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Geothermal

energy and water use


RPS Aquaterra and Hot Dry Rocks
Waterlines Report Series No 72, February 2012

Waterlines
This paper is part of a series of works commissioned by the National Water Commission on
key water issues. This work has been undertaken by RPS Aquaterra Pty Ltd in partnership
with Hot Dry Rocks Pty Ltd on behalf of the National Water Commission.

Commonwealth of Australia 2012


This work is copyright.
Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by
any process without prior written permission.
Requests and enquiries concerning reproduction and rights should be addressed to the
Communications Director, National Water Commission, 95 Northbourne Avenue, Canberra
ACT 2600 or email bookshop@nwc.gov.au.

Online ISBN: 978-1-921853-56-2


Geothermal Energy and Water Use, February 2012
RPS Aquaterra and Hot Dry Rocks

Published by the National Water Commission


95 Northbourne Avenue
Canberra ACT 2600
Tel: 02 6102 6000
Email: enquiries@nwc.gov.au
Date of publication: February 2012
Cover design by: AngelInk
Front cover image courtesy of Hot Dry Rocks Pty Ltd
An appropriate citation for this report is:
RPS Aquaterra and Hot Dry Rocks, 2012, Geothermal Energy and Water Use, Waterlines,
National Water Commission, Canberra

Disclaimer
This paper is presented by the National Water Commission for the purpose of informing
discussion and does not necessarily reflect the views or opinions of the Commission.

Contents
Executive summary
1.
Introduction to geothermal resources
1.1 Overview
1.2 Geothermal energy
1.3 Engineered geothermal systems (EGS)
1.4 Hot sedimentary aquifers (HSA)
1.5 Low enthalpy aquifers (LEA; Direct Use)
1.6 Ground source heat pumps (GSHP)
1.7 Aquifer thermal energy storage (ATES)
1.8 Geothermal systems assessment (GSA)
2.
Geothermal resources in Australia
2.1 Geological background
2.2 Current status of geothermal resource utilisation
2.3 Geothermal energy legislation
2.4 Future developments and trends in geothermal resource utilisation
29
2.5 Estimate of total industry growth/development
3.
Geothermal water use: requirements and potential effects
38
3.1 Overview
3.2 EGS and HSA water-related impact issues
3.3 Low enthalpy geothermal systems impact issues
3.4 Geothermal power plants
3.5 Projected industry water requirements
4.
Availability of water resources in geothermal areas
4.1 Overview
4.2 Water budget
4.3 Surface water
4.4 Groundwater
4.5 Co-produced fluids
5.
Water quality
5.1 Overview
5.2 Water salinity
5.3 Water chemistry
6.
Water policy and management
6.1 NWI and geothermal systems
6.2 Groundwater management
6.3 Guiding principles for geothermal energy and water planning
6.4 Future policy needs for an expanding industry
7.
Conclusions

Tables
Table 1: Installed stock of ground source heat pumps by the end of 2007 (EHPA
2008)..........................................................................................................................................
Table 2: Preliminary estimate of develoment and operational water requirements
for two different scenarios of projected geothermal electricity generating
capacity in Australia....................................................................................................................
Table 3: Equivalent geothermal power from co-produced hot water associated
with existing petroleum production in selected states of the US.................................................

Figures
Figure 1: Tectonic plate boundaries of the Earth (modified from Geothermal
Education Office 2000).................................................................................................................

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IV

Figure 2: Worldwide distribution of geothermal power plants (modified from


Geothermal Education Office 2000).............................................................................................
Figure 3: Geothermal energy applications in Australia (modified after Ayling
2007a)..........................................................................................................................................
Figure 4: Schematic design of an EGS development..........................................................................
Figure 5: Schematic design of a binary cycle power plant (modified after Ayling
2007a)..........................................................................................................................................
Figure 6: Schematic design of an HSA geothermal system (modified after
Driscoll, 2006)..............................................................................................................................
Figure 7: Industrial applications for LEAs (modified after Greenearth Energy
2011)..........................................................................................................................................
Figure 8 Closed-loop GSHP showing various orientations of pipework (modified
after Ayling 2007b)......................................................................................................................
Figure 9: The GSA framework as described by Cooper and Beardsmore (2008)
...................................................................................................................................................
Figure 10: Heat flow map of Australia showing extent of electricity grid
infrastructure (HDR 2011)..........................................................................................................
Figure 11: Broad divisions of the Australian continental crust, based on basement
rock age.....................................................................................................................................
Figure 12: Schematic design of the Birdsville power station (modified after Ergon
Energy 2008)..............................................................................................................................
Figure 13: Heat flow map of Australia with geothermal exploration permits
superimposed.............................................................................................................................
Figure 14: Total sales of GSHP in the eight most significant European countries
200407 (EHPA 2008)................................................................................................................
Figure 15: Comparison of UK heat pump installations compared to selected
European markets 200407 (EA 2009)......................................................................................
Figure 16: Australian average annual rainfall based on standard 30-year
climatology (19611990) (BoM 2009), (annotated with geothermal case
study projects and main concentrations of geothermal energy exploration
licences).....................................................................................................................................
Figure 17: Australias 245 river basins, with geothermal licences superimposed
(licences correct as of 1 December 2010)..................................................................................
Figure 18: Schematic of the subsurface groundwater environment (DNRM 2005)
...................................................................................................................................................
Figure 19: Australias 367 GMUs with geothermal licences superimposed
(licences correct as of 1 December 2010)..................................................................................
Figure 20: Sustainable yield of each GMU in Australia (from AWR 2005) with
geothermal licences (correct as of 1st December 2010) superimposed......................................
Figure 21: TDS concentrations in the Cadna-owieHooray Aquifer in the Great
Artesian Basin (GAB) (from Radke et al. 2000). Distinctive regions of TDS
concentrations can be delineated which are the result of proximity to
recharge areas and direction of groundwater flow......................................................................

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Abbreviations and acronyms


$

Australian dollars

1D

one-dimensional

ABARE

Australian Bureau of Agricultural and Resource Economics

ACT

Australian Capital Territory

AGEA

Australian Geothermal Energy Association

AGEG

Australian Geothermal Energy Group

ATES

Aquifer Thermal Energy Storage

AWR 2005

Australian Water Resources 2005 (the baseline assessment of water


resources for the National Water Initiative)

AWRIS

Australian Water Resources Information System

BoM

Bureau of Meteorology

CAGA

Central Adelaide Groundwater Area

CO2

carbon dioxide

CoAG

Council of Australian Governments

CSG

coal-seam gas

DECCW

Department of Environment, Climate Change and Water (NSW)

DERM

Department of Environment and Resource Management (Queensland)

DfW

Department for Water (SA), former DWLBC

DNRM

Department of Natural Resource and Water (Queensland); now DERM

DPI

Department of Primary Industries (Vic.)

DPIPWE

Department of Primary Industries, Parks, Water and Environment


(Tasmania)

DRET

Department of Resources, Energy and Tourism (Cth)

DSE

Department of Sustainability and Environment (Victoria)

DWLBC

Department of Water, Land and Biodiversity Conservation (SA); since July


2010 Department for Water (DfW)

EA

Environment Agency (United Kingdom)

EGS

Engineered Geothermal Systems

EHPA

European Heat Pump Association

EIR

environmental impact report

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VI

EPA 1970

Environment Protection Act 1970 (Vic.)

ETS

Emissions Trading Scheme

FIT

feed-in tariff

GAB

Great Artesian Basin

GABCC

Great Artesian Basin Coordinating Committee

GABSI

Great Artesian Basin Sustainability Initiative

GAP

Groundwater Action Plan

GDP

Geothermal Drilling Program

GEA 2010

Geothermal Energy Act 2010 (Qld)

GERA 2005

Geothermal Energy Resources Act 2005 (Vic.)

GFC

global financial crisis

GL

Gigalitre = 1 000 000 000 litres = 1000 Megalitres

GL/a

gigalitres per annum

GMA

Groundwater Management Area

GMU

Groundwater Management Unit

GSA

Geothermal Systems Assessment

GSHP

Ground Source Heat Pump

GW

Gigawatt = 1 000 000 000 watts = 1000 Megawatts

GWh

Gigawatt hour = a unit of energy equal to 1 000 000 000 Watt hours

HDR

hot dry rock

HE

hydrogen embrittlement

HFR

hot fractured rock

HR

hot rock

HSA

hot sedimentary aquifer

HWR

hot wet rock

kbbl

thousands of barrels (1 kbbl is approximately 159 kL)

kL

kilolitre = 1000 litres

km

kilometre = 1000 metres

kW

kilowatt = 1000 watts

kWe

kilowatt electric = 1000 watts of electric capacity

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VII

kWh

kilowatt hour = a unit of energy equal to 1000 watt hours. The kilowatt hour
is most commonly known as a billing unit for energy delivered to
consumers by electric utilities.

litre

LEA

low enthalpy aquifer (also referred to as direct use)

L/min

litres per minute

L/s

litres per second

metre

Ma

million years

MA 1992

Mining Act 1992 (NSW)

MDB

MurrayDarling Basin

MDBA

MurrayDarling Basin Authority

mg/L

milligrams per litre

ML

Megalitre = 1 000 000 litres = 1000 kilolitres

MRDA 1995

Mineral Resources Development Act 1995 (Tas.)

MW

Megawatt = 1 000 000 watts = 1000 kilowatts

MWe

Megawatt electric (the electrical power produced from a geothermal


system)

MWt

Megawatt thermal (the thermal power produced from a geothermal


system)

mW/m2

milliwatt per square metre

NCG

non-condensable gas

NRMA 2004

Natural Resources Management Act 2004 (SA)

NSW

New South Wales

NT

Northern Territory

NWC

National Water Commission (also referred to as the Commission)

NWI

National Water Initiative

ORC

Organic Rankine Cycle

PCV

permissible consumptive volumes

PGEA 2000

Petroleum and Geothermal Energy Act 2000 (SA)

PGER 2000

Petroleum and Geothermal Energy Regulations 2000 (SA)

PGER 2007

Petroleum and Geothermal Energy Resources Act 2007 (WA)

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VIII

PIRSA

Department of Primary Industries and Resources of South Australia

REDP

Renewable Energy Demonstration Program

REF

Renewable Energy Fund

RET

Renewable Energy Target

RSPT

Resource Super Profit Tax

RWIA 1914

Rights in Water and Irrigation Act 1914 (WA)

SA

South Australia

SAHFA

South Australian Heat Flow Anomaly

SEO

Statement of Environmental Objectives

SWMA

surface water management area

TDS

total dissolved solids

TJ

terrajoule (derived unit of energy)

WA

Western Australia

WAP

water allocation plan

WCD

Water Control District

WMA 1999

Water Management Act 1999 (Tas.)

WMA 2000

Water Management Act 2000 (NSW)

WMP

water management plan

WSPA

Water Supply Protection Area

UK

United Kingdom

year

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IX

Glossary
advection

The process where energy (heat) transfers via flow of fluids (water)
from one level to another (convection is a special case of advection
whereby fluid moves in closed-loop pathways).

blowdown

The removal of liquids and/or solids from a process/storage


vessel/pipeline by the use of pressure for the purpose of controlling
boiler water parameters within prescribed limits to minimise scale,
corrosion, etc. Blowdown is also used to remove suspended solids
present in the system, caused by feedwater contamination, by
internal chemical treatment precipitates, or by exceeding the
solubility limits of otherwise soluble salts, and the water deficit is
subsequently made up by more feedwater.

closed-loop system

A closed-loop system has a geological context, whereby any


geothermal working fluid brought to the surface via a production well
is pumped back underground to the same geological unit via an
injection well; these systems involve very low consumptive use, with
water required only to top up if there are minor water losses. The
GSHP sector, however, adopts a slightly different (engineering
context) definition of closed-loop to describe the circulation of a
refrigerant around a closed-loop of pipework (in some cases, air is
used).

conduction

The process whereby energy (heat) transfers from one rock unit to
another via direct contact.

consumptive use

The use of water for private benefit consumption purposes,


including irrigation, industry, urban and stock and domestic use.
(NWI definition.)

crust

The outermost layer of the Earth.

enthalpy

A measure of the total energy of a thermodynamic system. Enthalpy


is a measurement of heat and is synonymous with temperature.

feedwater

Water fed to a system to make up or replace that which is lost by


evaporation or other causes such as blowdown.

fumarole

A small opening (fissure) in the Earths crust through which smoke


and gasses are emitted; they are often associated with volcanoes.

geyser

A hot spring characterised by intermittent turbulent discharge of


water and steam.

hot springs

A source of geothermally heated groundwater that emerges onto the


surface of the Earth from underground.

lava

Magma that reaches the Earths surface is called lava.

magma

Molten rock found beneath the surface of the Earth which commonly
collects in chambers beneath volcanoes.

open-loop system

Open-loop systems in the GSHP industry use water drawn from a


well or surface water body (e.g. lake/stream) to circulate through the
system and heat exchange unit, with the water being returned to the
ground via a recharge well, or discharged to the surface.

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Organic Rankine Cycle

ORC is named for its use of an organic fluid within a Rankine cycle
heat recovery process to generate energy from lower temperature
sources, such as geothermal heat, solar ponds etc. (i.e. compared
to coal- or gas-fired).

parasitic loading

Some of the energy produced by the power plant is consumed by


the power plant itself (for pumps, fans, etc.), and so cannot be sent
to the grid to meet consumer demand.

reservoir

A large volume of underground hot water and/or steam hosted in the


rock within connected fractures or pores through which fluid can
circulate; the reservoir can be engineered through fracture
stimulation (general practice involves injection of pressurised fresh
water, without the incorporation of chemicals) and working fluid can
be artificially introduced.

volcano

An opening on the Earths crust through which lava, gas and ash
can escape.

working fluid (carrier)

A working fluid (or carrier) is required to extract heat from the EGS
to the surface. The fluid is usually water in liquid or vapour phase,
depending on its temperature and pressure.

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XI

Executive summary
Australia lacks conventional hydrogeothermal resources (e.g. similar to those in New
Zealand), and Australias only currently operating geothermal power plant, located in
Birdsville, Queensland, yields just 80 kWe (net) from a non-conventional hot sedimentary
aquifer (HSA) system. While Australia is seeking to position itself as a leading global
developer of geothermal energy technologies, through collaborative initiatives by Australian
governments, academia and industry, other countries are also investing in this nascent sector.
For example, Germany is geologically similar to Victoria but with higher feed-in tariff
arrangements providing significant financial support, and it already has four non-conventional
geothermal energy electricity plants in operation, totalling about 7 MWe.
Australia has excellent potential for significant energy production from non-conventional
engineered geothermal system (EGS) and HSA developments. EGS and HSA developments
currently underway in Australia are each in the order of tens of megawatts in scale, the most
advanced to date being located in South Australia. There is also considerable scope for
energy production from shallow systems such as low enthalpy aquifers (LEA) and ground
source heat pump (GSHP) applications. Given the scarcity of water resources in Australia,
however, it is unlikely that there will be growth in (shallow) aquifer thermal energy storage
(ATES) applications in the foreseeable future.
The geothermal legislation in all jurisdictions is subject to the provisions of the various state
and territory water acts, and existing arrangements are considered to be capable of managing
geothermal project water issues if implemented appropriately (with some notable exceptions).
Improved integration would be aided by removing exemptions in geothermal legislation and
possibly by combining legislation within the one act to cover the range of water balance
elements (e.g. extraction, reinjection, and discharge to environment) that are controlled by
separate water and/or environmental legislation.
Exemptions from the geothermal legislation for low enthalpy projects apply in four
jurisdictions: Victoria (less than 70 C or shallower than 1000 m); Northern Territory (less than
70 C); New South Wales (less than 100 C); and Western Australia (small-scale GSHP or
non-commercial direct use). However, no state or territory has an exemption from the
provisions of the water legislation for water-interfering or water-taking activities associated
with geothermal projects (other than the nominal but not material exemption in Tasmania).
Consumptive water-use requirements are generally quite low for exploration and construction
stages (including EGS and HSA), which involve water use and disposal for well drilling,
construction and testing activities. These water-related requirements are comparable to those
for conventional drilling activities and thus could be managed under existing permit
arrangements for water well drilling and testing issued by the relevant state or territory
jurisdiction. Depending on the scale of the development, the volume of water involved over a
specified time frame (e.g. as the geothermal field is developed over a number of years) may
be deemed significant, and the sustainability of the extraction could be considered under
existing water management arrangements in each of the jurisdictions.
Water-use requirements for different geothermal systems can vary markedly. Most operating
EGS/HSA geothermal systems for electricity generation recirculate the working fluid back into
the target extraction formation. These closed-loop systems involve little to no consumptive
water use, other than minor top ups (i.e. ~1% of total throughput). These water-use
requirements are consistent with those required for most mining operations and thus could be
managed under existing arrangements by the relevant jurisdiction.
Project approvals for closed-loop systems should incorporate requirements for management
strategies should fluid losses be experienced, including addressing potential increased water
use, water quality issues and thermal balances (all of which the geothermal operation would
seek to manage carefully to ensure project viability).

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XII

For water planning purposes, the potential geothermal energy water requirements are
estimated to be around 1 gigalitre per annum (GL/a) per 40 MW installed capacity of
electricity generation (approximately 3 ML/d per 40 MW). This includes allowances for
construction and operational requirements for geothermal development over a range of EGS
and HSA assumptions but excludes the cooling requirements of electricity generating plants
(by definition, it also does not allow for other low enthalpy or direct-use types of geothermal
development).
Some geothermal systems are open-loop when operational (usually direct use shallow/low
enthalpy systems, and, uniquely, the Birdsville HSA system), where the water is not
recirculated back into the target extraction formation. These systems do involve water use
and disposal, usually to/from separate water sources (e.g. often involving a surface water
body). Options for sourcing and/or discharging of water for open-loop systems may trigger the
need for specific licensing and planning requirements due to the higher risk of environmental,
social and economic impacts, which could be managed appropriately under existing water
policy and legislation. If there is significant growth in low enthalpy and GSHP systems then
future planning and policy should consider heat balance issues along with water balance
issues.
For geothermal power plants, the primary consumptive water requirement during the
production phase is for cooling purposes, although there are some minor ancillary
requirements such as power plant amenities and facilities. Geothermal power plants in
Australia are likely to use Organic Rankine Cycle (ORC) binary units. Where geothermal
power plants are located remote from plentiful water sources, the combination of a hot climate
and limited access to water will require innovative designs for power plant cooling systems.
In relation to the potential for impacts, the geothermal industry has some distinct differences
compared to other resource sectors (mining, oil and gas), notably that EGS and HSA systems
do not involve extraction of large volumes of rock/ore or oil/gas. Although EGS use similar
drilling and well construction techniques to the oil and gas sector the major difference is that
hydraulic fracture stimulation for EGS typically uses only water (no chemicals). A successful
EGS is also developed at great depth (up to 5000 m), with resistive layers above the reservoir
that limit the potential for transmission of impacts towards the surface (e.g. from fracture
stimulation or thermal gradients). HSA (and low enthalpy) systems are developed at lower
temperatures and/or shallower depths, but these systems rely on the natural permeability of
the aquifers, and the related flow and circulation patterns (i.e. do not involve fracture
stimulation).
State or territory governments should consider a precautionary and adaptive approach to
manage the potential environmental effects of any proposed fracture stimulation for
geothermal purposes. For example, these activities could be constrained to the use of fresh
water (i.e. no chemicals, proppants, gels, etc) and at depths in excess of 1000 m, as this
would limit the potential for impacts without overly constraining the practices applied to
geothermal developments. However, there also needs to be scope for site-specifics to be
considered and investigated in detail by proponents to establish impacts and management
plans for alternative approaches.
This report identifies a number of guiding principles that should be considered by jurisdictions
to manage the potential impacts of geothermal-related water use, noting that geothermal
legislation is subject to specific water acts for the management of water take. Fundamentally,
geothermal companies should be treated under the same rules and regulations as other
industrial water users, adequate allowance should be made in water sharing/allocation plans
for those industrial uses, and project plans need to clearly and transparently communicate the
water management objectives and regulatory regimes before they are approved.

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XIII

1. Introduction to geothermal
resources
1.1 Overview
Geothermal projects require access to water during several stages of development and
operation. Some current geothermal exploration and development activity occurs in areas of
low water supply potential and/or high water demand. However, water resources, and in
particular groundwater resources, are still to be quantified in many parts of Australia. Access
rights to water for geothermal applications will therefore require careful management and
discussion by both water planners and the geothermal industry.
The Intergovernmental Agreement on a National Water Initiative (NWI) was signed at the
25 June 2004 Council of Australian Governments (CoAG) meeting. Through the NWI, the
Commonwealth and state governments have agreed on actions to achieve a more cohesive
national approach to the way Australia manages, measures, plans for, prices, and trades
water. While this initiative remains a work in progress, this report provides some insight into
how to address the water use implications relating specifically to the geothermal industry.
Objectives of this report are to research and summarise current and prospective geothermal
energy technologies, determine consumptive water use requirements and volumes, and
promote discussion around water policy and management as it relates to the geothermal
energy industry. This report also aims to:

summarise the types of geothermal technologies for the spectrum of uses, from heat
transfer through to electricity production, and evaluate their impacts on water usage

quantify the extent and location of existing geothermal resource usage in Australia, and to
predict future development trends

determine consumptive water use requirements across the geothermal resources industry

quantify the volume of this consumptive water use across all facets of the geothermal
resources industry

consider water resource availability in the different geothermal production areas and the
implications of potential water use

identify any water quality or groundwater technical issues that will need to be taken into
consideration with the expansion of the geothermal energy industry

discuss geothermal energy use and water use in the context of the NWI

develop a discussion around water policy and management as it relates to the


geothermal resources industry so that the report offers guidance as well as being used as
a practical resource by water managers for consideration in water management and
planning decisions.

This report is not designed to be a detailed technical report on geothermal energy; however,
the reader is directed to further publications should more detail be required. The report is
predominantly targeted towards water planners and others who have vested interests in the
water and energy industries to provide a baseline of information for consideration in water
management and planning decisions.

1.2 Geothermal energy


Geothermal energy is the thermal energy stored beneath the surface of the Earth, and is
distributed between the host rock and natural fluids contained in pores and fractures within
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the host rock. This heat is mainly the result of the radioactive decay of naturally occurring
potassium, thorium and uranium isotopes in the Earths crust, which comprises ~80% of the
total heat budget. The remaining heat originates from the planets primordial development.
In the geological realm, heat moves from the Earths interior toward the surface as the result
of a number of heat transfer mechanisms. The two principal mechanisms of heat transfer are:

conductionthe process whereby energy (heat) transfers from one rock unit to another
via direct contact

advectionthe process where energy (heat) transfers via flow of fluids (water) from one
level to another (convection is a special case of advection whereby fluid moves in closedloop pathways).

For instance, the heat under the crust melts rocks to produce magma, which wells up towards
the surface of the crust due to buoyancy effects. The magma either reaches the surface,
where it forms lava, or slowly cools and crystallises within the crust as granite. Surface
manifestations of high heat flow include volcanoes, fumaroles, hot springs and geysers.
Surface heat flow is a measure of the flux of thermal power at the surface of the crust and is a
function of the rate of heat generated within the crust plus heat conducted from the deeper
mantle. The thermal state of the crust can be expressed at its surface in the form of heat flow
units (mW/m2) and it is generally assumed that heat is transported to much of the Earths
surface by conductive means.
The average rate of heat flow through the crust is approximately 59 mW/m2 (Tester et al.
2006). However, advantageous geological conditions prevailing in some areas of the Earths
surface result in much higher values.
In order to transfer heat from deeper, inaccessible areas of the Earth to the shallow
subsurface, a carrier is required. The most ubiquitous of these is water that has penetrated
deep into the crust from rainfall recharge areas. One such transfer mechanism is found in
earthquake-prone areas where active fault systems act as conduits for water to seep into the
Earth. The rainwater is heated as it descends into the crust and is eventually incorporated into
the subsurface fluid flow system.
Power derived from geothermal sources can broadly be defined as being conventional or
non-conventional resources. Conventional geothermal resources are commonly referred to
as hydrothermal geothermal systems. These systems exploit naturally convecting
hydrothermal (hot water or steam) resources from shallow depths (a few hundred metres to a
few kilometres) in the Earths crust. Hydrothermal geothermal resources are intimately
associated with active tectonic plate margins (Figure 1). There are numerous hydrothermal
geothermal power plants associated with these volcanic provinces (Figure 2), most notably in
the USA, Indonesia, the Philippines and New Zealand. The worlds first geothermal power
plant, which began operating at Larderello in Italy in 1904, is an example of a conventional
geothermal resource anddespite being partially destroyed towards the end of World War II
is still operating today.

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Figure 1: Tectonic plate boundaries of the Earth (modified from Geothermal Education Office
2000)

Energy production from non-conventional geothermal resources can be differentiated into two
main types:

hot sedimentary aquifers (HSA), where hot water resides in deeply buried aquifers within
sedimentary basins (at depths of 20003500 m)

engineered geothermal systems (EGS), where areas of high heat flow result in high
temperatures at moderate depths (30005000 m). A naturally occurring aquifer is absent,
and so engineering techniques must be employed to create an artificial aquifer system.
These high heat flow regions are not associated with active plate margins.

Figure 2: Worldwide distribution of geothermal power plants (modified from Geothermal


Education Office 2000)

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In 2010, the total installed capacity from worldwide geothermal power plants reached
10.7 GW, and the total world energy use was 67.2 GWh (Bertani 2010). Some 24 countries
currently generate electricity from geothermal resources, nearly all of which exploit
hydrothermal geothermal resources; i.e. those associated with active tectonic plate
boundaries. The worlds biggest generator of geothermal electricity is the USA (3093 MW),
followed by the Philippines (1904 MW) and Indonesia (1197 MW).
Australias only currently operating geothermal power plant is located in Birdsville,
Queensland, and yields just 80 kW (net) from an HSA system. The owner of the plant, Ergon
Energy, is in the process of expanding the capacity of the plant to over 300 kW (Beardsmore
& Hill 2010).
As there are no active plate tectonic processes operating in mainland Australia, we lack any
conventional geothermal resources. There is however significant scope for energy production
from HSA and EGS resources, as well as low enthalpy aquifers (LEA), ground source heat
pumps (GSHP) and aquifer thermal energy storage (ATES) applications.
Several geothermal energy developments are currently underway in Australia. The most
advanced include Geodynamics Innamincka Project in north-eastern South Australia (SA);
Petratherms Paralana Project near Arkaroola in eastern SA; and Panax Geothermals Penola
Project located within the Otway Basin close to the SA/Victoria border.
Initiatives introduced in recent years by Australian governments (Commonwealth, state and
territory), academia and industry to collaborate and break technical barriers are designed to
position Australia as a dominant global developer of EGS and HSA technologies. Two
geothermal groups have been established in Australia: the Australian Geothermal Energy
Group (AGEG), which fosters the commercialisation of Australias geothermal energy
resources; and the Australian Geothermal Energy Association (AGEA), which acts as the
national industry association for the Australian geothermal energy industry.
As of 31 December 2010 there were 57 companies exploring for geothermal resources in
Australia, 10 of which were listed on the Australian Stock Exchange. A total of $3.2 billion has
been committed in work programs to 2015 with large areas of Victoria, Tasmania, SA and
Western Australia (WA) under exploration permit. A number of permits have also been issued
in New South Wales (NSW) and Queensland, and in late 2009 the Northern Territory (NT)
invited applications for geothermal exploration leases. In the most recent review of the
geothermal energy potential of the world, Bertani (2010) estimates Australia has a realistic
potential of having 40 MW installed capacity by 2015. Other recent publications estimate as
much as 100 MW of geothermal capacity may be commissioned by 2015 (Beardsmore & Hill
2010) and up to 2200 MW of base-load capacity by 2020 (MMA 2008).
Government incentives, such as research and development grants and supportive legislative
frameworks, have helped nurture the geothermal industry in Australia. The Commonwealth
Department of Resources, Energy and Tourism (DRET), in close cooperation with AGEG and
AGEA, released the Australian Geothermal Industry Development Framework (DRET 2008a)
and Geothermal Technology Roadmap (DRET 2008b) to identify strategies for the
development of Australias emerging geothermal industry. As part of this process, DRET
administered the Geothermal Drilling Program (GDP) fund.
The $50 million GDP fund provided assistance to companies seeking to drill proof-of-concept
geothermal wells. Two rounds of funding announced in 2009 resulted in seven companies
being offered $7 million each for the following projects:

MNGI Pty Ltd (a wholly owned subsidiary of Petratherm Ltd) at Paralana, SA (Round 1)

Panax Geothermal Ltd at the Limestone Coast (Otway Basin), SA (Round 1)

Hot Rock Ltd at Koroit in the Otway Basin, Victoria (Round 2)

Geodynamics near Bulga in the Hunter Valley, NSW (Round 2)

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Green Rock Energy Geothermal WA1 Pty Ltd in the Perth metropolitan area, WA
(Round 2)

Greenearth Energy Ltd near Geelong, Victoria (Round 2)

Torrens Energy Ltd at Parachilna, SA (Round 2).

The GDP funds (round 2) were relinquished by four of the companies in early August 2011 as
they were unable to match the governments funds (DRET 2011).
The Australian Government also awarded $153 million to two companies (Petratherm and
Geodynamics) as part of the Renewable Energy Demonstration Program (REDP). State
governments have also awarded grants and funding to a number of companies holding
geothermal exploration permits, as well as grants and seed funds for research centres in a
number of states.
In essence, the geothermal energy potential in Australia can be best viewed as a continuum
between high enthalpy, deeply buried resources (20005000 m) suitable for large-scale
commercial electricity generation (EGS and HSA), through to low enthalpy, shallow
resources, suitable for small-scale LEA (direct use heating and industrial processes), GSHP
and ATES (Figure 3).
Figure 3: Geothermal energy applications in Australia (modified after Ayling 2007a)

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1.3 Engineered geothermal systems (EGS)


Engineered geothermal systems (EGS) are non-conventional geothermal systems, variously
known as hot fractured rock (HFR), hot wet rock (HWR), hot dry rock (HDR) or hot rock (HR)
resources. These systems target geological formations several kilometres below ground level.
The concept of EGS was first recognised and developed by the Los Alamos National
Laboratory in Fenton Hill, New Mexico in the 1970s. The project was initially funded by the US
Government; however, active collaborations were soon established under initiatives of the
International Energy Agency with the United Kingdom (UK), Germany, France and Japan.
Further projects were undertaken in the UK, Germany, France, Sweden and Japan with
varying levels of success, culminating in the first commercial EGS power plant in Landau,
Germany in 2007.
Unlike conventional geothermal systems, conduction is the dominant heat transfer
mechanism within EGS domains. EGS projects offer much greater potential applications over
conventional geothermal operations since they are technically feasible over much greater
areas of the Earths crust. This is because they do not have to rely on a naturally occurring
reservoir since hydraulic fracture stimulation can significantly increase permeability to achieve
economic fluid flow rates (i.e. provided there is a suitable water source).
Several physical elements are required for a viable EGS development (Figure 4). Firstly, a
high heat flux source covered by a sufficiently thick sequence of rock that thermally insulates
this heat (low thermal conductivity sedimentary sequences such as carbonaceous siltstones
and coals are optimal for this purpose). Secondly, a fluid reservoir, defined as a large volume
of underground connected fractures or pores, is required within the rock, through which fluid
can circulate at relatively shallow depth (<5000 m). It should be noted that the maximum
depth of 5000 m is based on economic rather than technical considerations. Finally, a working
fluid (or carrier) is required to extract heat from the EGS to the surface. Recharge is vital to
replace or partly replace fluid extracted from the reservoir. The fluid is usually water in liquid
or vapour phase, depending on its temperature and pressure.
Only the heat source and thermally insulating sediments need to occur naturally as, given
favourable conditions, the reservoir can be engineered through fracture stimulation and fluid
can be artificially introduced. For example, geothermal fluids extracted to drive a turbine in a
geothermal power plant can be reinjected into the reservoir after use.
Once borehole access to the reservoir is established and sufficient flow rates are achieved,
the system is primed for electricity generation. A working fluid (usually water) is introduced
into the system via an injection well. The water captures heat from the reservoir unit as it
circulates underground. The heated water is then brought to the surface via a production well
and used to generate electricity before being pumped back underground via the injection well.
The entire operation is therefore a closed-loop engineered system. The only water required
would be top-up water if there were any minor losses from the system.
A commercial scale example of an EGS is the Landau project in Germany, which began
operations in November 2007. It comprises a single extraction bore producing 3 MW of
electricity using Organic Rankine Cycle (ORC) technology. The temperature of the water is
approximately 160 C, flowing at 5080 litres per second (L/s) from a depth of 3000 m. The
water is then fed through a district heating system before being returned underground via an
injection well to effectively form a closed-loop system. Expansion of the Landau Project is
planned with the addition of a further 5 MW generating capacity.

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Figure 4: Schematic design of an EGS development

Standard practice in the geothermal industry for hydraulic fracture stimulation most commonly
involves pressurised freshwater without the addition of the chemicals that are typically used in
the coal-seam gas (CSG) industry. The fracture stimulation is developed over a local scale,
ensuring the integrity of the overlying low conductivity units.
The type of electricity power plant used is dependent on the temperature of the geothermal
resource and the volume of fluid available (Ayling 2007a). Steam-power plants are routinely
used in conventional geothermal resources. As stated previously, Australia lacks these high
enthalpy and high pressure systems; thus, almost all proposed Australian geothermal power
plants plan on utilising ORC technology, termed binary cycle systems (Figure 5).

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Figure 5: Schematic design of a binary cycle power plant (modified after Ayling 2007a)

A binary cycle power plant utilises a heat exchanger to transfer energy from the geothermal
fluid to a secondary working fluid (typically isopentane or ammonia) that has a lower boiling
point and higher vapour pressure than steam at the same temperature. Hot water from a
production well is circulated through the heat exchanger, and the cooled water is returned to
the underground reservoir, thus forming a closed-loop system. The working fluid is pumped
through the heat exchanger where it is vaporised and then expanded through a turbine to
generate electricity. The vapour exiting the turbine is then condensed, either by cold air
radiators or cold water, and recycled back through the heat exchanger in a second closedloop system.
Low enthalpy geothermal resources are being exploited for geothermal power generation in a
number of localities worldwide. However, it should be noted that the thermal efficiency of
binary cycle systems is low, in the range 5.813.8% (Tester et al. 2006). Economic
considerations are therefore as crucial to the development of a project as the actual
temperature and flow rate of the resource itself. The lowest temperature installed plant is at
Chena Hot Springs in Alaska, where plants use 74 C geothermal fluids to run three ORC
units for a total of 730 kW (gross) of electricity (Lund et al. 2010).

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1.4 Hot sedimentary aquifers (HSA)


A hot sedimentary aquifer (HSA) geothermal system can be described as a subset of
hydrothermal geothermal systems in that naturally occurring fluids reside within a naturally
permeable reservoir that may be up to several kilometres deep. In this case, boreholes are
used to access the reservoir and bring the hot water to the surface, as well as to inject the
thermally depleted water back into the reservoir (Figure 6); however, there is usually no need
for other engineering works such as hydraulic fracture stimulation since the reservoir is
naturally permeable. An example of an HSA system in Australia is the Otway Basin, which
straddles the SAVictoria state boundary. Several companies are seeking to produce hot
water from deeply buried, high yielding aquifers in the basal sections of this sedimentary
basin.
Figure 6: Schematic design of an HSA geothermal system (modified after Driscoll, 2006)

HSA systems are developed to make maximum benefit of convection, advection and
conduction processes. Whilst convection might be an important process within some HSA
systems, conduction is the principle heat transfer mechanism at the target depths since the
required insulating sediment blanket would inhibit the development of large convection cells.
In addition, modelling by Mortimer (2010) indicates that the extent to which convection plays a
role is strongly dependent on just two parameters: vertical permeability; and temperature. If
sediments are stratified and/or have low vertical permeability, they are unlikely to maintain
convection cells. The lateral movement of heat advectively, along with flowing groundwater, is
less affected by vertical stratification, and conduction of heat between rock masses is
independent of fluid transfer advection/convection.
An HSA project at Unterhaching in Germany was commissioned in 2009 and produces
3.4 MW using Kalina technology for the electrical power generation.

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1.5 Low enthalpy aquifers (LEA; Direct Use)


There is a long history of direct use geothermal systems, otherwise known as low enthalpy
aquifers (LEAs), for small-scale commercial and domestic purposes sourced from geological
units up to several hundreds of metres deep (Figure 7). Present day applications include
snow melting from pavements in Klamath Falls, Oregon through to alligator farming in the
Rocky Mountains, Colorado. A number of LEA applications have been operating in Australia
including aquaculture (fish farming), balneology (hot springs and bathing), agribusiness and
industrial uses (product drying and abattoirs), and district heating systems. Indeed, there is
much scope for cascading geothermal operations whereby otherwise-waste heat from EGS or
HSA operations is used for LEA purposes before the fluid is reinjected back into the
subsurface realm.
Figure 7: Industrial applications for LEAs (modified after Greenearth Energy 2011)

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1.6 Ground source heat pumps (GSHP)


Ground source heat pumps (GSHPs) are the shallowest geothermal system, and are
classified as a conventional application. GSHPs utilise the stable nature of the Earths
temperature at relatively shallow depths (down to a maximum depth of approximately 150 m),
although many units do not extend past a few tens of metres. The constant low enthalpy
conditions (usually less than 30 C) at these depths can be used to provide heating or cooling
to domestic and industrial sectors. During the winter months, cold working fluid from the
surface is pumped through an underground pipe network where it absorbs heat from the
relatively warmer surrounding rock. The warmed fluid is then return to the surface where it is
used to heat buildings. The same principle operates during summer where liquid warmed by
the atmosphere is pumped underground where it transfers heat to the relatively cooler
surrounding rocks and returns to the surface to act as air conditioning.
GSHPs are subdivided depending on whether they are closed-loop or open-loop systems.

1.6.1 Closed-loop GSHPs


Closed-loop GSHPs circulate fluid, typically a refrigerant, through a shallow underground pipe
network. An advantage of the closed-loop system is that it is non-consumptive since there are
no fluid losses. Depending on local requirements, the underground pipe network can be
arranged in several different configurations, and can even utilise a body of water (Figure 8).
The units are energy efficient, especially so when the temperature contrasts between the
ground and air temperature is maximised (i.e. during the height of summer and winter).
Figure 8 Closed-loop GSHP showing various orientations of pipework (modified after Ayling
2007b)

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Vertical loops are most practical when land surface footprint is minimal. Pipe diameters are
typically 150 mm in diameter and extend to a depth of between 50150 m. Horizontal loops
are utilised where there is sufficient land surface available, for instance under parks and car
parks. Horizontal loops are placed in trenches to a depth of approximately 2 m; however,
longer lengths of pipework are required to overcome temperature instability at these shallow
depths. Horizontal loops are cheaper and easier to install than vertical loops, and they are
thus usually more appropriate for domestic applications. A slinky loop is a hybrid of these two
loop systems and deployed where the available land is insufficient in size, or where drilling to
deeper depths is prohibitively expensive.

1.6.2 Open-loop GSHPs


Open-loop systems physically extract groundwater or utilise surface water for the purpose of
stripping energy (heat) for heating and cooling purposes. Unlike closed-loop GSHPs, the
water is not recirculated, and is reinjected to its source or to another discharge point. By its
nature, open-loop systems are only applicable at sites with adequate supplies of water.

1.7 Aquifer thermal energy storage (ATES)


Aquifer thermal energy storage (ATES) uses similar principles as GSHPs. However, rather
than utilising the stable nature of the Earth, an aquifer is utilised as the thermal storage
medium. Thermal energy is balanced or stabilised over a seasonal period, where the waste
heat lost to the source during the summer months from cooling is matched to that required in
winter months for heating.
ATES developments are not common and information regarding energy balances, operating
temperatures and monitoring, and the polarity reversal of wells is not within the public domain.
It is therefore not possible to comment further on ATES schemes.

1.8 Geothermal systems assessment (GSA)


Cooper and Beardsmore (2008) developed a holistic approach to delineating geothermal
resources with a prospect evaluation and engineering/geological risk management
methodology synonymous to that proposed by Magoon and Dow (1994) in their Petroleum
Systems analysis volume. The GSA framework (Figure 9) addresses the principal geological
risks at the basin or tenement scale. Thus, risk mitigation strategies can be employed when
exploring for geothermal resources. Further detailed work at a geothermal project scale is
required to progress exploration in areas that a GSA outcome might highlight.
The GSA approach applied by the industry in developing geothermal resources considers
water-related factors as a key component of the risk matrix (Figure 9), including:

lithology, stratigraphy and stress characteristics

permeability, porosity, fluid circulation patterns and constraining factors (aquitards) and
related modelling

water quality, geochemistry and isotope analysis.

Essentially, geothermal developments must take account of hydrogeological conditions to


ensure that the development maintains the existing conditions at a low level of risk of
influence from potential impacts such as water quality issues, subsidence and so on.

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Figure 9: The GSA framework as described by Cooper and Beardsmore (2008)

1.8.1 GSA development considerations


The GSA framework can be used as the basis of a simple risk-based evaluation system which
can be applied to conventional and non-conventional geothermal systems. The four critical
geothermal development considerations are:
1. Heat flow: probability that heat flow measurements or assumptions reliably
characterise the geothermal system under investigation (i.e. not simply temperature
but heat flux). Estimated from geographic coverage and uncertainty of heat flow
estimates.
2. Thermal resistance: probability that thermal resistance and heat transfer mechanisms
will be encountered at depth beneath the level of shallow exploration-well intersects
(purely conductive, convective component, advective component).
3. Reservoir: probability that reservoir properties and volumetric extent are as assumed
from shallow exploration wells. Estimated from geographic coverage, data type and
reservoir type. Includes void connectivity and prevailing stress regime.
4. Water: probability that water supply or chemistry will not adversely impact on the
project.
The variables are defined by measurable factors with intrinsic distributions. For example, in
petroleum exploration, reservoir risk incorporates the distributions of porosity, permeability,
area and net/gross thickness data. These factors are typically combined in Monte-Carlo
simulations to define the overall probability distribution of reservoir risk. This process provides
a disciplined and uniform approach to help mitigate exploration/drilling risks (Capen 1992;
Rose 1992).

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The methodology considers each component of the GSA risk matrix and places a confidence
rating on the data used based on experience and current understanding in the area of
interest.
Some aspects of risk in the geothermal system share varying degrees of co-dependence. For
example, heat flow and thermal resistance risk share a common link via rock thermal
conductivity measurements.
By understanding and quantifying the GSA risk elements of each critical technical area, steps
can be taken to establish development plans with low financial risk prior to significant
expenditure (being proactive rather than reactive). For example, if the chemistry of
groundwater is studied and found to be corrosive, then project plans can incorporate
appropriate materials to temper pipework and well casings.
Given the increasingly vocal debate over water issues, access to water is a major
consideration for geothermal developments. This report is designed to provide some
guidance on the geothermal issues in relation to water planning, notably regarding security of
supply as well as to manage third-party impacts.
As is demonstrated herein, consumptive water use requirements are generally quite low for
operating geothermal schemes that recirculate the working fluid (i.e. closed-loop or
reinjecting), and also for exploration and construction stages (including EGS and HSA). The
geothermal legislation is fundamentally subject to the provisions of the various water acts in
all states and territories. The nominal gaps in NSW and Tasmania are not material in that
activities that result in water take and discharge are subject to licensing under water and/or
environmental legislation, as is the case in every state and territory. Thus existing water
management arrangements are considered to be capable of managing geothermal
developments if implemented appropriately. For example, in some states, although low
enthalpy geothermal projects are exempt from geothermal legislation (i.e. low enthalpy being
less than 70 C or shallower than 1000 m in Victoria; less than 70 C in NT; less than 100 C
in NSW; and small-scale GSHP or non-commercial direct use in WA), such projects are
subject to existing water acts and planning regulations. In Tasmania, although Section 48 of
the Water Management Act 1999 (the WMA 1999) has an exemption relating to groundwater
extraction generally, including for geothermal activities, there is the power to develop a Water
Management Plan (WMP) as a response to development pressures in a specific area. (For
example, at the time of writing, the Wesley Vale WMP is the first such plan about to be
declared for water resources management generally (not for geothermal purposes).) The
general exemption to take groundwater may also be removed by the appointment of a
groundwater area under Section 124A of the WMA1999, thus requiring a licence to take
groundwater. It is understood that this exemption in Tasmania will be further addressed with
the upcoming promulgation of a new water management framework that has been developed
under the National Water Commissions Raising National Water Standards program. There is
also a review process underway in NSW and Queensland on water management
arrangements in relation to the resources and energy sector.
In relation to the potential for impacts, the geothermal industry has some distinct differences
from the mining, oil and gas industries (for example, EGS and HSA systems do not involve
extraction of large volumes of rock/ore or oil/gas). Further, although it does use similar drilling
and well construction techniques to the oil and gas sector, a successful EGS is developed at
greater depth (up to 5000 m), with resistive layers above the reservoir that limit the potential
for transmission of impacts (e.g. from hydraulic fracture stimulation or thermal gradients)
towards the surface. HSA and low enthalpy systems are developed at shallower depths, but
these systems rely on the natural permeability of the aquifers, and the related flow and
circulation patterns (i.e. do not involve fracture stimulation). In summary, water supply and
potential impact management issues for geothermal developments could be managed under
existing water planning frameworks as the geothermal legislation in all jurisdictions is
fundamentally subject to the provisions of the various water acts, as discussed in detail in
Section 2.3.

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1.8.2 Heat flow


Large areas of central Australia have been shown to exhibit very high heat flow values with
the rocks generating significantly more heat than most similarly aged rocks worldwide. This
has been attributed to an abundance of granites in the Earths crust which have anomalously
high concentrations of naturally occurring radioactive thorium, uranium and potassium
(referred to as internal radiogenic heat generation). Neumann et al. (2000) referred to the
area as the South Australian Heat Flow Anomaly (SAHFA). It is worth noting, however, that
the SAHFA has been geographically defined on the basis of a relatively limited data set. The
anomaly may perhaps be better described as a series of hotspots rather than one continuous
anomaly. A number of studies for various companies and government agencies have been
compiled to produce a heat flow map of Australia (Figure 10).
In accordance with the second law of thermodynamics, heat flows in three dimensions
through rock, always towards the lower temperature. As the lowest temperature influencing a
rock mass is generally at the surface, and as most data sets are gathered from onedimensional (1D) vertical bore holes, 1D conductive heat flow models are normally developed
as a first approximation of the regional heat flow regime. This heat flow modelling allows for
interpolation and extrapolation of temperature at depth as it honours the thermodynamic
principles of heat transfer. The depths over which temperature can be interpolated or
extrapolated depend on the depth to which the assumption of purely vertical conductive heat
transfer holds true. The assumption fails if a) there is a component of advective heat transfer
via fluid flow, b) there is appreciable lateral conduction of heat, or c) temperatures exceed
about 300 C, at which point radiation starts to play a role in heat transfer.
Figure 10: Heat flow map of Australia showing extent of electricity grid infrastructure (HDR
2011)

Heat flow is the product of temperature gradient and rock thermal conductivity. It is calculated,
or modelled, from measurements of these two parameters, and therefore heat flow is not
directly measured itself. Reliable modelling of heat flow is a precision skill that requires
experience and a detailed understanding of physical conditions in the borehole and the
physical properties of the rocks, including advective processes that may influence bore
temperature (such as groundwater flow or borehole advection) and the temperature
dependence of conductivity.
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Finally, heat flow models are only as reliable as the data that have been used to generate
them. It is therefore important that the temperature, conductivity and radiogenic heat
generation data used to model heat flow represent as closely as possible the actual thermal
conditions.

1.8.3 Thermal resistance


A thick overlying sequence with low thermal conductivitysuch as coals, carbonaceous
shales or fine-grained siltstonesis generally necessary as an insulating blanket to boost the
temperature for both EGS and HSA geothermal systems. Examples of low conductivity
sediments include:

the Otway Basin, which straddles the VictoriaSA border. The regionally extensive thick
Cretaceous Eumeralla Formation provides the insulatory lithology to the underlying
Cretaceous Pretty Hill Formation.

the CooperEromanga Basin which straddles the QueenslandSANT border. Thick


packages of Palaeozoic to Mesozoic carbonaceous siltstones, shales and coal act as the
insulatory cover.

1.8.4 Reservoir
A reservoir is defined, in the geothermal context, as the volume which hosts the working or
carrier fluid. Historically, crystalline basement, and in particular granitic basement, has been
the preferred medium for EGS reservoirs because of the notion that fluid losses from a
circulation system can be constrained if the host rock mass has negligible in situ porosity and
permeability in a bulk sense (i.e. other than where hydraulically fractured for the purposes of
EGS). A competent rock mass also helps constrain and control reservoir growth.
Granites have an internal fabric of joints and fractures. These need to be artificially widened in
order to act as conduits for substantial flow of water or any other heat transport medium. This
is achieved by increasing the pore pressure through the injection of fluid, usually water, into
the base of a deep injection well, leading to the slight opening of pre-existing fractures. The
common practice of hydraulic fracture stimulation for geothermal energy requirements uses
pressurised fresh water with no chemical additives (i.e. geothermal is not comparable to the
coal-seam gas industry in this regard). Natural internal stresses that operate at depth within
the granite cause the separated rock faces to slip under the influence of pressure in a process
referred to as micro-sliding. When the pore pressure is returned to normal, the fractures
close again but do not fit neatly due to the slipping; a network of voids that are all in
communication is thus produced. The resulting zone of enhanced permeability represents an
artificially engineered reservoir.
The distribution of joints with depth and their orientation with respect to the in situ stress field
is critical as this determines the growth orientation and geometry of the stimulated reservoir.
Furthermore, the nature of the joint network and in situ stress field determines to a large
extent the pressure required to stimulate the rock mass.
The stress field controls not just the creation of the reservoir but also the subsequent
operation and heat extraction. Pressurisation at levels just in excess of the minimum stress
value is optimal since this results in fractures remaining open and allows sufficient fluid flow.
However, if pressurisation greatly exceeds the minimum stress at the depth of the reservoir,
the likelihood is high that runaway growth of the stimulated rock volume will occur, leading to
an undesirable increase in water loss.
For an HSA system, a potential reservoir unit must have adequate porosity and permeability,
perhaps enhanced by fracture permeability along preferential stress directions. Typically, the
target units are at depths >2000 m in order to achieve required temperature.

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1.8.5 Working or carrier fluid (water)


The working or carrier fluid is the medium by which heat is extracted from the subsurface and
brought to surface (also referred to as a heat transmission fluid). All currently operating and
planned geothermal operations utilise water for this purpose, but research continues on using
supercritical CO2 as a working fluid (Brown 2000; Pruess 2006). Section 3 discusses water
requirements and attributes in more detail.
In order to commercially exploit an HSA resource, detailed data on the temperature and
water-flow characteristics of the groundwater aquifer need to be obtained. Flow
characteristics are especially important in order to ensure reinjection does not cool the system
and exhaust the resource too quickly. Two criteria need to be fulfilled: high-yielding aquifers
and hot water within the aquifer.
The geological risks associated with water in EGS projects relate to the presence of water in
adequate volumes to charge the system and provide make-up water in case of circulation
losses. In some cases groundwater may provide sufficient water volumes, but meteoric
sources can also be considered. In arid areas water availability and access may be an issue;
however, the water allocation planning framework should take this into consideration.
The availability of water can only be assessed on a case-by-case basis when information is
available regarding the location of specific prospects.

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2. Geothermal resources in Australia


2.1 Geological background
Australia lies wholly within the IndoAustralian plate, and active tectonic plate boundaries are
therefore absent. Large earthquakes are rare events and limited to intra-cratonic events, such
as the magnitude 7.2 Meeberrie earthquake (Western Australia) of April 1941the largest
recorded onshore earthquake in Australia (Geoscience Australia 2004). The most recent
volcanic activity in Australia has been recorded in the vicinity of the VictoriaSA border.
Charcoal dated from beneath basalt flows in the Mount Gambier and Mount Schank area
yield ages of 18 100 and 4700 years respectively (Sheard 1990).
Australia can be separated into three broad provinces based on the age and character of the
underlying basement rocks (Figure 11). The oldest crust is located in the Western Shield
Province whilst the youngest is found in the Eastern Province.
Figure 11: Broad divisions of the Australian continental crust, based on basement rock age

Notes: Archean crust 3800 Ma to 2500 Ma; Proterozoic crust 2500 Ma to 570 Ma; Phanerozoic crust <570 Ma)
(modified from McLaren et al. 2003, and Beardsmore & Hill 2010). Named localities refer to EGS and HSA projects
listed in Sections 2.2.1 and 2.2.2.

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The Central Shield Province is unusual compared to similarly aged Proterozoic rocks
elsewhere in the world in that large areas are enriched with anomalously high concentrations
of heat-producing radiogenic elements (uranium, thorium and potassium), primarily hosted in
granite and granodiorite rocks. In particular, the eastern and northern portions of SA (and
adjoining states) record significantly higher than average heat flows (Cull 1982; McLaren et al.
2003) and have been termed the South Australian Heat Flow Anomaly (see Section 1.8.2). All
of Australias currently operating uranium mines and numerous uranium prospects are located
within the Central Shield Province, including the worlds largest uranium mine at Olympic
Dam.
The Eastern Province has seen regular volcanism throughout the Cainozoic era (<65 Ma).
There is a general decreasing age of events from north to south. The most recent
manifestation of this volcanic activity is the extensive volcanic plain with more than 400
recorded eruption points stretching from Melbourne in Victoria through to south-eastern SA.
The origin of these volcanics is subject to much conjecture since they do not fit a mantle hot
spot model. Seismic tomography data acquired in southern Queensland, northern SA, the
coastal areas of Victoria and north-eastern WA indicate low seismic velocity anomalies in the
upper crust, possibly indicating elevated temperatures (Graeber et al. 2002; Saygin & Kennett
2010). These areas are also the main focus of the Australian geothermal industry.
To date, no surface thermal manifestations, such as hot springs, have been identified as
being associated with volcanism. Beardsmore and Hill (2010) note this is surprising given the
geologically recent volcanic activity in south-eastern Australia. The authors offer an
explanation in which the ambient groundwater flow through large regionally extensive shallow
unconfined aquifers advectively washes away any steam or hot water discharge from the
subsurface geological features.
Australia therefore lacks conventional (volcanic) high enthalpy hydrothermal geothermal
energy systems such as those targeted in New Zealand and Indonesia, and is generally
devoid of surface emissions of geothermal heat such as fumaroles, geysers and volcanic
activity.
Much of Australia is overlain by sedimentary basins of various sizes and depths. The
sedimentary infill of these basins is important since those containing high percentages of coal
and fine-grained sediments (clay and siltstones) will display excellent thermal insulation
characteristics. These low conductivity sediments retard heat flow to the surface, resulting in
elevated temperatures at depth. Of particular note is the Gippsland Basin in Victoria which
contains one of the largest brown coal reserves in the world. Other basins in NSW and
Queensland contain thick accumulations of black coal.

2.2 Current status of geothermal resource


utilisation
Whilst Australia is devoid of plate tectonic activity and volcanic high enthalpy hydrothermal
geothermal energy systems, it does have a long and varied history of utilising geothermal
resources, from electricity generating in Queensland to hot spring developments in Victoria
and swimming pool heating in Western Australia.

2.2.1 Engineered geothermal systems (EGS)


Australia (and in particular the Cooper-Eromanga Basin area of north-eastern SA southwestern Queensland) has a number of geological and geophysical attributes which are
conducive to the testing of EGS technologies. These include extremely high heat-producing
basement rocks, thick fine-grained insulating sediments, and a favourably aligned stress
regime conducive for horizontal fracture development.

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Geoscience Australia (Budd et al., 2007) estimated the amount of thermal energy in the
Australian crust at 1.9 x 1010 petajoules (6.0 x 1011 MWt.yrs) between the 150 C isotherm and
5000 m depth. Just 1% of that thermal energy is equal to 26 000 years of Australias primary
energy usage in 2004.
A number of EGS projects are currently underway in Australia, with the most advanced being
the Innamincka Project and the Paralana Project (for location see Figure 11).

Case study: Innamincka Project (Geodynamics)


Geodynamics Innamincka project (for location see Figure 11) is located within the CooperEromanga Basin in north-eastern SA. The project area includes the first geothermal
exploration licences issued in 2001 by the South Australian government. The project suffered
early technical difficulties with well design and construction, but this has since been rectified
(Section 5.3.1 has further information).
A total of five deep wells have been drilled to date:

Habanero-1, -2 and -3: The temperature at the top of the granite (36673690 m depth)
penetrated by all three wells is 227.5 C whilst a temperature of 245 C is recorded over
the depth interval 42004300 m (Chen & Wyborn 2009).

Jolokia-1: The bottom hole temperature is recorded as 278 C at 4900 m (Geodynamics


2010).

Savina-1: The well has been drilled to 3700 m but the temperature data recorded is still
confidential (as of September 2011).

In March 2009 the wells Habanero-1 and -3 achieved the proof of concept phase of the
project by demonstrating heat extraction via a two-well circulation test from the engineered
subsurface reservoir (Geodynamics 2009a). A 1 MW power plant has been constructed on
site and this will be commissioned later in 2011 by the drilling of a further two deep wells
(Habanero-4 and -5). The work program for these two wells suggests they will be used to
engineer a second, deeper fractured reservoir. This idea of creating multiple stacked reservoir
layers should markedly increase the flow rate (Geodynamics 2010).
Stage 2 of the project will see upscaling to a 25 MW commercial demonstration plant by 2015,
whilst Stage 3 will see the large-scale deployment of a number of EGS power plants in the
area.
Geodynamics recently announced a partnership with Origin Energy to explore the HSA
potential of the shallower section in their Innamincka Project.

Case study: Paralana Project (Petratherm)


Petratherms Paralana project (for location see Figure 11) is located in SAs northern Flinders
Ranges. A deep well (Paralana-2) has been drilled to 4012 m ,recording a temperature of
176 C at a depth of 3672 m, and an extrapolated temperature of 190 C 1 C at 4000 m
(Petratherm 2010). A fracture stimulation program was completed in July 2011 (Petratherm
2011)inclement weather conditions and flooding has delayed the work program by several
months. A second deep well (Paralana-3) will be drilled to intersect the reservoir and confirm
both reservoir connectivity and rate of fluid flow.
Future work will see a (up to) 7.5 MW demonstration plant to supply electricity to the Beverley
uranium mine, some 10 km from the Paralana project. Petratherm signed a Memorandum of
Understanding with the Beverley mine owner (Heathgate Resources) in 2006 (Petratherm
2006). Expansion plans will see the project upscaled to a 30 MW commercial power plant.

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2.2.2 Hot sedimentary aquifers (HSA)


Case study: Birdsville power station (Ergon Energy)
The Birdsville geothermal power station (for location see Figure 11, and schematic design
Figure 12) is located in south-western Queensland, close to the SA border. The site is located
within the Great Artesian Basin (GAB) and generates just 120 kW gross (80 kW net) electricity
from a single 1280 m deep artesian bore flowing at 27 L/s and 98 C. It accounts for all of
Australias current operating geothermal power output (Beardsmore & Hill 2010). The plant
owner, Ergon Energy, plans to increase the capacity of the plant to 300 kW via drilling of a
new high capacity bore into this HSA target.
Figure 12: Schematic design of the Birdsville power station (modified after Ergon Energy
2008)

Case study: Penola Project (Panax Geothermal)


Panax Geothermals Penola project (for location see Figure 11) is located within the Otway
Basin in south-eastern SA, and comprises the initial part of their greater Limestone Coast
Project. The Initial well, Salamander-1, reached a maximum depth of 4025 m and intersected
two thick sandstone packages within the Pretty Hill Formation; intervals 29013570 m and
35704000 m yielded average porosities of 13.2% and 10.2% respectively. A temperature of
171.4 C at 4000 m was recorded (Panax Geothermal 2010).
The Penola project is currently on hold until a joint venture partner is identified and/or there is
an improvement in financial market conditions.

2.2.3 Low enthalpy aquifers (LEA)


Commercialisation of Low Enthalpy Aquifers (LEAs) is becoming increasingly attractive in
Australia since they are recognised as a cheap source of thermal power. Unless otherwise
stated, much of this section is derived from Beardsmore and Hill (2010).

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District heating
Portland in Victoria was the site of an open-loop district heating system commissioned in
1983. Four bores at depths between 12501420 m intersected the Dilwyn Formation with flow
rates of 65 L/s and temperatures of 5659 C being recorded (Burns et al. 2000; Chopra
2005). The system was decommissioned in 2006 due to environmental regulationsthe poor
condition of the bore was in danger of collapse with the potential for cross-contamination of
aquifers, and serious economic inefficiencies were introduced by the need for cooling prior to
discharge of the post-heating system water. At its peak, the system supplied a number of
municipal buildings including the Civic Hall, Arts Centre, Senior Citizens Centre, Aquatic
Centre, Library, Tourist Information Office, History House, Portland Hospital, Richmond Henty
Hotel Motel, Police Station and the Maritime Discovery Centre. Burns et al. (1995) estimated
the annual energy savings achieved by the system at 8 857 014 MJ per annum.
The Sebel Deep Blue Warrnambool geothermal spa in Victoria utilises a single bore (openloop, 735 m deep) to supply 43 C water at a maximum rate of 50 L/s to provide hot water and
space heating for the resorts 122 rooms. Sustainability Victoria (2007) projected the
geothermal water would provide annual fuel savings of $40 000 and water/heat sales of an
additional $60 000 per annum (to a local caravan park and the yacht club). While the original
project design was for 700 ML of water to be treated via a small-scale desalination plant to
supply the local water authority, Wannon Water, the plant has not been built, and the outlet of
the waste water is via surface runoff.
These two examples show that problems can occur with poor integration of geothermal and
water management arrangements, especially if exemptions apply, as discussed in
Section 2.3. While current water planning frameworks may be capable of integrating
geothermal developments into existing arrangements, this is not always achieved in practice.
It is suggested that exemptions in legislation increases the potential for poor integration, and
this is not aided by different acts covering different parts of the water balance (e.g. extraction,
reinjection, discharge to environment).

Balneology
The Peninsula Hot Springs resort, located at Rye on the Mornington Peninsula (Victoria),
utilises 45 C water from the Mepunga Formation at a depth of 637 m and flow rate of 4.5 L/s.
The resort opened in June 2005 and is currently undergoing a major expansion. About
210 000 L of water per day is being used by the (single bore) open-loop system at present;
however, the expansion plans will see the establishment of a (recirculation) closed-loop
system, with water being returned to the aquifer via an injection bore (Peninsula Hot Springs
2009). The expansion plans will result in flow rates increasing up to 50 L/s with further
utilisation planned for geothermal resources including aquaculture, greenhouses and space
heating.
As well as the Peninsula Hot Springs at Rye and the Sebel Deep Blue spa in Warrnambool,
both in Victoria, a number of other places in Australia utilise geothermal resources for
balneology including Queensland (Innot and Kooma), NT (Mataranka), SA (Dalhousie),
Tasmania (Hastings) and NSW (Moree, Lightening Ridge, Burren Junction, Walgett,
Yarrangobilly and Pilliga), all of which are open-loop systems.
Many of these springs discharge to surface and the flow rate is often poorly constrained (i.e.
significant opportunity exists for water management improvements).

Aquaculture
Two sites currently utilise geothermal resources to farm barramundi (a tropical freshwater
fish). In Robe (SA) Robarra sources water from the Dilwyn Formation via a single (open-loop)
335 m bore at a temperature of 29 C. The system is estimated to provide in excess of 43 TJ
of thermal energy per annum. A similar open-loop facility is operated by Mainstream
Aquaculture in Werribee (Victoria) using 28 C water.

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Other
A number of swimming pools in Perth utilise geothermal energy to heat their water. One
example is the Claremont pool where warm water (43 C) is sourced from the Yarragadee
Formation from a depth of 864 m. The flow rate is 13.7 L/s, with closed-loop recirculation and
zero net extraction volume. The water is circulated through a heat exchanger to maintain a
constant pool temperature of 26.5 C. The geothermal water is injected back into the same
aquifer level at a temperature of 29 C and the system is estimated to utilise 15.3 TJ of
thermal energy per annum. Similar systems are operational at Christchurch and Craigie
swimming pools, and at the Challenge Stadium where hot water is also used to supply
domestic hot water. Paynesville swimming pool in Victoria and the University of Southern
Queensland swimming pool in Toowoomba (Queensland) are further examples of this
geothermal application. These closed-loop systems do not involve the consumption of water
in terms of licensed volumes.
Midfield Meats, based in Warrnambool (Victoria), utilises open-loop geothermal water in its
industrial meat processing facility for washing down and sterilising purposes.
Hot water at 68 C from two bores (approximately 500 m deep) was used as open-loop
process water in paper manufacturing at the Maryvale Paper Mill near Traralgon (Victoria) in
the 1950s (Cull 1979). These operations continued for a number of years until operations
ceased as a result of significant dewatering of the aquifer due to expansion of the Latrobe
Valley brown coal mining operations (King et al. 1987).

2.2.4 Ground source heat pumps (GSHP)


The Geoscience Australia building in Canberra, ACT, hosts one of the largest GSHP systems
in the southern hemisphere, supplying 2500 kW of thermal power to a floor space of
approximately 40 000 m2. The closed-loop system became operational in 1997 and it is
estimated the projected energy savings will be in excess of $1 million over the 25 year life of
the plant. Some 352 vertical bores, buried to a depth of 104 m, supply low enthalpy water
(with an undisturbed temperature of 18.2 C) to 210 GSHPs.
Closed-loop GSHPs comprise the overwhelming number of installations in Australia. The lack
of open-loop GSHPs is a function of the ongoing water debate in Australia. The only openloop systems thought to be operating in Australia are located within Sydney and source water
from Sydney Harbour. These include the Sydney Opera House, the Powerhouse Museum,
the Finger Wharf Apartments, as well as an air-conditioning system for the Australian Mutual
Provident (AMP) Society building on Sydney Cove, which became operational in the 1960s.
At present there are three GSHP suppliers and installers operating in Australia. Whilst there is
no definitive list of all operating GSHPs in Australia, information can be sourced from
Geoexchange Australia Pty Ltd (www.geoexchange.com.au), while Chopra (2005) lists the
following installations (it should be noted the list does not include residential installations):

New South Wales: Lithgow Hospital; NPWS Tourist and Information Centre, Jindabyne;
Macquarie University, North Ryde; Detention Centre, Dubbo; Cowra Shire Council offices;
Wagga Wagga Civic Centre; Surry Hills Community Facility; Woolloomooloo Wharves;
NSW Department of Environment and Conservation, Lidcombe; Australia Telescope
National Facility CSIRO, Marsfield.

Victoria: Victoria University of Technology, Werribee; Station Pier, Port Melbourne;


Wangaratta High School; Monash University, Melbourne; Bandiana ALTC; East Melbourne
library; Mount Hotham ski lodge; Corryong Council offices; Acacia College, Mernda.

Queensland: Logan Institute of TAFE; Royal Australian Air Force base, Amberley.

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South Australia: Royal Adelaide Hospital, North Terrace; Bureau of Meteorology (BoM),
Kent Town; Garden East Apartments, Adelaide; Coober Pedy Police Station; Mount Barker
TAFE.

Tasmania: Grand Chancellor Concert Hall, Hobart; Queen Victoria Museum and Art
Gallery, Launceston; Southern Cross Homes/Aged Care, Moonah; Antarctic Centre,
Hobart; Westpac Call Centre, Launceston; Hobart Aquatic Centre; Integrated Energy
Management Centre, Hobart; Elisabeth Street Pier Building, Hobart; Aurora Energy offices,
Launceston

Australian Capital Territory: ACTEW Corporation, Canberra; Geoscience Australia,


Canberra; Duntroon Headquarters, Canberra; Airport Caltex, Pialligo; ANU Research
Laboratory, Canberra; Solomon Islands High Commission, Canberra.

Northern Territory: BoM, Darwin.


Residential installations numbered more than 2000 in the year 2000, and were increasing by
a factor of 50% per annum (Burns et al. 2000).

2.2.5 Aquifer thermal energy storage (ATES)


To date there have been no ATES developments in Australia, and as these developments are
usually more common in the much colder northern hemisphere climate it is expected that their
detailed consideration is not warranted.

2.3 Geothermal energy legislation


Geothermal resources in Australia are legislated and regulated by the individual state and
territory governments (Beardsmore & Hill 2010). The degree of geothermal activity by industry
in each state and territory is partly a reflection of the different approaches taken by each
individual government agency. A total of 418 geothermal permits have either been awarded or
are under application as of December 2010, with a total forecast exploration expenditure of
approximately $3.2 billion.
The subsections below identify that geothermal legislation is specifically subject to the
provisions of the various water acts in all states and territories except NSW and Tasmania.
The gaps in NSW and Tasmania are nominal (i.e. not material) in that activities that result in
water take and discharge are subject to licensing under water and/or environmental
legislation, as is the case in every state and territory. This confirms that the existing water and
environmental management arrangements are capable of managing geothermal projects if
implemented appropriately. Exemptions from the geothermal legislation are identified, notably
for low enthalpy systems (i.e. in practical terms, this would usually be for direct use of heat
rather than electricity generation), and some implications are discussed further in Section 3.2.

2.3.1 South Australia


In South Australia, water resources (groundwater, surface water and watercourses) and
licensing/permitting requirements are administered by the SA Department for Water (DfW)
under the Natural Resources Management Act 2004 (NRMA 2004). The main method of
managing water allocation and use is the process of prescription, which is administrated by
the DfW, and results in the development of a Water Allocation Plan (WAP) by one of the eight
Natural Resources Management boards (NRM boards) operating in SA. The WAP sets the
principles or rules under which consumptive pools, entitlements and allocations are created,
and details how water is allocated to new licensed water users and how licences or
entitlements can be traded. The DfW assists NRM boards in the preparation of WAPs by
providing data (hydrogeological and hydrological) and advice about licensing, permits,
legislation, policy and intergovernmental agreements. Once an NRM board has prepared a
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draft WAP, the community is consulted. Once community consultation has been completed,
WAPs are adopted by the relevant Minister and become state government policy.
The Petroleum Act 2000 regulates geothermal resources in SA, subject to an amendment
proclaimed in late 2009 (Petroleum and Geothermal Energy Act 2000 (PGEA 2000) and the
Petroleum and Geothermal Energy Regulations 2000 (PGER 2000)). The Department of
Primary Industries and Resources of South Australia (PIRSA) regulates the PGEA 2000. The
PGEA 2000 allows for concurrent overlapping resource licences (minerals, petroleum and
geothermal).
The PGEA 2000 does not authorise water take outside the provisions of the NRMA 2004. The
PGEA 2000 stipulates that a geothermal company must prepare and submit an Environmental
Impact Report (EIR) and a Statement of Environmental Objectives (SEO), or demonstrate the
EGS/HSA project can achieve the objectives of an existing SEO. As part of the development
of the SEO and EIR, potential water sources for operations must be identified, including
consulting with all relevant stakeholders (including government agencies) to identify their
concerns and offer mitigation strategies. Once this process is completed the geothermal
company must apply for specific activity approvals pursuant to the PGER 2000 Regulation 18
or 19, where PIRSA is informed of the source of water. Whilst the SEO covers most water
requirements for exploratory geothermal drilling and field operations, activities that may
involve substantial water volumes (e.g. extended fracture stimulation activities, or make-up
water to offset water losses from an operational system), then a specific water licence would
be required under the terms of the relevant WAP.
Whilst the PGEA 2000 covers high temperature resourcessuch as EGS and HSA
applications (see above)there is no clear stipulation as to whether certain geothermal
activities (e.g. low enthalpy) are not covered by the Act. Informal discussions with PIRSA staff
suggest that LEAs and GSHPs may not be covered by the PGEA 2000, and these would fall
under the NRMA 2004. Proponents must obtain a well construction permit from DfW for a
specified geothermal well-casing design that is designed for aquifer resource protection (e.g.
through engineering measures to isolate aquifer units).
In terms of water allocation and licensing, some parts of SA are not prescribed under the
NRMA 2004, and thus any development in these areas would not require a water allocation
(i.e. if an adequate water supply can be identified in a non-prescribed area, then a licence or
allocation is not required). The Water Allocation Plan (WAP) for the Far North Prescribed
Wells Area (South Australian Arid Lands Natural Resources Management Board, 2009)
covers a large part (but not all) of the arid north-eastern quarter of SA, including the SA
component of the Great Artesian Basin and the Cooper Basin, areas of significant geothermal
prospectivity.
With regards to discharge of water (i.e. not involving reinjection) for geothermal operations
falling under PGER 2000, the key issue for PIRSA is whether discharge is sustainable. It is
understood that the option preferred by PIRSA would be that water used in geothermal
operations is reinjected to the same aquifer to maintain pressure and support sustainability;
however, PIRSA will consider alternatives if the geothermal operator can demonstrate the
system will be more sustainable via discharging by other methods. In any case, a licence for
water take and discharge would be required under the NRMA 2004.

2.3.2 Western Australia


In Western Australia, the statutory instrument that gives authority to take surface or
groundwater is a water extraction licence issued under the Rights in Water and Irrigation Act
1914 (RWIA 1914). Under the RWIA 1914, it is illegal to take water from or discharge water to
a watercourse or aquifer without a licence.
The taking, use or discharge of water for any geothermal exploration, development and
operations in WA is subject to the RWIA 1914. However, there is ongoing dialogue within the
Western Australian Government as to the definition of take of water for deep geothermal

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projects (e.g. questions such as of whether hot saline water sourced from 3000 m in a closedloop system that reinjects to the same aquifer should be treated differently from other water
use activities).
The Petroleum Amendment Act (2007) was introduced to amend the Petroleum Act (1967) to
provide for the exploration and recovery of geothermal energy in Western Australia. The
amended Act is known as the Petroleum and Geothermal Energy Resources Act (2007), but it
does not cover non-commercial uses or heat pumps. The PGER 2007 does not authorise
water take outside the provisions of the RWIA 1914, but it does exempt from the PEGR 2007
any small-scale ground-source heat pumps used at or near the source and non-commercial
small-scale uses of geothermal heat. The regulations currently being drafted may specify
whether the small-scale recovery of geothermal energy in prescribed circumstances is for a
commercial or non-commercial purpose, and it is anticipated that the Western Australian
Government will assess each geothermal project on its merits.
The PEGR 2007 allows the Western Australian Government to progressively release blocks
of land for open tender. Several block acreage release tenders have resulted in a favourable
response from industry, and further releases are anticipated in 2011.

2.3.3 Victoria
In Victoria, the Water Act 1989 is the legislation that governs the way water entitlements are
issued and allocated, including defining water entitlements and establishing the mechanisms
for managing Victoria's surface water and groundwater. The Department of Sustainability and
Environment (DSE) is the statutory body that manages water resources.
Groundwater resources in Victoria are managed by geographic extent of the aquifers, referred
to as Groundwater Management Units (GMUs), with groundwater allocation and sharing
being managed through licences issued by rural water corporations. GMUs can be
designated Groundwater Management Areas (GMAs), Water Supply Protection Area
(WSPAs) and Unincorporated Areas. GMAs and WSPAs may be depth limited or depth
unlimited. The Water Act 1989 provides a mechanism for capping water resources should
groundwater resources in a particular GMU be shown to be in danger of being depleted or
subject to adverse impacts. The cap, referred to as Permissible Consumptive Volumes
(PCVs), is set by the Minister for Water and represents the maximum volume of water that
can be allocated in a GMA or WSPA. Many GMAs and WSPAs are already allocated to their
PCV limit. In these areas new licences cannot be issued and the only way to acquire new
water in these areas is to purchase a licence from an existing groundwater entitlement holder.
The Geothermal Energy Resources Act 2005 (GERA 2005) and Geothermal Energy
Resources Regulations 2006 provide the framework for the large-scale commercial and
sustainable exploration and extraction of geothermal energy resources in Victoria. The use of
geothermal energy (i.e. electricity production) is regulated through existing planning and
environmental law. The GERA 2005 allowed the state government to release blocks of land
across the entire state for open tender. Two tenders held in 2006 and 2008 resulted in much
of the state being licensed (23 out of a possible 31 blocks). Total committed expenditure
during the five-year tenure of the permits exceeds $364 million. The GERA 2005 allows for
multiple concurrent overlapping resource exploration licences.
The GERA 2005 specifies that, in all instances, provisions of the Water Act 1989 apply to all
geothermal water licensing and permitting issues. Irrespective of whether water is reinjected
back into the same groundwater reservoir from where it was extracted, or whether the water
is discharged to surface watercourses, the water from geothermal activities is considered a
waste product and regulation would be governed by the Environment Protection Act 1970
(EPA 1970). An environmental licence would be required in all circumstances, although a
licence is not required under the Water Act 1989 to discharge to a surface watercourse.
Groundwater management is coordinated between government agencies, with any issues
examined by the Department of Primary Industries (DPI) in partnership with DSE. At present,
it is unclear from the Water Act 1989 licensing arrangements whether closed-loop systems

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are classified non-consumptive in Victoria, and an ongoing dialogue within DSE is seeking to
resolve this issue. Geothermal operations that are exempt from the GERA 2005 (i.e. low
enthalpy resources shallower than 1000 m or temperatures lower than 70 C) continue to be
managed under existing statutory arrangements within the Water Act 1989 and EPA 1970. It
is suggested that integration of water issues relating to geothermal developments is
problematic under these conditions: exemptions in geothermal legislation, the involvement of
a number of agencies operating under various acts, and licensing/management covering
different parts of the water balance (e.g. extraction, reinjection, discharge to environment,
etc).
The Victorian Government has stated that water allocation, pricing, use and discharge
requirements for the geothermal energy industry should be level with those that apply to other
water users (DPI 2010).

2.3.4 Tasmania
Two legislative mechanisms provide a framework for surface water and groundwater use in
Tasmania: water licences under the Water Management Act 1999 (WMA 1999) and irrigation
rights under the Irrigation Clauses Act 1973. The Department of Primary Industries, Parks,
Water and Environment (DPIPWE) is primarily responsible for managing water resources in
Tasmania.
Although Section 48 of the WMA 1999 has an exemption relating to groundwater extraction
generally, including geothermal activities, there is the power to develop Water Management
Plans (WMP) in specific areas where water resources are considered to be reaching their
sustainable limit (e.g. at the time of writing, the Wesley Vale WMP is about to be declared).
The general exemption to take groundwater may be removed by the appointment of a
groundwater area under Section 124A of the WMA 1999 requiring a licence to take
groundwater.
Geothermal resources are classified as Category 6 minerals under the Mineral Resources
Development Act 1995 (MRDA 1995) in Tasmania, and tenements are granted as a 'Special
Exploration Licence'. The MRDA 1995 allows over the counter applications for licences,
which has resulted in a large proportion of the state being licensed for exploration. Licences
can co-exist with existing or future minerals and petroleum exploration titles.
While construction of wells and bores in Tasmania requires a well works permit, geothermal
exploration activities are exempt from the well works permit system under the MRDA 1995.
However, geothermal operations are treated as mining operations under the WMA 1999 and
could therefore require a licence under the WMA 1999 through a Water Management Plan or
the appointment of a groundwater area.

2.3.5 New South Wales


The take and use of surface water and groundwater resources in New South Wales is
legislated by the Water Act 1912 and the Water Management Act 2000 (WMA 2000), with the
NSW Office of Water (within the Department of Trade and Investment, Regional Infrastructure
and Services) being responsible for water resources management. By definition, the term
'take' includes both the consumptive extraction of water (e.g. via a pump) and/or the
'incidental' take of water (e.g. leakage into a bore and/or work such as an excavation, opencut mine, underground mine). The current NSW Government has committed to an extensive
review of planning legislation and the competing land use demands for agriculture, mining
and the environment. A review of specific water regulations related to aquifer interference is
also being undertaken.
Under the Water Act 1912, water resources are managed under a system of surface water
management areas (SWMAs) and Groundwater Management Areas (GMAs). The Water Act
1912 remains active until a Water Sharing Plan (WSP) has commenced under the WMA
2000. WSPs delineate specific water source areas and prescribe the rules related to trade
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within and between zones within a water source. WSPs provide rules for sharing water
between the environment and water users, and prescribe long-term and annual extraction
limits based on climatic variability and the availability of water for extraction. A number of
WSPs have been commenced and plans are currently being prepared to include those
surface and groundwater water sources not yet covered (inland groundwater is subject to
embargo under WA 1912 as per NSW Government Gazette 159, December 2008). In general,
once a WSP has been commenced, the water trade market is the primary mechanism for the
purchase of entitlement. Where a water source is not fully committed and further water is
deemed available for release, the WMA has provisions that enable a 'controlled water
allocation' process to be applied. The controlled allocation process is still under development
and not yet implemented.
WSPs made under the WMA 2000 set limits on the availability of water by specifying a limit on
the total volume of water available for extraction from water sources within the plan area. This
limit is termed the Long-Term Average Annual Extraction Limit. A water access licence from
the Office of Water specifies shares in the available water from a water source (the share
component). This licence ensures that the total volume taken from a water source remains
within defined extraction limits.
The Mining Act 1992 (MA 1992) governs geothermal exploration, which is considered as
Group 8: Geothermal Substances under the Mining Regulation 2010, and defines a
geothermal substance as any substance occurring naturally underground that is heated by
the natural processes of the Earth to a temperature in excess of 100 C (which would exclude
low enthalpy applications). The MA 1992 allows over the counter applications but the
associated licence fee structure and issues with overlapping minerals licences (especially
coal) are possible reasons for the low number of applications compared to other states (just
15 exploration permits awarded as of January 2011). Application for a Group 8 geothermal
exploration licence requires the Ministers consent. At the time of writing the MA 1992 is not
specifically subject to the Water Act 1912 (or the WMA 2000). Activities that result in water
take are subject to licensing under the Water Act 1912 (or WMA 2000). A review by NSW on
these matters is in progress.

2.3.6 Queensland
In Queensland, the Water Act 2000 is the legislation that gives authority to take surface water
or groundwater. The Department of Environment and Resource Management (DERM) is the
statutory body that oversees water planning activities.
The Geothermal Exploration Act 2004 treats geothermal energy as a specific and unique
substance in Queensland, to facilitate exploration for geothermal energy through a tender
process on areas selected by the state government. This Act was repealed by the
Geothermal Energy Act 2010 (GEA 2010), due to take effect in March 2012, which provides a
regulatory framework for the exploration and production of geothermal energy. Two
mechanisms are now available for licence applications: the more prospective areas will fall
under a tender process whilst other areas will be available for over the counter applications.
Delays in implementation of legislation have resulted in a limited number of exploration
licences being granted in Queensland, although a larger number are under application.
The GEA 2010 states a geothermal licence holder cannot take or interfere with water as
defined under the Water Act 2000 unless the taking or interference is authorised under the
Water Act 2000. This applies to all geothermal activities including exploration, development
and operations. Furthermore, the GEA 2010 specifies that drilling of water bores must comply
with construction and drilling standards as defined by the Water Act 2000. The treatment and
disposal of any water resulting from geothermal work is legislated under the GEA 2010, so
there may be further opportunities to better integrate the sector within existing water planning
frameworks.
As with NSW, the Queensland Government is reviewing legislation and regulatory frameworks
with regards to groundwater and the coal-seam gas (CSG) industry. Amendments to the

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Water Act 2000 will support management and protection of water resources, by requiring
CSG operators to prepare periodic underground water impact reports, whilst amendments to
the Environmental Protection Act 1994 will require CSG operators to submit environmental
management plans to demonstrate their effective protection of environmental values,
including groundwater quality, and will introduce groundwater level trigger thresholds. Whilst
these amendments are focused on the CSG industry, it is possible these may have future
implications for the geothermal industry.

2.3.7 Northern Territory


The Water Act 1992 (as amended 2008) controls water resources in the NT, and is
administered by the Department of Natural Resources, Environment, the Arts and Sport. The
Water Act 1992 allows for the declaration of Water Control Districts (WCDs) in areas that may
be at risk of becoming stressed due to water extraction. A Water Allocation Plan (WAP) directs
the management of water in a WCD. The WAP outlines the vision, objectives, strategies and
performance indicators for the particular water source, and sets limits to the availability of
water assigned to specified beneficial uses, rules for managing licences and water trading.
The Geothermal Energy Act 2009 (GEA 2009) aims to facilitate and regulate the exploration
and extraction of geothermal energy in the NT. The GEA 2009 stipulates that geothermal
operations require two rights: a right to the heat energy, which would be granted through a
production licence; and a right to water. The rights to the use, flow and control of water
regardless of temperatureis subject to the Water Act 1992, under which water extraction
licences and ground discharge licences (i.e. water injected back into groundwater) are issued.
The GEA 2009 allows for over the counter applications for most of the Northern Territory,
although an area proximal to Katherine is currently reserved to allow for a competitive tender
process. As of January 2011, some 14 applications were being processed. Low enthalpy
geothermal resources are excluded from the GEA 2009 since the regulations explicitly state
geothermal water is a substance at 70 C or more.

2.4 Future developments and trends in


geothermal resource utilisation
2.4.1 Engineered geothermal systems (EGS) and hot
sedimentary aquifers (HSA)
The number of companies exploring for geothermal resources suitable for electricity
generating purposes (both EGS and HSA) increased rapidly in the period 200410. During
this time, most state and territory governments around Australia passed appropriate
legislation and regulation to ensure companies had the opportunity to explore for geothermal
resources. The most active states are currently Victoria and SA, and this is reflected by the
number and geographical extent of geothermal exploration licences in these states.
In 2007 the Australian Government announced a 20% Renewable Energy Target Scheme by
2020 (RET) and a $500 million Renewable Energy Fund (REF). However, at the time of
writing there remains uncertainty over carbon pricing policy which, together with the loss of
risk appetite by the private sector post-Global Financial Crisis (GFC), has resulted in many
companies being unable to fund exploration and development activities.
There has thus been a level of rationalisation of the geothermal industry in Australia in the
past 18 months. Whereas in the mid 2000s many resources companies were diversifying and
embarking on geothermal exploration activities, a number of these same companies have
since relinquished their geothermal exploration permits and are now concentrating on their
core resource assets.

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There are now 57 companies that hold geothermal exploration licences in Australia and this
number may well decrease should further rationalisation of the industry continue. This number
does not include companies that are targeting GSHPs and LEAs for direct use applications.
An increasing number of Australian geothermal companies have commenced exploration
activities overseasin particular in Asia, South America and Europetargeting both
conventional and non-conventional geothermal resources. By doing so, they hope to generate
cash flow and thus fund their geothermal resource activities in Australia.
Initially, most geothermal companies focused their attention on either HSA or EGS projects.
However, there is a growing trend for companies to explore for both types of geothermal
resources in the same area. Drilling deeper to exploit hotter EGS resources may not always
be more economically or geologically viable than exploring for less hot and shallower HSA
resources. It is noteworthy that Geodynamics, regarded as having the most developed EGS
resource in Australia (Section 2.2), is now in a joint venture with Origin Energy to explore the
HSA potential of the shallower section in their Innamincka Project.
New exploration permits are still being granted, in particular in Queensland, WA and SA. It is
also noteworthy that the NT will soon issue its first geothermal exploration licences. Figure 13
shows the current geothermal exploration licences in Australia superimposed on a heat flow
map of Australia (HDR 2011).
Given the high cost of drilling, one of the most important drivers for geothermal exploration is
the quality and quantity of geological and geophysical data already collected from previous
minerals and petroleum exploration and development activities. Proximity to the national grid
and other infrastructure is another important driver. It is therefore envisaged that the focus of
EGS and HSA exploration will continue in the areas already being targeted.
Figure 13: Heat flow map of Australia with geothermal exploration permits superimposed

Note: Licences correct as of 1 December 2010 (HDR, 2011).

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2.4.2 Low enthalpy aquifers (LEA)


There has, in recent years, been an increasing demand in Australia for utilising LEAs for a
range of domestic and commercial applications. When a site has been chosen, the aquifer
architecture and plumbing characteristics must be scrutinised to ensure the suitability of the
aquifer to the intended application. To date, very little work has been undertaken in Australia
to match aquifer potential to specific applications, although it is likely that site-specific studies
have been undertaken in-house by geoscientific and/or engineering entities.
The following section therefore outlines the geographical locations most likely to be growth
centres, or hot spots with substantial LEA potential. Whilst the information focuses on the
major population and commercial centres of Australia, it is likely that interest in LEA utilisation
will continue to grow in areas where non-renewable resources are too expensive, such as
remote locations away from the electricity grid or gas pipeline network.
Increasing numbers of LEA applications tapping the same aquifer will necessitate strict
planning and regulation in order to ensure the sustainability of the aquifer system. However, a
mechanism to achieve this is not yet in place. Increasing demands on groundwater resources
and aquifers as a result of climate change and population growth has already led to more
stringent government regulations, most recently in Adelaide and Brisbane. This trend is likely
to continue for the foreseeable future, and data pertaining to Australias water resources is set
to increase in quantity and quality.

Perth
The Gnangara groundwater system, within the Perth groundwater province (also referred to
as the Swan Coastal Plain), refers to the series of shallow aquifers in the vicinity of Perth: the
Superficial, Mirrabooka, Leederville and Yarragadee aquifers. The shallowest aquifer, the
Superficial Aquifer, comprises TertiaryQuaternary floodplain sandy deposits, and is underlain
by the semi-confined Mirrabooka Aquifer (up to 160 m deep).
The Leederville Aquifer is up to 500 m thick and is sited within the Cretaceous Warnbro Group
(Leederville Formation). The geological unit comprises interbedded, poorly consolidated, fineto coarse-grained sandstone and black, carbonaceous shale, distinctive glauconitic shale and
lignite seams.
The most significant aquifer within the Perth Basin is the Yarragadee Aquifer, which lies
several hundred metres below ground surface and attains a maximum thickness of
approximately 1000 m. The aquifer is part of the Jurassic Yarragadee Formation, consisting of
interbedded fine- to coarse-grained feldspathic sandstone, siltstone and claystone with minor
conglomerate and coal. The basal section is dominated by finer-grained siltstone and clay,
which grades up-section to a more sand-prone sequence. The aquifer is primarily composed
of non-marine fluvial, poorly sorted sandstones which are porous and poorly cemented, hence
allowing for considerable groundwater reserves.
The Yarragadee Aquifer is already tapped for geothermal purposesheating of the Claremont
and other swimming pools (Section 2.2.3). The aquifer is also one of the exploration targets of
Green Rock Energy, which plans to install absorption chillers for base-load chilled water at the
University of Western Australia campus at Crawley, Perth.
Concerns have already been raised, however, over the long-term sustainability of the
Gnangara groundwater system, since the climate of south-western Western Australia has
seen a steady decline in rainfall coupled with an increase in demand for water.

Melbourne
Greater Melbourne lies within the Port Phillip groundwater province, which comprises two
primary aquifer systemsa series of Tertiary aquifers that overlie the Bedrock Aquifer (DSE
2009).
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Approximately 80% of the groundwater resource in the Port Phillip Basin is currently utilised,
sourced from around 4000 bores (Nott 2004). This groundwater is used for a variety of nongeothermal applications including irrigation, horticulture, stock watering and industry. Since
bore yield, aquifer depth and water quality (especially in terms of salinity) vary on a local
scale, any potential open-loop LEA installation would be subject to both detailed
hydrogeological support studies and significant planning issues. In addition, the salinity issue
would be a factor for the long-term cost and efficiency of any installation.
The MiocenePliocene Upper Tertiary Aquifer comprises a varied sequence of sedimentary
units including claystone, siltstone, sandstone and gravel. Major geological units include the
Moorabool Viaduct Sand (Otway Basin and west of Port Phillip Basin), the Brighton Group
(Port Phillip Basin and Nepean Peninsula), and the Baxter Sandstone (Western Port Basin).
The Middle Tertiary Aquifer was deposited during the OligoceneMiocene and comprises
claystone, siltstone, sandstone, marl and limestone. Geological formations include the
Gellibrand Marl and Jan Juc Formation in the Otway Basin, the Fyansford Formation and
Batesford Limestone in the Port Phillip Basin, and the Sherwood Marl in the Western Port
Basin.
The PaleoceneOligocene Lower Tertiary Aquifer consists of both sedimentary and volcanic
units. It unconformably overlies the Bedrock Aquifer and the lithologies include claystone,
siltstone, sandstone, gravel, coal and basalt. The aquifer is dominated by the Dilwyn
Formation and Eastern View Group in the Otway Basin, the Werribee Formation and Older
Volcanics in the Port Phillip Basin and Nepean Peninsula), and the Childers Formation and
Older Volcanics in the Western Port Basin.
The Bedrock Aquifer comprises metasedimentary OrdovicianSilurian sandstone and shale,
and Devonian granite intrusives. These units form the rugose topography in the vicinity of
Melbourne.

Adelaide
The Mount Lofty Flinders Range groundwater province covers the city of Adelaide and
surrounding areas. The deep Tertiary Aquifer beneath Adelaide yields high-quality water which
is used for a variety of purposes including soft-drink and beer manufacturing, horticultural
production, irrigation of recreational and sports fields, and a number of other industrial uses. It
is therefore feasible that groundwater in the vicinity of Adelaide might be suitable for low
enthalpy geothermal installations.
However, in 2007 the South Australian Government prescribed all groundwater in the Central
Adelaide Groundwater Area (CAGA) as the resource was being increasingly developed
(DWLBC 2010). The Adelaide and Mount Lofty Ranges Natural Resources Management
Board, with technical support from the Department for Water, has initiated a water allocation
plan for the CAGA to ensure the resource is managed and developed in a sustainable
manner. This work involves the development of a multi-layered groundwater flow model (RPS
Aquaterra, 2011), which could be easily adapted to evaluate direct geothermal use scenarios.

Sydney
The Sydney Metropolitan area is covered by the Sydney groundwater province, which
comprises two coastal sand aquifers (the Botany Sandbeds and Metropolitan Coastal Sands)
and the porous rock aquifer (the Sydney Basin).
The Botany Sandbeds and Metropolitan Coastal Sands aquifers provide groundwater supply
options for local areas in Sydney, which obtains most of its water supply from Warragamba
Dam on the edge of the Blue Mountains in western Sydney. The aquifers generally have a
relatively shallow water table and are readily recharged by direct rainfall infiltration.
Unregulated use in some areas by heavy industry (such as tanneries, dry cleaners and wool
scourers) for many decades has resulted in pollution and contamination in some parts of the

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aquifer network, particularly in the Botany area. New boreholes in areas of contamination are
banned and a cleanup of the contaminated aquifer is ongoing.
The Sydney Basin aquifer underlies much of Sydney. However, the aquifer is not very
permeable, provides low bore yields, and contains relatively poor quality water. It provides
only limited quantities of groundwater for mining and quarrying activities in some areas.
Expansion of subsurface infrastructure in the Sydney area, especially car parks and tunnels,
is placing pressure on the aquifers. In addition, contamination of the aquifers remains a major
concern given the existing heavy industry dominance in some areas, and due to fertilisers and
agricultural chemicals associated with golf courses. A Catchment Allocation Plan is being
developed for the Sydney area to ensure sustainable use of the groundwater supply (DECCW
2010).

Brisbane
The Brisbane Metropolitan area straddles two groundwater provinces: the Tasman; and the
Clarence-Morton. Alluvial aquifers underlie Brisbane. However, at present the groundwater is
used for irrigation purposes only. There was an initiative (commissioned 2005) called the
Brisbane Aquifer Project, with the objective to assess and establish a network of bores for the
extraction and treatment of 20 ML of drinking water per day. The project established a number
of exploratory boreholes and test production bores to measure the water quality and actual
yield in a number of southern suburbs. The project was declared successfully completed in
April 2008.
In 2007, a moratorium was introduced (NRW 2007) on construction of works that take
groundwater from the Brisbane aquifer area (such as stock or domestic purposes, commercial
or industrial purposes, or for irrigation purposes). The moratorium also applies to works if they
would increase the amount of groundwater taken. The moratorium was deemed necessary to
secure the supply of groundwater resources for Brisbanes water supply.

2.4.3 Ground source heat pumps (GSHP)


It is difficult to comment on the future development of GSHPs in Australia since statistical data
concerning the current and past installation capacity and number of operating systems is not
routinely collected by any single central organisation. However, data available from the
European Heat Pump Association (EHPA) demonstrates trends in the European context
which may indicate potential for Australia.
Statistics from EHPA (2008) indicate growth in European sales for the eight most significant
countries from 200407 (Figure 14). Table 1 shows installed stock for selected countries
during the same period. EHPA (2008) reports a significant fall in the number of installations in
Sweden during 2008 (due to a number of reasons, most importantly because the market was
growing too rapidly and may have overheated). Growth in France and Germany remained
strong in the same period. A number of other European markets are prime for development,
including the Netherlands, UK and Eastern Europe.

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Figure 14: Total sales of GSHP in the eight most significant European countries 200407
(EHPA 2008)

Table 1: Installed stock of ground source heat pumps by the end of 2007 (EHPA 2008)

Country
Austria
Estonia
Finland
France
Germany
Norway
Sweden
Switzerland
Total

2004
30,577
1,475
30,000
49,950
48,662
9,562
195,531
33,000
398,757

2005
35,810
1,985
33,500
63,150
60,861
11,562
230,094
38,128
475,090

2006
43,045
2,735
38,000
81,600
87,875
14,062
270,111
45,258
582,686

2007
50,280
3,485
42,500
100,200
114,889
16,562
310,128
52,388
690,432

In 2009 the UK Environment Agency (EA) published its own market analysis for GSHPs in the
UK. Figure 15 shows the uptake of UK GSHPs in comparison to selected European markets
for the period 200407 (EA 2009).
EHPA (2008) stated that there were 3500 installations in the UK in 2008. During its
consultation process, the EA estimated that number would increase to 8000 GSHP
installations in the UK by 2009 (EA 2009). Considering the number of GSHPs installed
elsewhere in Europe, there is huge scope for growth in the UK. Current uncertainty
surrounding the UK Governments Renewable Heat Incentive (the key driver for growth) has
constrained potential growth since May 2010. It is anticipated that the Renewable Heat
Incentive Scheme will be launched in June 2011, and will facilitate the UK Governments 2020
renewable energy targets.

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Figure 15: Comparison of UK heat pump installations compared to selected European


markets 200407 (EA 2009)

In Australia, the GSHP market is comparatively immature. The European experience has
shown that government initiatives are critical for growth, especially for the domestic markets
shown where support is needed for the often expensive up-front capital costs.
Understanding how the Commonwealth and state governments intend to promote the uptake
of GSHPs will be crucial to forecast the market growth, and thus the potential impacts from
the water usage element associated with any market growth. Any potential impacts identified
should be integrated into forward planning, thereby providing a mechanism for water and
energy planners to inform each other and develop mutually acceptable development
frameworks.

2.4.4 Aquifer thermal energy storage (ATES)


There are currently no plans to develop ATES projects in Australia and, given the plethora of
water issues being discussed in Australia at this time, it is anticipated this status quo will
continue, at least in the short term. Projects are being planned and developed in several
European countries, specifically the Netherlands, Norway, UK and France.

2.5 Estimate of total industry


growth/development
This section presents details on the development of the geothermal industry under various
incentive scenarios. The water usage issues are discussed in Section 3.
For the purposes of this report, three broad geothermal development scenarios are used:

no incentives (low development scenario)

incentives for GSHPs and LEAs only (similar to existing domestic and light industry
rebate schemes)

incentives for all types (i.e. a full development scenario).


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2.5.1 No incentives for geothermal applications (low


development scenario)
As discussed in Section 2.4, development and deployment of large-scale geothermal
electricity projects will most likely be delayed. Australian geothermal companies may well
continue to focus on overseas geothermal opportunities.
Even with no incentives for geothermal applications, the growth for GSHPs and LEAs is likely
to continue at moderate levels since an increasing number of companies are keen to show
their green credentials. Water usage issues are discussed in Section 3.

2.5.2 Incentives for GSHPs and LEAs (similar to existing


domestic and light industry rebate schemes)
With regards to GSHPs and LEAs, experience in comparable European markets suggest
rapid uptake of these applications if government incentives are made available.
In Europe, the German Government enacted the Heat Act on 1 January 2009 whereby all
owners of new buildings are obliged to purchase part of their heat demand from renewable
energy sources. Grants of 20/m living space, but not more than 3000 per house for
existing houses and 10/m living space, but not more than 2000 per house for new houses,
are mandated. The experiences of Germany show that cascading use of LEAs can improve
the economic efficiency of these geothermal applications (Schellschmidt et al., 2010). Thus,
many installations combine district or space heating with greenhouses and thermal spas.
Korea has also seen a rapid uptake of GSHP and district heating systems since the Korean
government implemented subsidising programs for renewable energy deployment (Song et
al., 2010). The installed capacity of GSHP and district heating systems rose by over 960% in
the five years to 2009 (17.51 MWt in 2005 to 185.7 MWt in 2009). There was a particularly
large jump in installation capacity in 2009 due to an active rural subsidy program for
greenhouse heating.
In Australia, the Photovoltaic Rebate Program, introduced in 2000, is an example of
implementation and outcomes of a renewable energy scheme. The program initially offered
$4000 rebates to households to install small-scale solar energy power systems. By November
2007 the program had helped install 10 000 solar systems and was receiving an average of
153 new applications each week.
In November 2007, the schemenow called the Solar Homes and Communities Plan
increased the rebate to $8000 per household, aiming to install a further 15 000 units within
five years. By May 2008 the scheme was means tested due to the popularity of the rebate.
There followed a huge increase in uptake of the scheme, from 420 applications per week in
May 2008 to 6043 per week in May 2009.
It is likely that a similar scheme for GSHP would see a corresponding increase in GSHP
installations. The water use implications of this scenario are discussed in Section 3 (e.g. Table
2).

2.5.3 Incentives for all geothermal applications (full


development scenario)
An example of how the geothermal industry in Australia could grow can be seen from
experiences in Germany. Whilst Germany is regarded as having poorer geothermal potential
than Australia, the enactment of supportive renewable energy incentives by the German
government has resulted in a surge of geothermal projects currently being developed. In
addition, a maximum feed-in tariff (FIT) of 0.27/kWh (approximately $0.36/kWh; December
2010 exchange rate) has been introduced (Schellschmidt et al. 2010). These incentives not

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only provide viable economic conditions for the operation of geothermal installations, they
also stimulate the build up of a geothermal power industry in Germany and have opened new
opportunities for geosciences and for the drilling and service industry. This has certainly been
seen at recent international geothermal symposia.
This example should be considered carefully, however, as the push by Germany to diversify
its energy sources and to increase its indigenous supplies of electricity can be considered to
result from the ongoing tensions between Russia and Ukraine over natural gas supplies, with
ramifications for Europe. The most recent escalation occurred in January 2009 when Russia
cut all gas supplies to Ukraine. As Ukraine acts as a major transit corridor for Russian gas
supplies to Europewith approximately 80% of Russias gas passing through18 European
countries reported major deficiencies or cut-offs in their gas supplies during a particularly
harsh European winter.
In Australia in 2008, the AGEA commissioned McLennan Magasanik Associates Pty Ltd to
independently assess the business development plans of Australias geothermal energy
companies, to estimate how much electricity generation capacity the Australian geothermal
industry expects to deploy by 2020 and at what price (MMA, 2008). The findings indicated
that:

the Australian geothermal energy industry can be expected to provide at least 1000 MW,
and potentially up to 2200 MW, of base-load capacity by 2020 into the national electricity
market

capacity potentially represents up to 40% of the Australian Governments 2020 RET of


45 000 GWhthe equivalent of the output of up to 6000 MW of wind farms

an estimated $12 billion would be invested to develop 2200 MW of installed capacity

the cost of generating electricity from geothermal resources is expected to move rapidly
down the cost curve through to 2020through learning, experience and economies of
scale outcomes commencing at around $120/MWh at small scale (10 MW to 50 MW) and
decreasing to around $80/MWh at large scale (300 MW or greater) by 2020

price is expected to be the lowest cost of any form of renewable energy

most of the capacity is expected to come from developments in SA, with other states
increasing their contribution toward the end of the 2020 period

restricted access to risk capital since the GFC began has cast some doubt over the ability
of the industry to reach those targets. Other recent publications estimate that Australia
has a realistic potential of having 40 MW installed capacity (Bertani 2010) to as much as
100 MW of geothermal capacity (Beardsmore & Hill 2010) by 2015.

The water use implications of this scenario are discussed in Section 3 (e.g. Table 2).

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3. Geothermal water use:


requirements and potential effects
3.1 Overview
Geothermal energy is a developing industry in Australia. Information regarding water use and
effects on water resources is relatively scant since most data is considered proprietary by
geothermal companies. Information contained within this section is therefore drawn from a
combination of Australian experience, augmented by overseas experience where it can be
used as analogous to the Australian context.
With some notable exceptions (e.g. Swan Coastal Plain in Perth), the majority of licences for
major geothermal development in Australia are located in areas where the sustainable yield of
Groundwater Management Units (GMUs) has yet to be quantified. This uncertainty can be
accommodated in the water planning process, by ensuring that an adequate allowance is
provided in water sharing/allocation plans for industrial purposes (i.e. including geothermal, oil
and gas, and mining), to meet the needs of projects that have not yet been identified,
explored or developed. This approach is not applied everywhere (see previous comments in
relation to developments at Portland and Warrnambool), but has been successfully applied to
South Australias Far North Water Allocation Plan and provides a degree of certainty for major
geothermal resources development. Similarly, the potential for development of low enthalpy
(shallow) geothermal systems, which may arise in urban areas over coming decades, also
needs to be considered under urban water planning and review arrangements.

3.2 EGS and HSA water-related impact issues


3.2.1 Water planning issues overview for EGS and HSA
Section 2.3 identified that the overall geothermal legislation is explicitly subject to the
provisions of the various water acts in all states and territories except NSW and Tasmania.
The gaps in NSW and Tasmania are nominal (i.e. not material) in that activities that result in
water-take and discharge are subject to licensing under water and/or environmental
legislation, as is the case in every state and territory. This confirms that the existing water
management arrangements are capable of managing geothermal projects if implemented
appropriately. Some jurisdictions have certain exemptions from the geothermal legislation for
low enthalpy geothermal projects (i.e. such exemptions would generally not apply to
EGS/HSA for electricity generation, but could apply to projects for direct use of heat):

Victoria exempts low enthalpy being less than 1000 m deep and/or less than 70 C

New South Wales exempts low enthalpy being less than 100 C

Northern Territory exempts low enthalpy being less than 70 C

Western Australia exempts small scale GSHP used at or near source, and noncommercial small-scale uses of geothermal heat (but these are still subject to the
provisions of the water legislation)

South Australia does not specify whether certain geothermal activities (e.g. low enthalpy)
are exempt from their geothermal legislation, but it does stipulate that all geothermal
activities are subject to the provisions of the NRM Act 2004.

Despite the low enthalpy geothermal exemptions, no state or territory has an exemption from
the provisions of the water legislation for water interfering or taking activities associated with
geothermal projects.

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In Tasmania, there is a general exemption from licensing/allocations for groundwater


extraction for all uses (including geothermal). However, there are powers under the Water
Management Act 1999 to invoke water management plans in areas where there are serious
pressures on water systems. It is understood that this nominal (but not material) exemption in
Tasmania will be further addressed with the upcoming promulgation of a new water
management framework that has been developed in consultation with the Commission.
Pressure management of the subsurface reservoir is of critical importance in both EGS and
HSA projects. To achieve feasibility, EGS projects will usually require an introduced fluid that
is reinjected into the artificially created reservoir to act as the working fluid, as well as to
maintain reservoir pressure and inhibit fracture closure. Likewise, HSA developments require
reservoir pressures to be maintained otherwise natural pore voids may close, thus leading to
decreasing reservoir permeability and production/injection flow rates. In both instances, an
inability to maintain and manage reservoir pressures will ultimately lead to a decreased
operational lifespan of the project.
In addition, regulators are most unlikely to allow the reinjection of fluids into different aquifers
so as to prevent the mixing (and potential contamination) of fluids of different
hydrogeochemical compositions. From the geothermal operators viewpoint, it would be ill
advised to introduce fluids with varying hydrogeochemical properties into the reservoir system
as this may well lead to complications with precipitation and scaling of the reservoir and/or
bore network.
It is for these reasons that most EGS and HSA projects for electricity generation in the
planning and development stages within Australia are designed to be closed-loop systems,
with very low consumptive use during scheme operation. Most of the water produced from the
production well is reinjected to the same subsurface aquifer (or engineered reservoir in the
case of EGS projects). However, low enthalpy aquifer systems (typically for direct use of the
heat rather than electricity generation) often involve single-well or open-loop systems, and
thus involve potential for substantial consumptive use. In any case, the existing water
legislation and planning arrangements can be made applicable to all geothermal
developments, as outlined in Section 2.3.
Water demand is highest in geothermal projects where the volumes of in situ fluids contained
within the formations are inadequate to stimulate and operate an engineered underground
reservoir. Water consumption can be controlled by using closed-loop systems, fluid
reinjection, non-evaporative cooling and general pressure management, although most
geothermal projects will require a long-term water supply at some scale (e.g. for make-up
requirements). While guidance is provided in this report of the potential range of consumptive
requirements, it is not feasible to be exact at this time, as this is a developing rather than a
mature industry and every scheme will have site-specific factors that need to be taken into
consideration.

3.2.2 Exploration water issues for EGS and HSA


Since Australia is generally devoid of conventional surface manifestations of geothermal heat,
geothermal exploration in Australia is focused on identifying those areas where conductive
heat flow and thermal insulation results in elevated temperatures at accessible depth.
Identifying those locations requires a different exploration strategy to that employed for
conventional geothermal systems.
The general progression of an exploration program in Australia includes the following steps:

Desktop geothermal systems assessment (GSA, detailed in Section 1.8 of this report).

Shallow heat flow drilling.

Deep appraisal drilling.

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Once a GSA of an area has been completed, several areas of interest are typically identified.
A drilling program is designed which comprises a series of shallow heat flow bores, and
these bores are used to further ascertain local heat flow and other geological information of
the area.
Cordon and Driscoll (2008) cite two exploration companies that provided details of water
usage from their respective shallow heat flow drilling programs in SA, estimating 5085 kL
for a single shallow bore. Both companies faced logistical and environmental issues with
sourcing the water. Petratherm noted the main logistical issue faced was the trucking or
piping of water from local bores. As stock was using some of the bores, this necessitated
monitoring and rotation of bore usage to ensure sufficient supplies for stock. Company B
(which requested its name be withheld in the Cordon and Driscoll, 2008, report) drilled its own
water bores adjacent to the exploration bore since the trucks planned on carting water from
nearby bores would have severely impacted upon the sensitive track network.
Whilst both companies were exploring in sparsely populated parts of SA, they worked with the
local community and government to minimise real and perceived environmental impacts of
the drilling program.
Once a company has achieved a level of confidence in defining its geothermal resource, deep
drilling is planned to appraise the reservoir characteristicstypical to a depth of 3000
5000 m. This marks the beginning of the development stage as economic considerations
dictate the first deep exploration well is converted into either an injection well or production
well (drilling one well to 30005000 m is widely anticipated to cost $1215 million).
Cordon and Driscoll (2008) cite Petratherms plan to drill two wells at its Paralana project to a
depth of approximately 4000 m. Four local water bores were being drilled at the project site to
meet drilling requirements. The site is within the Far North Prescribed Wells Area (PWA), and
thus the shallow aquifer (non-GAB) water bores required a well construction permit and a
water licence/allocation.

3.2.3 EGS and HSA development water issues


Cordon and Driscoll (2008) utilised technical data from Mil-Tech UK Ltd (2006) to predict the
development stage as requiring a total of about 280 ML of water. This is based on the
assumption that an EGS module consists of one injector (first well) and two producers
(second and third wells) of 8.5 open-hole diameter. Bores are typically drilled to a depth of
30005000 m with an assumed separation between bores being about 600 m.
Closed-loop HSA projects require substantially less water since they do not require fracture
stimulation or reservoir charging. Cordon and Driscoll (2008) estimated approximately 2 ML of
water for each of the HSA deep bores to be drilled.
Water requirements and volumes are comprehensively reviewed in Cordon and Driscoll
(2008) and are surmised here:

Several mud sumps (typically four or five) are constructed to allow the hot drilling brine to
flow slowly from the first pool to the last. This is done with four objectives. Firstly, to cool
the circulating brine; secondly, to settle very fine particles of rock from the brine; thirdly, to
allow a place to store brine during over-and-under balancing; and, finally, the last mud
pool is used to prepare the required density of brine for injection.

A number of in situ small-scale hydraulic permeability tests (such as slug tests, production
tests and low-rate injection tests) are undertaken in the first bore to assess hydraulic
properties in the bore both before and after stimulation activities. The quantity of water
required is dependent on the tightness of the formation.

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Stimulation of the reservoir section to initiate shearing of joints and fractures and thus
develop the EGS underground heat exchanger. During the stimulation process, fresh
water is injected in increasing flow rate steps, typically 3070 L/s, with no addition of
chemicals (some developments have involved the use of chemicals). Once stimulation is
completed, then a post-fracturing injection test is undertaken to quantify the efficiency of
the stimulation.

The second bore is designed and drilled to intersect the underground heat exchanger.
Similar hydraulic permeability tests are performed to evaluate the reservoir section in the
second bore, and additional stimulation activities are usually undertaken. Reservoir
connectivity is quantified by performing a communication test between the first and
second bores. An inert tracer compound is utilised to gauge fluid flow through the
reservoir. The tracer is introduced via the injection well and detected at the first
production well, with breakthrough generally in the order of four to six days. If the initial
stimulation does not produce the desired result then remedial treatments can be
employed to reduce impedance to flow.

The third bore is drilled and similar tests and activities to that undertaken in the second
bore are undertaken.

Once reservoir characteristics are acceptable and basic circulation has been established
between the wells, then circulation with increasing flow rates is undertaken. Flow rate is
increased from approximately 40 L/s up to commercial rates of approximately 100 L/s.

3.2.4 Operational water issues for EGS and HSA


As there are only a handful of operational EGS plants in the world and none yet in Australia,
conventional geothermal projects are generally used in comparison to provide an estimate of
water usage for the production phase of EGS and HSA energy projects. In a typical,
successful conventional geothermal reservoir, individual production wells can produce 5 MW
or more of net electric power through a combination of high temperatures and high flow.
Minor volumes of water are required for periodic maintenance activities during operation of a
geothermal system. The production and/or reinjection capacity from an individual well tends to
decrease with time, depending on a number of variables including changes within the
reservoir, rates of chemical deposition and mechanical conditions of the well. To restore or
regain some of the capacity, well maintenance/rehabilitation is undertaken with a work-over
drilling rig as this is much cheaper and shorter (typically one week) than drilling a new well.
The New Zealand code of practice for deep geothermal wells (NZS 2403:1991) requires 12
hours minimum of water stored for quenching a well (the injection of cold water into a well to
prevent the formation of steam and/or reduce temperatures) during a work-over, and notes a
typical rate of 13 L/s. Acid cleaning is another rehabilitation method that involves injecting an
acid solution into the production or reinjection zone for a short period of time (hours) to
dissolve any build-up of scaling products within the formation around the well. The flow rate of
water required for this operation is similar to a well quench at approximately 13 L/s.
The primary use of water in power plants is cooling, although there are other ancillary uses
related to power generation. There are a number of different types of cooling systems and the
selection of these is based on the type of power plant, geothermal resource chemistry, site
meteorological conditions and access to a cooling source such as a river or aquifer. These
issues are discussed in detail in the next section.

3.2.5 Controlling EGS water losses


Controlling water losses is an important aspect of developing a geothermal energy project
particularly in areas of restricted water availability. Such losses can have significantly negative
economic and environmental impacts if not managed.
Australian EGS projects are likely to encounter risks associated with water supply. Consider,
for example, a hypothetical EGS project consisting of six wells each producing hot water at
100 L/s. If all the water is reinjected with 1% loss per cycle (estimate based on international
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experience), the project has to make up 6 L/s, or 0.5 ML, per day, throughout its entire life.
While that may not necessarily be a problem, it does imply that a permanent supply of water
might be required for many EGS projects.
Water loss mitigation strategies can be employed. In the case of shallow heat flow bores, the
main water losses can be attributed to evaporation on the surface of the sumps or water
filtrating out of the sumps as very little water is lost down hole. In one drilling project sumps
were resealed, which resulted in significant decreases in water loss from 816 kL to 28 kL in
a 24-hour period during drilling (Cordon & Driscoll 2008).
EGS field projects carried out throughout the world have experienced the impact of water
losses through trial production testing. The following anecdotes detail some of the issues
encountered (documented in Tester et al., 2006, Chapter 4).

Fenton Hill, USA


The reservoir could be circulated in such a manner that the fractured volume did not continue
to grow and, thus, water losses were minimised.
If water was injected at high enough pressures to maintain high flow rates, the reservoir
continued to grow and water losses were high. The fractures were being jacked open under
high injection pressures, causing extension of the fractures and increased permeability. At
lower pressures, this did not happen, so the permeability was lower and flow rates much
lower.

Rosemanowes, UK
An experimental proppant (sand) was carried into the joints as part of a secondary stimulation
using high viscosity gel. Proppants are small-sized particles that are mixed with
hydrofracturing fluids to hold fractures open after a hydraulic fracturing treatment (proppant
materials are carefully sorted for size and shape, hardness, and chemical resistance to
provide an efficient conduit for production of fluid from the reservoir to the wellbore). This
stimulation significantly reduced the water losses and impedance, but encouraged shortcircuiting and lowered the flow temperature in the production borehole.

Ogachi, Japan
Fluid losses within the reservoir were high during injection testing because the wells were not
properly connected. Once connection between wells was improved, fluid loss was reduced.

3.3 Low enthalpy geothermal systems impact


issues
Given the similarity of low enthalpy aquifers (LEAs), ground source heat pumps (GSHPs) and
aquifer thermal energy storage (ATES) schemes with regards to water requirements and
effects on water resources, these applications have been combined for the purposes of
consideration of water use issues. They are referred to collectively as low enthalpy
geothermal systems.
Several potential impacts on groundwater via utilisation of low enthalpy geothermal systems
have been identified, and these can be classed as either hydrogeological or thermogeological
events. The lack of information from an Australian context of low enthalpy geothermal
systems necessitates the use of international examples.
For the current scale of development (limited/isolated), the issues discussed below should be
manageable within existing arrangements for bore licensing and water allocation planning.
Should there be an intense concentration of development, then specific water management

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arrangements may need to be developed (e.g. considering the thermal energy balance of an
urban aquifer, as well as its water and salt balance).

3.3.1 Hydrogeological impacts of low enthalpy systems


Potential hydrogeological impacts relating to low enthalpy geothermal systems can be
grouped into drilling-related issues, and water balance and aquifer hydraulic issues.
There are three main drilling-related hydrogeological scenarios that may result in adverse
impacts from the drilling of low enthalpy geothermal systems (Banks, 2008), these being:

inadvertent penetration of artesian conditions

drilling through two aquifers, inducing leakage from one to another

drilling on contaminated land sites, thus resulting in conduits for contaminants to the
aquifer.

The application of existing permitting and driller licensing arrangements should be adequate
to manage the first two drilling-related risks, and existing contaminated sites legislation and
land planning regulations should be adequate to deal with the third risk.
In regard to aquifer and hydraulic issues, if the scheme is open-loop then there will be
discharge to a receiving water body that is either different to the extraction water body, or the
extraction/discharge water body itself may be an open-ended system. This can lead to
potential impacts on the water body that might be due to temperature or water chemistry, in
addition to the water balance impact. Options for sourcing and/or discharging of water for
open-loop systems (e.g. to/from bores/lakes/rivers/marine waters) may trigger the need for
specific licensing and planning requirements due to the higher risk of environmental, social
and economic impacts, which should be managed appropriately under existing water policy
and legislation, as discussed in Section 2.3.
Abstraction quantities from open-loop low enthalpy systems in London have been shown to
be mostly between 1020 L/s (from 2530 sites), with lesser numbers of sites abstracting
between 010 L/s and 2030 L/s (from 1015 sites each). Five sites recorded >50 L/s.
In closed-loop (essentially non-consumptive) schemes, where water is reinjected to the
aquifer, there will be localised drawdown or mounding of water levels/pressures around wells,
which could affect existing users (Banks, 2008).
The reinjection of water can cause increased rates of dissolution where the formation is
susceptible (notably carbonate-type formations). For example, Younger (2006) investigated
the potential for limestone dissolution as a result of cooling by low enthalpy geothermal
schemes. Injection of warm water could also result in the clogging of pore space (Banks,
2008) through dissolution and re-deposition. It should be noted that much of this is
speculative at this stage as the research is yet to be undertaken.
Thermogeologically, the primary constraint on the capacity of an area or location to support
low enthalpy geothermal systems is the number of schemes that can be installed without
thermal interference between the schemes, as discussed in the next section.

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3.3.2 Thermal impacts of low enthalpy systems


The lack of information from an Australian context of low enthalpy geothermal systems
necessitates the use of international examples. Since 2003, the Spatial Strategy for London,
UK, requires onsite generation of renewable energy, with GSHPs recognised as such a
technology. This has resulted in a major uptake in London of open-loop systems. To begin
with these were consumptive (open-loop), but the majority are now non-consumptive (closedloop).
Though closed-loop, it is recognised that there is now a developing density of schemes that
may be affecting the overall temperature of the Chalk aquifer from which the groundwater is
being sourced. A study on the regional distribution of ground temperature in the Chalk aquifer
of London (Headon et al., 2009), indicated that there is potential modification of the
subsurface thermal regime as a result of recharge. Elsewhere, such as in Winnipeg, Canada,
research has also been undertaken to try to determine the extent of the merging of thermal
plumes in the carbonate aquifer beneath the city (Ferguson & Woodbury 2005).
This is not to suggest that all centres of growth are now having adverse impacts on the
aquifers from which they are sourced. However, Australia has the opportunity to learn from
the experiences of those places that have already undergone growth.
Consents to investigate and discharge to the aquifer are the main requirement in the UK for
potential installers. As the applications become more complex, it is expected that the granting
of future licences will depend on the quality and thoroughness of the supporting assessments
(Fry, 2009).
Many of the issues related to closed-loop systems are actually in relation to the sustainability
of the installation. For example, problems might arise with the efficiency of the system as a
result of hydraulic breakthrough, or the lack of appreciation that injection wells require
specialist design. Hydraulic breakthrough can be defined as the possibility that warm (or cold)
water may flow back to the abstraction well, thereby compromising the capability of the
system to provide its optimum heating output.

3.4 Geothermal power plants


3.4.1 Geothermal power plant types and cooling systems
The three main types of geothermal power plants used to generate electricity are binary cycle,
dry-steam and flash-steam units. All of these plant types are based on the Rankine
thermodynamic cycle, which essentially converts heat to work. The lower the temperature of
the heat rejection (waste) part of the cycle, the higher the generation capacity from the same
heat source (i.e. the greater the overall efficiency). The type (or combination of types)
selected for a particular development is a function of the geothermal resource characteristics.
Geothermal power plants in Australia are likely to use relatively low enthalpy sources (e.g.
compared to coal-fired power) and thus use binary generation plants, as noted in Section 1.
A binary cycle unit uses a working fluid with a low boiling point and high vapour pressure,
heated in the heat exchanger by the geothermal fluid until it boils and changes state to a gas.
The binary working fluid is then expanded through a turbine generator where power is
generated. The binary working fluid is then condensed back to a liquid in a cooler before
being pressurised back to working pressure by a pump (Figure 5).
Dry-steam and flash-steam units utilise a steam turbine generator to generate power and are
typically used for higher enthalpy resources (such as fossil-fuel and conventional geothermal
power plants). These units will not be considered further, as they are generally unlikely to be
utilised in Australian geothermal projects.

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Coolers for what are expected to be the predominantly binary cycle geothermal power plants
may be air-cooled radiators, heat exchangers or cooling towers, are discussed below:

Closed-cycle water cooling

Requires a water source for initial filling, preferably low salinity and low corrosive potential
to minimise pipework and pump maintenance issues.

Higher parasitic loads for pumping cooling water through the system and cooling fans for
forced draft cooling.

As the heat is being rejected into the atmosphere, the cooling capacity is dependent on
the ambient temperature and humidity. An increase in air temperature or humidity
decreases cooling capacity.

Water is lost from the cooling tower through evaporation and drift.

If the geothermal working fluid is being condensed (i.e. a steam turbine is used) the
cooling system will gain water at a greater rate than the amount of water that is
evaporated in the cooling tower over the majority of ambient conditions.

Cycles of concentration of salts in cooling tower basins can drive the feedwater/blowdown
requirements (refer to glossary for definitions). For a resource with a high salinity there
will be a high blowdown requirement and this can make water-based cooling systems
impractical.

Air cooling

No cooling water is required.

High parasitic loads for the large number of cooling fans required.

Air-cooled binary plants typically suffer from load reduction on hot days.

Hybrid cooling systems

Utilise solely air cooling where the cooling load and ambient conditions allow, and water
cooling at other times. When the cooling load increases or the ambient
temperature/humidity increases, cooling water is sprayed onto the air coolers to provide
evaporative cooling, which increases the capacity of the cooling system.

Water use is minimised as water is only used when it is required.

Once-through water cooling

Requires the power plant to be located by a water sourcesuch as a lake, river or the
seaso only used where water resources are considered plentiful and as such are
unlikely to be implemented in Australia unless located along the coast.

Minor parasitic loads, mainly pumping (i.e. some of the power generated is used to run
pumps in the plant, rather than being distributed to the grid).

The plant cooling capacity, and hence generation capacity, remains constant as long as
the water source is at a relatively stable temperature.

In the case of a direct contact condenser, the condensed geothermal fluid is discharged
into the lake, river or the sea (more water output than taken in). This condensed
geothermal fluid may have contaminants in it that require environmental consideration.

Examples of cooling systems utilised in geothermal power plants

Birdsville Power Plant (Australia): Binary cycle plant with cooling of the binary fluid by
cooling water through heat exchangers. Cooling water is cooled by air-cooled cooling
tower.

Wairakei Geothermal Power Plant (New Zealand): Steam turbines with direct contact
condensers, utilising a once-through cooling system using river water.

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Ohaaki Geothermal Power Plant (New Zealand): Steam turbines with direct contact
condensers with a closed-system cooling system utilising a natural draft cooling tower.

Kawerau Power Plant (New Zealand): Steam turbine with a direct contact condenser with
a closed cooling system and a forced draft cooling tower.

Mokai Geothermal Power Plant (New Zealand): Two back-pressure steam turbines
exhausting into a binary cycle process. The binary plant utilises banks of forced aircoolers.

Power plant cooling issues for Australian systems


Geothermal power plants in Australia are likely to use low enthalpy resources and binary
generation plants. In addition, some are likely to be located in remote areas away from water
sources and in hot climates. A hot climate and a low enthalpy resource is likely to restrict the
use of air coolers and a lack of water for cooling would result in hybrid cooling systems being
the most probable application.
As noted above, the EGS and HSA systems under development in Australia are closed-loop
in which geothermal fluid is reinjected into the reservoir. If adequate volumes of water cannot
be withdrawn from the reservoir then this limits the cooling options. For HSA-type systems,
cooling water make-up can be sourced from the geothermal fluid itself, which equates to an
increase in consumptive take. A small proportion of the geothermal fluid that has been
through the binary plant can be further cooled in cooling ponds and used as make-up water to
replace cooling water lost through evaporation or as spray in hybrid cooling towers. This
geothermal fluid may require treatment to provide water of suitable quality for cooling water.
EGS systems, where water is injected into the ground, would require an input of additional
feedwater to make up for evaporative losses in the cooling tower.
The amount of cooling water required will vary substantially between plants, ranging up to
50 L/s per MW (the maximum figure relates to a once-through cooling system). The amount
used will be a function of the technologies selected, resource chemistry and local
meteorological conditions.
This cooling water requirement essentially forms a demand for geothermal industrial purposes
(additional to the demand for geothermal well drilling and testing) in relation to water
resources assessment (are the resources available?) and water allocation planning (is the
extraction sustainable?).

3.4.2 Other power plant water requirements


Auxiliary cooling water
Binary plants (the likely generation system for Australian conditions) typically dont require
auxiliary cooling water systems; however, large pumps may require seal water control
systems (water cooling of pump seals).
Steam turbine systems require auxiliary cooling water for generator cooling, lube oil systems,
gas removal systems and pump seal water control systems. Smaller steam turbine systems
(units less than 10 MW) can typically use air cooling on their auxiliary systems. The auxiliary
cooling water system usually shares the same cooling system as the cooling water system.
As such, losses in the system are from evaporative losses in the cooling tower. However,
make-up water is generally only required for plants that are not condensing steam. The
amount of auxiliary cooling required is a function of the equipment specified and not
necessarily related to the size of the power plant. Where water is scarce it is possible to
design a plant that uses a closed non-evaporative cooling water system or is all air cooled.

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Wash-water systems
Wash-water systems will not be expected to be required for closed-loop geothermal systems
such as EGS and HSA, but may be required for geothermal steam turbine systems.

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Steam turbine systems typically separate the steam from the brine by a cyclone separation
vessel. A small amount of particulates from the reservoir and dissolved solids carry over with
the steam. These solids can precipitate out and cause build-up and erosion on turbine blades.
To minimise scaling on turbines, wash water may be injected at points between the steam
separator and the turbine. The wash water is injected into the steam line as a mist or spray to
scrub the steam.

Dosing systems
Dosing systems may be required on the geothermal fluid and cooling water systems. On the
cooling-water side, dependent on the chemistry and the materials used, chemical injection
may be required to adjust pH, inhibit bacterial growth or inhibit metal corrosion. On the
geothermal fluid side, chemical injection may be required to inhibit calcite and silica formation,
which can cause scaling. Dosing systems typically use condensate in the case of
conventional geothermal steam turbine.
For an EGS or HSA system that would typically be used in Australia, dosing chemicals are
likely to be needed to limit heat exchanger fouling both from scaling on the geothermal side
and pH and bacterial growth on the cooling water side. The amount of chemical dosed is
dependent on the requirements of the system and each system will have its own unique
properties. The volume of water required for dosing in the absence of condensate is likely to
be of the order of up to 0.1-0.2 L/s per dosing system.

Power plant amenities and facilities


Most power plants have facilities such as toilets, showers, washing facilities, safety showers,
irrigation, and a lunch room, which all require a potable water source. The volume of water
required would be in the order of 0.1 L/s, but they would only operate when there is demand,
which depends on staffing levels. The total demand volume is quite small, essentially
comparable to typical domestic demands. HSA systems may be able to generate their own
potable water from the geothermal fluid with suitable water treatment depending on the
geothermal fluid chemistry.

Geothermal working fluid sampling


Steam sampling, either for monitoring the chemistry or for measuring flows via the tracer
method, require the geothermal fluid to be condensed or cooled to ambient temperatures for
analysis. Manual-grab samples are typically condensed or cooled with water; manual
sampling typically requires approximately 1020 L per sample. Automatic samplers may
require up to 0.7 L/s of water for cooling samples.

Fire systems
For steam turbine systems a sprinkler system will typically be required around the generator
and hydraulics plant. If a flammable fluid is used in a binary plant this will also need sprinkler
and fire water systems. Fire water is typically stored in a tank or pond, generally in the order
of a few hundred cubic metres, although this is dependent on the fire code requirements.
Generally, the fire system tank or pond is kept full and, other than initial filling, only requires
top-up water if the system is used or for leakages and evaporation in the case of a pond.

3.5 Projected industry water requirements


Projections of water requirements in an expanding geothermal sector are primarily restricted
to electricity generating developments associated with EGS and HSA, since LEAs and
GSHPs are generally closed-loop systems that require negligible water for well development
or for operations. The water requirements for EGS and HSA developments are substantially
different since HSA operations do not usually require fracture stimulation nor initial fluid
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charging of the reservoir (i.e. HSA systems make use of the in situ aquifer properties),
whereas EGS uses water for engineering effective circulation of the working fluid. For
operational water make-up requirements, however, both HSA and EGS are considered to
require about 1% make-up (see Section 4.1).
For an EGS development, the reported average water requirement for drilling and
construction of 280 ML (Cordon & Driscoll, 2008) is based on a three-bore configuration (a
triplet) comprising two production bores and one injection bore. Such a triplet would normally
be expected to supply approximately 10 MWe of powerdependent on resource flow rate
and temperature characteristics. Thus, an average of 280 ML of water might be consumed for
each 10 MWe EGS development.
For an HSA triplet construction, Cordon and Driscoll (2008) estimated approximately 2 ML of
water for each of the bores to be drilled; thus, 6 ML might be consumed for each 10 MWe
HSA development.
Section 1 detailed the predictions of three different reports as to the potential of geothermal
electricity generating capacity in Australia (MMA, 2008; Beardsmore & Hill, 2010; Bertani,
2010). Table 2 provides a preliminary estimate of the water requirements for two different
scenarios for each of the publications using the above estimates. One scenario assumes that
there will be an equal number of EGS and HSA developments (EGS 50%: HSA 50%) whilst
the second scenario assumes that substantially more EGS developments will be
commercialised (EGS 75%: HSA 25%).
Based on the values in Table 2, the potential geothermal energy water requirements
could be estimated to be around 1 GL/a per 40 MW installed capacity (or 3 ML/d per 40
MW). This ratio could be used for broad planning purposes, and includes allowances for
construction and operational requirements for geothermal development over a range of EGS
and HSA assumptions, but excludes the cooling requirements of electricity generating plants
(by definition, it also does not allow for other low enthalpy or direct use types of geothermal
development).

Table 2: Preliminary estimate of develoment and operational water requirements for two
different scenarios of projected geothermal electricity generating capacity in Australia
Author
Projectio
Projecte
Water need (GL/a)
Water need
n year
d
[EGS 50%; HSA
(GL/a)
installed
50%]
[EGS 75%; HSA
capacity
25%]
(MW)
Bertani
2015
40
0.8
1.1
(2010)
Beardsmore
2015
100
2.1
2.7
and Hill
(2010)
MMA (2008)
2020
1,000
20.5
27.4
lower forecast
MMA (2008)
2020
2,200
45.1
60.2
upper
forecast
Note: These estimates do not include power plant cooling requirements, as the type of cooling system will be
determined on a case by case basis and there is considerable variation between systems.

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4. Availability of water resources in


geothermal areas
4.1 Overview
The climate across Australia is characterised by its temporal (seasonal and annual) and
spatial variability. As such, climate is a determining factor in Australian water management
and planning. Extensive areas of central and western Australia are classified as semi-arid or
arid, with average annual rainfall <500 mm (Figure 16). Precipitation occurs sporadically and
can be concentrated and intense, causing both local and widespread flooding. Evaporation
rates tend to be extreme and surface water dries out very quickly. Indeed, Australian rivers
exhibit annual variability about double those of the rest of the world since flood years are
typically followed by prolonged periods of drought (Kollmorgen et al. 2007).
Figure 16: Australian average annual rainfall based on standard 30-year climatology (1961
1990) (BoM 2009), (annotated with geothermal case study projects and main concentrations
of geothermal energy exploration licences)

Rainfall generally increases towards the coast since these areas are adjacent to moisture
sources (the oceans) and have greater probability of access to rain-producing weather
systems. Topography also exerts a marked influence on rainfall as demonstrated by the
mountains of north-eastern Queensland, south-eastern Australia and western Tasmania.
Some of these areas have average annual rainfall exceeding 3000 mm.
Concerns over water scarcity coupled with increasing demands on water resources have
been raised in all parts of Australia in recent years, particularly in light of persistent droughts
and climate change. An intergovernmental agreement (the National Water Initiative, or NWI;
see Section 1.1) was formulated and signed by all Commonwealth, state and territory
governments at the June 2004 CoAG meeting (with the exception of Tasmania, which signed
the Agreement on 3 June 2005, and Western Australia, which signed the Agreement on 6
April 2006).
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The NWI signifies the Commonwealth, state and territory governments' shared commitment to
water reform. It places an emphasis on greater national compatibility in the way Australia
measures, plans for, prices, and trades water, and a greater level of cooperation between
governments. It builds upon the previous CoAG framework for water reform, which was
signed by all governments in 1994. A major activity to support the NWI has been a
comprehensive review of Australias water resources, referred to as the Australian Water
Resources 2005 (AWR 2005).
AWR 2005 is the baseline assessment of water resources taken at the beginning of the NWI
and against which future data, and the success of NWI reform processes, can be measured.
AWR 2005 addressed the following issues:

How much water do Australia's systems have?

How much water do we store?

When does it become available?

What is the variability of our water resources between years?

What are the connections between resources?

A series of regional water resource assessments were undertaken throughout Australia as


part of AWR 2005. These assessments were for specific water management areas/units in
Australia. They included surface water management areas (SWMAs), groundwater
management units (GMUs), capital city water supply areas, inter-jurisdictional and combined
water management areas.
Groundwater and surface water have traditionally been managed independently of each other
without appreciating the interconnectivity between these resources. As a result, it is likely that
double counting of resources has occurred. This could therefore exacerbate over-allocation of
resources in some regions. Over-allocation is where the total volume of water able to be
extracted by entitlement holders at a given time exceeds the environmentally sustainable
level of extraction for that particular system.
This is significant for the geothermal industry because all geothermal systems will use water
at some stage, at least for well drilling, and to varying levels for operational losses (around
1%), and also where cooling of electricity generation plants is required. Geothermal energy
legislation is subject to the provisions of existing water legislation and planning arrangements,
and access to water for geothermal projects is managed accordingly. Depending on which
state or territory is being explored, geothermal projects would need to work with water
allocation plans and obtain water entitlement/access licences, which may require geothermal
projects to utilise established water trading markets, where they exist.

4.2 Water budget


As part of AWR 2005, the following information was forthcoming from Kollmorgen et al. 2007.

In 200405, rainfall for Australia was 2 789 400 GL (average 364 mm), which was
substantially below the long-term average (457 mm) for most of the country (except in
south-western WA and northern NSW).

The 200405 year was preceded by over five years of below average rainfall across large
parts of Australia, particularly the eastern states and south-west WA. This below average
rainfall trend continued during the 200510 period. (Subsequently, in mid-2010 one of the
strongest La Nia events on record resulted in above average rainfall in the eastern
states and northern Australia (BoM 2011a), although south-western WA continues to
experience drought conditions.)

On average, 90% of rainfall is directly evaporated back to the atmosphere or used by


plantsonly 10% runs off to rivers and streams or recharges groundwater aquifers.
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In 200405, total surface water runoff was estimated at 242 800 GL and total
groundwater recharge estimated at 49 200 GL giving a total net inflow to Australias water
resources of 292 000 GL. Based on these figures, surface water runoff made up 83%,
and groundwater recharge, 17% of total net inflows.

Of the total surface water runoff (242 800 GL) over 60% occurred in Australias three
northern drainage divisions. Runoff was greatest in the Gulf of Carpentaria drainage
division (62 060 GL) followed by the Timor Sea drainage division (50 240 GL) and the
North-East Coast drainage division (40 210 GL). In contrast to the high levels of surface
water runoff in northern Australia, the MurrayDarling Basin (MDB) is relatively dry, with
only 6% of Australias runoff.

Compared to the total 200405 water recharge of 292 000 GL, water use totalled
approximately 18 700 GL. Whilst this overall picture may appear satisfactory, the highly
variable nature of supply and demand across Australia means that in a number of areas
resources were stressed. These areas included:

capital city water supplies where water restrictions were imposed, such as
Melbourne, Sydney, Perth, and Brisbane (in recent months water restrictions have
been eased in many parts of Australia)

inter-jurisdictional areas such as the MurrayDarling Basin and the Great Artesian
Basin (GAB). Groundwater extractions in the GAB total 550 GL/y whilst recharge it
approximately 325 GL/y (these are average annual figures rather than figures for the
200405 year).

The apparent over-utilisation of the GAB is an issue of concern that requires ongoing
monitoring. The Mereenie Sandstone provides the water supply to Alice Springs and the
high utilisation of this resource reflects the policy adopted to mine the groundwater
resource in the aquifer.

This is significant for geothermal areas because the Cooper-Eromanga Basin in particular (a
sub-basin of the GAB) has been identified as a highly prospective area for geothermal
development, and sourcing water supplies from the GAB would be an option most projects
would consider. Other options exist, however, including co-produced water from conventional
oil and gas operations, and also from coal-seam gas operations. It is recommended that all
feasible options be considered by geothermal developments, including the option for
developers to fund the capping of uncontrolled GAB bores in order to improve aquifer
pressures and thus reduce impacts generally, and also to increase the available GAB water
for productive purposes, including geothermal.

4.3 Surface water


A total of 245 river basins have been identified in Australia (Figure 17). Kollmorgen et al.
(2007) noted the total surface water storage capacity in Australias dams (including estimates
of farm dam storage) had not increased significantly since a value of nearly 126 000 GL was
reported in 199697. Data on water storage in large dams was previously published by the
Australian Bureau of Agricultural and Resource Economics (ABARE). This is now found on
the BoM website. At the time of writing, the most recent data (BoM 2011b) indicates the
201011 La Nia event resulted in a marked increase in reserves from 49.6% full on
25 February 2009 to 73.8% on 25 February 2010 (57 827 914 ML out of an accessible
capacity of 78 398 745 ML).
The 201011 La Nia event reversed the decreasing trend in water storages across eastern
Australia. However, it should be noted that each of the previous 15 years recorded below
average rainfall, especially in south-eastern Australia.
Many of Australias largest dams are primarily built to provide a combination of hydroelectricity
and irrigation supplies. These include Tasmania and the Snowy Mountains in NSW, with the

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latter also supplementing irrigation supplies in the MDB. Lake Gordon in Tasmania is
Australias largest dam with storage capacity of 12 450 GL. Major dams are also located
adjacent to the capital cities for public water supply and/or flood mitigation purposes.

Figure 17: Australias 245 river basins, with geothermal licences superimposed (licences
correct as of 1 December 2010)

Equally important are dams for irrigation purposes, with Lake Argyle (10 760 GL) on the Ord
River, located in northern WA, being Australias second largest reservoir. Irrigators within the
MDB are served by a number of large capacity storages including the Dartmouth Reservoir
(3906 GL), Lake Eildon (3390 GL) and Lake Hume (3038 GL).
Given the hydrological variability of Australias surface water systems, especially in the more
arid zones where there are many geothermal projects proposed but where there are few if
any large water storages, it may be problematic for geothermal projects to utilise surface
water supply systems (i.e. groundwater may be preferred). Geothermal developments nearby
to major surface water storages would increase competition for an already scarce water
resource.
AWR 2005 divided Australia into a number of geographical regions to effectively categorise
the surface water resourcesthese regions are known as surface water management areas
(SWMAs). These SWMAs were primarily mapped on a catchment to subcatchment scale, and
a total of 340 SWMAs have been defined in Australia.

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4.4 Groundwater
Groundwater is defined as the subsurface water that occurs beneath the watertable in soils
and geologic formations that are fully saturated (Freeze and Cherry 1979). Groundwater can
be further described in terms of aquifers and aquitards. An aquifer is a saturated permeable
geological unit that can transmit significant volumes of water under ordinary hydraulic
gradients for economic activities (Figure 18; DNRM 2005), whilst aquitards are low
permeability units within the stratigraphic sequence. Aquitards may have sufficient
permeability to transmit water as part of the regional groundwater flow, but this permeability is
insufficient to allow development of the resource (Freeze & Cherry, 1979). The size and
subsurface depth of aquifers and aquitards tends to be highly variable, being dependent on
both local and regional geological and hydrological factors.
Groundwater makes up approximately 17% of Australias accessible water resources and
accounts for over 30% of our total water consumption (NWC 2008). However, these values
were calculated during the most recent drought. Given the heavy rains associated with the
201011 La Nia event it is most likely these figures will be amended by the BoM in its
Australian Water Resources Information System (AWRIS) update.
Figure 18: Schematic of the subsurface groundwater environment (DNRM 2005)

High quality groundwater resources are referred to as potable water and are used for human
drinking water applications. Lower grade water tends to be allocated to agriculture, livestock
and industrial processes.
The availability of groundwater is generally controlled by several important parameters: the
type of strata that hosts the aquifer (i.e. whether it is a sedimentary or fractured rock aquifer
system); the degree of connectivity of the voids (whether they be fractures within the rock, or
pore throats in sedimentary grains); and the process of recharge, storage and transmission of
water. Sedimentary aquifers typically yield at higher rates and store a greater volume of water
compared to fractured rock aquifers due to the generally greater interconnection of granular
pore spaces compared to fractured networks.
A major controlling factor in groundwater availability is the rate of recharge to the aquifer
system versus the rate of extraction. Regions of high rainfall typically have significant volumes
of groundwater available in shallow aquifer systems (assuming an aquifer is present). In drier
climatic regions, such as the central parts of Australia, aquifers tend to be located at deeper
levels below the Earths surface, and are often associated with large volumes of water still
resident from the geologic past. Replenishment rates in these arid to semi-arid areas are
typically low, and recharge zones may be great distances away from the area of extraction.
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A number of priorities have been identified for future groundwater reform (NWC 2008), the
most urgent being to return over-allocated systems to sustainable levels. Other priorities
identified by the Commission include the need for nationally harmonised groundwater
measurement standards and definitions, a groundwater stocktake in northern Australia, and
urgent implementation of a sustainable integrated groundwater and surface water cap in the
MurrayDarling Basin.
AWR 2005 divided Australia into a number of geographical regions to effectively categorise
groundwater resourcesthese regions are known as groundwater management units
(GMUs). Some 367 GMUs have been defined in Australia (Figure 19) and these often fall
across more than one SWMA. Groundwater sharing agreements have been formalised
between different states where GMUs straddle multiple jurisdictions.
Figure 19: Australias 367 GMUs with geothermal licences superimposed (licences correct as
of 1 December 2010)

Since a number of factorssuch as rate of recharge and level of extractioncan vary


through the seasons, the absolute volume of groundwater within a particular GMU is difficult
to measure. A proxyreferred to as the sustainable yieldis therefore adopted; this is the
amount of water that can be sustainably extracted (Figure 20). It is clear that a number of
geothermal licences are located in areas where the sustainable yield has yet to be quantified.
In addition, a number of geothermal permits are sited in north-eastern SA where the GMU is
regarded as having a moderate level of extraction.

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Figure 20: Sustainable yield of each GMU in Australia (from AWR 2005) with geothermal
licences (correct as of 1st December 2010) superimposed

4.5 Co-produced fluids


In the United States alone, approximately 8000 GL of hot water are produced annually as a
by-product of conventional petroleum production (Table 3) primarily concentrated in nine
states (Curtice and Dalrymple 2004; cited in Tester et al. 2006). This resource could
potentially generate over 4200 MW of electrical power from 100 C resources from the states
listed in Table 3.
Historically, this co-produced water is a costly inconvenience in most mature petroleum areas
(Tester et al. 2006). There is, however, growing awareness that rather than disposing of this
water, the resource can be used to produce geothermal electricity for petroleum field
operations or to supply to the national grid.
The key factors required for successful geothermal electrical power generation from coproduced fluids include sufficiently high flow rates and temperature from a well or group of
wells in relatively close proximity to each other. Although some of the fluid produced from the
petroleum industry may not be suitable for use, a certain fraction may always be available that
can be easily produced, collected and used as feedstock for geothermal developments.

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Table 3: Equivalent geothermal power from co-produced hot water associated with existing
petroleum production in selected states of the US

State

Total water
produced
Annually
(kbbl)

Alaska
California
Illinois
Kansas
Louisiana
New
Mexico
Oklahoma
Texas
Wyoming
Total

1
5
2
6
2
1

688
080
197
326
136
214

215
065
080
175
573
797

12 423 264
12 097 990
3 809 087
46 973 24
6

Total
water
productio
n rate
(kg/s)
8522
25 643
11 090
31 933
10 785
6132

Equivalent
power
(MW@
100 C)

Equivalent
power
(MW@
150 C)

Equivalent
Power
(MW@
180 C)

153
462
200
575
194
110

528
1590
688
1980
669
380

733
2205
954
2746
927
527

62 709
61 097
19 227
237 138

1129
1099
346
4268

3888
3786
1192
14 701

5393
5252
1654
20 391

Note: 1 kbbl is 1000 barrels, or approximately 159 kL; 50 million kbbl is about 8000 GL
(Curtice & Dalrymple 2004; cited in Tester et al. 2006.)

Within Australia, co-produced water is of particular significance in the Cooper-Eromanga


Basin where a number of geothermal licences overlap existing petroleum operations. Each
petroleum field has a large evaporation basin to dispose of water co-produced during the
extraction of petroleum, so water sources are spread throughout the area. The size of each
evaporation basin varies depending on the rate of fluid production. The water is mineralised
(predominantly salts) and contains varying levels of bacteria, so the suitability of such sources
for geothermal operations may be limited. Further assessment of water sources co-produced
during petroleum operations could lead to geothermal energy projects in these areas;
however, this type of development has not yet been widely considered in water planning and
management frameworks.

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5. Water quality
5.1 Overview
Most major geothermal projects for electricity generation (proposed and developed
EGS/HSA) that plan on utilising groundwater resources will use closed-loop systems, as
discussed in Section 3.2, although regulators need to be aware of the additional water
balance impacts associated with systems that do not recirculate the working fluid (i.e. singlebore, open-loop systems). In principle, to reduce water and heat balance impacts, water
extracted for the purposes of geothermal utilisation should be returned to the subsurface
environment once heat energy has been extracted. From the perspective of geothermal
companies the costs involved with reinjection are offset by benefits, including reduced water
consumption (and thus reduced entitlement, licensing and compliance issues), and the
maintenance of aquifer pressures and thus reduced impacts.
Since the extracted groundwater remains within the closed-loop system there is no interaction
with the outside environment and thus negligible (if any) impact on groundwater quality
throughout the extraction/injection process. It should be noted that many of the groundwater
aquifers being targeted for geothermal utilisation lie at depths of a few kilometres (in the case
of electricity production, both EGS and HSA), and several hundred metres (LEAs). With the
notable exception of the GAB, deeper aquifers are less frequently used for human
consumption purposes.
There is always a risk of borehole failure and subsequent inter-aquifer leakage in any
groundwater extraction operation. As is common practice within the groundwater extraction
industry, any shallower intersected aquifers should be sealed off to minimise the risk of interaquifer leakage. All bores utilised for geothermal activities need to be cased to ensure the
stability of the borehole during extraction/injection processes. While there is no specific
construction standard for geothermal boreholes in Australia there is a set of minimum
construction requirements for water bores (Land and Water Biodiversity Committee, 2003).
For geothermal bores, each state or territory develops their own procedures, which may (or
may not) refer to the New Zealand Code of Practice for Deep Geothermal Wells (NZS
2403:1991). For example, SA applies an objectives-based process that requires the
geothermal proponent to submit their well design plans for review. This non-prescriptive
approach is designed to provide maximum flexibility for companies to incorporate new
technology and refined well-design practices without being tied to specific legislation. The
outcome of the engineering review of the well design is a recommendation to accept the well
design, or for the company to review and amend the well-design specifics. Under these
arrangements the possibility of borehole failure during geothermal operations (as distinct from
bore construction which involves fracture stimulation) should be no different from normal
groundwater extraction activities. While best practice methods for geothermal bore
construction and fracture stimulation are still being developed in a process of continuous
improvement it is recommended that technical guidance should be developed and applied in
due course.
The likelihood that a closed-loop geothermal project could impact on water quality for other
users in connected systems is negligible. However, mitigation strategies for dealing with this
unlikely scenario should still be employed and dialogue should be initiated between water
planners and geothermal operators at an early stage of any proposed development.
The quality of the water utilised for geothermal operations depends on a number of factors
including the local geology, the temperature of the resource and the source of the fluids.
Water salinity and chemistry need to be assessed to determine whether the fluid is applicable
for specific industrial purposes.

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5.2 Water salinity


As water flows through the subsurface environment it dissolves traces of the rocks and
sediments it encounters en route. The total concentration of dissolved minerals within the
water is referred to as total dissolved solids (TDS), and this is often taken as a proxy for water
salinity. TDS is measured in milligrams per litre (mg/L) with values of <1000 mg/L generally
acceptable for domestic and irrigation purposes, and 100010 000 mg/L for agriculture.
Seawater is approximately 35 000 mg/L.
Most minerals are only sparingly soluble in water (Nahm 1977) and the movement of
groundwater can be measured in terms of a few millimetres to hundreds of metres per year,
depending on the lithology through which it travels. Groundwater within large, deep basins
often has transit times measured in hundreds of thousands of years over hundreds to
thousands of kilometres.
High enthalpy EGS and HSA projects will likely have differing TDS values since the in situ
water within the different reservoir types has different evolution and habitat origins. For
example, the GABpresently the focus of HSA exploration by a number of geothermal
companiestypically has TDS concentrations in a range of three orders of magnitude from
<200 to >10 000 mg/L (Radke et al. 2000), whereas in situ fluid in the Soultz-sous-Forts
EGS project in France had concentrations of approximately 100 000 mg/L (Sanjuan et al.
2006). Although Australian geothermal operations generally describe the production fluid as
brine, there is very limited publicly available data stating actual salinity values.
There is typically a trend of increasing TDS with increasing depth of an aquifer and distance
from recharge areas, as documented in the GAB (Radke et al. 2000) and illustrated in
Figure 21.
By their very nature, in situ EGS fluids are typically more saline than HSA systems. This is
because EGS fluids are sourced from deep, fractured rocks (usually crystalline) with low
porosity and permeability. There is therefore slow solute movement and increased residence
time within the EGS realm. HSA systems typically have more benign water chemistry, as
discussed in Section 5.3.

5.3 Water chemistry


5.3.1 Gaseous components
In the absence of coal seams, the most likely gaseous components in groundwater, also
referred to as non-condensable gases (NCG), are carbon dioxide (CO 2), hydrogen sulfide
(H2S) and ammonia (NH3). These NCGs are usually only found in very small concentrations.
In conventional steam turbines utilising geothermal fluids directly, NCGs can reduce power
output by reducing the proportion of condensable steam. However, all geothermal systems
proposed in Australia will utilise heat exchangers to drive ORC units, rather than directly
utilising geothermal steam.
An incident at Geodynamics Innamincka project in April 2009 highlights the significant
potential problem associated with gaseous emissions. Corrosion associated with dissolved
H2S was attributed to hydrogen embrittlement (HE) within the well casing, resulting in a blowout of the Habanero-3 well (Geodynamics 2009b). Although not specifically stated by Gaffney
et al. (1988), the blow-out of Della-1 (near the Innamincka project) in 1987 due to corrosive
groundwater might also have been due to HE. HE is exacerbated by excessive
concentrations of H2S and/or excessive pressures, resulting in hydrogen atoms diffusing into
the tensile steel of the casing. HE can be managed by understanding the chemistry of the
water and ensuring the correct grade of steel is utilised in all pipework.

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Figure 21: TDS concentrations in the Cadna-owieHooray Aquifer in the Great Artesian Basin
(GAB) (from Radke et al. 2000). Distinctive regions of TDS concentrations can be delineated
which are the result of proximity to recharge areas and direction of groundwater flow.

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Trace amounts of H2S were present within the Portland district heating system (see Section
2.2.3) and this had to be removed at the cooling towers (Chopra, 2005). Whilst H 2S is a
common constituent of groundwater in volcanic provinces, it is likely to be uncommon in deep
groundwater in Australia. However, H2S is recorded from the CooperEromanga Basin in
central Australia, the site of a number of high enthalpy geothermal exploration and
development projects. The provenance of H2S in the CooperEromanga Basin is poorly
understood. It might come from a number of possible inorganic and organic sources,
including:

sulfides and sulfates associated with minerals within the Big Lake Suite granodiorite (e.g.
magmatic hydrocarbon gases as described in Japan by Kiyosu et al. 1992)

metagenesisdry gas generation from coal measures dominated by Type III organic
matter at present-day temperatures within the post-mature window ~190210 C

thermochemical sulfide reductiontransformation of some petroleum products at high


temperature to H2S (e.g. Cai et al. 2005).

Managing the risk of major problems arising from non-condensable gases does not require
any significant technological development. Rather, it is largely a matter for the geothermal
operator to ensure compliance with the specific state or territory environmental standards and
regulations.

5.3.2 Dissolved minerals


The amount of dissolved minerals and solids in groundwater increases significantly with
temperature (Tester et al. 2006). Some potentially harmful dissolved minerals such as boron
and arsenic are associated with volcanic-sourced geothermal fluids and are detrimental to
surface water and groundwater systems. However, there is a lack of information about the
distribution and magnitude of harmful minerals in non-conventional Australian geothermal
project fluids.
Silica is a dissolved mineral that is frequently present in geothermal fluids since silica is a
major component of rocks and sediments. Whilst not detrimental to health, the presence of
silica can lead to silica scaling on the interior of pipes, heat exchangers and other plant. This
phenomenon is a result of silica precipitating out of solution due to decreasing pressure
and/or temperature. Silica removal from pipe networks is a costly and time-intensive process.
Remedial applications such as pressure management and/or chemical additives to manage
the water chemistry are thus the preferred strategy prior to scaling becoming a problem.
The probability of EGS and HSA projects for electricity generation causing contamination of
surface or shallow groundwater is low since all currently proposed developments to date
propose closed-loop systems where produced fluids are reinjected into the deep subsurface.
Open-loop LEA systems involving surface discharge or reuse (such as Warrnambool ) would
require more active management.
One further possible cause of groundwater contamination is the drilling and development
phase of the project. Bores must be carefully monitored during this phase to ensure any
leakage of drilling fluid is rapidly identified and managed. Bore completion and casings should
be firmly cemented to ensure shallower aquifers are isolated and remain uncontaminated.
Refer to Section 5.1 for a discussion of bore construction standards.

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6. Water policy and management


6.1

NWI and geothermal systems

The Intergovernmental Agreement on the NWI was signed at the 25 June 2004 CoAG
meeting. Through the NWI, Commonwealth and state governments have agreed on actions to
achieve a more cohesive national approach to the way Australia manages, measures, plans
for, prices, and trades water. This initiative remains a work in progress. Whilst the NWI does
not specifically refer to the geothermal industry, it is taken that references to the minerals and
petroleum industries covers the entire resources sector, including geothermal.
As any geothermal system operation involves the circulation of water in the subsurface, the
systems should be considered within the normal water planning processes. For example,
there is potential for geothermal activities to impact on existing water users and waterdependent ecosystems in terms of localised groundwater level drawdown (around production
wells) and/or mounding (around injection wells). There is also potential for cumulative
impacts; for example, if a high density/intensity of geothermal schemes develops in a
localised area (e.g. GSHPs in metropolitan areas) where they may affect the subsurface
water/heat balance and hence impact on other water users or the efficiency of the various
schemes. With the possible exception of potential heat balance issues associated with any
concentrated development of low enthalpy and GSHP systems, existing water planning and
policy arrangements are generally capable of considering the issues of specific and
cumulative impacts (refer to Section 2.3 for more detail). If there is significant growth in low
enthalpy and GSHP systems, then future planning and policy should consider heat balance
issues along with water balance issues.
Under Clause 34 of the NWI, the signatory governments agreed that there may be special
circumstances facing the petroleum and minerals sector that need to be addressed by
policies and measures beyond the scope of the NWI agreement. In this context, all
governments noted that specific project proposals would be assessed according to
environmental, economic and social considerations, and that factors specific to mining
(resources) sector development projects (such as isolation, relatively short project duration,
water quality issues, obligations to remediate and offset impacts) may require specific
management arrangements outside the scope of the NWI.
In both its 2009 and 2011 Biennial Assessments of national water reform progress (NWC,
2009; NWC 2011), the Commission found that the circumstances in which Clause 34 would
apply are not well defined nor are they identified in a consistent and transparent manner. Little
progress had been made since the signing of the NWI in detailing the special provisions for
the petroleum and minerals industries, although at the time of writing some Commission
projects on these topics are nearing completion (notably the cumulative, water-related,
impacts of the mining industry (Jensen 2010), and co-produced water management for the oil
and gas industry). As a consequence, although the resources sector generally is not yet
comprehensively integrated with broader water planning processes or markets, integration of
the geothermal sector in particular would be readily achievable within current frameworks.
Section 2.3 identified that the geothermal legislation is subject to the provisions of the various
water acts in all states and territories except NSW and Tasmania. The gaps in NSW and
Tasmania are nominal (i.e. not material) in that activities that result in water take and
discharge are subject to licensing under water and/or environmental legislation, as is the case
in every state and territory. Along with examples presented in Sections 1.8 and 2.3 of how
geothermal projects are currently being managed, this indicates that the existing water
management arrangements are capable of managing geothermal projects if implemented
appropriately.

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The Commission recommended that NWI-consistent water access entitlements be defined for
the resources sector in order to provide those industries with secure access to water and the
ability to trade water rights with other users. Particular circumstances and potential third-party
impacts that might limit the applicability of NWI-consistent water access entitlements should
be clearly identified and managed.
While the geothermal energy sector has not previously been explicitly addressed within the
NWI considerations of the resources sector, the following section provides some broad
context on major geothermal water use characteristics, before further discussing water
planning implications for the geothermal industry.

6.2

Groundwater management

6.2.1 Regional water planning and high value areas


Regional water plans work at a high level and provide the opportunity to apply consistent
costing principles across a range of supply options, including optimisation of surface and
groundwater resources, aquifer storage and recovery, treated waste water, desalination, and
inter-basin transfers. It is important that such planning processes allow for the involvement of
the geothermal and related electricity generation industry to ensure that all options are on the
table.
In addition to addressing water availability through technical options, the NWI also provides
an opportunity for users to secure additional water through trading. Supply risks can be
managed through participation in water markets, which provide a degree of flexibility of
particular value to the electricity generation industry.
The Great Artesian Basin (GAB) and the MurrayDarling Basin (MDB) are two of the major
regions that incorporate high value groundwater resources within Australia. The GAB contains
a vast groundwater resource which, due to the high temperatures exhibited, provides an area
of natural interest to the geothermal energy industry. The MDB on the other hand, whilst
covering a large spatial extent, brings with it issues relating to an already highly developed
system with many competing water users.
Planners and managers in high value or highly developed areas such as these should find
useful information in this paper to support them in their initiatives. It will be important that
future arrangements for the geothermal industry and related electricity generators are as
consistent as possible with the framework principles for access and pricing under the NWI.

6.2.2 Open-loop and closed-loop geothermal systems


Several classification systems may be applied to geothermal projects. The early chapters of
this report provide a geothermal energy classification that integrates depth and heat flux (i.e.
EGS, HSA, GSHP, LEA, etc). Open-loop or closed-loop is the other main classification system
that is used by the industry in general, including the associated finance and engineering
sectors.
All deep geothermal systems that involve reinjection (EGS and HSA) are classified as closedloop, based on the geological context that injection occurs to the same formation as the
extraction (albeit possibly at a shallower level compared to the deep extraction).
The (shallow) GSHP sector, however, adopts a different definition of closed-loop to describe
the circulation of a fluid (water, refrigerant or, in some cases, air) around a closed loop of
pipework. Almost all GSHP systems are closed-loop systems, especially in Australia. Openloop GSHP systems, on the other hand, use water drawn from a well or surface water body

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(e.g. lake/stream) to circulate through the system and heat exchange unit, with the water
being returned to the ground via a recharge well, or discharged to the surface.
This option is obviously practical only where there is an adequate supply of relatively clean
water (which typically constrains the application of open-loop GSHPs in Australia), and all
local codes and regulations regarding groundwater discharge are met.
Regardless of definition, from a water resources and potential consumption/use viewpoint,
closed-loop systems are inherently non-consumptive and thus involve few risks in relation to
water management and the NWI. During operation, closed-loop systems generally do not
require an ongoing source of water, aside from potential top ups where fluid losses are
manifest (this would not apply to GSHP closed-loop systems). Project approvals for closedloop systems should incorporate requirements for management strategies should fluid losses
be experienced, including addressing potential water losses due to over-pressurisation, water
quality and thermal balances (all of which the geothermal operation would seek to avoid to
ensure project viability).
Options for sourcing and/or discharging of water for open-loop systems (e.g. to/from
bores/lakes/rivers/marine waters) may trigger the need for specific licensing and planning
requirements due to the higher risk of environmental, social and economic impacts. Therefore
water policy for open-loop systems should incorporate more stringent approvals and
management processes because of their greater exposure to other environmental systems.

6.2.3

Geothermal construction and operation issues

From the geothermal industrys perspective, important considerations for water planners in
terms of water use and access include the following:

Rights to extract water from specific geological units and use it for geothermal well
construction and testing, including pressure injection to geological units that may be
distinct from the extraction unit. Specific, but not significant, consumptive use
requirements would be required, but over short-term time frames, usually less than one
year.

Rights to extract and inject water from/to the same geological units for closed-loop
EGS/HSA geothermal operations (low consumptive use during operations or around 1%
make-up).

Options to use the water produced by geothermal operations for specific purposes (e.g.
essential human needs, irrigation, aquaculture, etc.) under arrangements consistent with
the NWI framework principles, and subject to the standard impact assessment
procedures for water allocation planning and licensing.

For GSHP systems, applicability of the existing/proposed water planning frameworks.

Reliability of tenure.

Where hydraulic fracture stimulation is employed, an understanding of the in situ stress


field of a reservoir is critical. If pressurisation greatly exceeds the minimum stress at the
depth of the reservoir, there is the potential for the continual growth of the fractured rock
volume, leading to an increase in water loss. Pressure should be maintained at a rate that
prevents this from occurring (especially during scheme operation).

Any make-up water volumes required need to be carefully managed and monitored
(regulated if necessary) to prevent the potential for additional water pressure to create
fracture extensions leading to water losses (refer to above point). Rights to the required
make-up water volumes for geothermal power utilisation may need to be secure in some
instances (e.g. cooling water for electricity generationsee Section 6.2.4), but should
otherwise be issued on the same basis as every other user so that water trade can be
applied to achieve the desired security.

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Micro-seismic evidence from EGS project exploration and testing indicates a typical
radius of influence of fracture stimulation in the order of 300500 m from the well in a
horizontal direction, with some cases extending up to around 1000 m (less than this
amount in a vertical direction). For wells that are typically around 4000 m deep there is
negligible potential for fracturing to extend up to the surface. Specifically, issues that have
been identified with CSG developments are not applicable to EGS/HSA systems. Where
relatively shallow or low enthalpy geothermal systems are proposed (i.e. <1000 m depth)
it would be prudent for regulators to adopt a precautionary approach and stringently
regulate fracture stimulation activity to ensure a low level of risk of environmental impacts.
Using a precautionary approach would bring the industry in line with the Commonwealth
position in regards to CSG development, which is another energy-related industry
encountering water policy-related uncertainty due to its infancy and rapid growth.

6.2.4

Electricity generation issues

Electricity generation issues relating to the geothermal industry are common to those relating
to the electricity generation industry generally. Recognising the linkages between water
supply and energy security, the Commission and DRET commissioned a report to investigate
the impact of changed water availability for electricity generation in Australia and to identify
future management options for the sector (Smart & Aspinall 2009). In particular, the study
looked at the implications of the agreement by state and territory governments to introduce:

water access entitlement and planning frameworks that enhance the security and
commercial certainty of water access for all users, and provide adequate opportunity for
productive, environmental and public benefit considerations to be identified and
considered in an open and transparent way

water market arrangements that facilitate the efficient trade of water, thereby giving waterusing businesses access to flexible opportunities to trade water and choose how they
utilise their water access entitlements

water pricing arrangements, such as full cost recovery for water services, that promote
economically efficient and sustainable use of water resources and water infrastructure
assets.

The report stated that geothermal power plants were likely to have a higher water intensity
compared to coal-fired power plants since geothermal turbines operate at lower thermal
efficiencies. However, this statement is potentially misleading since it appears to assume that
all geothermal power plants are water cooled. In fact, geothermal power plants can be either
water cooled, air cooled or a combination of both, depending on availability of water (see
Section 3.4). Smart and Aspinall (2009) detailed the factors influencing choice of cooling
systems with electricity generating power plants. Air cooling performs less effectively in hotter
ambient conditions, since the lowest temperature the cooling plant can condense vapour is
limited by the ambient dry bulb temperatureresulting in significant reductions in both
efficiency and generator capacity relative to water cooling. Whilst water-cooled geothermal
power plants would be more efficient in hot inland areas in Australia, water access constraints
may mean this is not viablealthough synergies with CSG and other co-produced water
could be explored. A compromise could be hybrid cooling in which air cooling is predominantly
used, with additional water cooling used during peak temperatures.
Smart and Aspinall (2009) concluded that the NWI reforms have only had a marginal impact
on the electricity generation industry. The water requirements of existing power stations have
been largely taken into account in catchment level water planning, and this does not appear
to have had a material impact on their water access arrangements. Some in the industry
commented that it was difficult to get involved in local community consultation processes
where adjustments to supply arrangements were considered. There had been some water
trading at the margin, although there was a view that water markets are far less transparent
than is desirable.

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Recommendations from Smart and Aspinall (2009) included:

Governments should ensure that future licence arrangements are made as consistent as
possible with the pricing and access frameworks of the NWI, particularly with respect to
supply security, security of tenure, trading entitlements, and pricing.

To facilitate improved water use efficiency by the electricity generation industry, water
supply access arrangements should not mandate take or pay arrangements, nor exclude
participation in water trading unless agreed by electricity generators.

In line with the NWI, the full opportunity cost of all supply and savings options should be
reflected in the price of all supply options when considering these in regional water
planning processes. This should form the basis of pricing for the selected options for
generators.

In light of the need to reduce carbon emissions and the impact on water demand for
cooling in power stations, priority should be given to focusing research and development
in Australia on water management and efficiency in electricity generation.

From the electricity generation industrys perspective, important considerations for water
access include:

rights to extract water

rights to water stored in reservoirs or in river flows

rights to discharge water

reliability of tenure.

These considerations will be particularly important in the water-limited prospective geothermal


areas mentioned in Section 4. Current water access arrangements for the electricity industry
involve licences and contracts specifically tailored for the adequate supply of water for
electricity generation, notably to provide a highly secure supply of water to large power
stations. While aspects of these licences and contracts are consistent with the water access
framework set out by the NWI, there are examples of where the licences and contracts do not
meet the requirements including:

limited rather than perpetual tenure

limitations or conditions on trading

imposing conditions such as water use efficiency and discharge rules

take or pay conditions.

Moving forward, policy makers should consider the impact of the current arrangements on
investment decisions for new generation capacity and the implications for water efficiency.
They should also consider the impact of inconsistencies between existing contracts (both
within and between jurisdictions) on the relative competitiveness of existing generators.
Water pricing policies being adopted in regional schemes, such as the South East
Queensland Regional Water Security Program, are sometimes based on a fixed and variable
charge to cover the supply of purified recycled water as well as cover the cost of storage and
infrastructure. Whilst these arrangements are consistent with the principles of the NWI, there
is a take or pay component associated with the fixed charge. On the surface, this appears to
discourage generators from considering further investment such as dry cooling, as they will
still be required to meet the take or pay commitment. They are not able to sell any water
saved under such a scheme in the event that they do make savings. This does not, on the
face of it, appear to be consistent with the pricing framework of the NWI and should not be
applied to new geothermal developments.

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6.3 Guiding principles for geothermal energy


and water planning
The consequences of not managing the water risks and uncertainties associated with
geothermal energy may be significant. Therefore, the careful, transparent and integrated
consideration of water-related impacts in all approval processes is recommended.

6.3.1

Geothermal energy within the resources sector

Clause 34 of the NWI provides for special management arrangements for mining and
petroleum activities. However, it does not preclude parties from including the resources sector
in their water planning regimes. Since Clause 34 of the NWI is only intended to operate in
exceptional circumstances, NWI-consistent water access entitlements could be made
available wherever possible to the resources sector in general and to geothermal energy in
particular. Where Clause 34 is applied in relation to geothermal developments, a clear and
transparent explanation of why it is used to invoke special arrangements, rather than
complying with the normal water planning and management regime, should be provided. For
example, in South Australia, resources developments can be managed within the water
planning regime or under specific arrangements outside the water planning regime, or
through a combination of the two. However, the Commission has identified that the question
of how resources sector activities relate to water planning processes in most jurisdictions
appears to require further consideration.
Wherever there is potential for significant water resource impacts, geothermal energy and
water use activities should be incorporated into NWI-consistent water planning and
management regimes from their inception. Given the lack of experience around water impacts
of geothermal operations in Australia, this will likely require a precautionary approach (at least
initially) that demands innovation from water managers and planners, and coordination with
existing project approval processes.

6.3.2

Guiding principles

The following guiding principles should be considered by state and territory jurisdictions to
manage the potential impacts (including cumulative impacts) of geothermal-related water use
(noting that some jurisdictions already reflect a number of these principles in their current
arrangements):

Wherever possible, geothermal activities should operate under the same rules and
regulations as other water users, with acknowledgement of the higher security needs of
water for cooling power-generation plants.

Project approvals need to reflect water management objectives and regulatory regimes.
They should be transparent, including clear and public articulation of predicted
environmental, social and economic risks along with conditions implemented to manage
the risks.

Given the nascent position of the industry in Australia, a precautionary and adaptive
approach to managing and planning for geothermal activities is essential to enable
improved management in response to evolving understanding of uncertainties.

The interception of water by geothermal activities should be licensed to ensure it is


integrated into water sharing processes from their inception. This is important for all
phases of deep geothermal projects, which can involve significant consumptive use.
Open-loop GSHPs also may have high demands, although these systems are not
common in Australia, and substantial growth in the short to medium term is considered
unlikely.

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67

Jurisdictions should consider the water and heat balances and water quality issues of
geothermal activities, and manage those impacts under regulatory arrangements that are
part of, or consistent with, NWI-stipulated statutory-based water plans developed for
groundwater management units.

NWI-consistent water plans should be completed to enable geothermal operators to


secure their necessary water supplies, either through the issue of entitlements or by
purchase from willing sellers. Where geothermal activities access low quality water, water
planning regimes should be extended to encompass these resources.

Policy makers should ensure that the geothermal industry is included when consulting
water planners, the community and other water users to plan and develop policy options
for future water resource management. For example, water allocation plans should make
adequate allowance for industrial users, as has been successfully shown in South
Australias Far North Water Allocation Plan.

If discharges to surface waters are unavoidable, they should be conditioned so that


environmental values and water quality objectives, including public health and ecological
objectives, are met (this is particularly applicable to open-loop systems).

A suitable precautionary approach to manage fracture stimulation of EGS would be to


constrain such activities to the use of fresh water (i.e. no chemicals, proppants, gels, etc)
and depths greater than 1000 m, to reduce the potential for environmental impacts.

Water produced as a by-product of geothermal activities that is fit for purpose for other
industries or the environment should be included in NWI-compliant water planning and
management processes. This will enable geothermal producers to manage their resource
in accordance with the principles of the NWI (particularly applicable to open-loop
systems).

6.4 Future policy needs for an expanding


industry
The increasing value placed on water resources by federal, state and territory government
agencies has resulted in the Australian geothermal industry becoming very aware of its roles
and responsibilities with regards to water use.
The Water Act (2007) (Cth) recognises growing concern in relation to the potential impact of
resources development throughout many parts of the basin; thus, Section 255AA was drafted
to ensure that the water impact of any future mining activity on floodplains is considered. The
section specifies that prior to licences being granted for subsidence mining operations (which
would appear to relate to any subsurface mining operation) on floodplains that have
underlying groundwater systems forming part of the MDB system inflows, an independent
expert study must be undertaken to determine the impacts of any proposed mining operation
on the connectivity of groundwater systems, surface and groundwater flows, and water
quality. Since open-loop geothermal is effectively mining hot water and closed-loop
geothermal is effectively mining heat from underground, it is expected that geothermal
operations would fall under this caveat.
In 200405, mining operations accounted for less than 1% of the total water consumed in the
MDB (approximately 20 GL). However, the rapidly expanding CSG industry in many parts of
NSW and Queensland means this percentage will certainly rise rapidly. Previously, the huge
volumes of co-produced water were disposed of in large evaporation ponds. However, this
disposal method has potential long-term environmental impacts linked to ecological damage,
groundwater contamination and depletion, salt disposal and accumulation, landscape impacts
and the amount of land required. Queensland has now mandated that the use of evaporation
ponds be discontinued. Synergies between geothermal energy and CSG extraction are thus
being explored (Mortimer and Cooper 2010).

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During exploratory and development phases of geothermal activity (both open- and closedloop systems), requirements for water use and disposal should be incorporated into
exploration permits issued by the relevant jurisdiction.
In cases where water needs to be brought in from external sources (i.e. EGS in low-yielding
aquifers), transfer of water between different sources may provide additional concerns, due to
the potential for geochemical issues. Further management arrangements may need to be
incorporated into the water planning process in these instances.
With regards to electricity generation issues, it will be important for policy makers to examine
how the existing and emerging arrangements are facilitating efficient resource allocation over
time and encouraging power stations to implement the most efficient water management
programs. The access and pricing framework of the NWI provides a good starting point for
any such assessment.

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7. Conclusions
Australia lacks conventional hydrogeothermal resources (e.g. similar to those in New
Zealand), and Australias only currently operating geothermal power plant, located in
Birdsville, Queensland, yields just 80 kWe (net) from a non-conventional hot sedimentary
aquifer (HSA) system. However, Australia has excellent potential for significant energy
production from (deep) non-conventional HSA and engineered geothermal system (EGS)
developments. EGS and HSA developments currently underway in Australia are each in the
order of tens of megawatts in scale, the most advanced to date being located in South
Australia. In addition, there is considerable scope for energy production from shallow systems
such as low enthalpy aquifers (LEA) and ground source heat pump (GHSP) applications.
Given the scarcity of water resources in Australia however, it is unlikely that there will be
growth in aquifer thermal energy storage (ATES) applications in the foreseeable future.
Initiatives introduced in recent years by Australian governments, academia and industry to
collaborate and break technical barriers aim to position Australia as a dominant global
developer of EGS and HSA technologies. Other countries are also actively pushing to develop
their non-conventional geothermal resources, most notably in Europe and the USA. It is
notable that Germany, geologically similar to Victoria, but with much higher feed-in tariff
arrangements that provide substantial financial support to this developing industry, already
has four non-conventional geothermal power plants in operation at Landau (3.5 MWe),
Unterhaching (3.4 MWe), Nuestadt-Glewe (230 kWe) and Bruchsal (550 kWe). At least two
more are in the construction phase and due for commissioning in 2011: Insheim (5 MWe) and
Sauerlach (5 MWe).
The geothermal legislation in all jurisdictions is subject to the provisions of the various water
acts in all states and territories except NSW and Tasmania. The gaps in NSW and Tasmania
are nominal (i.e. not material) in that activities that result in water-take and discharge are
subject to licensing under water and/or environmental legislation, as is the case in every state
and territory). Where low enthalpy and GSHP resources are exempted from geothermal
legislation (such as in Victoria, NSW, WA and NT), the operations are still subject to existing
water and planning legislation. Existing arrangements are thus considered to be capable of
managing geothermal project water issues if implemented appropriately. Improved integration
would be aided by removing exemptions in geothermal legislation and possibly by combining
legislation within the one act to cover the range of water balance elements (e.g. extraction,
reinjection, and discharge to environment) that are controlled by separate water and/or
environmental legislation.
In relation to the potential for impacts, the geothermal industry has some distinct differences
from the mining, oil and gas industries (for example, EGS and HSA systems do not involve
extraction of large volumes of rock/ore or oil/gas). Although EGS use similar drilling and wellconstruction techniques to the oil and gas sector, the major difference is that hydraulic
fracture stimulation for EGS typically uses only water (no chemicals). A successful EGS is
also developed at great depth (up to 5000 m), with resistive layers above the reservoir that
limit the potential for transmission of impacts (e.g. from hydraulic fracture stimulation or
thermal gradients) towards the surface. HSA and low enthalpy systems are developed at less
hot temperatures and shallower depths, but these systems rely on the natural permeability of
the aquifers, and the related flow and circulation patterns (i.e. do not involve fracture
stimulation).
There may be some benefit in water planners considering a precautionary approach to
manage the potential environmental effects of any proposed shallow fracture stimulation by
constraining such activities to the use of fresh water (i.e. no chemicals, proppants, gels, etc)
and at depths in excess of 1000 m, provided there is scope for site-specifics to be considered
and investigated in detail by proponents to establish impacts and management plans.

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During exploratory and development phases of major geothermal activity, well drilling,
construction and testing activities involve water use and disposal. These water-related
requirements are comparable to those for conventional drilling activities and thus could be
managed under existing permit arrangements for water well drilling and testing issued by the
relevant jurisdiction.
Consumptive water use requirements are generally quite low (around 1%) for operating
geothermal schemes that recirculate the working fluid (i.e. closed-loop or reinjecting), and
also for the exploration and construction stages (including EGS and HSA). For such schemes,
water supply/security issues are not significantly different from those facing other sectors.
Depending on the scale of the development, the volume of water involved over a specified
time frame (e.g. as the geothermal field is developed over a number of years) may be
deemed significant, and the sustainability of the extraction should be considered under
existing water management arrangements, including assessment of the potential
environmental impacts and socioeconomic factors.
Water use requirements for different geothermal systems can vary markedly. Most EGS/HSA
geothermal systems designed for electricity generation are closed-loop when operational,
where the water is recirculated back into the target extraction formation. Closed-loop systems
involve little to no consumptive water use, other than minor top-ups (i.e. ~1% of total
throughput). These water use requirements are consistent with those required for most mining
operations and thus could be managed under existing arrangements by the relevant
jurisdiction. Project approvals for closed-loop systems should incorporate requirements for
management strategies should fluid losses be experienced, including addressing potential
increased water use, water quality issues and thermal balances (all of which the geothermal
operation would seek to manage carefully to ensure project viability).
For water planning purposes, the potential geothermal energy water requirements are
estimated to be around 1 GL/a per 40 MW installed capacity of electricity generation (or 3
ML/d per 40 MW). This includes allowances for construction and operational requirements for
geothermal development over a range of EGS and HSA assumptions, but excludes the
cooling requirements of electricity generating plants (by definition, it also does not allow for
other low enthalpy or direct use types of geothermal development).
Some direct use geothermal systems are open-loop when operational (usually shallow/low
enthalpy systems, but also some HSA systems), where the water is not recirculated back into
the target extraction formation. These systems do involve water use and disposal, usually
to/from separate water sources (e.g. often involving a surface water body). Options for
sourcing and discharging water for open-loop systems (e.g. to or from bores, lakes, rivers or
marine waters) may trigger the need for specific licensing and planning requirements due to
the higher risk of environmental, social and economic impacts, which could be managed
appropriately under existing water policy and legislation, although historically this has not
always been effective. If there is significant growth in low enthalpy and GSHP systems, then
future planning and policy should consider heat balance issues along with water balance
issues.
For geothermal power plants, the primary consumptive water requirement during the
production phase is for cooling purposes, although there are some minor ancillary
requirements such as power plant amenities and facilities. Geothermal power plants in
Australia are likely to use Organic Rankine Cycle (ORC) binary units. Where geothermal
power plants are located remote from plentiful water sources, the combination of a hot climate
and limited access to water will require innovative designs for power plant cooling systems.
With some notable exceptions (e.g. Swan Coastal Plain near Perth, WA), the majority of
licences for major geothermal development in Australia are located in areas where the
sustainable yield of Groundwater Management Units (GMUs) has yet to be quantified. This
uncertainty can be accommodated in water planning processes by ensuring that an adequate
allowance is provided in water plans for industrial purposes (i.e. including geothermal, oil and

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gas and mining), to meet the needs of projects that have not yet been identified, explored or
developed.
This approach has been successfully applied to South Australias Far North Water Allocation
Plan, and provides a degree of certainty for major geothermal resources development.
Similarly, the potential for development of low enthalpy (shallow) geothermal systems, which
may arise in urban areas over coming decades, also needs to be considered under existing
urban water planning and review arrangements.
Given concerns over water scarcity, coupled with increasing demands on water resources in
Australia, geothermal companies, water planners and policy makers need to consider all
options for water sources. For example, two industries within Australia that produce
substantial volumes of water in excess of local needs are the petroleum and CSG industries.
Disposal of co-produced water in both industries is usually a costly exercise, financially and
environmentally. Rather than disposing of this water, the resource could be used to produce
geothermal electricity provided the fluids are co-produced at sufficiently high flow and
temperatures. Although some of the fluids co-produced by the petroleum industry may not be
suitable for use, a certain fraction may always be available that can be easily produced,
collected and used for geothermal developments. Co-produced water is of particular
significance in the Cooper-Eromanga Basin where a number of geothermal licences overlap
with existing petroleum operations. A separate Waterlines document addresses the issue of
co-produced water management.
Finally, this report identifies a number of guiding principles (see Section 6.3) that should be
considered by state and territory governments to manage the potential impacts of geothermalrelated water use. Most fundamental is that geothermal companies should be treated under
the same rules and regulations as other industrial water users, adequate allowance should be
made in water allocation plans for those industrial uses, and project plans need to clearly and
transparently communicate the water management objectives and regulatory regimes before
they are approved.

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