The development of geothermal energy in Australia is a step closer with the launch of an industry framework today. Geothermal energy is produced by harnessing the heat of so called "hot rocks" buried kilometres underground.

The framework has brought together industry, researchers and governments to work out how to make geothermal a genuine baseload power alternative. Geoscience Australia estimates it will take five to 10 years before geothermal energy is commercially available.

Local company Hot Rock Limited is preparing developments for its first geothermal exploration power station next year, in a quest to provide a cleaner, greener energy source for Australia by 2012.

Hot Rock is the largest single holder of geothermal exploration permits in Australia, and its four permits in the area have a total area of 18,294 square kilometres and extend for approximately 270 kilometres along the South Australian coastline and inland.

Locations within Hot Rock’s reach include Portland, Hamilton, Warrnambool, Terang and Colac, some of which have hot springs related to the Otway Basin Geothermal Province.

Geothermal energy is a process of generating clean electricity from naturally-occuring hot water under the ground. The heated water is pumped from below the surface via a network of production wells, and its heat is extracted to produce electricity. Cool water is then pumped back into the hole for use next time.

An independent review by engineering consultants, SKM, showed that the area in which Hot Rock holds permits has the scope to generate up to 1,750MWe or approximately 35 per cent of Victoria’s electricity needs.

Fully developing this area could position Victoria as one of the cleanest states of Australia for electricity generation, says Hot Rock.

The four permit areas held by Hot Rock have already been explored for oil and gas, with over 180 wells drilled. Four of these wells have been shown to offer geothermal resources with water heated to 145 degrees C at depths of 2,400 to 3,600 metres below the ground, which is relatively shallow, according to the company.

Hot Rock is in discussions with electricity generation and retail companies on a joint venture power development in the Koroit Project, which is a 250 square kilometre area within the permitted locations, within the vicinity of two previous drill holes that encountered hot water.

“The [joint venture] comprises an initial proof on concept phase involving the drilling and testing of two wells followed by development of a 50MW power plant,” the company said in a recent quarterly report to the Australian Stock Exchange.

COOPER Basin hot rocks explorer Geodynamics has been given a $10 million grant by the NSW Government to develop a commercial geothermal project in the Hunter Valley, NSW. The NSW government will invest $27 million in seven renewable energy projects, with Geodynamics" the largest player.

Managing director Gerry Grove-White said the funding would be for commissioning of a small geothermal power plant in the Hunter Valley in 2012. "The first stage of this will be the drilling of a 2km exploration well in early 2009 to confirm temperature gradients,"" he said. Geodynamics Hunter Valley tenements at Bulga and Muswellbrook may also hold significant geothermal resources, he said.

Meanwhile the company was close to a major milestones at its key project in the Cooper Basin near Innamincka, South Australia. A 1 MW pilot plant to power the company"s joint venture operations with Origin Energy in the outback town of Innamincka is planned to be commissioned from February 1 and the town powered by geothermal energy by March 31.

Mr Grove-White said the knowledge and expertise Geodynamics has achieved in the Cooper Basin over the past five years will be used in the development of the Hunter Valley project.

INVESTORS have bought into South Australian geothermal energy explorers in response to renewed Federal Government support for the sector, says Petratherm managing director Terry Kallis.

Federal Resources and Energy Minister Martin Ferguson reinforced the Government"s commitment to a $50 million geothermal drilling program at a CEDA speech in Adelaide on October 24. Shares in SA-focused geothermal energy stocks have since climbed a combined 34 per cent despite turbulent market trade.

"The Federal Government is reinforcing the fact that they"re still committed to the renewable energy sector . . . I think people are starting to see what the quality stocks are in each sector,"" Mr Kallis said. ...

Drilling at Petratherm"s Paralana project begins in May, 2009 under its $57 million TRUenergy farm-in agreement. Its shares have climbed 37 per cent since October 24, up 13c to 48c. ...

Mr Kallis said Petratherm had costed its Paralana Project at $6 million per megawatt (MW) for a 30MW base-load plant operating around the clock. A typical wind project would cost $2 million per MW of installed capacity, but would only operate for one third of the time, making geothermal as cost competitive as wind, Mr Kallis said.

He said Petratherm planned to generate revenues as early as May, 2010 when its Geo-Madrid District Heating Project is expected to be on stream.

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