This article briefly describes the two main types of geothermal resource and the mechanisms to:

• Identify and evaluate – or characterise – the resource
• Design and develop a geothermal power plant matched to the resource
• Access grid infrastructure
• Obtain planning approvals and engage the community.

Types of geothermal resources in Australia

Australia’s vast hot sedimentary aquifer (HSA) and hot rock (HR) resources have the potential to become a significant, secure, renewable base load power source. Preliminary work carried out by Geoscience Australia has suggested that by extracting 1 per cent of the available geothermal energy, 1.2 billion petajoules (PJ) could be yielded, which is equivalent to 26,000 times Australia’s primary usage annual energy.

HR projects are focused upon certain rocks, mainly granites, with elevated radiogenic components that have produced heat through decay of naturally occurring isotopes – primarily, uranium, thorium and potassium. Thermal insulation in the form of low thermal conductivity sediments overlaying the granite body is a critical feature. Depths within the 3 to 5 km range are typically considered as the exploration target to achieve desired temperatures of over 200°Celsius. The rocks require fracture stimulation to provide pathways for thermal fluids to migrate from injection to production well, in order to extract heat.

HSA resources tend to be cooler than HR systems but contain large volumes of hot water. In HSA systems, conductive energy over time has heated up sedimentary aquifers.

There is an existing HSA power plant at Birdsville (QLD), and several 100 megawatt (MW) HSA power plants operating in the US, with a few small commercial installations in Europe. HSA resources are naturally permeable and don’t require to be ‘engineered’ through rock fracturing (stimulation). As such, HSA developments are seen by some as being less technically challenging than HR developments.

Identifying and characterising the resource

For a geothermal resource to be viable, temperature, hydrologic and lithological conditions need to be favourable for geothermal fluid extraction from either an existing reservoir (HSA) or engineered reservoir (HR). Identification and evaluation of such relies on geological and geophysical information derived from surface measurements, as well as existing geology and temperature data from proximate (or offset) oil and gas exploration wells.

Identifying resources that exhibit the required temperatures involves building an image of sub-surface temperatures. Where such indicate a higher heat flux than is experienced from average crustal heat flow, then this is sometimes taken as a proxy for higher than normal temperatures at depth. Often heat conductivity models are created to extrapolate near surface temperature measurements to target depth (3 to 5 km).

However, there are limitations to these purely conductive heat models, including the fact that variations in thermal conductivity can distort unit heat flux intensities and hence thermal gradients. They also rely on a good knowledge of subsurface heat conductivity for each type of geology encountered and on an assumption that no convection is present as a heat transport mechanism.

A more comprehensive software based geothermal resource modelling tool is the finite difference dynamic reservoir simulator (TOUGH2), which has been used and proven against existing geothermal reservoirs over a period of more than 20 years. As well as modelling conductive heat flow, TOUGH2 models temperature changes, fluid flow and pressure draw-down over the life of the reservoir during production.

At this stage, and unless the target formation has been intersected, projections of temperature and reservoir permeability (if HSA) are estimates and hence should incorporate sensitivity analysis. It is also useful to develop probabilistic stored heat estimates and likely energy generation capacity estimates (which can be used to report on the resource estimate under the Australian Geothermal Resource Reporting Code).

This probabilistic estimate of generation potential can then feed directly in to a probabilistic financial model using Monte Carlo techniques to predict net present value and internal rate of return. It is the probability of exceedence (P90) figure of such analysis that commercial banks often use when evaluating projects for debt financing.

Power Plant Development

Having developed a robust reservoir model and estimated the production capacity of the reservoir over the life of the project (typically 25 to 30 years), it is then necessary to match the power plant design, capacity and choice of technology to the reservoir characteristics and to local conditions – such as ambient temperature, availability or lack of water for cooling – as well as making a preliminary assessment of grid connectivity.

There are a number of choices for power plant types, the selection of which depends on the temperature of the resource and ambient temperature. These include:

• Steam Rankine cycle power plant – suitable for resources above, typically, 240°Celsius.
• Organic Rankine cycle (ORC) power plant, which uses a lower boiling point organic fluid such as n-pentane that is typically suitable for resource temperatures in the 140°Celsius to 240°Celsius range.
• Kalina cycle power plant, which uses a variable boiling point water ammonia mixture and is capable at operating at lower resource temperatures, typically down to 120°Celsius.
• Refrigerant ‘heat pump’ style power plant that operate down to 80°Celsius.

Given the characteristics of the Australian geothermal resource, most, if not all power projects will be developed on a binary power plant principal where the geothermal fluid is separated from the working fluid in the power plant by means of a heat exchanger.

The ORC power plant is best suited to HSA resources. These plants are manufactured in 6 to 20 MW modules, with large scale power projects being constructed from multiple modules. Some of the higher temperature HR granite resources – such as those being

exploited in the Cooper Basin – may be suitable for conventional steam cycle plant or binary ORC plant that can work at high temperatures.

A geothermal resource in Australia will typically be capable of supporting 1 to 5 MWe (gross) per square kilometre, depending on:

• The resource type
• Permeability and thickness of reservoir (which determines well flow rate)
• Temperature.

Grid connection

Unless the development is supplying a remote, islanded community, it will be necessary to negotiate a grid connection with the local transmission company. Grid connection costs can range from a few million dollars to tens of millions (if not hundreds of millions) depending on:

• Distance to a suitable grid connection point
• Adequacy of the capacity of the local grid to export the output of the plant
• Upgrades required to the transmission infrastructure to accommodate the additional power flow
• The level of redundancy required in the grid connection.

There is also a requirement for the grid operator to undertake power flow modelling and stability modelling of the network under the energy market rules. This part of the project development should not be underestimated.

A grid connection does not give right of export of power onto a network. It is therefore important to understand the process involved in securing and negotiating a suitable grid connection. Grid connections of a several hundred kilometres add another level of complexity in terms of network stability issues and may require a more expensive HVDC solution than a usual HVAC connection.

Allied to grid connection is the securing of a ‘bankable’ power off-take agreement, covering both ‘black energy’ (electricity sales) and ‘green energy’ or green benefits sales such as Renewable Energy Certificates RECs, ideally over the project life.

Environmental approvals and stakeholder consultation

Successful power project development requires the ‘buy in’ of the local community and other major stakeholders at an early stage. It is therefore important to plan and implement a stakeholder consultation strategy to promote the benefits that the project will bring to the local and wider community.

Coupled with this is a requirement to undertake a full environmental impact assessment and obtain approvals under the appropriate legislation for the project.

The legislation covering geothermal development varies from state to state and hence it is useful to seek support from specialists with specific knowledge of the approval process in the region in which the project is situated prior to commencement of exploration drilling.

Conclusions

Geothermal energy has the potential to provide a significant amount of the energy requirements of Australia in the future as a base load, zero carbon energy source. This article has attempted to briefly outline the various stages involved in developing a geothermal power project in Australia. Although the various stages have been described in discrete sections, they are all interconnected. As such it is useful to take a holistic and integrated approach to project development, giving consideration to power plant selection and optimisation, grid connection, environmental approvals at an early stage, even when still evaluating the resource potential.

Dr Stephen Hinchliffe is SKM’s Geothermal Development Manager for Australia. He is a professional engineer holding Master’s degrees in electrical engineering, business administration and commercial law. Mr Hinchliffe is a Fellow of the Institution of Engineers and Technologists (UK) and has more than 15 years experience in power project development. shinchliffe@skm.com.au

Mark Miller holds a degree majoring in geology and is the Managing Director of Greenearth Energy; an Australian ASX listed geothermal exploration and development company focused domestically on the development of HSA geothermal projects in Victoria. Mr Miller has many years experience, domestically and internationally in developing start up businesses and in taking them to maturity. mark.miller@greenearthenergy.com.au