The legacy of Australia’s geothermal sector will live on
Despite the seemingly end of geothermal development ambitions in Australia, the legacy of the Australian geothermal sector will live on - through technological development and experience, but also through development internationally ... and hopefully Australia in the future.
Despite the end of the geothermal ambitions of Australian Geodynamics in Australia and the Pacific, and as a matter of fact, many of the other Australian players, the Australian geothermal companies have left a legacy behind.
At least this is my personal view, after following the sector for many years. In my early days in the geothermal energy sector through my role in banking, I was intrigued by the Australian geothermal companies.
Let me explain why. One of the key issues for geothermal development is funding. Raising money for drilling and development is one of the major hurdles of the sector. The Australian stock market is one of the key markets for the resource sector, think mining for gold, minerals etc. Therefore there was a certain understanding of risks and also a willingness to invest in companies and projects that – to describe it diplomatically – were challenging.
Geodynamics as one of the first Australian companies to go to the stock market to raise funding, was extremely successful and raised – as far as I remember – more than $200 million on the stock exchange. With that funding the company bought a drilling rig and started to develop one of the largest EGS pilot projects. One can argue about the sense of developing a project far from the grid and water sources, but technically it was a milestone project. You can find some of the history of Geodynamics on its website.
Australian and international experts were working on the project, creating a lot of experience that is being used to this day in various other projects around the world.
Geodynamics also opened the doors for many other Australian companies entering the geothermal sector – including Green Rock Energy, Hot Rock, Petratherm, Panax Geothermal (Raya Group), KuTh Energy, Greenearth Energy, Southern Gold, Torrens Energy, Wasabi Energy – and I am sure I am forgetting some here, sorry – but also a number of initiatives in the public sector and through research projects at Universities, e.g. at the University of Western Australia. … and many individual consultants and smaller firms that have directly or indirectly worked on geothermal.
Some of these companies focused on developing projects in Australia, others went internationally, e.g. in Chile, Turkey, Peru, Indonesia, Hungary and in the Pacific. So while most – if not all of these – companies have since ceased their geothermal activities, or simply don’t exist anymore, the projects they were developing are now being developed by players from outside of Australia.
What particularly intrigued me on Australian players was the different approach to the business model. Approaching developing on a lean basis modelled around a similar structure in mining, the companies were able to attract a lot of attention. And maybe even if it was too much for what they had to show, they did a fantastic job promoting geothermal energy to the general public, not only in Australia. So while in the end the companies were not successful to translate their success on the stock market into actual business success in finalizing projects, they actually pushed boundaries and started good projects, some of which will now be finished by others.
Australian players also were a key driver into looking into geothermal development on some of the islands in the Pacific and one can only hope that someone else will be able to pick up where they now have left. In retroperspective, the World Geothermal Congress held in Melbourne in 2015, now seems like having been a goodbye party.
So while the geothermal resources in Australia have not allowed development live up to the expectations of these companies, the Australian sector did a great job into research on hot rock/ enhanced geothermal systems (EGS) and sedimentary geothermal resources, which is living on and the experience is being used in other parts of the world today.
So where does this leave geothermal energy development in Australia, well I don´t know and I hope some of the Australian players will be able to comment on this piece, but there is an expansion in the works for the one geothermal plant in Australia operating today. The Birdsville plant of less than one MW of installed capacity is planned to see an expansion, even though this has been announced over the years several times. There are also various heating projects, mostly of smaller scale, and some research activities on geothermal cooling at the University of Western Australia.
Through my work I have gained a lot of friends in the Australian geothermal sector and I am absolutely certain that despite all the bad news of the past few years that this ain’t the last we have seen from you.
Source and inspiration: the news piece by ABC News Australia