Policy issues around the use of geothermal in the DHC systems at EU level

Philippe Dumas, Madeline Vander Velde ¹,

¹EGEC Geothermal, 2 place du champ de mars, Belgium-1050 Brussels

Geothermal energy is a mature renewable energy solution which requires a combination of favourable politics and regulation to become a mainstream source of heating, cooling, electricity and sustainable lithium extraction. The EU’s revised climate and energy targets for 2030 provide an important opportunity for geothermal energy, particularly the emphasis on renewable heating and cooling.

Recent developments of the climate crisis (especially the horrendous summer 2023 heatwave) combined with the invasion of Ukraine by Russia have added political momentum to focus on renewable heating and cooling efforts.

The invasion of Ukraine in February 2022 and the policy response, under the umbrella of REPowerEU, provided additional opportunities to advance investment in geothermal as well as raising political awareness of its benefits and contribution to 2030 and 2050 climate and energy targets. The European Commission’s REPowerEU plan outlined a series of proposals to move geothermal from niche to a mainstream solution proposed to addressing the climate, energy transition and Ukraine crises.

The EU Solar Strategy called for a tripling of geothermal capacity by 2030, whilst the EU Save Communication and legislative proposals outlined essential improvements that create a market for geothermal heating, cooling, and power, in addition to streamlining the process for capacity to come online. Geothermal supplies base load electricity to stabilize the grid and secures the supply, all the while being a renewable and environmentally friendly source of power. Geothermal heating and cooling is key to decarbonise buildings and the industry, through the usage of thermal underground storage (UTES). Sustainable extraction of minerals (such as lithium) from geothermal brines contributes to securing critical raw materials manufacturing within Europe.

The REPower EU strategy also calls for 20 million geothermal and ambient heat pumps to be installed in Member States by 2026 and nearly 60 million units by 2030. Some of this financing should be used for an EU financial de-risking scheme to accelerate investment in geothermal and other renewable heating solutions.

Carbon pricing for household heat was a key feature of the political pact around the current European Commission President, Ursula Von der Leyen’s, confirmation. For the first time, heat is one of the central issues in a climate and energy package. To ensure all roads lead to tangible conditions for geothermal projects, further investment will need to materialise over the coming years.

The political economy around clean technology, particularly electric transport, has evolved rapidly since the Dieselgate scandal in 2015. This has moved the car industry to the point where Volkswagen, the protagonist in the crisis, is the first company to call for the new German government to phase out fossil fuels and accelerate investment in electric transport and clean energy. This comes months after European engineers won the race to patent sustainable extraction of lithium from geothermal capacity without negatively impacting geothermal energy operations.

The current high prices for electricity and gas reinforce the need to stabilise the grid with renewable base load electricity technologies such as geothermal. Being also dispatchable, geothermal powerplant is the perfect enabler of the energy transition in the power sector.

Four obstacles need to be overcome in order for geothermal energy to become mainstream between now and 2030:

i) Dedicated support structures to enable infant markets to reach maturity

ii) An escalation in the removal of fossil fuel direct and indirect subsidies

iii) Development of business models to attract fossil extraction companies to transition towards geothermal technology usage

iv) Harmonisation of licensing and permitting rules.

References

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European Commission., Staff Working Document accompanying the proposal to amend the Renewable Energy Directive (2021), (SWD(2021)

European Commission., REPowerEU Plan (2022) COM2022 230 FINAL.

European Commission., EU Solar Energy Strategy (2022) COM(2022) 221 FINAL.

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