Mixed Reaction to Climate Change Statement from Australia's World Class Geothermal Energy Industry
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“The Prime Minister’s announcement today of the Government’s Climate Change agenda produced a mixed reaction from Australia’s emerging geothermal industry” according to Susan Jeanes, the Chief Executive of the Australian Geothermal Energy Association.
“The industry is pleased with the commitment to develop infrastructure to the areas where renewable energy sources are optimum. The geothermal energy expects that this would include a connection to remote parts of South Australia where the geothermal resource is world class, exceptionally hot and relatively close to the surface. The commitment is an important step in ensuring that emissions free, low cost renewable energy will be delivered into the national market towards the latter part of this decade, particularly for the ‘Hot Rock’ projects in northern South Australia”, Susan Jeanes said in Adelaide today.
“The industry is however, disappointed with the absence of any further certainty around how other generation and direct use projects from geothermal energy will develop without further funding commitments - no new funding was announced. The industry has been warning for some time that new projects will fail to get off the ground without new funding commitments from the Government.
“The $5b Clean Energy Initiative has allocated $2.5b to clean coal, $1.6 to solar energy and $200m to geothermal energy projects. Only about $10m has been paid so far to the geothermal industry from these funds alongside the more than $300m already spent by the industry.
“The industry calls on the Commonwealth Government to rectify the anomaly in its current funding regime and outline how it will support the development of the geothermal projects it needs to meet its own Renewable Energy Target (RET) by 2020.
“Geothermal energy is predicted to be the cheapest form of clean energy underpinned by a massive world class resource dispersed throughout Australia and it is the only form of new renewable energy with a baseload capability. It also has massive potential for a Direct Use capability where the heat energy displaces electricity in industrial and heating and cooling applications.
“The recent Australian Energy Resource Assessment produced by GeoScience Australia predicted that Hot Sedimentary Aquifer (HSA) projects will be the cheapest form of all energy technologies by 2030. These projects are located in sandstone aquifers across the Otway Basin in Victoria and South Australian and AGEA asserts that this reason alone presents a fundamental imperative for further public investment in the industry. Today’s announcement contains no support for these projects.
AGEA proposes the following policy requirements to grow a geothermal energy industry in Australia:
1. A carbon pricing mechanism so that Australian companies can access support from international equity markets and grow to the point where they can deliver energy into the national grid.
2. At least $550m in increased funding to enable the industry to continue to develop projects and access the expensive drilling equipment and other high upfront costs that will drive the early, higher risk stage of the industry’s development.
3. Support for the construction of transmission infrastructure to geothermal energy projects through the establishment Scale Efficient Network Extensions (SENEs) under the proposed new AEMC rules.
4. The inclusion of geothermal direct heat as an eligible source under the RET in order to enable the development of the direct use industry, particularly in Western Australia and Victoria. The industry estimates that up to 2,000GWh of electricity could be displaced by the development of direct use projects by 2020 and that as much of this would occur in Western Australia, this will assist WA meet renewable energy targets at lower cost.
5. Support for the R&D effort that the industry and state governments are currently driving.
“The industry is pleased with the commitment to develop infrastructure to the areas where renewable energy sources are optimum. The geothermal energy expects that this would include a connection to remote parts of South Australia where the geothermal resource is world class, exceptionally hot and relatively close to the surface. The commitment is an important step in ensuring that emissions free, low cost renewable energy will be delivered into the national market towards the latter part of this decade, particularly for the ‘Hot Rock’ projects in northern South Australia”, Susan Jeanes said in Adelaide today.
“The industry is however, disappointed with the absence of any further certainty around how other generation and direct use projects from geothermal energy will develop without further funding commitments - no new funding was announced. The industry has been warning for some time that new projects will fail to get off the ground without new funding commitments from the Government.
“The $5b Clean Energy Initiative has allocated $2.5b to clean coal, $1.6 to solar energy and $200m to geothermal energy projects. Only about $10m has been paid so far to the geothermal industry from these funds alongside the more than $300m already spent by the industry.
“The industry calls on the Commonwealth Government to rectify the anomaly in its current funding regime and outline how it will support the development of the geothermal projects it needs to meet its own Renewable Energy Target (RET) by 2020.
“Geothermal energy is predicted to be the cheapest form of clean energy underpinned by a massive world class resource dispersed throughout Australia and it is the only form of new renewable energy with a baseload capability. It also has massive potential for a Direct Use capability where the heat energy displaces electricity in industrial and heating and cooling applications.
“The recent Australian Energy Resource Assessment produced by GeoScience Australia predicted that Hot Sedimentary Aquifer (HSA) projects will be the cheapest form of all energy technologies by 2030. These projects are located in sandstone aquifers across the Otway Basin in Victoria and South Australian and AGEA asserts that this reason alone presents a fundamental imperative for further public investment in the industry. Today’s announcement contains no support for these projects.
AGEA proposes the following policy requirements to grow a geothermal energy industry in Australia:
1. A carbon pricing mechanism so that Australian companies can access support from international equity markets and grow to the point where they can deliver energy into the national grid.
2. At least $550m in increased funding to enable the industry to continue to develop projects and access the expensive drilling equipment and other high upfront costs that will drive the early, higher risk stage of the industry’s development.
3. Support for the construction of transmission infrastructure to geothermal energy projects through the establishment Scale Efficient Network Extensions (SENEs) under the proposed new AEMC rules.
4. The inclusion of geothermal direct heat as an eligible source under the RET in order to enable the development of the direct use industry, particularly in Western Australia and Victoria. The industry estimates that up to 2,000GWh of electricity could be displaced by the development of direct use projects by 2020 and that as much of this would occur in Western Australia, this will assist WA meet renewable energy targets at lower cost.
5. Support for the R&D effort that the industry and state governments are currently driving.