Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I want to speak tonight about emissions policy and carbon trading, which in much of the debate has been painted as jobs versus a responsible greenhouse gas policy. However, I think there are a number of possible creative and responsible solutions which would create jobs in new areas and continue, at least in the short term, with jobs in other areas. But I think that some of these projects require government assistance and forward-thinking government policies which look to the future of Australia and of our energy sources.

I want to speak about one source of energy in particular tonight—that is, geothermal energy. I have had the opportunity in my period of time in South Australia to be on one of the resources development boards of the South Australian government and have learnt a great deal about geothermal energy. South Australia is one of the leading states in the geothermal area. It has great comparative advantages in geothermal resources and has attracted more than 90 per cent of Australia’s national investment in geothermal research, particularly because it has the natural resources there. I think the salient point here is that in a global market, with a proper carbon pricing regime, geothermal energy is likely to be a significant growth industry for Australia in the energy sector. It is one that deserves careful nurturing and careful response by the government.

I would like to explain a little bit about what geothermal energy is, because often people bandy around these terms, and I do not necessarily think it is well understood. Geothermal energy is not new. It has been known about since the early 1900s. It is currently used in over 20 countries, where it is mostly based on heat sources that use water reservoirs—for example, in New Zealand and in Queensland, where there is currently an energy source that uses water reservoirs. But the area that is opening up in Australia and the area I want to talk about is the use of hot fractured rocks. These are rocks deep in the earth that maintain a high level of heat but that are overlain with insulating rocks which trap the heat.

The process that can be used relies on very well-known processes in the mining industry to produce energy from that heat. The process is that water is circulated through the hot rocks up to the surface and that the heat is captured by a heat exchanger using groundwater cooling. Once the heat passes through the heat exchanger, it is transferred into another closed cycle system that has an ammonia-water working fluid which has a lower boiling point than water. It is this system that generates the vapour to spin turbines to create power generation. The beauty of it—especially in South Australia, which has few water resources—is that the water used in the process is continually under pressure and never turns to steam. This means that the water in the system is continually recycled.

Since the first geothermal exploration licence in Australia in 2001, 16 companies have now joined the hunt for geothermal energy resources in 120 licence application areas. This represents a national investment of $570 million. These geothermal energy resources—although, as I said, many of them are in South Australia—are right around the country, right through Australia, and represent a very exciting possibility for energy generation. However—and I alluded to this in the beginning of my speech—one of the problems is that the anticipated cost of the enhanced geothermal system energy has been estimated at $49 to $60 per megawatt hour. So without carbon pricing many forms of conventional energy generation, such as coal and natural gas, are much more cost-effective.

Another complicating factor is that most—but not all—of the geothermal energy resources are in remote areas. That means that the cost of transmission to the energy market is also a factor in pricing. However, it has been estimated that six per cent to eight per cent of Australia’s power could be produced by this source by 2030 if a 70 per cent reduction of emissions is required. That means that this could be a significant source of energy in Australia that produces energy for a reasonable cost, reduces the amount of greenhouse gas emissions and is a clean, easily used form of energy. The important issue in this is that a lot of research and development is going on around Australia into this geothermal energy source, but we are now at the stage where we need to look carefully at the commercialisation of that research and development.

As I said, much of the technology used is well known, but it is a matter of ensuring that this exciting potential form of energy does have commercial application. That is where we need assistance from both state and federal governments to ensure that Australia is able to use this readily available form of energy. It is a form of energy that is almost as readily available as coal and gas in Australia and that has a significant number of benefits. The research and development that has gone on is very much supported by state governments and by the companies involved. It involves types of exploration and types of processes to get down into the rock to release the heat energy, to bring it up to the surface and to then process it.

One thing Australia has in the past been very good at—and this is well recognised—is doing that research and development but then failing at the last moment at the hurdle of commercialising the process. That is where I think that, rather than stopping at the research and development, governments need to concentrate a lot of effort and possibly quite a bit of funding into getting this process to the commercialisation stage. We have the potential here to export this technology to other countries which, if there is a carbon pricing regime instituted around the world, I am sure will be keen to utilise this kind of technology as well. We would not want to be in the position where, once again, overseas companies buy the research and development and are then responsible for the commercialisation of this kind of energy and sell it back to us.

Recently the 2006 annual report of the Australian Geothermal Implementing Agreement was released. That is a group consisting of most of the companies involved in this process looking at how they go forward. I am certainly hopeful that they get strong support from the government and that next time around we have a Labor government in place that is willing to look seriously at a carbon pricing regime and how companies in this form of energy, where carbon emissions are very low, will be properly supported and encouraged by the federal government.