Climate legislation overhaul opens door to geothermal, but not wide enough

Geothermal power station in Iceland [Njaj / Shutterstock]

The recent overhaul of European climate legislation to slash greenhouse gas emissions by 55% by 2030 is a good first step towards supporting geothermal energy but goes little further, according to a former Bulgarian environment minister.

“It is opening the question. It is highlighting the potential and opportunity. But I think it generally stopped somewhere there,” said Julian Popov, who now works for the European Climate Foundation.

Geothermal technology utilises the heat below the Earth’s surface to produce renewable energy. Unlike solar and wind power, it has a strong focus on decarbonising heating and cooling – a sector responsible for around half of Europe’s energy consumption and a third of its emissions.

But to help achieve decarbonisation in this sector, there needs to be a huge increase in the amount of geothermal technology in Europe and solutions to current barriers, like high upfront costs.

The Fit for 55 climate package only goes a little way towards tackling these issues, the industry says but notes some positive elements.

For instance, the call for cities with more than 50,000 residents to create heat plans is much needed, according to Sanjeev Kumar, head of policy at the European Geothermal Energy Council.

The climate social fund – a pot of money to help vulnerable households cope with the new carbon price for buildings – is also a good step to boost renewables in the heating sector, he added.

“If it’s designed well, then this is expected to be a bigger driver for targeted decarbonisation of heat in buildings than the recovery and resilience fund or anything else in the package,” Kumar told EURACTIV.

Unlike many in Brussels, both Kumar and Popov support Europe’s controversial choice to set up a separate emissions trading scheme for buildings and a fund to support this, seeing it as a way to promote decarbonisation in Europe’s polluting building stock.

Popov also challenged the “simplistic view” that such a measure will increase energy poverty, saying the problem is much more complex than that.

Decentralised policy is inefficient

But it is not all rosy when it comes to support for geothermal energy in the package.

The technology needs more support and a better legislative and economic framework in the renewable energy directive, according to Martin Hojsik, a Slovak lawmaker for the centrist Renew group in the European Parliament.

Development of geothermal energy in the EU needs a binding and ambitious target, and adequate support measures to deliver it, harmonisation of risk reduction frameworks and guidance on Heat Purchase Agreements,” he told EURACTIV.

Kumar warned that the target for increasing renewables in Europe’s heating and cooling – a growth of 1.1 percentage points per year – is around half of what is needed to reach the required level by 2030.

Alongside this, there are still serious flaws when it comes to supporting the rollout of geothermal energy. For instance, leaving EU countries to design key measures for boosting geothermal energy could prove a major stumbling block.

This includes measures to reassure investors facing geothermal’s high upfront costs, which have been left up to EU countries to design. That puts too much burden on the administrative power of each country and fails to make use of the economies of scale that can be achieved at an EU level, said Kumar.

“It’s not practicable or efficient to expect 27 different member states to design 27 different frameworks when actually the economies of scale from the EU is really what the industry needs,” he told EURACTIV.

Questions still to be answered

When it comes to decarbonising heat, there is more legislation to come. While the July package dealt with renewable energy, a second package due in December will deal with the gas market and buildings.

But the December package is already approaching the topic from the wrong angle, warned Kumar. He argued it should focus less on overhauling gas legislation, which locks the EU into fossil fuel consumption, and more on creating a competitive market for heating, a service provided by many renewable sources.

“The gas market package framing reeks of protectionism,” Kumar said. “It’s worrying that the Commission doesn’t want to expose the internal market for gas to competition from renewables and also energy efficiency, the same approach taken to the Electricity Market Reform by the last Commission.”

This is particularly risky in Central and Eastern Europe, which risks stumbling into the same problem it currently has in the transition out of coal. “Moving into gas for heating is an incredibly dangerous trap. It’s a financial trap,” warned Popov.

Instead, he wants to see more funding for research into the benefits of geothermal energy, particularly how it can make use of existing fossil fuel technology, like district heating networks.

“In Central and Eastern Europe, we have a lot of district heating systems, which are in many cases in a bad state, badly managed and in need of an upgrade. Again, this is another issue, how to link these existing assets to geothermal potential,” he told EURACTIV.

Europe needs an asset-based transition, he said, pointing to the example of Sofia, Bulgaria’s capital, which has good geothermal potential and a district heating system in serious financial trouble. Combined, these could work as a solution to the city’s heating, but the municipality cannot afford the research needed for it.

[Edited by Zoran Radosavljevic]

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