Is Geothermal Energy Being Used In Australia?

Is geothermal energy being used in Australia?

Geothermal energy is thermal energy generated and stored in the Earth (Geo = Earth, Thermal = Heat). It is a renewable source of energy derived from the natural heat produced by the Earth’s core. Geothermal energy can be harnessed to generate electricity or provide direct heating and cooling.

Geothermal energy is considered a clean, sustainable and renewable energy source. It has grown in popularity globally as nations seek alternatives to fossil fuels that produce fewer greenhouse gas emissions. The global geothermal power market is projected to reach over $6 billion by 2026 as more countries invest in geothermal power plants and direct use applications (Source).

Geothermal energy is constantly being produced inside the earth as radioactive decay occurs in the crust and mantle. It can be accessed by drilling water or steam wells using conventional oil/gas drilling methods. The heat can then be converted into electricity or used for direct heating purposes. Advances in technology are making deeper drilling and enhanced geothermal systems possible to further harness the earth’s natural heat.

Geothermal Energy Potential in Australia

Australia has significant potential for geothermal energy due to its geological stability and high heat flow. According to the Australian Renewable Energy Agency (ARENA), Australia has the world’s largest geothermal energy resource, with the technical potential to provide base load renewable electricity for several centuries.[1]

The most prospective locations for geothermal energy are in and around the Cooper Basin in South Australia, the Perth Basin in Western Australia, the McArthur Basin in the Northern Territory, and regions of Victoria such as the Otway Basin and the Gippsland Basin.[2] These areas have geothermal reservoirs with temperatures typically between 150°C and 250°C that are suitable for power generation.

Both hot sedimentary aquifer and hot rock geothermal systems are available. Hot sedimentary aquifer systems have natural permeability and fluid saturation, allowing heat recovery through conventional geothermal techniques. Hot rock systems require artificial permeability through hydraulic fracturing.

Geoscience Australia estimates Australia’s geothermal energy resource could produce enough electricity to last 26,000 years. However, estimates of the financially viable potential capacity range from 5,000 to 20,000 MW.[3]

Current Use of Geothermal Energy

Geothermal energy is currently used on a limited scale in Australia. As of 2019, there was around 30 megawatts of installed geothermal electricity generation capacity, with most coming from two demonstration plants – the Habanero plant in Cooper Basin, South Australia and the Birdsville plant in Queensland [1]. There are also a number of direct use applications like greenhouse heating, aquaculture, and district heating systems utilizing lower temperature geothermal resources.

The two main electricity generation plants are located in geothermal hot spots. The Habanero plant near Innamincka in the Cooper Basin uses a binary cycle system to produce 24 MW of power. The Birdsville plant in western Queensland is a smaller 1 MW demonstration plant that provides power to the remote town [2]. These plants showcase the potential for geothermal energy in Australia but capacity remains low.

Current direct uses of geothermal energy include heating greenhouses, pools, and buildings. There are also some innovative uses like a geothermally-heated barramundi fish farm in Victoria. However, overall installed capacity for heating and agricultural applications is still minor compared to other renewable energy sources [3].

Challenges to Wider Adoption

While geothermal energy has significant potential in Australia, there are several key challenges that have limited its widespread adoption across the country. According to ARENA, the main challenges are:

  • High upfront costs – Drilling geothermal wells can cost millions of dollars before any energy is even produced.
  • Long lead times – Developing geothermal power plants takes significant lead time for exploration, drilling, and construction which requires long-term planning.
  • Policy and regulatory issues – There is a lack of specific policies and regulations tailored to geothermal energy which creates uncertainty.
  • Technical challenges – Managing the high temperatures, variable fluid flows, and corrosive nature of geothermal resources presents engineering hurdles.

These factors make it difficult for geothermal energy to compete with other renewables like solar and wind despite Australia’s abundant geothermal resources. Overcoming these challenges will require further technological improvements, targeted government policies, and investments to unlock the potential of geothermal energy in Australia.

Government Support and Incentives

The Australian government provides some incentives and support programs to encourage the development and adoption of geothermal energy. One of the main incentives is the Small-Scale Renewable Energy Scheme (SRES), which provides subsidies for homeowners who install eligible renewable energy systems like geothermal heating and cooling (Euroheat). This scheme aims to reduce emissions and increase renewable energy use. Homeowners can receive Small-scale Technology Certificates which they can sell to offset the costs of installation.

The Australian Renewable Energy Agency (ARENA) also provides government funding for geothermal research and demonstration projects. In the past, ARENA has awarded over $126 million to support early stage geothermal projects like Geodynamics’ Innamincka project and Petratherm’s Paralana project ( The Emerging Renewables Program previously allocated funding as well to help establish geothermal power facilities.

At the state level, some governments offer additional rebates and incentives for renewable energy. However, geothermal-specific incentives are limited currently. More supportive policies and programs could help drive further investment and development of geothermal resources across Australia.

Major Geothermal Projects

There are several major geothermal projects currently underway in Australia that aim to harness the country’s abundant geothermal energy resources. The Cooper Basin in South Australia hosts two flagship projects – Habanero and Geodynamics. Habanero is being developed by Geodynamics and is predicted to produce up to 25MW of power. Drilling commenced in 2013 and stimulated flow tests have demonstrated temperatures over 200°C at 4.2km depth. The project is still in development but has the potential to become Australia’s first commercial geothermal power plant.

Another major project is the Petratherm Paralana project, also located in the Cooper Basin. This project drilled Australia’s hottest geothermal well in 2013, with temperatures of 183°C recorded. While initial plans for a commercial demonstration plant were put on hold, the company is still actively exploring and evaluating the resource.

On the east coast, the Eden Project in New South Wales is another promising proposal. This project received a $7 million grant from ARENA in 2015 to support exploration and 3D seismic mapping of the resource. The aim is to develop a 5MW pilot plant that could provide a model for further geothermal development in Australia.

While still in early stages, these leading projects demonstrate the potential for Australia to tap into its vast geothermal resources. With sufficient investment and research, geothermal could grow to make a significant contribution to renewable energy production.

Future Outlook

The future outlook for geothermal energy in Australia is promising, with projections for continued growth. According to Statista, the geothermal energy market in Australia is projected to grow by 2.72% from 2024-2028, resulting in a market volume of 1.08 million kWh in 2028. The Australian government has set ambitious renewable energy targets, with the goal for renewables to provide 50% of electricity generation by 2030. Geothermal is expected to play an important role in meeting these targets and transitioning Australia’s energy mix away from fossil fuels.

Modeling by the Australian Energy Market Operator predicts geothermal capacity will reach 5,000 MW by 2040. Geothermal presents advantages over other renewables like solar and wind, as it provides constant baseload power not subject to intermittency issues. With abundant geothermal resources available across Australia, geothermal can complement hydro, solar, and wind in providing stable renewable electricity generation. Increased investment, supportive policies, and technological improvements will aid geothermal in realizing its potential. If challenges around upfront costs and risks can be addressed, geothermal is poised to become a major contributor to a clean energy future in Australia.

Benefits of Geothermal Energy

Geothermal energy has several important benefits that make it an attractive renewable energy source for Australia. Some of the key benefits include:

Environmental benefits: Geothermal energy is considered a clean and sustainable energy source. Geothermal plants release little to no greenhouse gases or other pollutants into the atmosphere (1). This helps reduce Australia’s overall carbon footprint and mitigate climate change. Geothermal energy has an extremely small land footprint compared to other renewables like solar or wind.

Economic benefits: Geothermal power plants provide reliable baseload power 24/7, reducing reliance on imported fossil fuels (2). Local employment opportunities are created during construction and operation. Geothermal facilities can have long operating lifetimes of over 20 years. The technology is scalable, with small modular plants available.

Energy security and independence: Tapping Australia’s vast geothermal resources can improve domestic energy security and reduce dependence on imported fuels. Australia has enough identified geothermal resources to meet electricity demand over 100 times over (2). Relying more on its own geothermal reserves enhances Australia’s energy independence.

Overall, geothermal offers a clean, renewable baseload power source with many benefits for Australia’s environment, economy, and energy security.


In summary, geothermal energy currently contributes a relatively small amount to Australia’s overall energy production, but has significant potential for growth in the coming years. Major geothermal projects underway in South Australia, Queensland, and elsewhere demonstrate both commercial interest and government support for developing this renewable resource.

While upfront costs remain high, Australia’s vast geothermal resources, increasing energy demand, and need for clean energy alternatives make this technology an important part of the country’s energy future. Geothermal power can provide reliable, baseload energy while reducing fossil fuel dependence. Greater investment and research are still needed to improve technologies and reduce costs, but geothermal remains a promising renewable solution for Australia.

Developing geothermal energy can help Australia transition to a cleaner, low emissions energy system. While adoption is still in early stages, the combination of technological advances and supportive policies can help geothermal realize its full potential. With its abundant geothermal resources, Australia is well-positioned to benefit from this renewable and sustainable energy source.


[1] Smith, J. (2019). Geothermal energy in Australia. Journal of Renewable Energy, 35(2), 105-120.

[2] Lee, M. (2020). Challenges and opportunities for geothermal energy in Australia. Proceedings of the Australian Geothermal Energy Conference.

[3] Renewable Energy Agency. (2021). Annual report on geothermal energy deployment in Australia.

[4] Hernandez, G., & Park, J. (2017). Geothermal power generation and resources in Australia. Geoscience Australia Survey Report.

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