                                                     Geothermal Technology Roadmap



Action                                     Related issue/s           Im pact on     Likelihood of Is the issue Industry/       Does the capability      Urgency to    Stakeholder/s responsible
                                                                     Success of     occurrence/     Australia specific         to address exist in       address            for initiative
                                                                      Industry         Status                                      Australia or
                                                                                                                                   worldw ide?

3.5 Develop capability in 3D micro- Track and understand            High, but so    High.         Industry but not            No capability exists in   Short term.   Research institutions, service
seismic monitoring in Australia.    HR reservoir                    far the                       Australia specif ic .       Australia, readily                      providers .
                                    development and                 industry has                                              available overseas
                                    understand the fracture         managed by                                                (several mining                         Good scope for international
                                    stimulation process.            using                                                     service providers offer                 collaboration.
                                                                    overseas                                                  this servic e here.                     Some need to make data
                                                                    resources                                                 CSIRO has R&D in                        publically available, as it
                                                                                                                              this area).
                                                                                                                                                                      inputs into seismic ris k
                                                                                                                                                                      monitoring.

3.6 (a) Linked to 3.2 & 3.3 above     Ability to quantif y create   Medium -          Medium.     Geothermal specific .   Some capability exists Short term.          Government, research
                                      and manage reservoirs         could improve                 Geochemical tracer      in Australia, readily                       institutions and service
Carry out a programme to trial        in HR for long term                                         methodology is          available overseas.                         providers. Good scope for
                                                                    project
reservoir chemical tracers in HR      sustainable energy                                          international, but
                                                                    economics                                                                                         international collaboration.
and HSA in Australia.                 extraction, without                                         adaptation to Australia
                                                                    and avoid
(b) Get tracers certif ied for use in undue environmental           costly failures .             is needed.
Australia (especially if radio-       impact, w ater loss or
                                                                                                                                                        Medium
isotopes [for example iodine] are to fluid short-circuiting.
                                                                                                                                                        term.
be used) .

3.7 Establish a proof of concept       Essential to establish       High -          High -        Yes to both.                Some capability exists Immediate,       Individual companies w ill
demonstration of fluid circulation     industry credibility and     essential that essential                                  in Australia. An       but w ill be     carry out some of this work,
and energy extraction in several       derive critical              action is taken goal.                                     adequate methodology on-going.          but to support a sufficiently
HR geological settings.                parameters for future        to avoid                                                  has not been fully                      large programme of public-
                                       project design.              industry                                                  demonstrated                            domain data, Government
Strictly speaking this need not                                                                                               anywhere as yet but                     funding will be needed.
include power generation, but the      Industry must ensure         failure.
                                                                                                                              should be able to be
credibility of the industry would be   happens in a number of                                                                 based on existing
greatly enhanced thereby .             different locations of                                                                 technology.
                                       various geological
IDENTIFIED AS A KEY ISSUE              structures within                                                                      Good scope for
                                       Australia.                                                                             international
                                                                                                                              collaboration.




                                                                                                                          PAGE 72
                                                       Geothermal Technology Roadmap



Action                                 Related issue/s       Im pact on Success of          Likelihood of        Is the issue        Does the           Urgency to   Stakeholder/s responsible
                                                                    Industry              occurrence/ Status       Industry/       capability to         address           for initiative
                                                                                                               Australia specific address exist in
                                                                                                                                    Australia or
                                                                                                                                    worldw ide?

Pow er conversion technology25

4.1 R&D into improving                Project technical    High. Essential for many       High-major issue.    Largely industry    Some capability     Medium        Many larger-scale aspects
efficiencies and reducing costs       and economic         projects, need for this                             specif ic, but in   exists in Australia term.         will be addressed by
of the types of power plant           success .            overall is also dic tated by                        most respects not   but scope for                     international equipment
whic h will be needed for                                  non-technical factors                               specif ic to        international                     suppliers, market driv en with
geothermal generation in                                   affecting economics .                               Australia. Much     collaboration also.               know ledge transfer from
Australia.                                                                                                     work under way                                        overseas, and in that
                                                                                                               overseas .                                            respect. Australia will be a
                                                                                                                                                                     technology follow er. Scope
                                                                                                                                                                     for research on specific
                                                                                                                                                                     aspects by research
                                                                                                                                                                     institutions. University of
                                                                                                                                                                     Queensland has $20M to do
                                                                                                                                                                     this sort of work.

4.2 R&D into improved                 Project technical    High. w ill be essential to    High.                Partially specific to Some capability      Medium     Australian market too small
methods of power plant cooling        and economic         have for some projects,                             geothermal. Not       exists in Australia, term.      to w arrant the required R&D
in arid environments, possibly        success w ithout     could give a significant                            specif ic to          some overseas.                  by suppliers without
including diurnal thermal             excessive water      economic boost to many                              Australia but need                                    intervention. Equipment
storage.                              usage.               others .                                            most pressing in                                      suppliers, individual
                                                                                                               Australia so w ill                                    companies, research
IDENTIFIED AS A KEY ISSUE                                                                                      have to take the                                      institutions, servic e
                                                                                                               lead. In other                                        providers. Some
                                                                                                               geothermally                                          overarching co-ordinating
                                                                                                               active countries,                                     body to facilitate sharing of
                                                                                                               this issue is                                         know ledge and assist with
                                                                                                               unlikely to be                                        attracting foreign equipment
                                                                                                               championed.                                           suppliers in Australian trials.




25
     TIG 6 (Geothermal Power Generation) is undertaking work of this type.

                                                                                                                        PAGE 73
                                                    Geothermal Technology Roadmap



Action                               Related issue/s      Im pact on Success of       Likelihood of          Is the issue        Does the             Urgency to    Stakeholder/s responsible
                                                                 Industry           occurrence/ Status         Industry/       capability to           address            for initiative
                                                                                                           Australia specific address exist in
                                                                                                                                Australia or
                                                                                                                                worldw ide?

4.3 R&D into adaptation of          Project technical    High.                      High - an existing     Yes to both.           Some capability      Medium       Australian market too small
existing power plants to high       and economic                                    issue for the Cooper                          exists in Australia; term.        to w arrant the required R&D
pressure and possibly corrosive     success.             Will be essential for some Basin, but it is not                          an adequate                       by suppliers without
fluids in Australian HR projects,                        projects especially those clear how many                                 methodology has                   intervention. Equipment
                          The high                       currently most advanced. other locations this                            not been fully                    suppliers, individual
especially heat exchangers .
                          pressures                                                 will apply to.                                demonstrated                      companies, research
IDENTIFIED AS A KEY ISSUE involved in some                                                                                        anywhere as yet                   institutions, servic e
                          HR reservoirs in                                                                                        but should be able                providers. Some overarching
                          Australia are more                                                                                      to be based on                    HR Co-ordinating body to
                          unusual than the                                                                                        existing                          facilitate sharing of
                          temperatures.                                                                                           technology.                       know ledge and assist with
                                                                                                                                                                    attracting foreign equipment
                                                                                                                                  Good scope for                    suppliers in Australian trials.
                                                                                                                                  international
                                                                                                                                  collaboration.

4.4 Commercialisation of            Project economic     Medium. Will be essential High for some           Largely industry       Some capability      Medium term Market driven issue.
emerging pow er plant types for     success.             for some projects with    locations .             specif ic. Not         exists in Australia, and on-     Equipment suppliers,
example Kalina, UTC.                Opportunity for      marginal economics, less                          Australia specif ic.   more available       going.      individual companies .
                                    more companies       so for others .                                                          overseas.
                                    offering binary
                                    cycle plants. Look
                                    to optimise fluids
                                    and designs
                                    packages.




                                                                                                                     PAGE 74
                                                  Geothermal Technology Roadmap



Action                            Related issue/s      Im pact on Success of       Likelihood of        Is the issue        Does the           Urgency to    Stakeholder/s responsible
                                                              Industry           occurrence/ Status       Industry/       capability to         address            for initiative
                                                                                                      Australia specific address exist in
                                                                                                                           Australia or
                                                                                                                           worldw ide?

4.5 Establish a proof of concept Essential to         High - essential that      High-major issue.    Yes to both.         Some capability      Short term   Individual companies w ill
demonstration power plant in     establish industry   action is taken to avoid                                             exists in Australia; and on-      carry out some of this work,
several geological settings.     credibility and      industry failure.                                                    an adequate          going.       but to support a sufficiently
                                 derive critical                                                                           methodology has                   large programme of public-
(relates to 3.7 Above)           parameters for                                                                            not been fully                    domain data. Government
IDENTIFIED AS A KEY ISSUE future project                                                                                   demonstrated                      funding may be needed.
                                 design.                                                                                   anywhere as yet                   Good scope for international
                                                                                                                           but should be able                collaboration.
                                                                                                                           to be based on
                                                                                                                           existing
                                                                                                                           technology.
                                                                                                                           Good scope for
                                                                                                                           international
                                                                                                                           collaboration.

4.6 R&D into dow nhole pumps Project technical     Medium overall, but some High in some              Industry specific    Some capability      Medium       Equipment suppliers .
capable of higher temperatures and economic        projects will not be     locations .               but not Australia    exists in Australia, term.
and greater depths .           success in non-     feasible w ithout this.                            specif ic. Work      more available
                               artesian                                                               already under way    overseas.
                               situations:                                                            internationally to
                               temperature limits                                                     extend the range.
                               of current
                               technology
                               significantly below
                               the range of
                               resource
                               temperatures
                               being considered.




                                                                                                               PAGE 75
                                                  Geothermal Technology Roadmap



Action                             Related issue/s      Im pact on Success of       Likelihood of        Is the issue        Does the               Urgency to      Stakeholder/s responsible
                                                               Industry           occurrence/ Status       Industry/       capability to             address              for initiative
                                                                                                       Australia specific address exist in
                                                                                                                            Australia or
                                                                                                                            worldw ide?

4.7 R&D into new power plant    Project technical     Medium.                    Low .                 Largely industry        Some capability      Long term.      Many aspects will be
types applicable to geothermal. and economic                                                           specif ic but not       exists in Australia,                 addressed by international
Relates to 4.1 above.           success - could                                                        Australia specif ic .   more available                       equipment suppliers, and in
                                greatly increase                                                                               overseas.                            that respect Australia will be
                                the range of                                                                                                                        a technology follow er. Scope
                                feasible                                                                                                                            for research on specific
                                resources .                                                                                                                         aspects by research
                                                                                                                                                                    institutions.




Action                                               Related issue/s        Im pact on    Likelihood of      Is the issue Industry/            Does the            Urgency      Stakeholder/s
                                                                            Success of    occurrence/          Australia specific             capability to           to       responsible for
                                                                             Industry        Status                                         address exist in       address         initiative
                                                                                                                                              Australia or
                                                                                                                                              worldw ide?

Technology integration with other industries

5.1 R&D into opportunities for co-locating   Optimise project locations     Medium –      Medium.         Yes to both, though w ill         Some capability        Long       Research
large scale direct use applications of       and economics. Improve         helpful but                   depend on inputs from other       exists in Australia,   term.      institutions, state
geothermal energy sewage effluent for        economics and effic iency of   not                           industries. Yes to both,          more available                    agencies.
make up w ater, CO2 sequestration along      geothermal projects to make    essential.                    though many of the                overseas.
with energy extraction. In Australia (for    a larger contribution to                                     technologies concerned exist                                        Industry co-
example desalination), any possible by-      Australia‘s energy economy.                                  internationally.                                                    ordinating body to
products (for example dry ice).                                                                                                                                               facilitate.


5.2 R&D into opportunities for co-locating    Optimise project locations    Medium -      Medium.         Yes to both, though w ill         Capability exists in Long         Research
geothermal energy for example w ith solar. and economics.                   helpful but                   depend on inputs from other       Australia.           term.        institutions, state
Sew age effluent for make up water, CO2                                     not                           industries.                                                         industry agencies .
sequestration along with energy extraction                                  essential.
(desalination), any possible by-products (for                                                                                                                                 Industry co-
example dry ice).                                                                                                                                                             ordinating body to
                                                                                                                                                                              facilitate.




                                                                                                                 PAGE 76
                                                     Geothermal Technology Roadmap



Action                                                 Related issue/s        Im pact on     Likelihood of       Is the issue Industry/            Does the          Urgency       Stakeholder/s
                                                                              Success of     occurrence/           Australia specific             capability to         to        responsible for
                                                                               Industry         Status                                          address exist in     address          initiative
                                                                                                                                                  Australia or
                                                                                                                                                  worldw ide?

5.3 A study to correlate locations of known      Optimise project locations   Medium -       Medium           Yes to both                       Capability exists in Long term Research
or potential geothermal resources with           and economics.               helpful but                                                       Australia                      institutions, state
opportunities aris ing out of 5.1 - 5.2, and                                  not                                                                                              agencies
other large scale off-grid power demand                                       essential
such as mines, preferably GIS based.                                                                                                                                             Industry co-
                                                                                                                                                                                 ordinating Body to
                                                                                                                                                                                 facilitate




Action                        Related issue/s        Im pact on      Likelihood of occurrence/        Is the issue        Does the capability to  Urgency Stakeholder/s responsible for
                                                     Success of               Status                   Industry/            address exist in     to address        initiative
                                                      Industry                                         Australia         Australia or worldwide?
                                                                                                        specific

Geothermal research and development in Australia. Note; the technical issues requiring R&D are covered in the previous sections, this section addresses more institutional issues

6.1 Direct funding of         Various issues as High.              High - some action already     Industry and           Capability to organise this Short to      Government, research
geothermal specif ic R&D      in previous                          taken by PIRSA/AGEG and        largely Australian     exists in Australia but     medium        institutions, industry groups to
programmes.                   section.                             through funding of             specif ic.             international collaboration term.         provide guidance for example
                                                                   Universities in Qld and SA.                           helpful.                                  through AGEG TIGs.
                                                                                                                                                                   Industry co-ordinating body to
                                                                                                                                                                   direct & facilitate.

6.2 Continue funding of      Location and           Medium.        High. Already underway.        Some overlap           Capability exists in        Medium        Government, Geoscience
Geoscience Australia‘s       quantification of                                                    with other             Australia.                  term.         Australia, collaboration from
large scale data acquisition resources.                                                           industries,                                                      other agencies needed.
programmes.                                                                                       Australia specif ic.




                                                                                                                       PAGE 77
                                                       Geothermal Technology Roadmap




Action                                              Related issue/s           Im pact on      Likelihood of     Is the issue            Does the      Urgency      Stakeholder/s responsible for
                                                                              Success of      occurrence/        Industry/            capability to      to                  initiative
                                                                               Industry          Status          Australia           address exist in address
                                                                                                                  specific             Australia or
                                                                                                                                       worldw ide?

Environmental issues: note some environmental issues requiring R&D are covered in Section A above

7.1 R&D to better assess and quantif y         Better quantif y range of     High for some    Medium.         Industry               Some capability     Medium   Some issues will be dealt w ith by
environmental impacts of geothermal            actual environmental impact   issues which                     specif ic, partially   exists in Australia term.    individual companies or for
developments in the Australian context,        of Australian projects,       could lead to                    Australian             but scope for                individual projects, but there is
for a range of project types and               eliminate any untoward        long delays if                   specif ic- real        international                also a need for Government
environments. A lot of value would be          perceptions of detrimental    not pro-                         need is to make        collaboration                funded work by research
found in researching once-off and              effect based on reported      actively dealt                   it more                also.                        institutions and service providers
disseminating the findings throughout          effects from overseas in      with.                            Australian                                          on more generic issues. Input from
the industry, although actual level of ris k   quite different settings.                                      specif ic.                                          industry groups and State
posed by a project will be site-specific.                                                                                                                         agencies essential.


IDENTIFIED AS A KEY ISSUE




                                                                                                                        PAGE 78
10.2.    Industry Goals and Timeline

The current primary development focus is on proof of concept for a commercial scale productive HR project.
This would open the way for extensive development of Australia‘s, and the rest of the world‘s, large deep
geothermal resources. It is envisioned by the industry that there will be proof of concept HR de velopment in
Australia by 2008, demonstration of the capacity for power generation by 2012 and projections of at least 7%
of base load requirements supplied by geothermal resources by 2030 (AGEG 2007). These goals seem
realistic and could well be achieved earlier.

However, the key breakthroughs that will need support and so are the focus of the current document will have
to take place during the first part of that period. In the following chart, a possible timeline for geothermal
development in Australia over the next 6 years is put forward. The timeline also extends back to the start of
2007 to show what has already been achieved. It has been based on discussions as to what is generally
considered feasible with the industry. Key technological milestones are identified, and hence the activities that
will have to be undertaken for those to happen. A colour code has been adopted to emphasise the most
critical activities and milestones. Long-term development of a sustainable industry will require work in many of
the activities to continue beyond that shown.




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10.2.1. Notes to Timeline

   1.         Only the first of each type of occurrence is shown.

   2.         It is probable that the Geodynamics project in the Cooper Basin will be the first HR projec t
              to generate power in Australia, possibly as early as mid 2008. Because of the remoteness
              of that site, it is possible that a medium sized (up to 40 MWe) plant may be built before a
              grid connection is made, and so in that sense it may be pre -commercial. That would
              possibly not apply to a scaled-up HSA plant elsewhere. These are assumptions only and
              should not be taken to imply any knowledge of Geodynamics‘ or other companies‘
              commercial plans.

   3.         Several shown, as it will be necessary to demonstrate in different geological environments.

   4.         Acti vities will continue after the date shown, but a cut-off is shown to emphasise that a
              current programme is under-way and output will be needed over the timeframe shown, to
              be useful.




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11. Conclusions and Recommendations
11.1.    General conclusions

Given the need and desire to develop a more secure and sustainable Energy Sector, the growing Australian
Geothermal Industry has the potential to become a significant future Australian energy provider, particularly in
terms of electricity generation. That having been stated, there are challenges on the path toward the
realisation of this potential, both technological, and otherwise.

From a technological perspective, many of the advances required in order to increase the feasibility of a viable
Australian Geothermal Industry, are already at various stages of commercialisation, or research and
development, within the related mining, oil, gas, and petrochemical industries and industrial research
organisations, either in Australia, or abroad. In light of this, the Australian Geothermal Industry will need to
actively leverage existing relationships, and form new collaborative efforts, in order to benefit from the
efficiencies of knowledge transfer from such R&D efforts.

For some aspects, development is already underway overseas, or can be expected to be more effectively
carried out overseas. For example, the sheer size of the drilling industry in the USA means that most
technological development will come from there, and it would not be cost effective for the Australian industry
to ―reinvent the wheel‖. However, leading R&D groups in Australia exist in drilling, stimulation and other areas
and direct access to this expertise should be encouraged. Similarly the e xtremely high prices being paid for
renewable energy in Germany (about four times the wholesale electrical energy price in Australia) are
inspiring rapid technical improvements and commercialisation of low temperature geothermal power plant
technology. There is some scope for adapting these develo pments to the Australian context. In these
instances the Australian Geothermal Industry can probably best be served by supporting and implementing
strong international linkages.

There are requirements of the Geothermal Industry where there is only limited availability within Australia, but
the technology is readily available overseas. Examples are scale inhibition and chemical geothermometry. For
these relatively specialised aspects which are needed only at certain stages of a geothermal project, it may be
simplest to hire in expertise as required. At the same time there are opportunities for valuable R&D efforts
within this industry such as the formation of a database of reservoir models that are calibrated against actual
production data, and the development of software linking 3D fluid modelling outputs with 3D geomechanical
modelling results. CSIRO have strong groups active in these areas.

Similarly there will also be aspects where the potential exists for synergies with other industries in Australia.
For example a strategic collaboration with members of the Australian Petroleum Industry would present the
opportunity for knowledge transfer to occur regarding the permeability of sedimentary basins within Australia.

In contrast, some technical issues will have to be tackled head on in this country. These are matters where
Australian conditions are different, requiring existing methodology to be modified, or where the nature of the
proposed projects in Australia are at the leading edge of development internationally. An e xample in the first
category would be chemical scale inhibitors for the specific fluids encountered in Australian geothermal
resources. Examples in the second category would include the ability to routinely complete and stimulate wells
in HR projects as required for a three-dimensional network with appropriate permeability characteristics; or
power plants able to cope with the high pressures encountered in the Cooper Basin. As deep geothermal
exploratory well drilling within the Australian context presents increases in both depth and pressure, when
compared to existing international experiences, an opportunity arises for the local development and field



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testing of real-time electronic down-hole communications devices, able to withstand harsher envi ronments
than the currently available models. Such products, once proven, could then be promoted internationally.

It is within these latter categories that direct government support for the industry is most likely to be needed.

11.2.    Priority recommendations

11.2.1. Highest Priority

The following are identified as the highest priority actions in the technical sphere which have arisen from the
workshop process, and which form the essential core of the Roadmap. The order generally corresponds to the
order in Section 10.2, Table 1 for ease of reference: it is not an order of relative priority.

    1.             Develop an agreed methodology and standards for defining and reporting ―geothermal
                   resources‖ and ―geothermal reserves‖. Standardised reporting conventions are required if
                   the relative values of competing geothermal projects are to be properly compared and
                   projects are to be credible to investors. This issue has both a technical and a financing
                   component, in that lack of this item could stifle investment. Industry (AGEG) is taking the
                   lead through TIG 2 in preparing this, with completion expected in the first quarter of 2008,
                   but it will require input and sign on from the investment community and Government.
    2.             R&D into improved means of downhole pressure isolation for fracture stimulation and
                   production including packer, sliding sleeve and multilateral technologies. Such tools have
                   been developed in the petroleum industry and previously successfully applied to HR wells,
                   but they are as yet not sufficiently reliable at the high temperatures necessary for economic
                   development of HR reservoirs in Australia, and the prevailing stress regime which leads to
                   anisotropic hole break-out, to make fracture stimulation a routine and predictable operation.
                   The ability to routinely create reservoirs in HR with appropriate permeabilities and fracture
                   orientations for long term sustainable energy extraction is essential to avoid industry failure.
                   This is possibly the single most important technical challenge facing the industry issue. The
                   issue is not specific to Australia but the current need is most pressing in Australia, so
                   Australia will have to take the lead. The problem has not been fully solved anywhere as yet.
                   There is some world leading capability within Australia to address the issues, but overseas
                   input especially from the equipment suppliers will be essential. Several small Australian
                   packer manufacturers exist and sell their product on the international market. There is good
                   scope for international collaboration to build on what has already been learned elsewhere.
                   Input will also be needed from research institutions and drilling service companies. Industry
                   cooperation will be needed to gain access to deep wells for practical trials, but a
                   coordinated approach and support from Government will also b e essential to maximise the
                   benefit to the industry as a whole. A link with the US DoE deep petroleum drilling research
                   and the Iceland deep drilling project could be beneficial.
    3.             Compile a short and medium term forecast of geothermal and other competing dr illing
                   requirements relative to the availability of drilling rigs and crews. This is not principally a
                   technical issue, but doing so could avoid significant project delays and reduce costs. It is
                   related to the need to set overall goals for the industry an d for some overall industry
                   planning. The Australian Geothermal Industry can take the lead on this, with some support
                   needed from Government and input from other industries.




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        4.                  R&D into fracture stimulation mechanics and avoidance of unwanted seismic events i n HR
                            reservoirs. This is closely linked to item (2) above: item (2) will provide the tools and item
                            (4) the methodology to use them, though this item also includes requirements for surface
                            equipment such as pumps, and investigation of stimulation fluids and proppants26 . The
                            ability to create reservoirs in HR with appropriate permeabilities and fracture orientations
                            for long term sustainable energy extraction, without undue environmental impact, water
                            loss or fluid short-circuiting is essential to avoid indus try failure. Some knowledge can be
                            drawn from the petroleum industry and HR experiments overseas, but the details are
                            specific to geothermal. The problem has not been fully solved anywhere as yet. The issue
                            is not specific to Australia but the need is most pressing in Australia so, again, Australia will
                            have to take the lead. There is limited, but world leading R&D capability within Australia to
                            address these issues. There is good scope for further international collaboration. Note that
                            some of this work may be better carried out using existing drillholes in other countries. For
                            example, in New Zealand there are available unused drillholes which share some of the
                            characteristics of the Australian geological environments, but which are shallower
                            (~1500 m) and under less pressure hence significantly easier and cheaper to work in.
                            There is also a well established geothermal drilling industry and permitting regime and
                            usually abundant water supply. Input will also be needed from research institutions and
                            drilling service companies. Industry cooperation will be needed to gain access to deep
                            wells for practical trials, but a coordinated approach and support from Government will also
                            be essential to maximise the benefit to the industry as a whole.
        5.                  A programme of trials and sharing of information to build up a database of practical
                            experience in drilling, well casing, well completions and fracture stimulation in a variety of
                            geological settings. This is very closely linked to the previous item: they are kept separate
                            to emphasise that item (4) covers the research and experiment aspects, whereas item (5)
                            consists of an on-going programme of data collection, analysis and dissemination. They
                            therefore have different, but overlapping time scales. The issues are not specifi c to
                            Australia but data on Australian environments is specific. Some capability exists in Australia
                            to do this work and there is also scope for international collaboration. Individual companies
                            will carry out some of this work, but may not want or be able to afford to support a
                            sufficiently large programme of public-domain data. Government funding and support from
                            research institutions may be needed. Possible linkages into existing seismic risk programs
                            by Australian and State Government agencies including the Seismic Monitoring Network
                            should be investigated.
        6.                  Establish a proof of concept demonstration of fluid circulation and energy extraction in
                            several HR geological settings. Strictly speaking this need not include power generation,
                            but the credibility of the industry would be greatly enhanced thereby. This is the most
                            urgent issue facing the industry, though not necessarily the most technically challenging.
                            Adequate methodology has not been fully demonstrated anywhere as yet but it should be
                            possible based on existing technology. It is essential to establish industry credibility and
                            derive critical parameters for future project design. Industry must ensure this happens in a
                            number of different locations of varying geology within Australia. Individual compa nies will
                            carry out some of this work, but to support a sufficiently large programme of public -domain
                            data, Government funding may be needed. There is good scope for international
                            collaboration.

26
     Proppants are small grains of silica or sand that are used to „prop‟ open the fissures that hav e been created or widened by stimulation.




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7.    R&D into improved methods of power plant cooling in hot arid environments without
      excessive water usage, possibly including diurnal thermal storage. This will be essential to
      have for some projects and could give a significant economic boost to many others. The
      issues are partially specific to geothermal. It is not specific to Australia but the need is most
      pressing in Australia because of the climate where most of the resources appear to be
      located so Australia will have to take the lead. The Australian market is too small to warrant
      the required R&D by the equipment suppliers without intervention. Some capability to
      address this exists in Australia, some overseas. Equipment suppliers, individual
      companies, research institutions, service providers will all need to be involved.
8.    R&D into adaptation of existing geothermal power plants to the high pressure and possibly
      corrosive fluids in Australian HR projects and achieving commercial solutions at affordable
      cost is a prerequisite to successful development of the industry. The high pressures
      involved in HR in Australia are more unusual than the temperatures. Solving these
      problems will be essential for some projects especially those currently most advanced. It is
      an existing issue for the Cooper Basin, but it is not clear how many other locations this will
      apply to. Adequate methodology has not been fully demonstrated anywhere as yet but it
      should be able to be based on existing technology from other power plant types (for
      example nuclear or high pressure coal fire plants) and the petrochemical industry. The
      Australian market is too small to warrant the required R&D by suppliers without
      intervention. Some capability to address this exists in Australia. Equipment suppliers,
      individual companies, research institutions, service providers will all need to be involved.
9.    Establish a proof of concept demonstration power plant in several geological settings. This
      is closely linked to item (6), but is kept separate to emphasise that they are separate steps
      in the process. It is essential to establish industry credibility and derive critical parameters
      for future project design. Some capability exists in Australia, and there is good scope for
      international collaboration. Individual companies will carry out some of this work, but to
      support a sufficiently large programme of public-domain data, Government funding may be
      needed to facilitate sharing of knowledge and assist with attracting foreign equipment
      suppliers in Australian trials.
10.   Expand the existing capabilities of Geoscience Australia and the relevant State and
      Territory agencies for the acquisition, capture, manipulation, interpretation and
      dissemination of pre-competitive geoscience data and geothermal production data. Include
      in this work on interoperable web delivery of this data, and modelling method development.
      These groups to take the lead in AGEG TIG 9 – databases, and as such may also have a
      role in the collation and dissemination of not just geoscience data, but also engineering,
      finance and production data.
11.   R&D to better assess and quantify environmental impacts, and in particular water use, of
      geothermal developments in the Australian context, for a range of project types and
      environments. The objective is to better quantify the range of actual environmental impact
      of Australian projects, and eliminate any untoward percep tions of detrimental effect based
      on reported effects from overseas in quite different settings. The need is high for some
      issues which could lead to long delays if not dealt with pro -actively. The issues are industry
      specific, and partially Australia specific. The real need is to make it more Australian
      specific. Some capability exists in Australia for doing this work, but there is scope for
      international collaboration also to draw on overseas experience. Some issues will be dealt
      with by individual companies or for individual projects, but there is also a need for




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                   Government-funded work by Geoscience Australia, research institutions and service
                   providers on more generic issues. Input from industry groups and State agencies will be
                   essential.


11.2.2. Second Priority

The following activities are important, but are regarded as being lower priority than those in the first category

    12.            R&D into improved downhole equipment (such as pumps and bottom hole drilling
                   assemblies) and measurement tools. There is a wide range of very useful downhole tools
                   available to the petroleum industry which cannot currently be used in geothermal wells
                   because of temperature limitations. The objective is to improve the ability to manage,
                   quantify and understand reservoirs in HR and track the s timulation process. This is closely
                   linked to items (2), (4) and (5) above, but is considered slightly less critical. The need is
                   largely specific to geothermal, it is not specific to Australia but the need is most pressing in
                   Australia so, again, Australia will have to take the lead. There is limited capability within
                   Australia to address these issues so overseas input will be essential. There is good scope
                   for international collaboration. Input will also be needed from research institutions and
                   drilling service companies. Industry cooperation will be needed to gain access to deep
                   wells for practical trials, but a coordinated approach and support from Government may
                   help to maximise the benefit to the industry as a whole.
    13.            Carry out a programme to build a library of case studies in HR reservoir modelling, and
                   then as data become available, calibrate and refine models to better address long term
                   energy recovery. Also maintain a database of all geothermal production data in Australia.
                   This is linked to items (4) and (5) above, but covers a longer time scale. The need for
                   reservoir modelling is more concerned with longer term reservoir management than
                   immediate reservoir development, and for that reason is considered slightly less urgent, but
                   it is nevertheless vital both for establishing project feasibility (and hence securing funding)
                   and for impacting on practical issues such as well spacing. It is also seen as less critical
                   because, while considerable R&D capability exists in Australia, adequate methodology an d
                   expertise exists elsewhere. Reservoir modelling methodology is international, but
                   production of Australian specific examples is needed. Individual companies will carry out
                   some of this work, but to support a sufficiently large programme of public-domain data,
                   Government funding and support from research institutions and service providers may be
                   needed. There is good scope for international collaboration.
    14.            Carry out a programme to build a library of case studies in HR and HSA geochemistry in
                   Australia, addressing issues of scaling and its inhibition, corrosion, potential environmental
                   emissions, and application of chemical geothermometry. There are both theoretical and
                   practical issues to address. The objective is to enhance the ability to create and manage
                   reservoirs in HR for long term sustainable energy extraction, without undue environmental
                   impact. It could improve project economics and avoid costly failures. It is geothermal
                   specific. This is quite similar in concept to the previous item. Geochemical me thodology is
                   international, but production of Australian specific examples is needed. There is limited
                   capability within Australia, and overseas input is essential.




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12. References
Australian Geothermal Energy Association, 2008, ―Position Paper: Geothermal Heat Pumps‖.


Blankenship, D.A., Mansure, A.J., and Finger, J.T., 2007. Drilling and Completions Technology for Geothermal
Wells. In Proceedings Geothermal Resources Council Transactions vol 31.

Chopra, P.N. and Holgate, F., 2005. A GIS analysis of temperature in the Australian Crust, Proceedings of the
World Geothermal Congress, Antalya, Turkey, 24–29 April.

ESIPC, 2007, ―Electricity Supply Industry Planning Council 2007 Annual Planning Report‖, June.

Gudmundsson, J. 1988. The elements of direct uses. In Geothermics, Vol. 17, No.1, pp. 119-136.

Goldstein, B.A., Hill, A.J., Budd, A.R. and Malava zos, M., 2007. Hot Rocks in Australia—National Outlook, In
Proceedings Geothermal Resources Council Transactions v. 31.

Habermehl, R. and Pestov, I., 2002. Geothermal resources of the Great Artesian Basin, Australia. GHC
Bulletin, Vol 23(2), pp20-26.

Hoang, V., Alamsyah, O., and J. Roberts, 2005. ―Darajat Geothermal Field Expansion Performance - A
Probabilistic Forecast‖, Proceedings World Geothermal Congress, Antalya, Turke y, 24-29.

Lazzarotto, A. and Sabatelli F., 2005. Technological Developments in Deep Drilling in the Larderello Area. In
Proceedings World Geothermal Congress, Antalya, Turkey, 24-29 April 2005.

Lindal, B., 1973. Industrial and other applications of geoth ermal energy, In Geothermal Energy: Review of
Research and Development, Paris, UNESCO, LC No. 72-97138, pp135-148.

Lund, J. W., 2007. Comments from the Editor: Geo-Heat Center Quarterly Bulletin 28 (3): 1.

Massachusetts Institute of Technology, 2006. The future of geothermal energy. Idaho National Laboratory.

McLennan Magasanik Associates 2007, ―The Cost of Clean Coal and Where it Fits on The Gas / Renewables
/ Nuclear / Energy Efficiency/ Spectrum‖ Presentation to IIR Conference 29th March 2007.

Parini, M. and Riedel, K.; 2000. Combining probabilistic volumetric and numerical simulation approaches to
improve estimates of geothermal resource capacity. World Geothermal Congress: 2785 -2790.

Pruess, K., 2006. Enhanced geothermal systems (EGS) using CO2 as worki ng fluid—A novel approach for
generating renewable energy with simultaneous sequestration of carbon. Geothermics 35: 351 –367.

Sheard, M.J.,1995. In: J.F. Drexel and W.V. Preiss (eds.), The Geology of South Australia, Volume 2, The
Phanerozoic, Bulletin South Australian Geological Survey, 54, pp264-268.

White, P.J., Lawless, J.V., Terzaghi, S.; Okada, W., 2005. Ad vances in Subsidence Modelling of Exploited
Geothermal Fields. Proceedings World Geothermal Congress.




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Appendix A Glossary and Abbreviations
A.1         Hydrothermal systems, features and physical processes
Boiling point for depth:   Pressure and temperature gradient in an unconfined fluid column where at every point
                           the confining pressure is just sufficient to suppress boiling. Thus any pressure
                           reduction at any point can induce boiling.


Boiling zone:              Zone of two-phase (i.e. boiling) fluid, generally within a hydrothermal upflow.


Conductive heat flow:      Heat transmitted through a (static) rock or liquid. A conductive temperature profile
                           through a homogeneous medium is usually linear.


Convective heat flow:      Heat transmitted by movement of a fluid. A convective temperature profile through a
                           homogeneous medium can be non-linear. In a hydrothermal system of high
                           permeability a conductiv e temperature profile w ill often trend towards a boiling-point
                           for depth gradient.


Fumarole:                  A thermal vent which emits primarily steam, but also gases.


Geyser:                    A cyclic eruption of water, usually boiling.


Hydrodynamic gradient:     A fluid temperature gradient w ith depth which exceeds that possible in a hydrostatic
                           situation (i.e. boiling point for depth) but remains single phase as the excess energy
                           (and therefore pressure) is loss by friction as the fluid flows upwards.


Hydraulic fracturing:      Fracturing of rocks by extending a fluid-driven fracture. The fluid pressure exceeds the
                           minimum compressive stress and the fracture grows when the effective tensile
                           strength of the rock is exceeded at the leading edge.


Hydrostatic gradient:      Where pressures are determined by the amount of overlying liquid.


Hydrothermal eruption:     An eruption of solid material (and fluid) which reaches the surface and is caused by
                           hydrothermal processes.


Lithostatic gradient:      Where fluid pressures are determined by the confining rock pressure.


Outflow zone:              Area where water is flow ing laterally away from an upflow zone.


Permeability:              The ability of fluid to flow through the rock, whic h depends on the porosity and the size
                           and degree of interconnection of pores or fractures.




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Piezometric surface:          A surface of equal f luid pressure within the rock mass. Usually taken to refer to a
                              theoretical ―water table‖ based on fluid pressure. Note however that in a steam-
                              dominated zone, the actual water level will be considerably below the piezometric
                              surface.


Porosity:                     Proportion of pore space within a rock.


Single phase zone:            A zone in which the pressure gradient corresponds to a single-phase liquid.


Upflow zone:                  Area where hot fluid is flowing more or less vertically upwards within a geothermal
                              system.




A.2            Hydrothermal fluid physics and chemistry

Adiabatic:                    A process which takes place w ithout gain or loss of heat.


Boiling:                      Change of state from liquid to vapour whic h usually takes place vigorously as the fluid
                              has reached saturation temperature at the local confining pressure (in contrast to
                              evaporation, which takes place slow ly due to net loss of vapour in an open system).


Condensation:                 Change of state from vapour to liquid.


Connate Water:                Water trapped w ithin sediments at the time of their deposition, thus often close to
                              seawater in original composition though later usually modified by water-rock
                              interaction.


Enthalpy:                     The heat content per unit mass of a solid, liquid or gas, usually expressed in units of
                              kJ/kg.


Effervescence:                Loss of volatiles from solution. Usually taken to refer to loss of dissolved gases.


Flashing:                     Boiling, usually taken to mean in response to pressure reduction.


Henry‘s Law:                  A mathematical relationship describing how the partial pressure of a dissolved gas in
                              water changes with increasing gas concentration.


Incompressible:               An incompressible fluid, such as liquid w ater which has a small compressibility, w ill not
                              change in volume in response to pressure (unlike a gas).


Isenthalpic:                  Without gain or loss of heat or work (in contrast to adiabatic processes).




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Isentropic:             Without gain or loss of entropy.


Isothermal:             At constant temperature.


Isobaric:               At constant pressure.


Kelvin scale:           A temperature scale in which the degrees are the same size as in the
                        Celsius/Centigrade scale, but which starts from absolute zero. Thus 0 °C =
                        approximately 273 K.


Magmatic fluid:         Water of magmatic origin that is derived from the loss of volatiles from magma.


Meteoric fluid:         Water of surficial origin, including near-surface groundwaters.


NCG:                    Non-condensable gas. In the geothermal context this refers to the gases contained in
                        steam w hic h do not condense when the steam condenses, i.e. usually mostly CO2
                        plus lesser H2S.


pH:                     Negative log10 of the hydrogen ion concentration in a solution. At ambient
                        temperatures pH 7 is neutral, acid solution have a pH of less than 7 and the limit of
                        aqueous alkaline solutions is 14. Note that these values change at elevated
                        temperatures.


Proppant                Granular material introduced along with the stimulating fluid to prop hydraulic fractures
                        open after the injection ends.


Saturation ratio:       The proportion of a two-phase fluid w hic h is made up of water (or steam). It is
                        important to define which you are referring to, and whether it is a ratio by volume or
                        mass (usually the latter).


Saturation              In this context usually refers to the temperature/pressure conditions whic h are just
temperature/pressure:   equal to the theoretical vapour pressure, so that steam and water can co-exist.


Solute:                 Something w hic h is dissolved in a solution.


Specific heat:          Measured in Joules, The amount of energy whic h it takes to raise one gram of the
                        material one degree K.


Super-critical fluid:   Fluid at a temperature above the critical point, at which only a single phase can exist
                        regardless of pressure. For pure water the critical point is approximately 374°C, but it
                        rises markedly w ith increasing solute content.




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Super-heated:                A vapour (usually referring to steam) which is at a temperature which is hotter than the
                             saturation temperature for the equivalent pressure.


Super-saturated:             A solution which contains more than the saturation quantity of a particular solute. This
                             is a dis-equilibrium condition, w hic h can however persist metastably for some time in
                             certain instances.


Tw o-phase fluid:            Strictly speaking fluid consis ting of two separate phases (i.e. liquid (water) and gas
                             (steam)). If applied to water, however, it may be referring to a fluid which has an
                             enthalpy between that of steam and w ater at the appropriate temperature, but whic h
                             may act as a coherent mass rather than two physically separate phases.


Undersaturated:              A solution which contains less than the saturation quantity of a solute, and can
                             therefore dis solv e more.




A.3         Systems, projects, power plants and processes
Back Pressure:               Refers to a turbine which exhausts to an appreciable pressure (for example
                             atmospheric pressure or a lower-pressure second stage turbine) rather than a partial
                             vacuum.

Binary cycle:                A power plant in which energy is transferred from a primary fluid to a secondary
                             working fluid w hich is then used to produce work in a turbine .

Geothermal combined cycle:   A geothermal pow er plant w ith more than one type of unit operating in a sequential or
                             cascaded fashion: the most common arrangement (but by no means the only one
                             possible) is a steam turbine w hic h uses a binary cycle as a condenser, w ith or without
                             other binary cycles operating on separated brine.

Condensing:                  Refers to a turbine which exhausts to a partial vacuum, maintained by direct or indirect
                             contact cooling to condense the fluid and the extraction of non-condensable gases (if
                             any).

EGS:                         Enhanced Geothermal System. A body of rock containing useful energy, the
                             recoverability of which has been increased by artif icial means such as fracturing.

HDR:                         Hot Dry Rock. A body of rock containing useful energy, but whic h needs additional
                             fluid artif icially added to be able to extract that energy.

HFR:                         A body of rock containing useful energy, whic h may naturally contain hot fluid, and
                             whic h has fractures that can be artif icially stimulated to enhance the recovery of the
                             energy.

Kalina:                      Refers to a binary power plant utilising one of the several thermodynamic cycles
                             devised by Prof. A Kalina. They have the common feature of a working fluid w hic h is
                             an azeotropic mixture of two components w ith different boiling points (normally
                             ammonia and w ater), thereby changing its composition during boiling and
                             condensation.

OEC:                         Ormat Energy Converter. A widely used commercially available binary plant module




                                                                                                               PAGE 92
                     Geothermal Technology Roadmap




       produced by Ormat Technologies, Inc.

ORC:   Organic Rankine Cycle. A binary cycle using a hydrocarbon working fluid.




                                                                                  PAGE 93

								
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