Australia to switch to Geothermal Energy

SYDNEY (Reuters) - Generating electricity using the heat of ancient rocks buried deep below the red sands of the Australian outback?

Spurred by high commodity prices and a drive to reduce Australia's reliance on coal, several companies are looking to harness hot rock temperatures of up to 570 degrees Fahrenheit to unleash green energy.

A combination of nature's 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 than the country's known oil or coal reserves.

Based on encouraging test results, pioneer explorer Geodynamics Ltd. 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.

"This is the best spot in the world, a geological freak," Geodynamics managing director Bertus de Graaf told Reuters. "It's really quite serendipitous, the way the elements -- temperature, tectonics, insulating rocks -- have come together here."

Geodynamics has completed the drilling of its two 2-3/4-mile Habanero wells -- named after the world's hottest chile variety -- and is now testing geothermal levels in the surrounding rock to establish a proven reserve level.

"Mother 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," says Peter Reid, chief executive of another explorer, Petratherm Ltd.

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

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