RMIT and Greenearth Energy were successful earlier this month in an ARC Linkage application to produce electricity and fresh water from a geothermal resource. The aim is to supply power and drinking water to small and isolated Australian communities. The RMIT team is led by Professor Ali Akbarzadeh. Greenearth MD Mark Miller is hoping to apply the results on Greenearth Energy's "geothermal hot sedimentary aquifer discoveries in Victoria" with small-scale geothermal power and desalination units delivering up to 100 kW of electricity and 75000 liters/day of fresh water. ARC funding for the Linkage project is $320k over four years (2009-2012).
Unocal is selling Imperial Valley Geothermal Assets to Magma Power (of Canada). Wasn't there a Magma Energy way back in California before Unocal bought Geysers and other fields? I do not think there is any connection between Magma Power and the old Magma Energy other than the name.
An ABNNewswire item refers to the Australian geothermal Energy rush with six companies reporting massive energy reserves. Bahay Ozcakmak of Activated Logic e-mailed me to note that this table is actually an extract from a report published by Activated Logic on the 4th of June, available here with other news articles with the media releases from Activated Logic available at:
http://www.activatedlogic.com.au/in-the-media-press-releases.html . I updated the original table by using the current info he supplied in his e-mail and here it is:
| Project | Resource, EJ | Category | ||
| GDY | Geodynamics | Innamincka & Hunter Valley | 245 | various |
| GER | Greenearth Energy | Geelong & Gippsland | 264 | inferred |
| GRK | Green Rock Energy | Olympic Dam Region | 120 | inferred |
| PAX | Panax Geothermal | Linestone Coast | 332 | various |
| PTR | Petratherm | Paralana | 230 | inferred |
| TEY | Torrens Energy | Parachilna | 780 | inferred |
| SAU | Southern Gold Ltd | Roxby Geothermal Project | 260 | inferred |
| HRL | Hot Rock Ltd | Penola | undisclosed |
The "Category" colum refers to the level of confidence in the reported number. "Inferred" resources indicate resources where the information and confidence are relatively low. According to the Australian geothermal reporting code, the increasing geological knowledge and confidence takes a resource from "inferred" to "indicated" and then finally to "measured".
A Courier Mail article yesterday reports that the uncertainty on the future of the ZeroGen project continues. Earlier this month, Mitsubishi Heavy Industries and Mitsubishi Corporation had announced that they could design, build and commission a 530-MW coal-fired power plant for $4.3b (probably A$) by 2015 with the ability to remove and sequester about 65-90% of the CO2 emissions. This is not geothermal news of course but it is interesting as it puts a price on the CCS as $8.1 million per MWe. The Queensland Government says that it will not decide on its commitment to the future of the project until the present pre-feasibility project completes later this year.
Another piece of news I saw on the paper today reminded me of the Katrix P/L. This company received a REDI grant for $811,252 in December 2005 "to develop a new high-efficiency fluid expander to enable small-scale residential and commercial solar thermal power and heat systems... By 2007-08, 50% of the company’s sales, worth $20M, are forecast to be export sales, primarily to the United States." I think I need to check what happened to Katrix and what was produced at the end of the REDI grant.
Speaking of REDI grants, I am hoping that there has been good progress on the Round #3 grant given to Proactive Energy Developments limited and the University of Newcastle to build a regenerator gor supercritical cycles. The regenerator is a crucial item in realising a high efficiency in the supercritical CO2 cycle we are investigating. This was a $1.2m REDI grant awarded in December 2006.
The Clean Energy Act barely passing the US Congress last week will give geothermal a big boost but only if it becomes the law. It has to get approved by the Senate before this happens. The Bill calls for the US to reduce its GHG emissions by 17% from its 2005 levels by 2020. The Bill also requires 20% of electricity to come from renewable (almost all alternatives like solar, wind, geothermal, etc except nuclear) sources by 2020. The GHG emission is going to be reduced by implementing a cap on total emissions and then asking the large emitters to bid for "allowances" to emit CO2. This is similar to the cap-and-trade scheme that worked in the past for substantially reducing the SO2 emissions. The cap will shrink in future years: 3% by 2012; 17% by 2020; 42% by 2030; and 83% by 2050.
It may be the excitement on renewable stocks that enabled the Canadian geothermal energy company Magma Energy to raise C$100m in a reportedly oversubscribed initial public offering. The company has one geothermal operation in Nevada (currently operating at 8 MW but reportedly capable of producing 23 MW) and 19 exploration leases in Argentina, Chile, Nicaragua, Peru and Western US that reportedly amount to a potential capacity of 199 MWe.
Altarock issued a statement addressing the earthquake concerns raised by an article in New York Times (see below). Basically, it says that Basel is part of a large locked fault and the EGS area in Geysers is a fractured fault which is settling and re-settling every day. Smaller faults mean smaller events but also mean reduced likelihood of a large event. Click here for the rest of the rejoinder.
An article in the Metal Miner web site suggests that the downturn in the oil exploration markets may be compensated by the increased activity in the geothermal sector. Aparently, as the oil price dropped the oil exploration also dropped. One company, Baker Hughes reports only 899 rigs working this week down from 1000 last year, a 10% drop. The oil industry capability is quoted to drill many deep holes down to 8 kilometers. which is about twice the depth required for most HFR geothermal projects.
A New York Times article questioned the safety of geothermal energy. The well-quoted article (e.g. see the US environmental web site trehugger article for a referral) address the earthquake risk that may be caused by EGS stimulation. It started getting space everywhere around the web, e.g. the well-read US web site Huffington Post. We may hear more about the topic in the future, therefore it is is worth addressing here. I have not read the original NYT article but reading referrals to it, an uninformed person may think that someone is digging under San Francisco and deliberately shaking it to create an earthquake and the company doing this, has already done it before (i.e. created an earthquake) in Basel, Switzerland. The article is referring to the AltaRock project at the NCPA Geysers Power site. This project is aiming to deepen an existing NCPA well into hot rock, stimulate, drill a new well into the fractured reservoir, and extract the hot water to add to the existing electricity generation capacity. The project is partially funded by a DOE grant.
It is necessary to set the record straight with respect to Basel. I am quoting from the paper Markus Haring (the Basel Project manager) presented in last year's Australian AGEG/AGEA Geothermal Energy Conference:
"Prior to drilling the 5009 m deep Basel-1 well, a reconnaissance well was drilled to 2755 m and a refined microseismic monitoring system with five additional shallower wells was set up. The monitoring array was not only for visualizing microseismic activity during hydraulic stimulation, but also to observe the natural seismicity in this area, which is characterized by sparse, sometimes destructive seismicity, as shown by the historic Basel earthquake in 1356 with an estimated MW of 6.9.
The hydraulic stimulation process in the Basel-1 well was stopped after six days of injection when the induced seismicity gradually built up with magnitudes of up to ML 2.7. Four hours after shut-in a seismic event of ML 3.4 occurred, coinciding with the start of bleeding off the well to hydrostatic conditions. The short jolt, which was accompanied by a loud bang, scared the local population. The event exceeded the officially accepted threshold of ML 2.9 and led to a suspension of the project for the time being. Within 55 days after stimulation three aftershocks with ML >3 were recorded."
There is a small but finite risk of causing surface tremors by stimulating an EGS reservoir and Geysers is not too far from San Francisco (120 kilometers). Therefore, it is easy to understand the attention and web space being given to the treehugger article. The AltaRock stimulation of the Geysers well is expected to be done in August this year and it will be interesting to find about the maximum surface event caused during that stimulation. An extensive microseismic monitoring system using surface arrays and well instrumentation is used. According to the EIS for the project, the maximum surface tremor expected is 2.0 on the Richter scale, which is probably equivalent to a big truck passing next to your house.
Finally, I would like to welcome Dr Paul Petrie-Repar and Dr Katsuyoshi Tanimizu to the QGECE. Dr Paul Petrie-Repar is bringing us close to ten years of experience in designing and analysing gas turbines in Germany and in Australia. Due to the pull of his consulting practice, where he advises a global client base on turbine blade flutter and vibrations, he can only work with us part-time but I am sure we will get a lot of value during the days he is here. Dr Katsuyoshi Tanimizu is a recent PhD graduate of our Department and he only has a short-term appointment since he will return to Japan next year. Katsu will be doing computer modelling in turbines and the heat exchangers programs.
When I started talking about the new staff, I should also say that Dr Emilie Sauret just called me and said that she is starting next Monday. She is a graduate of the University Paris with a PhD from the same university on turbulence modelling and computational fluid dynamics with applications to jet engines and the like. Emilie will be joing the Turbines program our QGECE program. Watch this space. We are getting the troops and facilities in place and gearing up towards our aim of having a 5-kW supercritical turbine tested in our laboratories by the end of 2012.
New Mexico Tech will use geothermal heat to heat the university buildings. The plan will cost $11m and will save $800,000/year on natural gas costs. The VP-Research says that if the plant is built "the university could turn the hot topic of geothermal energy into a graduate engineering program that would complement its already world-class hydrogeology department."
In Iceland, the deep drill into a supercritical water reservoir is expected to complete next month. The hole is down to 3200 meters and is advancing at the rate of 100 m/day. The article suggests that the bottom-hole sensory gear already reached its temperature limit and they are drilling blind. This is the IDDP or Iceland Deep Drilling Project. The project is aiming to drill a 4-km hole into a supercritical water reservoir at 1100 oC. At these pressures, a hole blowout is a significant risk. A blowout in 1999 in another geothermal well in the island left a 100-ft-wide crater. That one was caused by the malfunction of a valve used to seal a wellhead.
A US web site quotes the DOE that nearly 40% of all US CO2 emissions are the result of space airconditioning and water heating. This is about the same as the CO2 emitted by the transportation sector. It highlights the importance of relatively low-temperature direct heating applications of geothermal energy. Is it the low lying fruit? It must be, especially in areas where space heating is a real need -- unlike Brisbane or most of Queensland.
In a Jakarta Globe article, the Indonesian Minister of Energy and Mineral Resources, Purnomo Yusgiantoro, reiterated his government's commitment to geothermal energy while opening the second unit at the Wayang Windu geothermal plant of PT Star Energy. The PT Star Energy announced an allocation of $350-400m to increase the plant capacity to 400MWe by 2012 from its present capacity of 280 MWe (110 + 170) or at a unit cost of US$3-3.3 m/MWe. The same article reports that the construction of Unit 2, which started in 2007, cost $200m or US$1.2m/MWe. There is a jump in the unit cost and it is probably the cost of the Unit 2 that is at fault. PT Star Energy will sell its electricity at 5.5 to 5.7 cents per kWh.
An article in The Australian today reports that the large energy companies, AGL and Origin Energy, expressed strong confidence in geothermal energy as a baseload provided for Australia. Origin is a joint venture partner with Geodynamics, while AGL has a 10 per cent stake in another aspiring geothermal producer, Torrens Energy, and the right to take up to a 50 per cent stake in its project in exchange for funding. The article also quotes geothermal producers who "believe they can have 2200MW of capacity generating power by 2020".
On Sunday, Queensland Premier Ms Blligh released The Queensland Renewable Energy Plan. The highlights of the plan include a joint study with the Clinton foundation to investigate a $1m-feasibility for a solar thermal plant in Queensland and a confirmation of the Bligh government's support for hot rocks geothermal energy by investing $5m in geothermal project development. Part of this $5m is probably the money that goes towards upgrading the Birdsville plant. Last Thursday, the Mines and Energy Minister Stephen Robertson announced earmarking $4.3m to upgrade the Birdsville geothermal plant. Birdsville plant is the first and only (presently) operating geothermal plant in Australia. The government investment is to subsidise a major upgrade by the plant owner, Ergon Energy, to reportedly at least double the capacity from its present 80 kilowatts.
Finally, I welcome Dr Andrew Rowlands to the QGECE. He started with the Centre today. Andrew has a PhD from UQ Chemical Engineering/AIBN. His main role at the Centre will be to figure out how to make sure we capture and retain the intellectual capital generated by the QGECE research fellows and students. This role includes writing communications and control software and hardware infrastructure for the QGECE Turbine and Heat Exchanger Laboratories; and pre- and post-processors to improve the useability and functionality of the in-house CFD code generated by other QGECE staff and students to design and analyse turbine and heat exchanger heat and mass transfer. Welcome aboard Andrew.
Last night I gave a seminar in Engineers Australia, Spring Hill, organised by the Society for Sustainability and Environmental Engineering. It was a double act with Gerry Grove-White talking before me. It was good to hear in Gerry's presentation that the well incident was fully under control with the Habanero #3 well plugged by several hundred meters of concrete placed near the bottom and the casing steel above removed for inspection (sent to SKM New Zealand who has been commissioned by GDY to identify the cause of the incident).
In other news, Panax announced a share offer with the aim of raising $9.3m to fund their Penola project (6.7MWe gross). Panax MD, Dr Bertus de Graaf said that after the capital raising Panax will have approximately $22 million in available cash, including the recently signed A$7 million drilling grant from the Federal Government.
Iceland's Reykjavik Energy operating Hellisheidi geothermal plant answers an article published on 26 May by ipsnews.net, where a number of environmental issues were raised with the Hellisheidi plant. I did not read the original article but it looks like some of them were related to that specific site, like H2S emissions from the site, and others were some superfluous commentary about the "renewability" of geothermal energy. I think both are answered adequately in the article put together by Leslie Blodgett, Geothermal Energy Association.
Raser Technologies announced that its Thermo 1 plant (a.k.a. the Hatch plant) is expecting to reach full capacity in the next quarter (July 2009). This plant will be interesting to watch with its modular construction based on 50 UTC PureCycle units. I must admit I like the way they announce their present situation and future plans through a video clip. According to the CEO's annoouncement in that clip, the company is expecting to generate 377 MW by 2013. I also noted that the company business plan is based omn selling the electricity at 9.8 cents/kWh.
I read this on an AZGS blog site and do not know if there is a more authoritative reference: US started a 5-year $5-million project to build the National Geothermal Data System (NGDS), which will become the data system for DOE's geothermal energy program nationally. The project starts next month and is headed by he Intermountain West Geothermal Center at Boise State University. Other members of the coalition are Univ. of Utah, Oregon Institute of Tech - Geo-Heat Center, Stanford Univ., US Bureau of Land Management, USGS, Arizona Geological Survey (AZGS), Great Basin Center for Geothermal Energy, and the Geothermal Energy Assoc.
In spite of the recent fluury of activities, geothermal is still running a distant third in renewable energy technologies. According to an article posted on the Wall Street Journal web site, even after a year of record investment, global outlays for geothermal are still kind of puny ($2.2 billion) compared to what wind and solar are garnering ($51.8 and $33.5 billion, respectively). At least, the article concludes, geothermal is riding an upward trend at DOE, unlike hydrogen fuel cells which have recently fallen out of favor.
I also read today that Kenya is seriously looking into geothermal energy to supplement its electricity generation capacity and allocated Sh5.7 billion (A$91m) to the newly formed state-owned Geothermal Development Company (GDC) with the aim of growing the geothermal capacity from the present 130 MWe to 760 MWe by 2019. The article quotes the Kenyan geothermal potential as 7000 MW.
I will leave my office now to attend a organising committee meeting for the forthcoming Australian Geothermal Energy Conference. You can still submit an Abstract by Friday this week if you want to join us this November. If we repeat last year's performance, we expect to have 300+ delegates in Brisbane in November.
This is for the students looking for a career opportunity. A joint AGEA/WWF report is predicting the creation of 17000 jobs in the geothermal energy sector over the next 40 years. So hurry up to get a piece of the action. The report is available from the WWF web site. I downloaded it but have not read it yet.
A good story on the Potter Drilling technology appeared yesterday. As you know, this is a drilling technology that works by thermally spalling the rock. I saw a demonstration at the Potter Drilling laboratory at the beginning of the year and it was impressive. Potter Drilling told me at that time that they had Google backing towards a field demonstration at the end of 2009.
Speaking of publications, you may also want to read our first publication from the reservoir program: The article by Dr Tonguc Uysal and company on Hydrothermal CO2 degassing in seismically active zones during the late Quaternary. in the Journal Chemical Geology. It is an interesting paper on explaining and demonstrating how ancient climate variations affect the geothermal system activity.
Newberry Geothermal in US is receiving $80m in stimulus funds for the Bend geothermal power plant. This is a national park and there is some sensitivity with the locals about the possible impact of the plant on the area, especially considering it will be a flash plant. The expected water temperature is 400oF or 204 oC, although two holes in 2008 failed to prove there is sufficient water for a flash plant.
What else has happened in the last 24 hours? I submitted my paper for the WGC 2010. It will probably be severaly outdated by the time the Conference starts but that is life.
Commonwealth Minister for Resources and Energy, Martin Ferguson, yesterday announced the Round 2 of Geothermal Drilling Program funding, which will provide $7m to support drilling of a deep geothermal well. The recipient company will have to provide matching funds. Two companies were successful in Round 1 in April 2009: MNGI(a subsidiary of Petratherm) for driling in Gippsland, Victoria, and Panax to drill Limestone Coast, South Australia .
In USA, Raser Technologies Inc expects to receive $150m in government-backed loan guarantees by late summer to add 46 MWe capacity (US$3.3m/MWe) to an existing geothermal plant in Provo, Utah. Razer Technologies Inc is a system integrator that opened a 14-MWe geothermal plant (the 'Hatch' plant named after the US Senator Orrin Hatch) earlier this year to sell electricity to Anaheim, California, based on fifty UTC PureCycle modules. The UTC PureCycle modules are 280-kWe units based on an organic Rankine cycle with R245fa (pentafluoropropane) as the cycle fluid.
According to the Antara news of Jakarta, the geothermal energy subsidiary PGE of the Indonesian oil and gas company PT Pertamina will receive a loan of US$500 million from the World Bank to finance nine geothermal power projects in the country. According to the Pertamina president, PGE needs US$3b for its 1342-MWe geothermal project portfolio and additional loans are being sought from Japan International Cooperation Agency (JICA) and the German Bank KfE. At a unit cost of US$2.23m/MWe, this sounds like a good deal to me.
In North America, geothermal stimulus money has already started to flow, with reported progress in financing for the Neal Hot Springs project in eastern Oregon. The DOE selected US Geothermal Inc to do a due diligence review of a $85m loan for this project to Magma, a Vancouver company soon to be listed on the Canadian stock exchange.
As the interest on geothermal energy grows, I copy a good quote from a daily news site: ""of all renewable energy sources, ( geothermal ) is probably the ugly, red-headed stepchild that no one knows about."
I noted that the fourth GeoTHERM Expo and Congress will take place in 25-26 February 2010 in Offenburg, Germany. Let us keep watching this web site for further news.
Alameda Power & Telecom announced that it will build a 1-MW solar photovoltaic array to power its pump station that pumps waste water from surrounding areas into its Geysers geothermal reservoir. The headline excited me first as I thought mistakenly that this would be the first successful solar-geothermal hybrid plant. It is not. I do not think the solar-produced electricity would be cheaper than the Geysers' own output. But there must have been some grant money involved to make it attractive.
Electratherm announced that its 50-kW ORC system will be used by Gulf Coast Green Energy at a geothermal energy project funded by the "Research Partnership to Secure Energy for America". This is a compact low-temperature system capable of utilising waste heat from a 93oC hot brine resource or similar waste heat stream. The cycle fluid is Honeyweel refrigerant R245FA. ElectraTherm launched this system with an installation at Southern Methodist University’s Geothermal Laboratory in June 2008.
A news brief that comes today states that there are about 215 commercial geothermal projects under construction at the moment in 24 countries and their successful completion will nearly double the present installed geothermal cpaacity of 10,500 MW. In US alone, the confirmed geothermal projects in the construction pipeline amount to 4400 MWe. It looks like it will not be long before geothermal energy stopps running a distant second to solar and wind iin generating zero-emission electricity.
I have been reading more about the DOE funding. The so-called EGS Component R&D grants have a funding ceiling of US$5 million to fund 80 percent and 50 percent of a program's cost respectively. I am not sure what th eimplications are for increased US-Australian R&D collaboration, which we all want.
In addition to the confirmed pipeline of projects above, new players are jumping on the geothermal bandwagon every day. Chilean Mining Ministry launched a tender yesterday for 20 geothermal exploration licences to tap ointo the reported 2000 MWe geothermal potential. Large companies are expected to place tenders and I copy the quote by one of the large companies: ""To enter the geothermal business you need a lot of capital and patience" How true. And this is why the huge geothermal potential in many countries still remain to be realised but it is changing. In the subcontinent, Tata Power announced yesterday plans to produce 5 MW of power, each from geothermal and solar power plants in Gujarat, with an investment of Rs 200 crore. Apparently Tata Power is aiming to produce 25% of its electricity from renewable sources by 2017. Tata Power is a major investor with the purchase of about 30 million GDY shares (or 11.4% of the total) in September 2008.
When talking about the shares, here is an interesting piece of news about the Australian geothermal shares. A benchmark used to measure the performance of the stock market listed geothermal companies is The Australian Geothermal Index. it looks like this index has fallen 39 percent since the start of July of last year. Australian geothermal sector is now worth approximately AUD$450 million (US$364.5 million) compared with AUD$650 million (US$526.5 million) a year ago according to Bahay Ozcakmak of Activated Logic.
Congratulations to Richard Hillis as the University of Adelaide receives $1.6 million from the South Australian State Government to establish a new geothermal research centre over the next two years. ""The new centre will conduct research into enhanced geothermal systems, and in power systems that provide an economically and environmentally viable delivery of geothermal energy."
In the States, in addition to what president Obama promised last week, Secretary Chu announces another $50m of recovery act funding to accelerate deployment of geothermal heat pumps yesterday.
In Germany, the new Unterhaching geothermal power station near Munich was opened by the Environment Minister Sigmar Gabriel. The binary plant is based on the Kalina cycle and its design power output is 3.35 MWe with the waste heat (16 MWe) to be used in space heating. According to the project web site, the plant is tapping into a 120-130 oC reservoir at 3950 m depth. The production hole is producing 150 l/s of hot water, which is pretty impressive (the diameter for the first casing is 16" for the injection well -- this is the only information I have about the well diameters, please let me know if you have data on ALL the diameters for this project; I am very impressed with the reported flow rate of 150 l/s). This is a delayed start for the plant since the first trial had to be stopped last year due to problems with heat exchanger sealing and turbine vibrations. According to my notes from the Landau Conference in 2007, the project cost was estimated to be €70m at that time with the breakdown as 33% for drilling (€18m), 39% heating network (network length = 20 km), and 28% top-up heating plant and auxiliary systems.
Plans were announced yesterday to build a 3-MWe hot-fractured rock geothermal plant in Cornwall (UK) by EGS Energy. Here are some parameters about the project as I got it from a Daily Mail article:
This is going to be first geothermal plant in UK producing electiricity. The newspaper article quotes experts who believe that the energy stored in Cornwall granite is enough to provide one-tenth of Britain's electricity. The drilling is expected to start soon and the cost is estimated to be 15 million pounds (A$30 million).
In Australia, Petratherm announced yesterday that the giant 2000HP Le Tourneau “Lightning Rig” #828 owned by Weatherford International is now being assembled in Paralana to start drilling soon. It took 75 trucks to transport the rig to the site.
The Australian reports today Greenearth Energy modelling that points to a 150oC geothermal resource 2.9 km below the two Loy Yang brown coal power stations. Greenearth holds the geothermal exploratin licences for the region. Could this be a potential site for a CO2 geothermal siphon ?
In another continent, US is going back to supporting geothermal energy. Last week, President Obama announced $350 million funding for geothermal energy:
This is the first major federal funding in US since 1983. The funds will be administered by the Department of Energy. In the same announcement, President Obama also allocated $117.6m for solar energy. It is interesting to compare this against the Australian Commonwealth's priorities about the renewable energy technologies.
Click here for an interesting article on the implications for investors looking to invest in geothermal companies.