Geothermal Energy FAQs

Greenearth Energy's Geelong Geothermal Power Project

The Victorian Government recognises that the state has a huge renewable resource potential and is committed to ensuring Victoria is a leader in renewable and clean energy development. The Government’s investment in geothermal projects to help unlock this potential underscores this commitment.

Geothermal energy is a clean, renewable energy source that has the potential to provide a constant flow of base-load power to Victoria’s electricity grid. It has the potential to play an important role in changing our energy mix and lowering our carbon emissions.

What is geothermal energy?

Geothermal energy is generated from naturally occurring heat from hot rocks and hot water reservoirs deep beneath the earth’s surface.

As can be seen from the figure below, more than 20 permits covering most of Victoria have been issued to companies exploring for commercial geothermal resources.

Click the map to view a larger version.

Current geological data indicates the likely presence of large hot sedimentary aquifers (HSA’s) running from below Geelong to beyond the border with South Australia.  This is at a depth of between 3,500 to 4,200 metres. It includes the area covered by Geothermal Extraction Permit (GEP) 10, held by Greenearth Energy and where the proposed Geelong Geothermal Power Project is planned to be located.

In Australia, there are two types of geothermal resources under development - they are: Hot Sedimentary Aquifers (HSA) and Enhanced Geothermal Systems (EGS or Hot Rock (HR) systems).  Both types of resources are being developed for power generation and for direct-use projects.  To date, proposed drilling projects in Victoria are HSA projects aimed at power generation.

For more information about methods for extracting geothermal energy, please see the Geothermal energy in Victoria Landholder Information booklet.

Is there a risk of seismic activity?

Geothermal drilling is similar to other drilling methods, such as those used in the petroleum and mineral exploration industries.

Prior to approval of operations plans, the DPI assesses all risks including seismic activity. Greenearth Energy will be required to undertake a thorough independent seismic assessment before approval will be given by the DPI. In addition, the drilling methodology, well design and construction must also meet the highest standards.

Will exploration drilling affect local groundwater?

Prior to commencing any activity the permit holder must submit an Operation Plan which will not be approved by DPI unless the drilling methodology, well design and construction proposed is such that groundwater is protected. Drilling is well understood and a common practice nowadays, after several decades of petroleum and minerals drilling in Victoria. Drilling companies are required to ensure the well is securely cased to prevent contamination of aquifers during and after drilling. 

Can the water be used for other activities?

The hot saline water that will be used to generate electricity will be brought to the surface from depths of up to 4 km (some 3kms below aquifers of beneficial use) and has no other beneficial use than as geothermal resource fluid.  This hot saline water is then returned to the original aquifer, albeit slightly cooler, in a closed looped system.
 
Water allocations affected by geothermal operations may be subject to the Water Act 1989, while the quality of water discharges (eg. water injected back into groundwater) is regulated by the Environment Protection Act 1970.

Or the Australian Geothermal Energy Association website.

What is the Geelong Geothermal Power Project?

The Geelong Geothermal Power Project, being developed by Greenearth Energy, is to be located near Geelong, about 11 kilometres north-west of Anglesea (GEP10). The project comprises three possible stages: drilling to prove the geothermal resource; a 12 MW demonstration plant; and if the hot water resource is proved, development of a commercial project.

The project, which could eventually power up to 100, 000 homes with emissions-free energy, is the first to be recommended for funding under the Victorian Government’s Sustainable Energy Large Scale Demonstration Program.

Victoria’s South-West is rapidly emerging as a cleaner-energy hub. The development of projects like this is great news for all Victorians who will see not only the environmental benefits from developing cleaner electricity generation, but the economic benefits from new renewable energy jobs.

What Government support is being provided?

The Victorian Government through its Energy Technology Innovation Strategy has allocated up to $25 million for the Geelong Geothermal Power Project as a new large-scale, pre-commercial sustainable energy demonstration project.  

The project was assessed by an independent panel and the ETIS project funding was announced.

ETIS is supporting this project in two stages:

• Stage 1: the Government will provide $5 million this proof-of-concept stage, which involves work to confirm the extent and quality of hot sedimentary aquifers (HSA) at the project site. This will involve drilling two deep geothermal wells and flow testing. The overall estimated cost of stage 1 is $30 million, with $18 million being provided by Greenearth Energy and $7 million from the Commonwealth Government.
  
  
• Stage 2: the Government will provide $20 million for the establishment, connection and operation of a $74 million 12 MW demonstration geothermal energy plant. Stage 2 will only go ahead if commercial resource is proved in Stage 1.

The Geelong Geothermal Power Project was also successful in attracting $7 million under the Federal Government’s Geothermal Drilling Program (GDP) for Stage 1.

What is the first step in the project?

Greenearth Energy has informed the Government and the public that its initial investigations will involve two geothermal wells being drilled through sedimentary sands into a deep, hot sedimentary aquifer.  The first well is a production well, where existing hot water will be brought to the surface.  The second well is a injection well, where the water brought to the surface is returned to the aquifer.  Both of these wells will be fully cased and cemented ensuring that the production and injection of the water into the deep sedimentary aquifer is undertaken in a closed loop system.

Upon, the successful drilling of both wells, extensive flow testing will be carried out to enable the proper characterisation and assessment of the resource. 

This will be used to determine, whether to advance to Stage 2, Demonstration.

Further information can be found on the Greenearth Energy website.

Regulation of geothermal drilling activities

The Geothermal Energy Resources Act 2005 (GER) was developed to ensure that Victoria’s geothermal resources are developed in an environmentally and socially aware manner. 

Under the Act, companies must submit a detailed work Operations Plan for approval by the Department of Primary Industries (the government Regulator for the GER), prior to any work commencing.  This plan contains information on how the company will manage any risks associated with the proposed activity, including risks to the environment, infrastructure and/or the community.  All projects are also subject to the government’s Native Vegetation Management Framework.

Geothermal drilling is similar to other drilling methods, such as those used in the petroleum and mineral exploration industries. The Geelong Geothermal Power Project is targeting extraction from a hot sedimentary aquifer - which does not involve significantly stressing geological faults. However, prior to approval of any Operations Plan, the DPI assesses all risks including seismic activity.

Community Consultation

As part of the GER Operations Plan, all companies are required to undertake community consultation with local stakeholders in the community.  This is also a requirement under the ETIS Large Scale Demonstration Program for all sustainable energy projects.  Find out more about community engagement requirements.

Under the GER there is an effective right of entry, subject to approval of the Operations Plan, but it does not provide for compulsory acquisition of land. Before any drilling operations can proceed, a company must have the consent of the landowner. Guidelines have been prepared for the information of owners and occupiers of private land that may be impacted by an earth resources industry. These guidelines contain frequently asked questions and are intended as a guide only. They do not replace legislation. 

Greenearth Energy has been in contact with the local communities including Gherang and Wensleydale since January 2010 and will provide opportunities for local input over the life of the project through the community consultation processes put in place.