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Geothermal Energy Geothermal Energy

What is Geothermal Energy?

Geothermal energy is derived from the thermal energy generated and stored in the earth interior. It is considered as renewable resource as there is a constant heat flow to the surface and atmosphere form the immense heat stored within the Earth. The geothermal energy is accessible since groundwater transfers heat from rocks to the surface either through boreholes or naturally occurring cracks and faults.

In many cases heat flow is not directly accessible from the Earth's crust due to lack of ground water movements. For those situations an engineered Geothermal System (EGS) is required.

Depending on the heat extraction purpose which primarily depends on the geothermal resource temperature, geothermal exploitation could be divided into three categories; extraction for power generation, extraction for direct use and extraction from shallow resources by means of ground source heat pumps (GSHP) [SETIS 2014] .

The total installed capacity of geothermal energy amounts to about 60 GW worldwide with shares of 18 %, 26 % and 56 % for power generation, direct use and GSHP.

In EU-28 the total capacity of power plants was 0.99 GWe  while direct use capacity amounted to about 3.0 GWth. The total capacity of GSHP was about 14.9 GWth.

In 2013, Geothermal energy provided about 0.2 % of the total EU-28 final electricity demand and 0.8 % of the electricity generated by renewable sources (about 710 TWh).

In terms of global investment, geothermal was the only raiser renewable technology gaining 38 % in comparison with 2012, reaching up to EUR 3.32 billion (at EUR 1 = USD 1.328) [Bloomberg New Energy Finance & Fs-Unep 2014].

Further information on geothermal energy can be found at the Strategic Energy Technologies Information System (SETIS): https://setis.ec.europa.eu/technologies/geothermal-power

Technology facts

Geothermal is defined as heat from the earth.

Geothermal resources have been classified according to their reservoir fluid into low (< 100 °C), medium (100 – 180 °C) and high enthalpy (> 180 °C) at 1 km depth.

Geothermal power plant’s annual capacity factor (CF) is generally above 90 %.

EU Electricity production

Total installed capacity for geothermal electricity production in Europe (including Iceland and Turkey) by the end of 2014 was 2.019 GWe  (0.99 GWe in the EU-28) for 77 power plants (51 in the EU-28) producing more than 12 TWh (5.6 TWh in the EU-28 in 2012) of electricity per year.

According to projects under development, by 2018 around 3.5 GWe, linked to the rapid growth of the Turkish market, of installed capacity are expected [EGEC 2014].

EU Heating production

Total installed capacity for geothermal direct use in Europe was 3.0 GWth by the end of 2013 from which 1.3 GWth correspond to district heating plants. These plants produced around 13 TWhth per year in 2013. 

Based on pipeline projects (204 planned projects) the capacity will increase from 4.5 in 2013 to 6.5 GWth by 2018 [EGEC 2014]

The total installed GSHP capacity was 14.9 GWth

Germany, Sweden and Italy are the countries with greatest installed capacity of geothermal energy in the European Union.

 

References

[EGEC 2014] EGEC: EGEC Market Report Update 2014

[SETIS 2014] SETIS: Geothermal Energy: Technology Information Sheet

[Bloomberg New Energy Finance & Fs-Unep 2014] Bloomberg New Energy Finance and Fs-Unep: Global Trends in Renewable Energy Investment, 2014

 

What are the barriers and needs of Geothermal Energy?

The main barriers and needs facing the sector are shown in Table 1.
 

Table 1. Challenges & needs faced by the Geothermal Energy Sector in the near future [Sigfusson & Uihlein 2015]

Key Aspects

Challenges/Obstacles

Needs

Technical

Lack of scaling-up of EGS technology

For an adequate proof of concept the technology needs to be demonstrated under different geological conditions where permeability can be produced and maintained without having to rely on pre-existing fractures in the reservoirs

Technical

High drilling costs (more than 50 % of costs associated with the construction and commissioning of a geothermal power plant

Economic resources in terms of R&D have to be put in place to test novel drilling technologies in a reasonable period of time to reduce costs. Knowledge and experience are essential to reduce costs

Technical

Reduce successful rate of current stimulation methods

Increase the accuracy of stimulation methods to improve predictability of results. Promote research activities on the reservoir stimulation field

Economic

An average of 5 – 7 years is required to develop geothermal power projects, which means a long term of investments, even though a high performance of the plants

Adequate supporting schemes are required, including the active participation of financial institutions and public authorities

Economic / Legal

Financial incentives, legal framework and support schemes across different EU Member States are inconsistent and in some cases inadequate.

This lack of clarity means long lead times to obtain necessary permits, and uncertainties for investors over issues like the right to own and use geothermal energy.

Make clear requirements on Environmental Impact Assessments (EIAs) and associated insurances to guarantee environmental safety.

Definition of long term incentive schemes.

Social

Public opposition in some regions due to seismic, visual and odour-related impacts

Increasing public acceptance of geothermal energy will require education and awareness campaigns, as well as R&D to minimise the environmental impact of geothermal

Social

Shortage of qualified workers

Vocational training and professional certification are mandatory to ensure the workforce capacities and develop appropriate installations of a technical perspective

 

References

[Sigfusson & Uihlein 2015] Sigfusson B and Uihlein A: 2014 JRC Geothermal Energy Status Report

 

What are industry and the EU doing about Geothermal Energy?

To define different markets within the geothermal industry, three categories are identified [Antics et al. 2013];

  • Power generation
  • Direct use
  • Ground source heat pumps.

Based on this classification, the European market shows different trends.

Power generation

Figure 1. Global installed capacity for power generation. [IGA 2014]

In 2015, EU-28 represents 7.8 % of the global installed geothermal capacity (12.7 GW) and since 1990 its total capacity has increased from 552 to 988 MWe in 2015, a compound annual growth rate (CAGR) of over 4 %. [IGA 2014] The electricity production accounted for 5.6 TWh by the end of 2014 [EGEC 2014].

 

In 2013, 8 power plants entered into operation with a capacity of about 145 MWe. In the EU-28, new plants have been added in Germany (16 MWe) and Italy (1 MWe) mainly. Other new installations took place in Turkey (128 MWe).

In 2012, geothermal energy provided about 0.2 % of the total final electricity demand (about 2800 TWh) and 0.9 % of the electricity generated by renewable sources (about 660 TWh) in the EU-28.

Direct use

The installed capacity for direct use of geothermal energy for heat in the EU-28 was about 3.0 GWth in 2012. The countries that show greatest direct use are Italy, Hungary, and France. Direct use increased by almost 25 % between 2011 and 2012. Main direct uses in the EU-28 are heating networks (about 50 % of direct use) and balneology (about 20 % of direct use). Currently, geothermal district heating has a share of about 0.5 % of the total district heating market [Sigfusson & Uihlein 2015].

Ground source heat pumps (GSHP)

Installed GSHP capacity in Europe amounted to about 16.5 GWth in Europe and 14.9 GWth in the EU-28. Main markets for GSHP in the EU are Sweden, Germany, France, and Austria. The total number of units installed was estimated to be about 1.34 million units in Europe (1.21 million in the EU-28) in 2013 [Sigfusson & Uihlein 2015].

References

[Antics et al. 2013] Antics M, Bertani R, and Sanner B: Summary of EGC 2013 Country Update Reports on Geothermal Energy in Europe. European Geothermal Congress 2013 (19)

[IGA 2014] IGA: Installed Generating Capacity. URL: http://geothermal-energy.org/geothermal_energy/electricity_generation.html

[EGEC 2014] EGEC: EGEC Market Report Update 2014

[Sigfusson & Uihlein 2015] Sigfusson B and Uihlein A: 2014 JRC Geothermal Energy Status Report

European investment

Figure 2. European public investment annual evolution

Public European investment reached more than EUR 12 million by 2014 though three main instruments; seventh framework programme (FP7), competitive and innovation framework programme (CIP) and regional policy funds. The total amount lowered by 20% in 2014 compared to 2013.

The share of public investment in 2012 is 3 % according to a survey carried out by the JRC-IET.

Geothermal deployment facts

Investment

Highly dependent on specific sites, investments range from EUR 2 500/kW for large power plants extracting from hydrothermal volcanic reservoirs at 2-3 km depth to 13 000 EUR/kW for small EGS plants extracting from 5 km depth.

Drilling represents 30 % to 50 % of the cost of a hydrothermal geothermal electricity project and more than half of the total cost of engineered geothermal system (EGS).

Levelised costs of electricity (LCOE) for geothermal electricity varied from EUR 50-90 MWh for conventional, high-temperature plants and EUR 100- 200/MWh for medium-temperature plants.

The LCOE for Enhanced Geothermal System power plants was between EUR 200-300/MWh [SETIS 2014].

The estimated total amount of human resources in geothermal energy related sectors is approximately 63 400 people, principally employed in direct use and GSHP supply chain. On average, between 2011 and 2013 the number of employees in this sector was close to 40 000.

References

[SETIS 2014] SETIS: Geothermal Energy: Technology Information Sheet

European R&D private investment

From the private perspective in 2012 four countries bring together up to 80% of the European private investment namely the Netherlands, Germany, France and Finland with a total amount of EUR 360 million.

Figure 3. Total European corporate R&D investment

In comparison to 2011, private investment lowers from EUR 620 million to EUR 454 million in 2012 which represents a reduction of 26.7 %.

The majority of private investment effort was spent by companies operating in the industrial engineering sector, with EUR 341.6 million in 2011 (55.1 %) meanwhile oil & gas producers companies channelled EUR 84.1 million, corresponding to 13.6 % of the overall corporate R&D investment. 

Figure 4. Corporate R&D investment. Distribution by industry sector

 

What is the current and future potential place of Geothermal Energy in the energy system?

In the short term according to [EGEC 2014] based on a total of 79 project under development, the European capacity will increase from 2 GWe installed in 2014 to around 3.5 GWe in 2018.

In terms of number of power plants, Figure 5 shows the trend up to 2022 based on both projects under development and under investigations. Taking into consideration project status, 284 are expected under operation by 2022, (156 by 2019).

In the case of geothermal district heating market, according to the 204 planned projects, the estimated capacity will grow from 4.5 GWth in 2013 to 6.5 GWth in 2018 (increase of 45 %).

Finally, for GSHP extracting from shallow geothermal energy, an increase is not expected in the short term.

Figure 5. Number of geothermal power plants in Europe [EGEC 2014]

In the long term, since only few sources were available concerning projections of direct use and GSHP, projections on geothermal energy are focused on power generation. Long-term projections for future growth in power generation capacity are shown in Figure 6 reaching a global installed capacity between 22.8 (conservative) and 28.629 GWe (optimistic) in 2030 [Taylor 2013].
 

Figure 6. Projections for global installed capacity and annual capacity additions 2015-2030 [Sigfusson & Uihlein 2015]

References

[EGEC 2014] EGEC: EGEC Market Report Update 2014

[Taylor 2013] Taylor M: Q2 2013 Geothermal Market Outlook

[Sigfusson & Uihlein 2015] Sigfusson B and Uihlein A: 2014 JRC Geothermal Energy Status Report

Who is/should be involved in Geothermal Energy?

Private sector

Based on the information managed by the JRC-IET, the total number of companies operating in the geothermal energy sector and developing R&D activities is 697 based on both projects and patents.

The total market size in 2011, at EU-28 level, was EUR 7.4 billion, mainly due to power generation and direct use applications (63%).

The total turnover of geothermal in Germany was EUR 1.8 billion in geothermal power generation and direct use, while EUR 720 million in the GSHP sectors (34 %). Sweden (25.5%), France (9.5%) and Italy (8.5%) held a cumulative 49% of market share (EUR 7.4 billion). Sweden leads the EU-28 GSHP with EUR 1 billion turnover in 2011.

Figure 7. Number of companies involved and turnover per country in geothermal energy in the EU28

 

Public sector. Support schemes

From the public perspective specific schemes for the geothermal energy technologies deployment are isolated cases. Germany and United Kingdom present best practices.

For instance, in Germany geothermal power plants up to 500 kW (100 kW, from 1 January 2016) are eligible to a feed-in-tariff (FiT) support, whose amount is evaluated through a complex computation. The digression rate is 5% every year from 2018, while the eligibility period is 20 years plus the year in which the system or plant entered in operation.

An overview of the distributional features of support schemes in Europe, with geothermal energy eligible technology are reported in Figure 8, distinguishing between power generation and heating and cooling. 

Figure 8. Support scheme portfolio for power generation (a) and heating and cooling (b) geothermal energy technologies.  EU countries

Despite the existence of different support schemes, geothermal projects present high up-front costs and could last for up to 6-7 years. Therefore, supporting schemes and policies have to be reliable enough to attract investments.
 

Figure 9 presents the European map in terms of public (a) and private (b) investment in the geothermal sector. From the private side efforts are not completely aligned with the number of companies. Thus Germany is the country with the highest public investment and number of companies in Europe, meanwhile the Netherlands leads the private investment despite of have less than half the number of German companies.

 

Figure 9. Maps of the public (a) and corporate (b) R&D investment in geothermal energy in Europe. Legend in EUR million

 

At the regional level, several regions have included geothermal deployment as a priority (Table 2).
 

Table 2. List of European regions with Energy Policy Priority on Geothermal [Eye@RIS3 2015]

Region / Country Name

Description

Capability

Capability (Sub)

Target Market

Target Market (Sub)

CZ Moravskoslezsko

Smart grids and smart cities with utilisation of specificities of the Moravian-Silesian Region during a process of changes of its technological profile - geothermal energy, methane, co-generation and accumulation, underground infrastructure

Energy production & distribution

Energy distribution

Energy production & distribution

Energy distribution

FR Alsace

Renewable energies (biogas, biomass, geothermal energy, hydroelectricity). This is the 2nd axis of the activity labelled as Green economy.

Energy production & distribution

Power generation/renewable sources

Energy production & distribution

Power generation / renewable sources

RS Vojvodina

Ecology & environmental protection (waste water management, recycling, decrease of harmful gas emission, energy efficiency, renewable energy sources: geothermal resources, biomass/biogas, biodiesel, mini hydropower, wind turbines, solar energy)

Energy production & distribution

 

Water supply, sewerage, waste management & remediation activities

 

 

References

[Eye@RIS3 2015] Eye@RIS3. URL: http://s3platform.jrc.ec.europa.eu/map

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