Hot, dry rock exploration and production relies on exploiting hot granite rock trapped beneath layers of insulating rock no more than 5km below the earth's surface. The heat in such 'reservoirs' can reach more than 250C.

Generating useable energy from hot rocks involves drilling two parallel wells. Water will be pumped down one well at extremely high pressure, passing through fractures in the granites and return up the other well. The super-heated water would then transferred up via a second well to a power station to generate steam and then electricity.

So far not one joule of electricity has yet been generated in this way, but the Centre for International Economics (CIE) estimates in its report, funded by hot rocks pioneer Geodynamics, that a low estimate of Australia’s recoverable hot fractured rock (HFR) resources equates to the nation’s current electricity consumption for 450 years.

“The fundamentals are huge. There are very few other energy options that could deliver the benefits of geothermal energy while reducing emissions,” said the report’s author, CIE director Kerry Barwise.

“The industry’s development would place Australia at the leading edge of technology, which would be used in many other countries.”

In addition, the study said the development of a hot rocks sector could also lower forecast greenhouse gas emissions by the equivalent of 5 million cars, or 1.8 million houses, by 2030.

On Monday, the Australian Government announced a $1.6 billion scheme to push alternative energy and fuel sources, including $59 million to identify potential onshore energy sources, such as geothermal.

The Australian Bureau of Agricultural and Resource Economics has estimated the country will need an additional 25,000MW of new electricity generation capacity by 2030, or 50% more than current capacity.

Several companies, including Geodynamics, Petratherm and Green Rock are working on hot rocks projects, mainly in South Australia.