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.
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.