Geothermal clean energy projects in Europe stall during pandemic

by Arthur Neslen | Thomson Reuters Foundation
Friday, 4 June 2021 17:11 GMT

U.S. Secretary of State Antony Blinken speaks with CEO of Reykjavik Energy Bjarni Bjarnason during a tour to the Hellisheidi Geothermal Plant, in Hengill, Iceland May 18, 2021. Saul Loeb/Pool via REUTERS

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"It's hard to get people to drill in a lockdown," says one analyst, as COVID-19 economic slowdowns sap finance for geothermal expansion

By Arthur Neslen

BRUSSELS, June 4 (Thomson Reuters Foundation) - New climate-smart geothermal-powered heating and cooling projects in Europe "nearly came to a halt" in 2020 due to financial uncertainties during the coronavirus pandemic, according a report by the European Geothermal Energy Council.

While an average of 12 new projects were commissioned every year between 2010 and 2019, none were approved in 2020, and only two existing projects were completed.

"The halting of many developments during 2020 represented a sudden break in an increasingly positive dynamic for geothermal district heating and cooling developments throughout Europe," the report noted.

Geothermal district heating pipes hot water buried deep below the earth's surface to warm homes, buildings and industry, using distribution networks.

By contrast, geothermal power plants tap subterranean heat to generate electricity. Installed capacity of this renewable energy source surged in Europe between 2010 and 2019, more than doubling from 1.5 gigawatts to 3.5GW, the trade association said this week in its paper.

The underground energy is prized for being able to operate around the clock, unlike wind and solar which are weather-dependent.

Industry groups say the geothermal energy production process can also produce lithium-rich brine as a byproduct, a critical raw material for the growing electric car sector.

But the underground power source has not enjoyed the explosive growth of its renewable rivals in Europe and, outside of Turkey, no further capacity for generating geothermal electricity was installed last year.

A combination of factors slowed the geothermal sector's overall progress to a crawl as lockdown kicked in, according to industry experts.

"It's hard to get people to drill in a lockdown," said Sanjeev Kumar, the European Geothermal Energy Council's head of policy.

"Worries about financial uncertainties put these projects, with their higher upfront costs, at more risk from local authorities, who are the main investors," he said.

Despite the slowdown, more than 200 geothermal-based district heating projects are in the pipeline, with almost half of them located in France, Germany or the Netherlands, according to the Council's report.

Germany-based energy supplier E.On has announced plans to build a geothermal plant in Malmo, Sweden, to help the city become climate-neutral by 2030.

In the German city of Munich, Stadtwerke München aims to pipe enough geothermally-heated hot water to supply 560,000 people by 2040.

(Reporting by Arthur Neslen ; editing by Laurie Goering : (Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters. Visit http://news.trust.org/climate)

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