Petratherm is an ASX listed company dedicated to the development of commercially sustainable, emission free geothermal energy projects. Born out of Minotaur, a majority shareholder and successful small market cap mining company, Petratherm is currently one of the only active members of Australia’s geothermal exploration and development market, and one of the two receiving government support in the form of grants. “We’re only one of two companies that have actually drilled a deep geothermal well that has actually been successful, so we’re quite proud of that,” says Managing Director Terry Kallis. As well as their flagship geothermal energy plant in Paralana, Petratherm is involved in other projects within Australia, Spain and China.
As a pioneer of the geothermal industry, Petratherm maintains a variety of interests both locally and internationally. The Paralana Geothermal Energy Project in South Australia, in joint venture with Beach Energy, a leading player in the oil and gas industry, stands to become Australia’s first geothermal base load commercial plant. The company is currently in the process of becoming the first formal provider of geothermal energy in Spain, with a conventional geothermal project in the works on Tenerife, the largest of the volcanic Canary Islands, and additional undertakings in Madrid and Barcelona. In 2008, Petratherm identified many possible geothermal electricity generation sites within China through an Engineered Geothermal Project Prospectivity Assessment, a project for which they were awarded an Asia Pacific Partnership grant from the Australian Government.
Engineered Geothermal Systems, or EGS, is a relatively new, unconventional method of geothermal power generation. “The resource is huge,” says Terry, noting the plentiful and easily accessible nature of the subterranean dry rock that contains the geothermal energy that Petratherm seeks to harness. While the resource is vast, it remains relatively untapped due to the current technological restrictions regarding the energy’s extraction. “With thousands of megawatts of potential, the issue is, ‘how do you extract it in a commercial way, and deliver it to a market in a competitive way, at the right price?’” Presently, Petratherm has assumed two significant leadership roles within the EGS market: One as a leading member of the industry itself, and the other as a leader of the Australian Geothermal Energy Association, for which Kallis has stood as chair or deputy chair since its establishment seven years ago. As well the company has had heavy involvement in the development of the Geothermal Code, an important document that assists in the classification of resources.
The key advantage of EGS over other renewable brands lies in its continuous provision of base load energy. Other sources such as wind power are, while viable, intermittent in their production due to the inconsistent nature of the resource. “There’s always a question about how to supply what customers want, which is a reliable, continuous source of power at the right quality and the right price,” says Terry. The further reduction in price of EGS in the future will help it to become competitive not only with other renewable sources, but also with fossil fuels.
A significant difference between conventional and engineered geothermal systems is the challenge of searching for a naturally occurring geothermal reservoir presented by conventional systems. Instead, engineered systems use technology to fabricate a reservoir wherever geothermal energy is found. Two wells are then drilled, with cold water flowing down one, percolating in the reservoir, and rising up through the producer well. In some cases, such as that of Petra herm’s Paralana flagship project, naturally occurring fractures that would be useless to conventional systems can be harnessed and enhanced by EGS and made viable.
One of the present difficulties of EGS is the generation of a commercially profitable flow rate. The creation of a large enough reservoir between the two wells is a critical step, allowing the increase of water flow between wells. Other challenges are those common in any drilling operation, as one typically must drill up to four kilometres into the earth to reach the dry rock. “It’s a challenge within itself, but it’s something that becomes less of an issue as you understand the formation you’re working in,” says Kallis.
The relationships that Petratherm has built throughout the energy industry have been an important aspect of the company’s success. Most notable is the joint venture partnership that was formed with Beach Energy, as any of the tools, techniques, and personnel that Beach employs have proven to be essential to Petratherm’s operation. Key members of the, Australian Geothermal Energy Association, Petratherm also works closely with the Clean Energy Council, sharing innovative ideas and technology. Petra herm’s primary suppliers, Halliburton, and Weatherford, provide vital services such as drilling, as well as pumping equipment. The government itself, both state and federal, also plays a critical role, providing essential grants to aid in the growth of such and early stage technology.
The continued acquisition of funding is one of Petratherm’s greatest challenges. “We’re a small market cap company in a quite capital expensive process, particularly early on,” Terry explains, “What we need is additional monies from the equity market, that’s difficult no matter what small market cap company you are.” Securing such funds can be difficult in the geothermal sector, which has only seen limited success in the past by other companies. Despite the legacy that other groups may have left, Kallis remains optimistic that confidence will grow within the market for companies such as Petratherm. “We’ve withstood scrutiny by many people, but our project in Paralana is a quality project, our project in Tenerife is a quality project, and despite the tough times, those projects have stood out.”
With a background in the electricity industry, Terry approached the geothermal sector with market-oriented mindset. “The first thing I did was look for a customer,” Terry laughs. “It might seem obvious, but when everyone’s focused on the geology and trying to probe a resource, sometimes you forget you need a customer.” Within the first seven months of his time with Petratherm, Terry became heavily involved in the company’s rapid advancement through the acquisition of a client, as well as a Memorandum of Understanding with a fellow uranium mine, the commencing of partnership discussions with Beach Energy, and the procurement of a five million dollar government grant. Looking to the future, Kallis is confident that the quality and innovation that Petratherm brings into the geothermal sector will generate further attention and support from a government, corporate, and consumer level.