memorandum by Mr Rouquet, rapporteur
1 "Geothermal" is the term that refers to both the
science that studies the Earth’s interior thermal phenomena and
the technique that aims to exploit them. By extension, geothermic
also relates to geothermal energy, sourced from the Earth’s heat
energy, which is directly used as heat or converted to electricity.
2 Much of the Earth’s internal heat (62%) comes from the radioactivity
of the rocks making up the Earth’s mantle and crust. This is natural
radioactivity generated by the decay of uranium, thorium and potassium.
3 Geothermal heat is an inexhaustible source of energy comparable
to that of the sun.
4 Up to now we have used only a small part of the underground
heat reservoir potential. Being a proven technology and controlled
technically, nowadays, geothermal energy can be used for electricity,
for district heating, as well as for heating and cooling of individual
buildings. But the discovery of more accessible reservoirs has done
little to encourage geothermal development.
5 Global processes provoked by the burning of fossil fuels can
be positively influenced at a local level where sustainable, decentralised
solutions with regard to heat and electricity supply can be realised.
New technologies, among which geothermal shows a high potential,
will come into play at much larger scale than experienced so far.
6 As gas and oil supplies dwindle worldwide, the use of geothermal
energy can become an attractive solution, as it is already proven
in some European countries.
7 This is also one of the reasons why participants of the recent
World Economic Forum in Davos concluded that geothermal energy will
offer the best possible cost-effectiveness of renewable sources. Furthermore,
geothermal energy can be used for base-load supply.
8 Legal, institutional, regulatory, environmental and social
barriers have severely constrained the implementation of geothermal
projects in Europe. The potential is mainly undeveloped, which is
mainly due to inadequate framework conditions.
9 Humankind has always known how to take advantage
of geothermal energy, having used it in heating and cooling for
thousands of years in China, ancient Rome and the Mediterranean
and for more than one hundred years for electricity.
10 The use of geothermal energy is nothing new in Europe. For
example, a hot spring in Chaudes-Aigues (Auvergne, France) was used
in the 14th century for the first district heating and a low temperature
(81°C) geothermal resource has already been exploited, since the
late 1960s, at Paratunka, Russian Federation, combining power generation
(680 electric kilowatts (kWe) installed capacity) and direct uses
of the waste heat for soil and greenhouse heating purposes.
3 The current situation
11 Geothermal energy is used in 90 countries around
the globe, 24 of which use it to produce electricity, including
China, Iceland, United States, Italy, France, Germany, Portugal,
Turkey, New Zealand, Mexico, Nicaragua, El Salvador, Costa Rica,
Russia, Indonesia, Philippines, Japan and Kenya.
12 In 2005, five of these countries obtain 15% to 22% of their
national electricity from geothermal. Yet, only a small fraction
of the potential has been developed and used so far. This potential
is still to be exploited both for direct use and for electricity
generation. Today, total installed geothermal capacity is 9.7 gigawatts
(GW). Most European countries already have considerable geothermal
installations. The same applies to the United States of America,
Central America, Indonesia and Kenya in the African Rift Valley.
El Salvador, Kenya and the Philippines especially play a key role
in geothermal energy supply.
13 In 2005, the world’s geothermal capacity was estimated at
a total of 8 933 megawatts (MW), broken down as follows: Asia 3 290
MW; North America 2 564 MW; European Union 823 MW; other European countries
301 MW; Australasia 441 MW; Central and South Americas 1 377 MW;
Africa 128 MW. Geothermal energy is Iceland’s main energy source
but it is El Salvador which is the biggest consumer – 22% of the electricity
generated there is produced by geothermal energy (2005). In addition,
geothermal heat provides heating and hot water for about 87% of
14 One of the largest geothermal sources is located in the United
States. The Geysers, some 145 km north of San Francisco, began production
in 1960 and now has a capacity of 900 MW. It comprises a collection
of many electric power stations using steam from over 400 wells.
4 The use of geothermal
energy in Europe
15 The largest geothermal district heating systems within
the European continent can be found in the Paris area of France,
with Austria, Germany, Hungary, Italy, Poland, Slovakia, among others,
showing a substantial number of geothermal district heating systems.
16 As far as geothermal electricity is concerned, the vast majority
of eligible resources is concentrated in Italy, Iceland and Turkey
due to young volcanism.
17 High temperature resources are mainly concentrated in volcanic
islands (the Azores for Portugal, the overseas départements for France, the Canary
Isles for Spain) and in Greece, which is one of the most favoured
countries in Europe for development of high temperature resources.
18 Medium temperature resources exist in some concentrated locations
(for example, in Hungary and Germany).
19 Central Europe has mostly low-energy geothermal resources
in deep sedimentary basins. Hungary, due to its unique geological
position upon the “geothermal hot spot” Pannonian Basin, has very
20 Iceland has led the way in direct uses of geothermal energy,
mainly in greenhouse and district heating (89% of the total domestic
heating demand) and is increasing its electricity production, which
in 2006 reached a 420 MW installed capacity. Although significant,
this capacity ought to be compared to the huge potential of the
island, estimated at 4 000 MW, a figure far above national power
requirements, 1 500 MW.
21 In Guadeloupe, at Bouillante, not far from the Soufrière volcano,
four exploration wells were drilled in 1984, one of them to a depth
of 300 metres, leading to a decision to install a 5 MW power station.
Very close to that site, three new, deeper production wells (averaging
1 km) were commissioned in 2001 and a power station built in 2003
(Bouillante 2) made it possible to generate an additional 11 MW
by the end of 2004. This new energy provision covers around 10%
of the island’s annual electricity needs.
22 In mainland France, deep wells have been drilled, most recently
in 2005, to a depth of around 5 000 metres in Soultz-sous-Forêts
in Alsace, in artificially fractured rock. In addition, 30 urban
heating networks, using low-energy geothermal energy, have been
operating successfully in the Paris region for about thirty years.
Heat pump installations using groundwater continue to be developed
in the Paris region and elsewhere as these heating and cooling techniques
are particularly well suited to the tertiary and residential sectors.
23 In Germany, a 3.4 MW power station in Unterhaching (near Munich),
generating heat and electricity in parallel, has been undergoing
test runs since 2007. Drilling is to a depth of 3 350 metres, with
a flow-rate of 150 litres of water per second at a temperature of
24 In the wake of the first oil crisis, several initiatives to
exploit geothermal energy were launched in certain European countries.
However, a number of projects had to be stopped for financial reasons,
as well as on technical grounds as the technology was not fully
mastered, which may have given geothermal energy itself a poor image,
all the more so as, in the same period, fossil fuel prices had substantially
25 Today, these technologies have been mastered and the likely
trends in oil prices now make them a more attractive prospect.
26 It is therefore not astonishing that geothermal energy was
the highest growth sector for investment in 2008, with investment
up 149% and 1.3 GW of new capacity installed.
5 The principles
27 The deeper the borehole into the Earth’s crust, the
higher the temperature rises. On average, temperatures increase
by 30°C for every kilometre drilled. The thermal gradient depends
greatly on the region of the globe concerned. In New Zealand for
example, water already exits in the subsurface at very high temperature,
in the form of steam.
There are a number of technical approaches to geothermal energy,
each very different, geared to highly diverse consumer profiles
and investors, such as:
geothermal energy (EGS, Enhanced Geothermal System), which uses
the heat of very deep-lying artificially fractured rocks (3 000
to 5 000 metres) to produce electricity and heat;
- medium-depth geothermal energy (up to 3 000 metres), which
heats water to a temperature high enough to be used directly in
a heating network;
- geothermal energy for domestic or tertiary use, which
uses heat pumps for the heating and cooling of buildings (air-conditioning);
- geothermal energy for agricultural or industrial use,
which may be used to heat greenhouses for example or delivering
process heat for industrial purposes..
29 Geothermal energy has a huge potential. In the United States
the famous MIT (Massachusetts Institute of Technology) produced
a theoretical study in 2006 showing that an enormous energy reserve
existed between 3 000 and 5 000 metres deep, which, if harnessed,
could easily cover all the energy requirements of the entire United
States. Similarly, the so-called TAB study from the Office of Technology
Assessment at the German Parliament (TAB) showed the same for Germany
6 Geothermal energy
development: opportunities and challenges
6.1 Why geothermal
energy in Europe?
30 In recent decades, growing concern on environmental
issues has spread across Europe and the demand for energy has also
been shooting up. It is clear that an easily exploitable energy
source is needed to give a boost to local activities and support
self-sustaining economic growth in Europe.
There are many advantages to geothermal energy which make
this technology extremely valuable for electricity generation and
- almost universally
available, geothermal energy provides an answer to all energy needs:
electric power, heating, cooling, hot water;
- being a base-load energy, geothermal energy is available
twenty-four hours a day, seven days a week from domestic sources;
so it generates continuous and reliable power, independent of weather conditions;
- as no fossil fuel is used for the power generation, geothermal
power plants provide heat and electricity at stable and predictable
- once the geothermal plant is built, which represents a
high investment, geothermal power production has low operational
costs and is effective for decentralised distributed application;
- geothermal energy utilisation can be cost competitive
with conventional energy resources and produce continuous income
- no burning of fossil fuels is involved and no man-made
emissions, such as CO2, will affect the area;
no radioactive waste is produced;
- moreover, geothermal fluids can be channelled, via geothermal
wells and collecting lines, to power plants, thus concentrating
natural emissions, which would otherwise contaminate the surrounding
soils and atmosphere, to a single point;
- geothermal energy contributes to a sustainable energy
mix based on renewable energies; it helps diversify energy supplies
and increases energy independence from fossil fuel imports;
- using decentralised energy technologies creates employment
in local communities at much higher rates than many other energy
technologies; there are economic opportunities for new industries
and new industrial and craft jobs and deep geothermal energy projects
potentially bring jobs to former mining areas;
- contrary to power plants with huge land demand, a geothermal
plant does not need much space; it has a low visual impact.
6.2 Hurdles hindering
a wider use of geothermal energy on the European continent
6.2.1 Technical barriers
32 There are a number of technical difficulties that
can be met by project planners, developers as well as operators
when developing geothermal projects:
220.127.116.11 Environmental considerations
33 Although it can be assumed that geothermal production
is an environmentally friendly and renewable solution, some negative
aspects can appear. Most opponents to geothermal energy disapprove
of geothermal projects because of noise, threats to rare animals
or plants or the risk of micro-seismicity.
Possible nuisances caused by geothermal plants could be:
- air emissions;
- noise pollution through cooling systems during the utilisation
phase of geothermal energy; the short drilling phase is also a source
- visual impact: if the geothermal boiler of a district
heating system cannot be dissimulated in a building, it may be considered
that the development of a geothermal power plant in the middle of
the landscape would have a negative impact.
These nuisances can generally be solved technically; examples
- the reinjection of the
water and circulation in a closed loop can inhibit odours;
- well pressure management can hinder degassing and thus
smells; however, reinjection is not compulsory in all countries;
- in a high density location (as is the case for district
heating) some precautions can be taken such as avoiding night drilling
and/or isolating some equipment.
18.104.22.168 Deep geothermal
projects and micro-seismicity
36 Under certain tectonic conditions, the construction
and the operation of geothermal power plants may trigger micro-seismicity.
The same phenomena occur frequently in natural gas and oil exploitation
and in tunnelling. This is related to the particular geological
structures in the respective region.
37 In August and September 2009, the residents of Landau (Germany,
Rhineland-Palatinate) experienced some micro-seismic sensations.
38 Again in Germany, in the southern Black Forest town of Staufen-im-Brisgau,
there was cracking in several buildings and the ground rose at a
rate of one centimetre per month. A link has been established between
these phenomena and geothermal near-surface drilling operations.
They are the consequence of the injection of water into a subsoil
containing anhydrite, a mineral substance that transforms into gypsum
when it comes in contact with water, resulting in a volume increase
of 60% and subsequent damage.
39 A Soultz-type geothermal project was launched on a commercial
basis in Basel in Switzerland in 2006. In December 2007, stimulation
experiments resulted in a mini-earthquake that was felt by local
inhabitants. As a result the project was definitely stopped in 2009.
Several projects have been launched in the upper Rhine Valley, based
on the Soultz experience. These include the Landau (3 MW and district
heating) and Insheim projects. Once again, micro-earthquakes associated
with these projects have generated fears among local inhabitants.
A European project is to be launched on this subject to throw more
light on the physical mechanisms underlying these induced earthquakes.
The French Geological Survey (BRGM) and the University of Strasbourg
will participate in this research.
40 However, these are the sorts of problems associated with the
development of any new technology. Operating and drilling difficulties
affecting installations established following the first oil crisis
and more recently are no longer applicable, thanks partly to our
greater mastery of the technology and partly to a much better understanding
of the geological conditions that make sites suitable for geothermal
22.214.171.124 Adequacy between
resources and need
41 Another barrier to the further exploitation of geothermal
energy relates to the fact that the potential should be adequate
for the needs on the Earth’s surface.
42 Even if a potential exists for the development of district
heating, exploiting it will be interesting only if population density
and the need for heat production are adapted to the resources available
so as to provide heat economically. Geothermal heat plants are located
close to densely populated areas or local industry with a high heat
43 For electricity production, the problem of matching demand
and resources is less significant as electricity can be transported
over longer distances and, despite increasing efficiency, demand
6.2.2 Grid-related barriers
44 Already in the near future, national regulatory authorities
in Europe will have to facilitate the integration of renewable energy
into the power grid and transmission system operators will have
to grant electricity from renewable sources priority dispatch. This
will help adjust the balance of the power markets, at present heavily tilted
towards conventional fuels.
6.2.3 Non-technical barriers
45 After 1986, the sudden collapse of oil and gas prices
caused an equally sudden loss of interest in geothermal development
in many European countries with the consequence that some operations
were shut down mainly due to unexpected financial difficulties.
Fossil energies were attractive again and this provoked loss of
interest from investors and public owners.
46 Nowadays, the main reason for low geothermal energy production
in Europe is the existence of non-technical barriers that hinder
the efficient exploitation of the geothermal resource. It is therefore
necessary to overcome these hurdles that influence geothermal projects
at different stages and in various fields of the project and hinder
the growth of the geothermal sector in Europe.
6.2.4 Legislative and
47 The present lack of legal compliance and regulation
for geothermal energy exploitation in some European countries is
inhibiting the effective exploitation of this underutilised resource.
126.96.36.199 Equivocal legislation
48 The relevant legislation is contained in laws on
mining, energy, environmental matters, water management and geological
projects, sometimes in a conflicting way, and the licensing procedure
for geothermal facilities is also rather complex in most countries.
49 In some countries, there is not even a specific law for geothermal
energy and different ministries are responsible for geothermal energy
applications, which makes the predictability of legal decisions
188.8.131.52 No long-term guarantee
for the exploitation of the resource
50 In some countries, there is no legal protection guaranteeing
the long-term ownership of the resource. In those cases, neither
the exclusive usage of the field is guaranteed nor is the usage
of the necessary water reservoir secured by the law.
184.108.40.206 Complexity of administrative
procedures and length of administrative proceedings
51 Major administrative barriers arise from the complexity
of administrative procedures and the length of administrative proceedings.
The high number of authorities involved, the lack of co-ordination
between different authorities and little awareness of benefits of
geothermal energy in local and regional authorities also constitute non-negligible
220.127.116.11 CO2 storage endangers
the development of geothermal energy
52 It is feared that CO2 capture
and storage laws, as currently being discussed in many European
countries, will slow the development of clean energy sources, in
particular geothermal energy.
6.2.5 Financial and economic
53 There are a number of financial and economic aspects,
especially for deep geothermal projects, which hamper heat and/or
18.104.22.168 High upfront costs:
high investments for drilling and testing
54 Compared to other renewable energy technologies,
deep geothermal energy projects have non-negligible upfront costs
(mainly due to the costs of exploration, like seismic investigations
and drilling exploration wells).
55 This is stressed by the existence, in some countries, of high
additive costs (that is, exploration and/or exploitation permission
costs, the cost of geological geothermal data).
56 Geothermal energy does not yet have the critical mass that
would produce a decrease in investment costs.
22.214.171.124 Additional cost
for the construction of district heating networks
57 In case of construction of a completely new geothermal
project, the construction of a new district heating network leads
to higher investment costs.
58 This could also facilitate the development of geothermal energy
projects in combination with district heating networks that currently
are supplied by non-renewable energy.
126.96.36.199 Further cost efficiency
needed for drilling
59 There is a lack of drilling rigs for geothermal energy.
The high demand for suitable drilling equipment increases the overall
60 Parallel to that, the lack of geothermal projects makes it
difficult to develop a geothermal drilling industry dedicated exclusively
to geothermal energy projects.
188.8.131.52 The particularity
of geothermal energy: the existence of geological uncertainties
61 One of the most important barriers is the geological
risk of the non-discovery of adequate resources for the project:
money has to be spent whilst the success of the project has not
been proved. There is also a long-term geological risk of facing
a resource with lower-than-estimated temperature, higher-than-estimated mineralisation,
or difficult reinjectivity.
62 The danger that the resource decreases or disappears before
reimbursing the cost of the equipment as well as the risk of damage
affecting the wells, the material and the equipment of the geothermal
loop during the exploitation period should not be underestimated.
184.108.40.206 Lack of an insurance
mechanism insuring the risk of non-discovery of adequate resources
- drilling insurance (technical
- operation insurance (machine breakdown)
63 Geological risk insurance needs to be available for
a company which undertakes exploration and development of a geothermal
64 Geological risk insurance mechanisms which insure the presence
and the quality of the resource in the reservoir (flow rate and
temperature) are only offered in a few countries (in Germany, France
and through the Geofund). Traditional insurance policies do not
offer any specific solutions for the risk of non-discovery. A risk-sharing
instrument helps to overcome this barrier in order to foster investments
in geothermal energy projects.
65 Furthermore, there are private enterprise insurance solutions
available which have to be negotiated on an individual basis and
include high insurance premiums.
66 For example, in France, a geological risk insurance was developed
to offer a long-term guarantee to cover the possible modification
in quality and quantity of the resource.
67 The development of geothermal energy in France was encouraged
by the implementation of a global scheme involving financial guarantees
designed to cover project investors against the geological uncertainties specific
to this activity: the risk during the drilling phase of not obtaining
geothermal resources matching the flow rate and temperature requirements
necessary to ensure the profitability of the planned operation.
68 To take over the risk of non-discovery, the German Ministry
for Environment (BMU) has developed a risk mitigation instrument
focused on geothermal drilling projects.
69 France, Germany and Bulgaria have a system of risk insurance
for geological risks covering the risk of not discovering the necessary
quantity and quality of the resource.
70 This kind of insurance is particularly important for pilot
technologies that could have application problems if a financing
bank requires such insurance contracts to guard against losses during
220.127.116.11 Long payback period
71 Deep geothermal projects are projects with a long
18.104.22.168 Low outcomes
72 For many geothermal projects, outcomes appear low.
In some countries, royalties and other taxes during exploitation
reduce the sources of incomes. These expenses are sometimes too
high compared to the annual heat sales.
22.214.171.124 Short depreciation
period for district heating and wells
73 Another difficulty comes from the short depreciation
period for district heating and wells.
74 Longer depreciation periods would lead to lesser expense in
profit and loss accounts and therefore could support the economic
profitability of a geothermal project.
75 Special deprecation is available in some countries but only
for some equipment or instruments.
76 In case of a non-fixed depreciation period for wells for example,
it can be assumed that a period adapted to the lifetime of the drilling,
corresponding to at least thirty years, is theoretically possible
as the geotechnical period of use of a geothermal well.
77 But the longer the period is, the more difficult it will be
for it to be accepted by authorities or by banks. With special depreciation
rates, governments can also support investments in certain cases.
126.96.36.199 Low feed-in tariffs
78 Feed-in tariffs regulated by law are a revenue-neutral
way of making the installation of geothermal energy more appealing.
79 A system of feed-in tariffs for geothermal electricity ensures
a certain amount of income but this is not always high enough to
ensure an attractive outcome. Moreover, the remuneration is generally
only given for the net electric energy, and not for gross production
capacity. This reduces substantially potential revenues from a geothermal
188.8.131.52 Long-term risks:
lack of security for investment
80 In some European countries, heat and electricity
sales are not guaranteed over a long period. Investors in geothermal
heat and electricity production projects need to assess the heat
and electricity market to make sure that electricity and heat sales
are high enough during the long payback period needed.
81 Finally, competitiveness with fossil fuels is a key factor
in the development of geothermic projects. As the relatively cheap
prices for fossil fuels make it difficult to launch geothermal projects,
the oil price fluctuations play an important role when considering
if geothermal energy might be an option.
184.108.40.206 Lack of innovative
financing instruments adapted to the special needs of the geothermal sector
– Effective tools for risk mitigation required
82 Most financial instruments are not dedicated to geothermal
energy in general. These instruments do not consider the particularity
of geothermal projects: high upfront costs during the exploration
and pre-feasibility phase and security concerning the size and output
of the energy supply project only after completion of the first successful
wells. But a significant sum has to be spent before the resource
is proven. This explains the lack of financial institutions ready
to participate in the early stages of a project. They are reluctant
to invest while the profitability of the project has not been proven.
83 Equity from the company’s own resources or grants from public
bodies could cover these expenditures. Private equity investors
will expect a high rate of return during the first stages of the
project due to the risk their investment still faces. Finally, classic
project finance schemes can be used only at a very late project
84 Currently, the European Investment Bank does not fund projects
in the early stages but only projects which have proven their economic
220.127.116.11 Special bank facilities
85 Very few banks propose special bank facilities with
low interest loans adapted to geothermal project characteristics.
86 Specific financial guarantees, designed to protect project
investors against the geological uncertainties specific to this
activity, could secure the financing of a project.
87 The investor must have access to adequate capital to move
a geothermal project into the later stages of development and he
must be willing to put that capital at significant risk. This combination
of uncertainty and difficulty in finding money multiplies the risk
of geothermal projects.
88 Getting a loan for investment is difficult as most banks will
not lend money to high-risk projects.
89 Special bank facilities with low interest loans are rarely
possible at the moment, except in Germany and Iceland.
18.104.22.168 Tax reductions
90 Tax reductions are an effective governmental incentive
and concern both electricity production and heat production. They
can help to promote increased capital investment in geothermal projects.
91 Public grants are the only instruments proposed to
complement equity capital or to finance exploration phases. Grants
can support the financing of investments.
92 Subsidies are offered at national level, but mainly at regional
level. They cover mainly the investment phase, for drilling wells,
but also the purchase of equipment for the central production and
can cover 30% to 40% of the investment.
93 France offers special subsidies for feasibility studies that
are a first step to financing the exploration phase, whereas the
Portuguese regional programmes are more oriented to the development
of pilot projects.
22.214.171.124 Tradable certificates
and quota systems
94 The generation of green certificates or the possibility
for a geothermal project to participate in emission trading could
provide additional sources of income.
126.96.36.199 Venture capital
95 Venture capital can be an adequate financial instrument,
even though it is dependent on well-functioning financial markets
both for loan finance and for the ultimate listing of successful
96 Although venture capital is usually available everywhere or
negotiable, as yet it is not attracted to geothermal energy projects.
For example, venture capital is the most important financing source
for geothermal projects in Germany.
97 Venture loans are offered in Iceland and by the European Investment
188.8.131.52 Funds for research
and pilot projects
98 Allocating funds for research and pilot projects
could be another way of fostering geothermal energy but nothing
systematic can be found at the European level.
99 Some countries also dedicate money to promoting research and
development of new demonstration projects that geothermal energy
can benefit from.
100 These instruments should permit the launching of new technologies,
for example to develop EGS Systems that will enable the production
of electricity where no natural resources exist.
101 On the whole, all these instruments are a way of increasing
profitability, by offsetting the high upfront costs and payback
period of the project so as to overcome the financial risk barrier
and attract investors.
184.108.40.206 Growing necessity
of common European instruments
102 Some common instruments exist across Europe that
facilitate investments in geothermal projects. However, the lack
of harmonisation is obvious.
103 The development of geothermal financial instruments at the
European level to support geothermal projects in their early stages
might be an interesting aspect to consider.
104 A European solution should mainly try to solve two aspects:
the lack of financing for the exploration phase and the risk of
inappropriate quality or quantity of the geothermal resource compared
to the expectations for the project. This solution would have to
take into account, on the one hand, project specific aspects, which have
to be fulfilled, and, on the other hand, the investment environment
of the project.
105 Therefore, a combination of financing schemes and incentives
can be a key point for the economic success of geothermal projects.
6.2.6 Awareness and acceptance
220.127.116.11 A predominantly
negative public opinion in Europe
106 If public opinion is globally positive to geothermal
energy, deep geothermal projects sometimes suffer from low public
107 In many European countries, awareness of geothermal energy
is still quite poor.
108 In 1985, a double flash 2 MW pilot power plant was installed
in the high enthalpy field of Milos, Greece, and operated intermittently
until 1989. However, the plant was then shut down because of environmental protests
due to sulphur emissions into the atmosphere. Because of the unfortunate
fate of the Milos electrical plant, a geothermal power plant planned
in Nisyros was rejected.
109 Even though citizens are becoming more and more concerned
by environmental issues, they are not always ready to accept such
renewable projects. This is explained in some cases by local environmental difficulties.
18.104.22.168 Lack of political
110 The formulation of national political objectives
in the sector of renewable energies is an important factor for the
development of public awareness.
111 Globally, there is a political will to expand renewable energy
in general, including geothermal, but it is not always translated
into operational action.
112 In some European countries, geothermal energy is not mentioned
in the national renewable energy plan.
113 National research and development funding schemes should clearly
have geothermal energy research, pilot projects and spin-off activities
amongst their priorities.
22.214.171.124 Lack of information
114 There is currently a lack of information about geothermal
energy and geothermal possibilities, for the public but also more
generally for all possible actors in a geothermal project.
115 Clear market signals as well as information campaigns proactively
targeting suppliers can help to overcome this obstacle.
116 The information infrastructure on geothermal potential is
well developed in very few countries (such as Germany, which disposes
of online tools like GeotIS)
117 Improved information regarding resources in emerging European
markets will allow more companies to enter the geothermal industry,
especially those with multiple synergies with the geothermal industry,
such as oil and gas service companies.
118 Finally, dissemination of information is necessary to increase
the public and stakeholders knowledge.
126.96.36.199 Lack of co-operation
119 Many stakeholders participate at different stages
in a geothermal project: consumers, suppliers, developers, governments,
operators and financial institutions. They all have multiple interests.
In order to successfully manage the development of a geothermal
project, businesses, experts, authorities and civil society groups
need to co-operate and work to implement “win-win” situations.
120 The sharing of competence could have a positive impact at
different levels: facilitating insurance proposals, decreasing drilling
costs and raising awareness among financial institutions that work
at the European level.
121 Drilling companies in the gas and oil sector have a number
of diversification opportunities in the drilling and exploration
phase of geothermal projects. There are various techniques and expertise
that can be transferred from oil and gas to geothermal exploration.
Better co-operation between these sectors is therefore crucial.
122 Additionally, clustering of wells leading to bigger power
plants could lead to economies of scale and decreasing investment
123 The setting up of technology platforms, which bring together
companies, research institutions, the financial world and the regulatory
authorities at the European level, might help to define a common
research agenda and strategies which should mobilise a critical
mass of – national and European – public and private resources.
124 The development of European solutions and a common European
market can reduce costs and thus make geothermal power a more competitive
energy source compared with both conventional and other renewable
188.8.131.52 Training, professional
125 Training, professional accreditation, certification
and awareness training, especially for the instructors of ground
source heat pump designers and drillers, need to be improved considerably
as there is currently a lack of certification regimes or incompatibilities
between member states.
126 This implies the development and mutual recognition of accreditation
and certification schemes for installers of small-scale renewable
energy installations (and notably GSHP installers).
127 All barriers should be overcome in order to boost development
of geothermal energy projects at a European scale.
7 The role of political
128 Growth in the geothermal sector must be complemented
with reliable government support.
129 The experience of local elected representatives is important
here, as the main difficulty is very often to convince decision
makers, companies and engineering practices to consider these issues
without fear or prejudice. Insurance- and approval-related matters
are other difficulties to be overcome.
130 It is necessary, therefore, to identify the sticking points
still preventing more widespread use of this technology and, above
all, its appropriation by all the players in the economic and industrial
system, without which there can be no green transformation.
131 At a time when the global crisis has grave ramifications for
the economies of many Council of Europe member states and when a
lot of European citizens have expressed their environmental concerns
at the ballot box (particularly in the European elections of June
2009), it is crucial for existing companies to realise the need to
go green. One of the tasks of the political decision makers is to
accompany them in that transformation.
132 The example of the photovoltaic sector shows that states can
give a decisive boost to the development of geothermal energy if
tools are well designed and adapted to the particularities of geothermal
133 Continued government support will bolster growth rates.
134 Financial incentives for geothermal energy development, such
as interest-free subsidies, low interest long-term credits or subsidies
for experimental and R&D projects are needed and governments
can provide a framework for this.
135 Political leaders can both enhance support for start-ups and
micro-enterprises, through technical assistance and grants, as well
as other financial instruments such as loans, equity, venture capital
and guarantees, and highlight the added value of undertaking these
136 If a project is, for example, planned by the public sector
(which might, above all, be the case for district heating) an insurance
solution can lower the risk to a level that enables implementation
of the project. In that case, insurance mechanisms seem to be necessary.
137 Geothermal energy is a renewable energy source with
great potential that is largely unexploited. With the steady progress
in research on geothermal energy, exploitation systems will steadily
improve and the market share of geothermal energy production will
138 The most promising areas are the building of new district
heating networks, optimisation of existing networks, and the development
of new and innovative applications of geothermal energy in industry
139 Meanwhile, a number of such applications have been developed
and some of those have already been demonstrated (snow-melting and
de-icing, district cooling, etc.). Some applications are particularly
promising, such as seawater desalination due to the coincidence,
in many places, of water scarcity, seawater availability and geothermal
140 Some technologies for exploitation of deep geothermal energy
are now mature. However, this potential appears to be not sufficiently
141 Established countries will continue to invest in geothermal
power and new European countries will explore opportunities. This
will lower initial capital costs and attract drilling and other
companies to invest in the sector. Technological evolution can be
expected in both power and heat, and towards improving plant efficiency
and decreasing installation and operational costs.
142 Therefore, in the near future in Europe, the advantages of
geothermal energy as an environmentally friendly energy should be
highlighted together with its application in low-cost and soft technologies,
particularly when both resource and heat demand coincide.
143 Geothermal energy needs to gain its rightful position
in the European energy market. The increasingly urgent need to curb
climate change is proving to be an effective catalyst for the European
geothermal energy industry.
144 The main objective needs to be the promotion of collaboration
between public organisations and the private sector to encourage
the development of geothermal energy among different authorities.
In particular, political decision makers need to focus on the implementation
of political instruments and legislation that help to enhance the
development of this renewable energy. Some legislative or regulation
barriers can indeed trigger economic hurdles.
145 Additionally, an adequate financial package has to be given
in advance so that companies can effectively plan a project’s execution.
146 The main barrier for the development of the European geothermal
sector is the geological risk of non-discovery of resources: investment
has to be made while the success of the project has yet to be proved.
147 Public geological risk insurance systems have been developed
in very few countries. They should be extended to all European countries.
The current approach to the decision on whether to launch a geothermal energy
project is mainly economic and financial. The cost of fossil energies
is then used to analyse the competitiveness of a project. But this
approach does not take into account the external cost or environmental benefits.
148 The cost difference may be too small to decide in favour of
a geothermal system. Energy policies could play a major role in
changing such decisions.
149 Developing common European solutions could be interesting
from many points of view. Indeed, the sharing of competences could
have a positive impact at different levels.