Geothermal project approved for Good Water Energy

The Territory Government has paved the way for a green hydrogen industry - but it comes with a catch.

More than three years after lodging a drilling application, geothermal energy start-up Good Water Energy has received NT Government approval to develop its first Australian geothermal project.

Years after lodging the initial application, Good Water Energy announced on New Year’s Day the NT Government had approved drilling at the company’s Middle Arm tenement.

Good Water Energy chairman and founder Warren Strange said the company’s “pioneering” geothermal technology promised to transform Australia’s renewable energy landscape.

He said drilling at Middle Arm was planned for May 2025 with production planned for 2026 if low-cost green hydrogen was sourced.

But Mr Strange also applied a significant project caveat, insisting Good Water Energy paid a $10m capped royalty payment to the NT Government.

“To mitigate the risk of a future unreasonable royalty being applied, GWE is offering to pay the NT government a reasonable, but generous thermal energy production royalty, fixed for the life of their projects in Darwin,” Mr Strange said.

Good Water Energy’s Warren Strange. Pic: LinkedIn

“This royalty could provide more than $10m per year to the NT Government if large scale green hydrogen and sustainable aviation fuel production is approved by the government and GWE expands to meet the Australasian market demand.”

Mr Strange looked at opportunities in the United States as he sweated on approvals for his Territory venture.

“It has been a long, difficult and frustrating process to finally receive drilling approval in Darwin,” Mr Strange said.

“During this process, GWE has established a geothermal project in Texas and is well advanced with plans to produce low-cost green hydrogen for the US aviation, transport and remote electricity generation markets.

“Geothermal energy rights belong to landowners in Texas, so we have skipped the four year and $3m tenement and drilling application process required in Australia and other territories where the states own the geothermal rights and generally block geothermal energy development in support of the fossil fuel industry.”

The project will include a 6000m deep exploration well to access hot granite rock, the injection of desalinated sea water and generation of baseload electricity.

He said the green electricity, distilled water and excess thermal energy would be used to produce low-cost green hydrogen.

Middle Arm Sustainable Development Precinct.

The company wants to produce up to one million tonnes of competitively-priced green hydrogen from Middle Arm and if successful, replicate the technology elsewhere in Australia.

“We’re excited to showcase to the world our strategy to produce very competitively priced green hydrogen and to show it is no longer just a vision but a fast-approaching reality,” he said.

The NT Government said royalty regimes applied to production activity and waved away Mr Strange’s $10m cap.

“Additional detail and further discussion would be required before the Minister and the NT Government could determine an appropriate royalty structure for geothermal energy, whether with Good Water Energy or any future geothermal energy proponent, in accordance with the Geothermal Energy Act 2009 (NT),” a spokesman said.

Originally published as Geothermal project approved for Good Water Energy