Five steps to delivering the geothermal decade

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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Geothermal energy, which turns an abundance of the heat stored beneath the earth’s surface into meaningful energy, provides the least-cost, high-economic impact and socially beneficial pathway to delivering the 1.5 degrees climate target.

Philippe Dumas is the Secretary General of the European Geothermal Energy Council (EGEC).

It provides baseload or dispatchable renewable electricity which is critical to balancing electricity when the wind and sun are not around. It provides the cheapest renewable heating and cooling. The Bundestag and Maltese Parliaments use it for heating and cooling whilst the ASP building in the European Parliament is installing geothermal as we speak. Lithium can be extracted from plants at sufficient quantities to significantly reduce the EU’s reliance on imports and even move up the lithium-ion battery value-chain. However, five key reforms are required from the Fit for 55% package to unlock the full potential of geothermal energy in Europe.

Risk insurance

Firstly, risk Insurance is the best way to leverage private sector investment. Upfront drilling and construction account for up to 70% of the total cost of a project over its 30+ year lifespan.  France, Germany, the Netherlands and others have used national risk insurance schemes to attract private capital by de-risking drilling and construction. For example, for every €1 paid by the French government, €42 was leveraged by private investors. An EU risk insurance scheme is needed to reduce overheads and create a European market for geothermal and other capital-intensive renewables such as ocean, offshore wind and concentrated solar. The Renewable Energy Directive compelled Member States to lower capital costs for renewables. In this instance, a European solution is required to deliver economies of scale and Union-wide coverage. It is a critical aspect of the competitive single market for energy.

Renewable district heating

Secondly, we need to get serious about renewable district heating. The approach to decarbonising buildings is not fit for the required mass deployment of renewable heating and cooling solutions. Many cities are converting existing district heating schemes to geothermal and building new ones. Munich city government plans to link 84,000 homes to a geothermal scheme. Vienna, Dublin, Malmo are some of the large-scale heat decarbonisation projects that take us closer to climate neutrality. This is why geothermal and renewable district heating schemes need to be recognised as Projects of Common Interest in the Trans-European Networks for Energy framework They replace reliance on fossil imports, which cost €331 billion in 2018, up €65 billion from 2016, provide genuine energy security and also dramatically reduce energy bills for consumers. ADEME, the French environment agency found that geothermal district heating in France cost just €15 MWh compared to €51 for fossil gas provision. Renewable district heating is cheaper than fossil. It needs public support to balance the decades of direct and indirect public granted to incumbent fossils since 2013 and against whom they compete.

Focus on innovation

Thirdly, targeted financial and policy support is needed for innovative technologies. The deeper one drills, the higher the temperature of the renewable returned. Ultradeep drilling, pioneered by GA Drilling, aims to reach depths of 10kms and beyond to unlock supplies that could power and heat cities and high-temperature industrial processes. Horizontal drilling techniques and closed-loop technologies require approach to innovation funding dedicated to large-scale heat decarbonisation.

Heat for the industry

Fourthly, much of the energy consumed by industrial is industrial process heat in low to medium temperatures ranges. Countries like New Zealand have encouraged investment in geothermal paper and pulp plants to dramatically reduce energy, greenhouse gas emissions and also save money. Many chemical and other industrial processes can be covered by geothermal energy. Supporting industry with this low-cost, high-value energy source at their doorstep must be a priority for an effectively industrial strategy.

Level playing field for heat generation

Finally, it is impossible to ignore the elephant in the room any longer. Climate neutrality means an end to the internal market for gas. This privileged subsidy regime must be replaced by an internal market for renewable heating and cooling because heat, like electricity, is a service provided by multiple sources. Removing the plethora of direct and indirect fossil heating subsidies will have an equal if not greater impact on decarbonisation than a carbon price for heat. It will also unlock household, business and industrial expenditure on fossil heat that can be best invested into meaningful outcomes.

We need policy certainty to make this the geothermal decade. And we need it now.

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