Hot Rocks in Australia National Outlook

1
Hot Rocks in Australia National Outlook
B.A. Goldstein1, A.J. Hill1, A.R. Budd2 and
M.Malavazos1
2
Hot Rocks in Australia National Outlook

• Social and political drivers
• Geothermal energy
• National overview
• South Australias geothermal boom
• Status of drilling results
• Research Development
• Conclusions

3
Whats driving the push for geothermal energy?
After Hubbert, 1967
-
from geology textbook in mid 70's
After Hubbert, 1967
-
from geology textbook in mid 70's
80
80
10,000 years of Energy Use
10,000 years of Energy Use
AD
BC
Energy
AD
BC
Energy
12
12
10
kw
-
h
10
kw
-
h
70
70
Non
-
Non
-
Slaves,
renewable
renewable
60
60
animals
fossil fuels
fossil fuels
and
Nuclear, geothermal,
firewood
50
50
Nuclear, geothermal,
wind, solar, wave, other
or
wind, solar, wave, other
40
40
Slaves,
slaves and animals
and/or
animals
slaves and animals
and
30
30
firewood
Early vs. late peak debate
20
20
1
10
Early versus late peak
Yr
Yr
3000
1000
2000
4000
5000
6000
1000
2000
3000
1000
2000
4000
5000
6000
1000
2000
0
7000
3000
0
7000
3000
4
Partial Solution for Secure Energy and Emissions
Reduction
Perceptions of climate change
Vast emissions-free hot rock energy

Access to this figure was kindly provided by Jeff
Tester MIT and all rights reside with Geoff Sims

• Since 2001, 29 companies applied-for 206 licences
  covering 186,700 km2 on a variety of plays in
  Australia.
• Work programs (2002-12) worth AUS747m (US672m)
  and this excludes upscale/deployment AUS135m
  (US122m) spent to date of which 75 is private
  investment.
• 80 of this investment has been attracted to
  South Australia reflecting SAs supportive
  investment framework natural endowment in hot
  rocks at relatively shallow depths

Visit http//www.pir.sa.gov.au/geothermal
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Prospective Materiality of Geothermal
Energy security is paramount1 Price is king
for commodities

• MIT (Tester, et al 2006)
• 100,000 MWe hot rock power in the USA by 2050
• 13.7 billion PJ resource to 10 km.
• 130,000 x annual primary energy use in the USA
• Cost competitive after 100 MWe (7 yrs into
  learning curve)
• Lowest cost after 200 MWe (10 yrs into learning
  curve)
• Electricity Supply Assoc of Australia (2007)
• 6.8 of Australia's base-load from hot rocks by
  2030.
• Geoscience Australia (2007, to be refined)
• Australias hot rock energy 150oC to 5 km 1.2
  billion PJ.
• 20,000 x annual primary energy use in Australia
  (04/5)

1 It is only when the tide goes out you can see
who is swimming naked Warren Buffet
6
Geothermal power expected to be lowest cost
before 2050
Forecast USA Electricity Supply from Hot Rock
Enhanced Geothermal Systems (EGS)
Get MIT Rpt (Tester, et al 2006) from
htpp//geothermal.inel.gov
Price increase from 2,000 MW reflects move to
deeper hot rocks with time while competing
electricity supplies are also expected to
increase in cost. Step-changes reflect
progressive development of next deeper 1 km
slabs.
7
Climate Change Excites Geothermal Exploration
8
Seachange

• The Australian Federal Government has just set a
  National low emissions electricity target of
  30,000 GWh by 2020 and will implement an
  emissions cap and trade scheme by 2012
• Launch of 5 year AUS59m (US53m) Onshore Future
  Energy Security Program in 2006 with focus on
  petroleum, geothermal nuclear
• Australian Federal election is imminent. The
  Federal Opposition has announced a AUS50m
  (US45m) collaborative drilling geothermal fund
  if elected to office watch this space.

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Hot Rocks in Australia National Outlook

• Social political/economic drivers
• Geothermal energy
• National overview
• South Australias geothermal boom
• Status of drilling results
• Research Development
• Conclusions

10
Geothermal Resource Pyramid
After Hillis et al., 2004
1 km3 of 250C rock contains stored energy of 40
million barrels of oil
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Geothermal Play Concepts Assessing Geologic
and Economic Adequacy

• Australias geothermal resources generally fall
  into two categories
• Hydrothermal resources (relatively hot
  groundwater)
• Hot Rock resources (Enhanced Geothermal Systems)
  variety of play concepts being pursued by
  companies in a number of distinct geological
  provinces
• The development of Hot Rock (EGS) is expected to
  predominate in Australia. Geologic factors that
  determine the extent of EGS plays can be
  generalised as
• source in the form of radiogenic, high heat-flow
  basement rocks (mostly granites)
• low thermal-conductivity rocks insulating source
  rocks to provide thermal traps
• permeable fabrics within insulating and basement
  rocks (susceptible to fracture stimulation)
• Commercial factors include, but are not limited
  to
• a practical depth-range, limited by drilling and
  completion technologies (defining a base) and
  necessary heat exchange efficiency (defining a
  top)
• distance to power grid and markets
• relative costs to generate, including
  environmental costs

12
Temperature at 5 km
Degrees C at 5 km
277
242
206
171
135
100
Chopra Holgate, 2005
Temperature is aliased over much of Australia
because of variation in Q and k
13
Progress Towards Emissions Free, Renewable
Base-load Geothermal Power
JURISDICTION RESPONSIBILITIES Onshore States
the Northern Territory Offshore Federal
legislation applies with mirror legislation for
near-shore State/NT waters. TO 20 Sept 07
South Australia 164 of Geothermal Expl.
Licences (GELs) applied-for. Larger GELs with
lower fees posed as amendments to Act Will
clarify that GELs are not required for shallow
applications (heat pumps, etc) Victoria Regulatio
ns came into effect in 06. Geothermal Expl.
Permits (GEPs) needed at gt 1km or gt 70º C 12
GEPs granted in April 07. Expect more to follow
Queensland Grant of 14 GEPs pending Native
Title Access Agreements. Legislation for
production in progress. New South Wales 5
Exploration Licences (ELs) for geothermal
applied-for 5 ELs granted Tasmania 5 Special
Exploration Licence (SEL) applied-for 1 SEL
granted Western Australia Legislation expected
in 07/08. Call for GEL bids to follow. Northern
Territory Legislation expected in 07/08. Call
for GEL bids to follow.
14
Indicative 200 Million for ONE 40MWe Demo
plant. Upscaling demo's excluded from forecasts
15
Hot Rocks in Australia National Outlook

• Social political/economic drivers
• Geothermal energy
• National overview
• South Australias geothermal boom
• Status of drilling results
• Research Development
• Conclusions

16
Hot Rock Projects in South Australia - Sept 07

• 19 GEL / GELA Holders
• 164 GELAs, GELs, GRLs on a variety of plays
• 590 million in work programs 2002-2012 and this
  excludes demo plants, up-scaling and deployment
  projects
• 13 wells drilled to date
• Geodynamics Habanero 1, 2
• Petratherm Paralana 1B, DW1, Yerila 1
• Scopenergy Heatflow 1, 3, 4
• Greenrock Blanche 1
• Geothermal Resources Frome 1, 2, 3, 8
• Geodynamics Habanero 3 Drilling ahead expect
  to reach 4300m TD in early Nov.

• Tri-Star Energy
• Clean Energy Australia
• Osiris Energy
• Touchstone
• Deep Energy
• Inferus
• A-B-L-R Joint Venture
• AAA Energy
• Earth Heat

• Geodynamics
• Petratherm
• Geothermal Resources
• Green Rock
• Scopenergy
• Torrens Energy
• Pacific Hydro
• Eden (Tasman affiliate)
• Teck Cominco
• Granite Power

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South Australian Heat Flow Anomaly

• Exceptional target for
• Geothermal Energy
• 80 higher heat flow than
• typical Proterozic crust
• Heat due to
• Thermally Anomalous
• Granite
• 11 to 62 µWm-3
• Radiogenic Iron
• Oxide
• possibly even higher
• heat generator
• Courtesy of Petratherm

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Hot Rocks in Australia National Outlook

• Social political/economic drivers
• Geothermal energy
• National overview
• South Australias geothermal boom
• Status of drilling results
• Research Development
• Conclusions

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Pacific Hydro
Marla
Geodynamics
Oodnadatta
Habanero 1,2
Eden
Eden
Moomba
Osiris
Proactive
Eden
Coober Pedy
Petratherm
Yerila 1
Proactive
Petratherm
Olympic Dam
Paralana 1
Eden
Green Rock
Blanche 1
Tarcoola
Leigh Creek
Proactive
Torrens
Geothermal
Port Augusta
Green Rock
Wudinna
Eden
Torrens
Port Lincoln
Petratherm
ADELAIDE
Geothermal
Osiris
Heat Flow 1,3,4
Scopenergy
Mount Gambier
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Geodynamics Habanero-1 Well
Habanero-1 Feb-Oct 2003 4,421 m into 250C
fractured, overpressured granite www.geodynamics.c
om.au
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Habanero-1 Well Stimulation Nov 2003 - Jan 2004
www.geodynamics.com.au
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Habanero-1Seismic Monitoring of Stimulation
Plan View
www.geodynamics.com.au
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Habanero-1 Seismic Monitoring of
StimulationSide View
www.geodynamics.com.au
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Habanero-2 Jul-Dec 2004 to 4,350m
flowed 25 L/s at 210C producing 10MWe in May
2005 lost hole attempting sidetrack around
dropped safety plug purchased
32M rig from US with a rights issue in June
commenced drilling Habanero 3 in August 2007
HotRock40
7x5,000m wells 40MW plant
www.geodynamics.com.au
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Pacific Hydro
Marla
Geodynamics
Oodnadatta
Habanero 1,2
Eden
Eden
Moomba
Osiris
Proactive
Eden
Coober Pedy
Petratherm
Yerila 1
Proactive
Petratherm
Olympic Dam
Paralana 1
Eden
Green Rock
Blanche 1
Tarcoola
Leigh Creek
Proactive
Torrens
Geothermal
Port Augusta
Green Rock
Wudinna
Eden
Torrens
Port Lincoln
Petratherm
ADELAIDE
Geothermal
Osiris
Heat Flow 1,3,4
Scopenergy
Mount Gambier
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Petratherms Targets
modified from Neumann et al. (2000)
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Sedimentary Basin Over Hot Basement
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Paralana Hot Springs 62C
29
September 2005 June 2006 Drilling
Campaign Yerila-1 Paralana-1B, Paralana -1B
DW1
30
Yerila-1 64C at 675 m (68C/km) Paralana-1B 58
C at 485 m (81C/km)
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target temperatures in the Adelaidean cover
overlying basement HEWI
109C at 1800m 50C/km
32
Paralana Future Plans

• drill production and injection wells to 3.5-4 km
  and circulation test (Q1 2008)
• Beach Joint Venture 5M REDI Grant
• develop and commission 5-7.5 MW geothermal plant
  (2008-2009)
• transmission line (10 kms) to Beverley Uranium
  Mine and test to 2010
• MoU with Heathgate Resources
• towards 260 MW power plant (using 18 MW
  increments) connected to power system at Port
  Augusta via 300km 275 kV line

33
Pacific Hydro
Marla
Geodynamics
Oodnadatta
Habanero 1,2
Eden
Eden
Moomba
Osiris
Proactive
Eden
Coober Pedy
Petratherm
Yerila 1
Proactive
Petratherm
Olympic Dam
Paralana 1
Eden
Green Rock
Blanche 1
Tarcoola
Leigh Creek
Proactive
Torrens
Geothermal
Port Augusta
Green Rock
Wudinna
Eden
Torrens
Port Lincoln
Petratherm
ADELAIDE
Geothermal
Osiris
Heat Flow 1,3,4
Scopenergy
Mount Gambier
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Green Rock Energy - Olympic Dam Geothermal
Project

• Drilled logged Blanche No1 well in 2005 to
  1,935m
• Sited 5km from power grid
• Evaluated temperatures in Blanche No. 1 SAP 1
  others
• Cored 1,216 m of fractured hot granite
• Next Mini fracture stimulation of Blanche 1 in
  Q4 2007

35
Green Rock Energy - Olympic Dam Geothermal
Project
36
Olympic Dam ProjectBlanche 1 Thermal Data 850C
at 1934m
Rock Types
Temperature (oC)
Conductivity (W/mK)
4.0
0
20
40
60
80
100
1.0
2.0
3.0
5.0
0
0
200
200
400
400
600
600
800
800
Depth (m)
Depth (m)
1000
1000
1200
1200
1400
1400
1600
1600
1800
1800
2000
2000
37
Pacific Hydro
Marla
Geodynamics
Oodnadatta
Habanero 1,2
Eden
Eden
Moomba
Osiris
Proactive
Eden
Coober Pedy
Petratherm
Yerila 1
Proactive
Petratherm
Olympic Dam
Paralana 1
Eden
Green Rock
Blanche 1
Tarcoola
Leigh Creek
Proactive
Torrens
Geothermal
Port Augusta
Green Rock
Wudinna
Eden
Torrens
Port Lincoln
Petratherm
ADELAIDE
Geothermal
Osiris
Heat Flow 1,3,4
Scopenergy
Mount Gambier
38
Geothermal Resources Frome Project - Curnamona
Craton

• currently conducting a 8 well shallow drilling
  program

39
Frome Project - Gravity and Seismic
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Hot Rocks in Australia National Outlook

• Social political/economic drivers
• Geothermal energy
• National overview
• South Australias geothermal boom
• Status of drilling results
• Research Development
• Conclusions

41
Path to Commercialisation Exploration
Proof of Concept - Demo
Min M
Max M Pre-drill studies 0.05
0.25 Shallow drilling
0.20 2.00 Deep Drilling
6.00 10.00 Frac 1st Well
1.00 2.00 2nd Deep Well
6.00 10.00 Frac 2nd Well
1.00 2.00 Extended Flow Test
1.00 2.00
15M 28M
Rough costs through to proof-of-concept

• Federal Underpinnings
• GAs Onshore Energy Security Initiative
• Fed Geothermal Industry Dev Framework
• Future LETDF grants
• Emissions trading / targets
• Feed-in schemes
• Flow through share scheme

SA 390k grants for Geothermal research. Expect
others to follow
Fed. Grants incl REDI 30.3 million
42
(No Transcript)
43
Australian Geothermal Energy Group (AGEG)
Technical Interest Groups (TIGs)
On 30 June 07, the SA Government provided a
250,000 pump priming grant to the U of Adelaide
to focus on problems worth solving that has
resulted in 9 research proposals worth in excess
of AUS800,000 including in-kind contributions to
accelerate commercialisation of geothermal energy.
Parallels an IEA RD Annex
44
Key Steps Already Taken to Drive the
Commercialisation of Geothermal Energy

• Significant exploration and proof-of-concept
  investment attracted/fostered with Federal (30
  million) and South Australian ( 1.6 million)
  grants and policy frameworks
• The Australian Geothermal Energy Group (AGEG)
  AGEG Technical Interest Groups (TIGs) formed to
  share information to commercialise geothermal
  resources at maximum pace minimum cost.
• Australia participating in the IEAs Geothermal
  Implementing Agreement
• Seven ASX listed Hot Rock Companies. More coming.
  The majority of companies in the AGEG have agreed
  to form an Industry Directorate

Key Steps That Will Drive the Commercialisation
of Geothermal Energy

• Geothermal exploration, proof-of-concept and
  demonstration projects (fostered with Gment
  Grants)
• Geoscience Australias Onshore Energy Security
  Project to infill deliver (1) a national
  geothermal database, and (2) a national
  geothermal resource assessment (including play
  maps)
• Federal Government Geothermal industry
  Development Framework
• Roadmap for geothermal energy to meet a
  significant part of Australias power demand by
  2030.
• Attractive, appropriate investment frameworks in
  all Australian jurisdictions
• Research and sharing lessons learnt to reduce
  uncertainties (nationally internationally).

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Milestones Ahead on the Road to the Vision
Commercialised Geothermal Energy

• Several successful research (exploration) and
  proof-of-concept (heat energy is flowed)
  geothermal projects. At least 10 by 2010
• Several geothermal power generation demonstration
  projects in distinctively different geologic
  settings. At least 3 by 2012
• Compelling success with geothermal power
  generation demonstration so the investment
  community is convinced geothermal energy is real.
  By 2012
• Safe, secure, reliable, competitively priced,
  renewable and emissions-free base load power from
  geothermal energy for centuries to come. At
  least 7 of base-load demand from hot rock power
  by 2030.

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Conclusions

• Geothermal energy offers the potential of
  significant emissions-free baseload renewable
  energy
• South Australia is focus of EGS exploration and
  development activity due to world class
  geothermal resources and licensing legislation
  other States and NorthernTerritory close behind.
• 29 companies testing a portfolio of geothermal
  plays and willing to share knowledge to
  accelerate commercialisation of geothermal energy
• www.pir.sa.gov.au/geothermal for links to
  Australias geothermal sector

Habanero 2 Steam Separator, May 2005
47
Acknowledgements

• Martin Hand University of Adelaide
• Richard Hillis Petratherm
• Bob Johnson Geothermal Resources
• Adrian Larking Green Rock Energy
• Doone Wyborn Geodynamics

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OUR PLAN IS TO FIND VERY HOT, VERY PERMEABLE,
SHALLOW ROCKS UNDER THE GRID
GEOTHERMAL ENERGY COULD AMELIORATE CLIMATE CHANGE
THE VISIONARY LEADERSHIP WORK IS DONE. HOW LONG
WILL YOUR PART TAKE?