Researchers at the University of Adelaide’s Australian School of Petroleum have successfully extracted commercially significant heat from deep granite formations, demonstrating that hot rock geothermal energy can provide baseload renewable power for South Australia.

The project drilled to depths exceeding 4 kilometres to access granite at temperatures above 200 degrees Celsius. Water pumped through the fractured rock absorbs heat and returns to the surface, where it drives turbines to generate electricity. The system has operated continuously for six months, extracting heat at rates sufficient for a 10-megawatt power plant.

Hot rock geothermal energy differs from conventional geothermal power, which taps naturally occurring underground water reservoirs. Australia has limited conventional geothermal resources but abundant hot granite at accessible depths across much of the continent.

Why Geothermal Matters

Renewable energy from wind and solar varies with weather and time of day, requiring backup generation or energy storage. Geothermal provides constant output regardless of weather, complementing variable renewables without requiring fossil fuel backup or massive battery installations.

South Australia already generates more than 60% of electricity from wind and solar but must import power from other states when renewables underperform and local gas generators provide backup. Geothermal could reduce dependence on interstate connections and gas generation.

The technology also offers opportunities beyond electricity generation. Industrial processes requiring steady heat, like mineral processing or chemical manufacturing, could use geothermal heat directly. District heating for buildings is another application where steady heat sources are valuable.

Professor Mark Peterson, who leads the Adelaide research team, said hot rock geothermal’s potential has been recognised for decades but technical challenges prevented commercial development. The recent demonstration shows those challenges are solvable with current technology.

Technical Challenges

Creating heat exchange systems in solid granite requires fracturing the rock to allow water circulation. The Adelaide project used hydraulic stimulation, similar to techniques from oil and gas industry, to create a network of fractures connecting injection and production wells.

Controlling the fracture network is critical. Too much fracturing and water short-circuits between wells without absorbing sufficient heat. Too little and flow rates are inadequate for commercial power generation. The research team developed monitoring techniques using microseismic sensors to map fracture development.

Maintaining well productivity over years presents another challenge. Mineral precipitation from circulating water can clog fractures, reducing flow rates. The team treats injection water to minimise scaling and periodically flushes wells to remove deposits.

Induced seismicity, where hydraulic fracturing triggers small earthquakes, has concerned communities near some geothermal projects. The Adelaide project detected microseismic events during stimulation but none large enough to be felt at the surface. Monitoring continues to ensure operations don’t trigger significant earthquakes.

The system achieved flow rates of 40 litres per second with temperature drops of 140 degrees Celsius across the heat exchanger. This produces about 23 megawatts of thermal power, sufficient for 10 megawatts of electrical generation after conversion losses.

Economic Viability

Previous geothermal projects in Australia struggled with economics. Drilling costs are high, and uncertain reservoir performance made business cases risky. Several projects that looked promising based on exploration data failed to achieve commercial production.

The Adelaide project benefits from lessons learned from those earlier attempts. Improved drilling techniques reduced well costs by about 40% compared to projects a decade ago. Better understanding of fracture mechanics improved reservoir performance predictability.

Current cost estimates suggest geothermal electricity at approximately $110 per megawatt-hour, more expensive than wind or solar but competitive with gas generation with carbon pricing factored in. Costs should decrease as experience accumulates and technologies improve.

The 10-megawatt scale demonstrated in Adelaide represents a stepping stone toward commercial plants. A 50-100 megawatt project would achieve better economies of scale, reducing per-megawatt costs. But proving the technology at smaller scale was necessary before companies would invest in larger projects.

Policy and Support

The South Australian government provided $12 million in funding for the demonstration project, recognising geothermal’s potential contribution to the state’s renewable energy goals. The federal government contributed additional research funding through ARENA.

Regulatory frameworks for geothermal development exist but have seen limited use given the technology’s early stage. Geothermal projects require permits similar to mining operations, covering drilling, water use, and environmental impacts. The established petroleum industry provided regulatory precedents that adapted reasonably well to geothermal.

There’s debate about what policy support geothermal development needs. Some argue it should compete directly with other generation sources without subsidies. Others note that wind and solar benefited from substantial early support and geothermal deserves similar assistance during commercialisation.

One policy option is capacity payments that reward reliable generation capacity regardless of when it operates. This would recognise geothermal’s value for grid stability without distorting electricity markets. Several jurisdictions internationally use capacity markets to support reliable generation.

Global Geothermal Context

Enhanced geothermal systems, the technical term for hot rock projects, are under development in several countries. Projects in France, Switzerland, and the United States have demonstrated the technology with varying success.

Some projects encountered problems with induced seismicity or failed to achieve predicted performance. The technology remains less mature than conventional geothermal, which is well-established in places like Iceland, New Zealand, and the Philippines.

Australian geology offers advantages for geothermal development. Large areas have hot granite at depths accessible with current drilling technology. The Cooper Basin in South Australia and granite formations in Western Australia and Queensland show particular promise.

Companies including Geodynamics and Petratherm pursued Australian geothermal development over the past two decades with mixed results. Both companies scaled back operations after technical and financial challenges. The Adelaide project builds on knowledge from those efforts while avoiding some of their mistakes.

Research and Development Priorities

Continued research focuses on reducing drilling costs, improving fracture network control, and managing long-term reservoir behaviour. Drilling costs dominate project economics, so even modest cost reductions significantly improve viability.

The research team is investigating advanced drilling techniques including plasma drilling and millimetre-wave rock fracturing. These approaches might reduce costs and improve well productivity, though they remain experimental.

Better reservoir modelling tools would help predict performance before expensive drilling begins. Current models capture key physics but struggle with the complexity of real fracture networks. Machine learning approaches show promise for improving predictions by learning from operational data.

Collaboration between universities, CSIRO, and industry is essential. Universities contribute fundamental research and student training. CSIRO provides specialised expertise and facilities. Industry brings commercial perspective and ultimately funds commercial deployments.

International collaboration also matters. Australian researchers participate in the International Partnership for Geothermal Technology, sharing knowledge with counterparts in other countries. Some challenges facing Australian geothermal are unique to local geology, but many are common to enhanced geothermal worldwide.

Commercial Pathway

Several companies are now developing commercial hot rock geothermal projects in South Australia based on the Adelaide demonstration. Projects range from 10 to 50 megawatts, targeting industrial customers and power purchase agreements with electricity retailers.

Financing remains challenging despite the demonstration project’s success. Geothermal projects have high upfront costs and relatively long development timelines compared to wind or solar. Investors want evidence that multiple projects can succeed, not just one demonstration.

The first commercial projects will be scrutinised intensely. If they perform as predicted and deliver reliable generation at projected costs, subsequent projects should attract financing more easily. If they encounter problems, the entire sector suffers.

For industrial energy users evaluating geothermal as a heat or power source, the technology is approaching commercial readiness but not yet proven at scale. Project developers can provide more detailed technical and economic assessments for specific sites and applications.

The Adelaide demonstration shows that hot rock geothermal can work technically. Whether it becomes a significant part of Australia’s energy mix depends on economics, policy settings, and how the first commercial projects perform. The potential is there, and the technology is maturing. The next few years will determine if potential translates to substantial deployment.