Deep Geothermal Energy in Europe

Barriers for market development

Philippe Dumas, Manager, European Geothermal Energy Council

23/03/2012 - VILNIUS

1) Electricity

2) Heating& Cooling:- Deep- Shallow

Deep Geothermal

EGEC Deep Geothermal

Market Report 2011

Summary of Key ConclusionsGeothermal Electricity

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Installed Capacity per CountryGeothermal Electricity

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Looking to next 5 years…

Hot Facts on GeoElec

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Looking to the future…

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EGS in Europe…

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Barriers to Geothermal DevelopmentELECTRICITY

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Specifically for EGS•Lack of awareness about this technology, its potential and advantages, among policy makers, the general public and potential investors•Limited research funds to develop new pilot projects and to progress down the learning curve

Technical Barriers•Lack of wide and detailed information on geothermal energy resources (information not available or not standardized and spread out in different ministries, universities, national institutes, oil & gas companies)•Lack of high skilled professionals and training courses, notably on EGS

Social & Environmental barriers•Public acceptance (to be tackled by increasing the awareness among the general public)

Renewable Energies – on a level playing field ?

0

100

200

300

400

500

600

700

2007 2008 2009 2010

$ b

ln (

no

min

al) Renewable electricity

Biomass

Fossil-fuel electricity

Coal

Gas

Oil

Subsidies for energy

(after IEA data published in the Guardian)

+ subsidies for nuclear energy

Barriers to Geothermal DevelopmentELECTRICITY

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Regulatory barriers•Length and administrative burden of licensing procedures;•Lack of clear rules for competition over underground sites•Grid access (covered by Article 16.2 of Directive 2009/28/EC)•Market distortions and unfair competition from conventional sources (taxes, non-complete internalization of externalities, infrastructures, etc.)

Financial barriers•Risk associated to the first drilling and its coverage (to be tackled through national, European and international risk insurance schemes);•Given the high upfront costs* (high drilling costs and shortage of drilling rigs for geothermal energy) there is a lack of innovative financial mechanisms;•For deep geothermal systems, fees and royalties for the use of underground resources;•Lack of support schemes: very low financial support compared to other technologies,

One Solution: GEOELEC Project

Objective of GEOELEC project is to* convince decision-makers about the potential of geothermal electricity in Europe: Create awareness and improve perception among policy makers

* stimulate banks and investors in financing geothermal power installations.

Work Program:Prospective for geothermal electricity in Europe

Financing geothermal power projects

Regulatory, social and environmental conditions

Education and employment in the geothermal sector

Promotion activtiesVisit www.geoelec.eu

Conclusion: 3 Factors Affecting Geothermal Electricity

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Summary of Key ConclusionsGeothermal District Heating

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Systems in EuropeGeothermal District Heating

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Hot Facts on GeoDH

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Future of GeoDH in Europe

Barriers to Geothermal Development

District Heating

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Technical barriers

•Lack of wide and detailed information on geothermal energy resources •Lack of high skilled professionals

Regulatory barriers

•Lack of national/regional/local geothermal regulatory framework and a favorable local planning•Length and administrative burden of licensing procedures for exploration and drilling;•Lack of clear rules for competition over underground sites 

Barriers to Geothermal Development

Heating

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Financial barriers

•Risk associated to the first drilling and its coverage;•high drilling costs and lack of drilling rigs for geothermal energy;•Lack of new business models to make GeoDH economically viable despite the foreseen decrease in heating demand;•For deep geothermal systems, fees and royalties for the use of underground resources;•Fragmented and very limited support financial support; unfair competitive with conventional sources•Insufficient statistics on h&c 

Conclusion: 3 Factors Affecting Geothermal District Heating

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26-27 April 2012: Joint Annual Conference

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With the support of:

Thank you !

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