A beautiful thing: The beauty of it, especially in South Australia, which has few water resources, is that the water used in the process is continually under pressure and never turns to steam. This means that the water in the system is continually recycled. Since the first geothermal exploration licence in Australia in 2001, 16 companies have now joined the hunt for geothermal energy resources in 120 licence application areas. This represents a national investment of $570 million. These geothermal energy resources – although, as I said, many of them are in South Australia – are right around the country, right through Australia, and represent a very exciting possibility for energy generation.
But carbon price needed: However, and I alluded to this in the beginning of my speech, one of the problems is that the anticipated cost of the enhanced geothermal system energy has been estimated at $49 to $60 per megawatt hour. So without carbon pricing many forms of conventional energy generation, such as coal and natural gas, are much more cost-effective. Another complicating factor is that most, but not all, of the geothermal energy resources are in remote areas. That means that the cost of transmission to the energy market is also a factor in pricing.
Keep tech in Aus: However, it has been estimated that six per cent to eight per cent of Australia’s power could be produced by this source by 2030 if a 70 per cent reduction of emissions is required. We have the potential here to export this technology to other countries which, if there is a carbon pricing regime instituted around the world, I am sure will be keen to utilise this kind of technology as well. We would not want to be in the position where, once again, overseas companies buy the research and development and are then responsible for the commercialisation of this kind of energy and sell it back to us.
Govt support vital: Recently the 2006 annual report of the Australian Geothermal Implementing Agreement was released. That is a group consisting of most of the companies involved in this process looking at how they go forward. I am certainly hopeful that they get strong support from the government and that next time around we have a Labor government in place that is willing to look seriously at a carbon pricing regime and how companies in this form of energy, where carbon emissions are very low, will be properly supported and encouraged by the Federal Government.