First ARENA grant to unlock riddles of geothermal wells

The first grant to be made by the newly formed Australian Renewable Energy Agency (ARENA) has been announced, with a modest sum of $1.25 million going to assist a $3.5 million geothermal research program.

ARENA was formed on July 1 and has $3.2 billion under management, including about $1.7 billion that has yet to be allocated. The geothermal grant comes from the Emerging Renewables Program, which had a nominal $126 million to spend.

The program is being undertaken by the South Australian Centre for Geothermal Energy Research at the University of Adelaide, along with developers Goedynamics, and Panax Geothermal, and will focus on work to better understand and predict the permeability of geothermal drilling wells.

This could help collate more accurate data and increase the bankability of geothermal wells in hot sedimentary aquifers, which have struggled to gain financing, and the few that have been drilled have obtained mixed results.

“Understanding permeability, or the ability of a rock to allow fluids to pass through it, is essential to predict the potential for geothermal energy generation from hot water that is circulating deep underground, known as hot sedimentary aquifers,” federal energy minister Martin Ferguson said in a statement.

“If we can predict well permeability more accurately companies can better determine exploration and production sites, leading to lower costs and risk in the geothermal industry.”

Ferguson noted that the two geothermal wells drilled in hot sedimentary aquifers reservoirs in Australia had achieved fluid flow rates that were significantly lower than expected. Those two wells were drilled by Panax in the Otway basin, and by an Origin-led joint venture with Geodynamics in the Cooper Basin.

“This project will help address two important technical challenges confronting the geothermal energy industry in Australia: well drilling practices to assess potential damage to the rock during drilling and evaluation of the anticipated fluid flow rates,” Ferguson said.

Panax said the initiative could have major implications for the viability of Australia’s geothermal resources.

Managing director Kerry Parker said that the project had the potential to provide key insights into the drilling, completion and potential next steps of its Salamander 1 well. The first well produced steam, and the promise of cheap energy, but complications found during well-testing have clouded the project.