Australia pioneers 'hot rocks' energy

Spurred by high commodity prices and a drive to reduce Australia's reliance on coal, several companies are looking at ways to harness the heat of ancient rocks buried deep below the sands of the Outback. The companies want to use rock temperatures of up to 300 degrees Celsius to generate electricity.

A combination of natureÕs bounty, government support and entrepreneurial spirit may well help Australia win the race to generate electricity for commercial purposes from the rocks, which some say could produce more power than the countryÕs known oil or coal reserves.

Based on encouraging test results, pioneer explorer Geodynamics could make an investment decision on its first power station in early 2006, the climax of five years of drilling in the South Australian desert.

ÒThis is the best spot in the world, a geological freak,Ó the companyÕs managing director Bertus de Graaf says. ÒItÕs really quite serendipitous, the way the elements - temperature, tectonics, insulating rocks - have come together here.Ó

Geodynamics has completed the drilling of its two 4.5-kilometre Habanero wells - named after the worldÕs hottest chilli - and is now testing geothermal levels in the surrounding rock to establish a proven reserve level.

ÒMother Nature has been kind to us. Australia could be the world leader within the next couple of years given the geological anomalies present in South Australia,Ó says Peter Reid, chief executive of another exploration company, Petratherm.

'The Europeans had a head start in establishing pilot schemes, but they remain academically focused and have been slow to commercialise a resource that can economically compete with fossil fuels as a means of electricity generation,Ó Reid says.

'If it can be perfected, and current indications suggest it can, then it could be an immense source of energy for an energy hungry country like this, one of the few places with the required heat in the rocks to make it work,Ó Reid says.