What Australia lacks in active plate tectonic processes to produce conventional geothermal resources, it makes up with excellent energy potential from hot sedimentary aquifers and engineered geothermal systems, as well as low enthalpy aquifers, ground source heat pumps and aquifer thermal energy storage applications.

Australia’s present geothermal energy use is very limited. Based on an energy resource assessment by Geoscience Australia and the Department of Agriculture, Fisheries and Forestry, just 1% of the geothermal energy resources in Australia with a minimum temperature of 150 °C and a maximum depth of 5 KM could provide 190 million PJ of energy – enough to supply 25,000 times Australia’s energy usage.[1]

It is clear that the country’s geothermal market is geared for growth, boosted by recent policy changes intended to raise the uptake of renewable energy in Australia.

Australia to launch Clean Energy Finance Corporation

The Australian Government has passed a legislation establishing the Clean Energy Finance Corporation (CEFC), a significant regulatory development for geothermal energy. 

The CEFC will invest over AUD10 billion in renewable energy, low-emission and energy-efficient technologies, including that for geothermal energy. The legislation creating the CEFC was passed by Parliament on 25 June 2012. The CEFC will commence operations on 1 July 2013.

The CEFC will apply a 'commercial filter' to its investment decisions to balance its public policy objectives in fostering investment in clean and renewable energy with the need to invest capital in a commercially-realistic way.

Government fuels geothermal energy industry

The efforts of the CEFC will be complemented by that of the Australian Renewable Energy Agency (ARENA), which will provide over AUD3.2 billion in grant funding for renewable energy, supporting the early-stage development of the geothermal industry.

The Government has also allocated AUD1.9 million in funding under the Emerging Renewables Program to facilitate the availability of enhanced data for targeted geothermal exploration.

The project aims to assist in defining the best potential geothermal sites, and to reduce the costs and risks associated with geothermal exploration. 

Key geothermal power projects in Australia

These policy developments come with recent notable geothermal activities.

The Paralana geothermal project in South Australia has increased its power potential estimates after the latest round of test drilling, with a predicted production of 1,300 MW of geothermal energy over the next three decades.

Meanwhile, Geodynamics has begun drilling the Habanero 4 well to replace the Habanero 3 well that failed in 2009. The new well is an important step in achieving Geodynamics’ goal of establishing a 1 MW pilot plant at Innamincka in 2013. 


The establishment of the CEFC and ARENA provides further incentives for the expansion of the geothermal sector in Australia.

It marks a promising development for market participants who, for their part, should monitor the progress of the investment mandate for the CEFC to assess how they might benefit from it.