High geothermal temperature reservoirs contain naturally pressurised steam and hot or boiling water, stored in porous rock or sand, which has been heated by energy associated with recent volcanism.
In some areas of the world, hot rocks exist very close to the surface and hot water or super heated steam can be conveyed to the surface through fissures or vents. In this terrain hot springs, boiling mud pools or geysers may be present. They can only be found in certain areas of the world, for example Japan, New Zealand and other countries in which there are active volcanoes and magma that is relatively close to the surface. There are also geothermal ‘hotspots’ in places like Hawaii, Iceland, Italy, Yellow Stone (USA) and the Rift Valley of East Africa.
Victoria’s geothermal waters are of much lower temperature and have been formed by the circulation of groundwater in deep sedimentary basins where temperatures of up to 60°C are present as the result of normal thermal gradients in the earth’s crust. These resources can be sourced by drilling into saturated porous sand aquifers lying within the sedimentary basins (this is also the case for many of New Zealand’s geothermal resorts).
History of geothermal water use
The utilisation of geothermal water dates back many thousands of years. There is evidence that the Japanese used hot springs for bathing and cooking from 11,000 BC, and also that the Native American Indians settled near hot springs in North America around 7,000 BC and that they used them for bathing and medicinal purposes.
The Roman Empire’s use of geothermal water for bathing spread across most of Europe and was well established by the first century BC.
Electricity generation from geothermal resources dates back to the early Twentieth Century when the first small scale facility was developed in Tuscany, Italy. Since then, geothermal power stations have been constructed in many countries including New Zealand, Japan, the USA, Indonesia and Kenya. In Australia a small geothermal plant has been operating since 1992 at Birdsville in Queensland. This plant uses water at about 100°C from the Great Artesian Basin and generates about a third of the town’s energy needs.
Despite the size and potential of Victoria’s geothermal groundwater resources, to date their use has been limited. The popular 
Peninsula Hot Springs provide a wide range of bathing and treatment options which have been developed with a Japanese theme.
More recently, Local Governments have commissioned studies to examine the potential viability of new hot spring bathhouse facilities in Metung and Port Fairy.
To facilitate the harnessing of this potential green energy resource, the Victorian Government has introduced legislation to support investment in geothermal energy. The Geothermal Energy Resources Act 2005 puts in place a framework that:
- gives secure title to the resource,
- provides efficient and effective allocation processes, and
- establishes transparent, fair and efficient land use and environment planning and land access processes.
The legislation ensures that health, safety and environmental issues are considered as part of geothermal operations. The new legislation is designed to encourage major energy investment projects. Projects that involve bores at temperatures less than 70°C or where the heat source is less than one kilometre below the earth’s surface, will not require an exploration permit. The developer will however be required to obtain a licence from the controlling water authority approving installation of the geothermal bore and authorising extraction of water from the bore.
Current and potential use
Geothermal energy has several advantages over water that has been heated by the burning of fossil fuels. It can provide a sustainable supply of energy and water over long periods of time, and compared with most other energy sources, is safe and has minimal environmental impact. The operating costs of geothermal energy are relatively inexpensive compared with other energy sources, particularly after the initial capital outlay for infrastructure has been recovered.
While high temperature geothermal resources can be used to generate electricity, the lower temperature resources commonly found in Victoria (typically between 35–60°C) are often used in spas, and in the heating of buildings, swimming pools, greenhouses, and fish farms. Other uses include the washing of wool, pasteurising milk, dehydrating fruit, production of paper and various industrial processes.
Sometimes, geothermal water is piped to a number of buildings in a suburb or town where it is used for space heating. This is called a ‘district heating scheme’ and the best current example is the city of Reykjavik, capital of Iceland, where most homes are heated using piped hot water. Until recently, geothermal water was used to heat a number of public buildings and a swimming pool in Portland, Victoria. The bore has been decommissioned for repair.