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Energy heavies back geothermal sources

Energy heavies back geothermal sources(Via The Australian)ENERGY giants Origin and AGL have been busy beefing up their wind-farm

portfolios in recent months in preparation for the upgraded Renewal Energy

Target -- should it make its way through parliament. But perhaps the most

revealing aspects of presentations both companies made last week was their

faith in geothermal energy as a significant source of base-load power in

the future.Wind power is expected to dominate the early years of the RET scheme, which

will require that 20 per cent of Australia's power generation comes from

renewable sources by 2020.But Origin told the UBS Energy and Utilities Conference that geothermal

energy, developed at scale, could be a superior long-term solution to meet

its RET targets, while AGL said geothermal would likely play a key role in

base-load generation, even if some projects -- not its own -- faced

significant transmission costs.Origin is a joint venture partner with Geodynamics, while AGL has a 10 per

cent stake in another aspiring geothermal producer, Torrens Energy, and the

right to take up to a 50 per cent stake in its project in exchange for

funding.Geothermal producers believe they can have 2200MW of capacity generating

power by 2020. The Australian Geothermal Energy Association and World Wide

Fund for Nature say this would create 3800 full-time jobsby 2020. Their

report said direct employment in the industry could more than double by

2030 and jump to more than 17,300 by 2050.Another report released last week by WWF, this time in conjunction with

ocean energy producer Carnegie Corp, predicted a further 3200 jobs would be

created if Carnegie met its goal of 1500MW of ocean energy capacity by 2020.However, both reports argued that for those technologies to meet their

potential in the shortest period, the RET would need to be strengthened,

possibly through banding, where extra credits are allocated to emerging

technologies, direct assistance for drilling and an expansion of early

development programs.CSR renews itselfTHE timing of the long-awaited announcement on the demerger of CSR --

coming as the government plans to bring its new renewable energy target

into force -- may not be entirely coincidental.One of the key concerns about splitting off a pure-play sugar business had

been that it would be largely hostage to volatile commodity prices. But

earnings are being stabilised -- partly through hedging, partly through

high-margin refining for third parties, but also through its renewable

energy businesses, which are emerging as the sugar division's biggest

growth opportunity.CSR has been building up its biofuel and biomass energy operations in

recent years. It is the second-largest producer of ethanol in the country

and the largest generator of renewable energy from biomass.Last year, these two businesses accounted for about 30 per cent of the

sugar division's $84 million earnings before interest and tax, and internal

growth plans suggest they could account for more than half of earnings in

the future, meaning it will have as much exposure to the price of fuel,

electricity prices and renewable energy certificates as it will to raw

sugar.Much will depend on the government's policies on biofuels and renewable

energy. CSR will soon complete a near doubling of its ethanol capacity to

60 million litres a year. The ethanol -- made from molasses, a sugar

bi-product -- produces less than half the CO2 emissions of petrol, and the

feedstock does not affect food prices.The co-generation operation uses bagasse -- waste fibre from the cane crop

-- to power the mills. But 100MW of the 175MW produced by the company is

sold into the grid, and CSR sees the potential of adding 300MW of capacity

in coming years -- with bagasse and cane trash. This will largely depend on

the final structure of the RET, which is due to come into force from

January 1, with CSR's demerger scheduled for the early part of next ye