Dig the heat

Geothermal power development is moving a little more slowly than either governments or investors would like.

Geothermal industry defends its record
Sydney Morning Herald 20th May.

Australia's geothermal sector has responded to criticism it is not progressing fast enough, saying major new geothermal projects can take as long to develop as a liquefied natural gas plant.

Opposition resources spokesman Ian Macfarlane said recently the geothermal industry had stalled.

He singled out Geodynamics Ltd as being "no further advanced than it was five, ten years ago".

Geodynamics chief executive Geoff Ward says the criticism is unwarranted, especially considering technical issues that have plagued the projects are being overcome.

"There is a view that the industry exists through government funding alone," Mr Ward told AAP.

"We've raised in excess of $400 million over ten years and spent nearly $300 million in the ground but only $11 million has come from government funding."

Panax Geothermal Ltd managing director Kerry Parker said talk of the sector surviving on grants was "rubbish".

"It's an industry that, you've got to be honest, is suffering at the moment," Mr Parker said.

In Indonesia, Panax is working on conventional geothermal projects, which target volcanic-based hot aquifers. They don't require fracturing rocks, like projects in SA, and are hence easier to develop.

Indonesia was a ready market for Panax, given the nation's goal was to expand geothermal energy production by about 4,000 megawatts (MW) by 2015, from 1,400 MW currently, to meet an energy shortfall.

Both Geodynamics and Petratherm Ltd still remain committed to SA, with Petratherm expecting to deliver Australia's first commercial supplies of hot rock power from its Paralana project by the end of 2012.

This would be three years later than initially expected, following drilling problems at the project including fluids flowing into the well.

He said the greatest risks were principally financial.  Other than deep pockets, patience was needed as a geothermal development was similar in scope to a large LNG project, Mr Ward said.

"My view of the energy future of this world is we'll see progressively more gas, more renewables and less coal.

"And it's inevitable the nuclear issue will come up for serious debate and so it should."

Indonesia is struggling to keep up with demand for improved infrastructure, electricity being a prime example. Rolling blackouts, three times a day where I live, were a challenge while I completed my thesis two years ago. In response to the demand, Indonesia appears to be considering any option. The government has given geothermal some favorable treatment, but apparently sometimes not favorable enough for some investors.

Geothermal Mining Allowed in Forests
Fidelis E Satriastanti, The Jakarta Globe, May 22, 2011

Keen to develop clean energy, Indonesia is now permitting underground mining in protected forests to help harness the power of the earth, a senior official said on Friday.  A new presidential regulation would allow greater geothermal development because 80 percent of geothermal reserves were found beneath protected forests or national parks.

Currently, the country is the third-largest producer of geothermal power, but the five existing plants contribute only 1.5 percent of the nation’s power generation capacity.  The state goal is 25 percent renewable power by 2025 along with 23 percent natural gas, 30 percent oil, and 22 percent coal. Geothermal, hydropower and bio-energy are the flagship sources in the new policy.

Impression on the Infrastructure Conference
Scott Younger, The Jakarta Globe, April 28, 2011

On a more sombre note, those listening to proposals for the future of geothermal developments were dismayed to hear that an additional payment was being considered when a developer was going to take a project on to the exploitation stage. In line with regulations applying in the oil and gas sector, geothermal is to be treated as an extraction rather than renewable issue.

Geothermal developers had been looking towards more encouragement to invest further in this very important renewable area that will be the main contributor to offset the heavy reliance on fossil-fuel-based power.

Meanwhile foreign oil industry interests are asking for more generous terms.

Legal uncertainty, unattractive fiscal term remain major problems to lure investors
Hasyim Widhiarto, The Jakarta Post, 21/5/2011

A prominent oil and gas businessman who joined a recent gathering with President Yudhoyono recalled how hard it was to convince the country’s top officials to revise regulations that he thought made oil and gas exploration in Indonesia no longer competitive.

During the gathering,…, the President, according to the businessman, asked him what the government should do to raise investor interest in the local oil and gas industry.

When the businessman asked him to consider offering a 50 percent take of oil and gas production to companies that run explorations in the eastern part of Indonesia, the President, however, expressed strong reluctance.

“You know that [such a request] is impossible,” … President said in response to his suggestion. “If I give [the oil and gas industry] too generous fiscal terms, I will be accused of selling the country to foreign companies. You have to remember that there are many people like [political activist and the 1998 Reform movement icon] Amien Rais around me.”

The businessman said he was not surprised with the President’s answer.
“So, maybe the catalyst [to revise oil and gas regulations] is to approach people like Amien Rais first,” he said, laughing.

And in New Zealand a report suggests that most of the countries power requirements could potentially be met by geothermal.

Geothermal energy could power New Zealand
May 29, 2011, via reve

"Scientists conservatively estimate that deep geothermal resources in the central North Island could provide 10,000 megawatts for over 100 years for New Zealand," said GNS Science Senior Geothermal Scientist Greg Bignall, a convenor of the Taupo workshop.
"This would satisfy all of New Zealand's current electricity demand, which is generated from a capacity of 9,000 megawatts," Dr Bignall said.

"But to achieve this there are a number of engineering and scientific challenges to overcome as conventional technologies would be pushed beyond their limits to extract fluids from such depths. Currently there is no satisfactory way of handling geothermal fluids that are 400 degrees Celsius."

Ground-breaking science, innovation and engineering would be needed for successfully drilling into these deep, very hot environments.

All of the country's current electricity demands could be met by deeper boreholes tapping into hotter geothermal energy, scientists say. Conventional geothermal energy comes from boreholes up to 3km deep, tapping fluids up to 300 degrees, and providing about 13 per cent of the country's total electricity. But by drilling to depths of about 5km and tapping even hotter fluids, the energy output from geothermal resources could increase dramatically.

More information on NZ geothermal can be found at GNS Science