July 30, 2025 • 4 mins
One of our largest power companies sees the great potential in the Government's push for geothermal energy.
The Resources Minister Shane Jones' draft strategy lays out a goal of doubling its production by 2040.
Mercury Energy Chief Executive Stewart Hamilton says 20% of New Zealand's power already comes from geothermal.
He told Ryan Bridge it has great opportunities to decarbonise and grow the economy.
Hamilton says they're currently doing a $300 million extension on one of their geothermal sites, which will produce enough power for the entire city of Wellington.
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Speaker 1 (00:00):
More energy is on the way and it's coming from
below our feet. Energy mister Shane Jones announcing yesterday plan
to double our production of geothermal energy by twenty forty.
He says we have the potential to be a world
leader in the geothermal sector. Stuart Hamilton is Mercury Energy
CEO with me this morning. Hey Stuart, good morning, How
are you good? Thank you? What did you make of this?
(00:22):
I mean it's a first of all, it's a draft plan,
but is there enough meat on the bones for you?
Speaker 2 (00:28):
Yeah, it's a good start, we think. Looking Zilland's already
a global leader in gffrmal energy production, and we've produced
about twenty percent of our christy from geoffrmal compared to
a place like the US where it's less than one
So we've definitely got huge potential to not only just
use this to decarbonize, as it actually potentially grow our
economy and various advanced technologies like supercritical.
Speaker 1 (00:51):
Why do we need the government to be stumping up
money for drilling new wells?
Speaker 2 (00:55):
So welling is that drilling wells is a huge upfront
cost and large risk in geofrmal development. So we drill
wells are about three kilimeters deep, and each well cost
is about fifteen to twenty million dollars. So despite extensive investigation,
sometimes you can miss that hot liquid under our feet.
And when each geofrmal field needs about ten to twenty wells,
(01:17):
it's a pretty large upfront cost and risk.
Speaker 1 (01:20):
How do you know where the hot liquid is? Well,
obviously it's not an exact science.
Speaker 2 (01:25):
Exactly that you can do quite a lot of investigation
from the surface to get an understanding of what where
the liquid might be and when the heat might be,
but it's not until you actually start drilling that you
get a feel for whether you've got both the heat,
but you actually need to have the hot liquid as well,
so you need both of those in combination.
Speaker 1 (01:40):
When are we going to start drilling or are we
already you know, more than five k's for the real
potent stuff.
Speaker 2 (01:48):
Yeah, So the super critical is something which we're working
on at the moment. There's probably going to be it's
sort of in development over the next couple of years.
But despite that, in the meantime, we're actually doing quite
a lot of work with conventional GF thermal so mercury.
For example, we're currently doing a three hundred million dollar
expansion of one of our sites and that will come
(02:08):
on stream early next year and produced enough power for
the whole of the city of Wellington, for example. So
we're pushing pretty hard with just the conventional geof thermal
in conjunction with the supercritical.
Speaker 1 (02:19):
If we were to double what the Minister says we
should be doing, doubling the production of geothermal energy by
twenty forty how many holes do we need to drill?
You know, how much is this going to cost?
Speaker 2 (02:31):
Yeah, it's pretty significant, So doubling our energy and even mercury.
We've got our own sort of goals to actually double
our size by twenty thirty five. So there's a fair
bit of investment, and we're talking billions of dollars and
potentially just the whole of the electricity sect there has
another ten billion dollars worth of investment over the next
five years alone. So that's a significant investment in the industry.
(02:53):
But that's absolutely needed.
Speaker 1 (02:55):
And we'll be paying for that through higher prices of electricity.
Speaker 2 (03:00):
Qickly, what happens is we taken it part of our
the money we're making an investor back into the sector.
So over the half of the money that we've made
in the last couple of years actually goes back into
new and existing power stations.
Speaker 1 (03:13):
Hey, appreciate your time this morning. Stuart Stuart Hamilton, Mercury
Energy Chief Executive on Shane Jones' big geo thermal steam
up yesterday. He was quite excited by this. Interestingly, he
because he got in big trouble the day before, got
the night before when he made his little tweaks to
the oil and gas band reversal, which has taken them
(03:35):
sweet amount of time. But yesterday there was all the
scientists under the sun. We're coming out loving Shane Jones.
What an exciting time, said Isabelle chamber Fought from Energy Futures.
She says, what an exciting time. The strategy lays the
groundwork for a national, forward looking and collective approach to
(03:55):
the next generation of geothermal energy. But just lapping it
up Professor Barry Barton, he says this is a significant
move from the government. Interestingly, he also points out that
there are Maldy stakes in geothermal unresolved claims against the
Crown through the White Tangi Tribunal over geothermal areas, So
(04:20):
what happens there and What does Shane think about all
of that? For more from Early Edition with Ryan Bridge,
listen live to news Talks it'd be from five am weekdays,
or follow the podcast on iHeartRadio.
More energy is on the way and it's coming from
below our feet. Energy mister Shane Jones announcing yesterday plan
to double our production of geothermal energy by twenty forty.
He says we have the potential to be a world
leader in the geothermal sector. Stuart Hamilton is Mercury Energy
CEO with me this morning. Hey Stuart, good morning, How
are you good? Thank you? What did you make of this?
(00:22):
I mean it's a first of all, it's a draft plan,
but is there enough meat on the bones for you?
Speaker 2 (00:28):
Yeah, it's a good start, we think. Looking Zilland's already
a global leader in gffrmal energy production, and we've produced
about twenty percent of our christy from geoffrmal compared to
a place like the US where it's less than one
So we've definitely got huge potential to not only just
use this to decarbonize, as it actually potentially grow our
economy and various advanced technologies like supercritical.
Speaker 1 (00:51):
Why do we need the government to be stumping up
money for drilling new wells?
Speaker 2 (00:55):
So welling is that drilling wells is a huge upfront
cost and large risk in geofrmal development. So we drill
wells are about three kilimeters deep, and each well cost
is about fifteen to twenty million dollars. So despite extensive investigation,
sometimes you can miss that hot liquid under our feet.
And when each geofrmal field needs about ten to twenty wells,
(01:17):
it's a pretty large upfront cost and risk.
Speaker 1 (01:20):
How do you know where the hot liquid is? Well,
obviously it's not an exact science.
Speaker 2 (01:25):
Exactly that you can do quite a lot of investigation
from the surface to get an understanding of what where
the liquid might be and when the heat might be,
but it's not until you actually start drilling that you
get a feel for whether you've got both the heat,
but you actually need to have the hot liquid as well,
so you need both of those in combination.
Speaker 1 (01:40):
When are we going to start drilling or are we
already you know, more than five k's for the real
potent stuff.
Speaker 2 (01:48):
Yeah, So the super critical is something which we're working
on at the moment. There's probably going to be it's
sort of in development over the next couple of years.
But despite that, in the meantime, we're actually doing quite
a lot of work with conventional GF thermal so mercury.
For example, we're currently doing a three hundred million dollar
expansion of one of our sites and that will come
(02:08):
on stream early next year and produced enough power for
the whole of the city of Wellington, for example. So
we're pushing pretty hard with just the conventional geof thermal
in conjunction with the supercritical.
Speaker 1 (02:19):
If we were to double what the Minister says we
should be doing, doubling the production of geothermal energy by
twenty forty how many holes do we need to drill?
You know, how much is this going to cost?
Speaker 2 (02:31):
Yeah, it's pretty significant, So doubling our energy and even mercury.
We've got our own sort of goals to actually double
our size by twenty thirty five. So there's a fair
bit of investment, and we're talking billions of dollars and
potentially just the whole of the electricity sect there has
another ten billion dollars worth of investment over the next
five years alone. So that's a significant investment in the industry.
(02:53):
But that's absolutely needed.
Speaker 1 (02:55):
And we'll be paying for that through higher prices of electricity.
Speaker 2 (03:00):
Qickly, what happens is we taken it part of our
the money we're making an investor back into the sector.
So over the half of the money that we've made
in the last couple of years actually goes back into
new and existing power stations.
Speaker 1 (03:13):
Hey, appreciate your time this morning. Stuart Stuart Hamilton, Mercury
Energy Chief Executive on Shane Jones' big geo thermal steam
up yesterday. He was quite excited by this. Interestingly, he
because he got in big trouble the day before, got
the night before when he made his little tweaks to
the oil and gas band reversal, which has taken them
(03:35):
sweet amount of time. But yesterday there was all the
scientists under the sun. We're coming out loving Shane Jones.
What an exciting time, said Isabelle chamber Fought from Energy Futures.
She says, what an exciting time. The strategy lays the
groundwork for a national, forward looking and collective approach to
(03:55):
the next generation of geothermal energy. But just lapping it
up Professor Barry Barton, he says this is a significant
move from the government. Interestingly, he also points out that
there are Maldy stakes in geothermal unresolved claims against the
Crown through the White Tangi Tribunal over geothermal areas, So
(04:20):
what happens there and What does Shane think about all
of that? For more from Early Edition with Ryan Bridge,
listen live to news Talks it'd be from five am weekdays,
or follow the podcast on iHeartRadio.
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