Leading the fray is the industry's biggest player, Geodynamics, which has most recently been awarded a $5 million Renewable Energy Development Initiative (REDI) Federal Government grant to build and operate Australia's first hot fractured rocks (HFR) geothermal demonstration power plant – a high-efficiency Kalina cycle generation plant in the Cooper Basin near Innamincka, South Australia.

The demonstration HFR power plant, to be known as the Innamincka Power Project, will use the existing deep geothermal wells Habanero-1 and 2.

It is planned that hot geothermal brine will be drawn up from the existing deep underground reservoir – previously developed by Geodynamics for zero emission power generation – using a high efficiency Kalina cycle generation plant. The cooled brine will then be re-injected into the reservoir, making a closed loop system.

Before getting final clearance for the demonstration plant, Geodynamics must complete the reservoir testing program, which in turn is subject to the well intervention program in Habanero-2.

The company must also finalise the design criteria, performance parameters and scale of the demonstration plant, and execute the REDI Grant Agreement with AusIndustry.

These steps are expected to be completed in the first half of 2006.

In September, Geodynamics upgraded the reservoir at its Habanero project to 11 million cubic feet.

"This is considerably higher than achieved elsewhere in hot fractured rock projects around the world," managing director Bertus de Graaf said at the time.

A month later, hydraulic stimulation at its Habanero-1 exploration well enlarged the Bottom Zone reservoir by 52%, as well as significantly improving the zone's already high permeability. Hydraulic tests before and after stimulation showed the injection capacity of the well improved by at least 30%. The tests also confirmed that Habanero-1 was optimally connected to the bottom stimulated fracture zone, the company said.

In June, Geodynamics successfully raised a gross of $14.2 million from a share purchase plan (SPP) through the issue of 9.2 million shares at $1.55 each. More than 60% of the company's shareholders participated in the SPP.

These funds were used to fund further testing at the company's Cooper Basin project. In July, the company said this testing had confirmed the feasibility of heat extraction from the target hot rocks on a large scale. This phase-measured pressure build-up in the underground heat exchanger (reservoir) was a follow-up to a recently completed long-term flow test.

Tests also indicated the underground heat exchanger was connected to a natural fracture system of lesser permeability many times greater in size, the company said. It also confirmed the existence of a "vast" volume of superheated, over-pressured water, trapped within the granite fracture network, according to Geodynamics.

While Geodynamics moves towards commercial production, Petratherm and Green Rock have also produced promising results from their respective exploration campaigns over the past 12 months.

Petratherm, which only spudded its maiden geothermal well, Paralana-1, at the beginning of this year, has most recently announced an "engineering breakthrough" to help it move one step closer towards commercialisation.

Managing director Peter Reid said the company had found it could achieve the required temperatures for geothermal energy production by circulating water through porous strata above the target hot rocks.

Currently, Australian hot rocks projects are based on forcing waters through the dense hot rocks deeper below the surface, which requires fracture treatment (fraccing) adding to the cost and risks of geothermal drilling.

"If this new technique pays off, it will open up the window for taking HDR power that extra step," he told EnergyReview.net in November.

This strata-level geothermal process will be introduced at Petratherm's Paralana-1B well, 130km east of Leigh Creek. Drilling at Paralana-1B has already reached 491m, where the company recorded a bottom-hole temperature of 58C at 485m.

The company also received positive results in September, during re-logging of its Yerila-1 well at its Callabonna prospect in Central Australia, which found it was significantly hotter than first thought and could prove one of the hottest such wells in Australia.

The second logging found that Yerila-1 had a higher mean average temperature gradient than first thought – at least 68C a kilometre compared to the 56C first reported – giving it one of Australia's highest geothermal gradients ever recorded in the near-surface insulating rock strata covering the target hot granites deeper down.

The temperature trend was also in a much straighter line than originally plotted. This is a critical factor in Petratherm determining whether its target of rocks of a minimum 220C temperature can be found no deeper than 3.5km.

In May, Petratherm won a $140,000 South Australian Government "Plan For Accelerating Exploration" (PACE) grant to support the drilling of Yerila-1.

Now, the State Government has awarded Green Rock Energy with a $68,000 grant to speed up its hot rocks exploration and drilling of GEL 128, near the Olympic Dam mine.

Several months ago, Green Rock announced its Blanche-1 exploration well in the permit had recorded the hottest temperatures drilled to date in granite in Australia outside the Cooper Basin.

The PACE grant will help fund next year's drilling in an area several kilometres away from Blanche-1, in which there was a greater potential thickness of insulating sediments, according to Green Rock.

"These sediments cover the heat-generating granite proven by the recent drilling of Blanche-1," managing director Adrian Larking said.

"This could result in even higher temperatures and at lower depths than in Blanche-1, which would reduce production drilling costs and improve the overall economics of the geothermal energy project."

Green Rock's tenements are near a high voltage transmission line, which connects to the National Electricity Grid, and a similar distance from the Olympic Dam mine.

While Green Rock may be using more traditional engineering methods than Petratherm, it's all about location for Larking.

"We've got a very different strategy from the other explorers," he said. "While the main focus of other companies is to find the hottest rocks possible, we'll only explore and develop a site if we're close to markets and infrastructure."

Following a successful exploration program this year, Green Rock plans to drill two very deep wells to tap a 1000MW potential geothermal energy source in the area.

If this pays off, the company will build a pilot scale power station to generate electricity to either satisfy energy-hungry BHP's Olympic Dam mine or connect to the national energy grid.

Green Rock said the host rock had the right fracturing qualities, and nearby potential markets, transmission lines and other infrastructure give the flexibility to stage the development in 50 to 100MWe modules.

The program could be producing power by 2008, Larking said.

"For us, being nearby existing markets, infrastructure, transmission lines and the power grid is our main advantage, as it would allow us to come on-stream quickly and scale it up in small stages as the project develops," he said.

In May, Green Rock Energy and another geothermal outfit, Perilya Geothermal Energy, were taken over by Mokuti Mining. At the time, the mining company's shareholders also agreed to a name-change to Green Rock Energy Ltd.