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Emerging technologies need guarantee, says Se -

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Emerging technologies need guarantee: Senator

Jessica Hill reported this story on Monday, August 17, 2009 12:22:00

ELEANOR HALL: The Coalition, the Greens and Independent Senator Nick Xenophon all agree on one
aspect of the design of the renewable energy target bill. They want a percentage of the renewable
energy target to be set aside for emerging technologies like geothermal.

They are concerned that without this allocation, the measure may be entirely consumed by wind
projects, which could delay the geothermal industry by 20 years.

Jessica Hill has our report.

JESSICA HILL: Geothermal has traditionally taken a backseat to other renewable technologies like
solar and wind. But supporters like independent Senator Nick Xenophon believe that is about to
change.

NICK XENOPHON: Geothermal has the greatest potential to replace coal, in the sense that it's a
base-load power source. If geothermal gets up and running, as I hope it will in the next few years
and it needs the support of government to do that, then we've actually got a viable alternative to
coal.

JESSICA HILL: Susan Jeanes, CEO of the Australian Geothermal Association, shares Senator Xenophon's
enthusiasm.

SUSAN JEANES: We'll be providing the lowest-cost form of renewable energy, it's the only current
form of renewable energy that's base load.

JESSICA HILL: Geothermal power, also known as hot rocks, is mined several kilometres below the
earth's surface. In Australia, geothermal energy is created by pumping water onto hot granite
rocks, which generates steam that drives traditional turbines.

For supporters of geothermal, Australia is a veritable goldmine. Susan Jeanes.

SUSAN JEANES: The Cooper Basin has been identified as probably the world's best resource for
geothermal energy.

There are some very good resources running through Victoria, down the east coast. We have, we
suspect there is some very good heat underneath the coal beds in the Hunter Valley and the Latrobe
Valley and we're very keen to explore for the right heat source in those regions because we see
that geothermal energy could have a huge contribution to make to energy supply in these traditional
coal regions.

But what we have got to now is the point where we are starting to develop projects - and by the
time we're ready to deliver power at scale, we're concerned there will be no incentives left under
the renewable energy target scheme, because they will all be taken up, and they can all be taken up
the way that the scheme is designed, by existing technologies.

JESSICA HILL: It's a concern shared by the Opposition, the Greens and independent Senator Nick
Xenophon, who all agree that the Government should set aside a percentage of its renewable energy
target for emerging technologies like geothermal.

Independent Senator Nick Xenophon.

NICK XENOPHON: I think in relation to geothermal you need to have some clear signals there to
acknowledge that it is an emerging technology. There is a real argument there to ensure that they
get additional credits. There is a loading on those credits so it sends very clear signals for
investment in geothermal.

JESSICA HILL: Greg Combet, the Minister assisting the Minister for Climate Change says that rather
than set aside a portion for emerging technologies, the market should be allowed to decide.

GREG COMBET: Well the Government's establishing a target of 20 per cent of Australia's electricity
supply to come from renewable energy sources by the year 2020.

So with that mandated part of the marketplace, if you like, investment will flow into renewable
energy technologies that will help deliver the target and obviously investors will put their money
into the technologies that are going to be most cost efficient and that at the moment proved to be
the most viable technologies.

JESSICA HILL: But there's concern that the existing technologies such as wind, as you say, will
consume the measure before emerging technologies such as geothermal have a chance to develop, and
therefore attract investment. What would you say to that?

GREG COMBET: Oh, look, wind power is clearly going to be one of the important renewable energy
sources; it is at the moment, and there will be hopefully significant further investment in it.

But what we are doing is mandating a share of the electricity market - 20 per cent by the year 2020
- for renewable energy sources. We are not going to go about picking particular winners and
mandating a subset of that marketplace for them.

What we are going to do is have the 20 per cent share of the electricity supply available to be
filled by renewable energy sources, and the marketplace will determine where the investment will
go.

ELEANOR HALL: That is Greg Combet, the Minister assisting the Minister for Climate Change, ending
that report by Jessica Hill.