Tuesday, July 23, 2024
HomeInterviewsBuilding a unified geothermal strategy for Europe - interview with Miklos Antics,...

Building a unified geothermal strategy for Europe – interview with Miklos Antics, President, European Geothermal Energy Council

Miklos Antics will be one of the speakers at the Budapest Geothermal Energy Summit, to be held on 20 September 2024.

In January 2024, the European Parliament adopted a resolution calling on the European Commission and Council to work on a European geothermal strategy. Objectives include addressing regulatory and financial bottlenecks and calling for a geothermal industrial alliance to help coordinate and drive regulations, finance and investments.

Ahead of the Budapest Geothermal Energy Summit, we spoke with Miklos Antics, President of the European Geothermal Energy Council (EGEC) about the key components of a European geothermal strategy, the importance of training people and the latest technologies and innovative trends.

“The strategy is essential for Europe to have pathways to develop geothermal energy all over the continent,” Mr Antics begins, mentioning countries like France, the Netherlands, Poland and Hungary which have already made geothermal a state policy. “The EU Parliament’s resolution intends to create pathways to adopt geothermal as a European policy, ensuring the right support schemes are in place. Deep geothermal, for example, is well-known in many countries, but in others, there are administrative and permitting issues. Mining and producing subsoil fluids are regulated under various legal frameworks, creating confusion. We need a unified approach across all countries.”

In this regard, an alliance to develop geothermal energy is a crucial step.

“The sector currently relies heavily on the oil and gas industry, especially for deep geothermal projects,” Mr Antics points out. “We need to update this approach and train people with the necessary skills. This process should follow a logical progression, covering legal, institutional, policy and financing aspects. How do we team up together as an alliance, particularly in trans-border regions? It’s not only up to the EU Parliament to solve this but also the geothermal community.”

Indeed, training people is a significant challenge, especially in light of the Net-Zero Industry Act which aims to boost skilled workers through national training academies.

“We are overwhelmed with requests and struggle to find skilled individuals, whether geoscientists or professionals from the oil and gas industry who need a completely different mindset,” Miklos Antics explains. “To make geothermal an attractive business, we need to look at the evolution of training worldwide. Petroleum engineering is no longer as appealing, so some institutions have rebranded their programs as energy engineering, incorporating sections on geothermal energy. However, many people still choose the oil and gas industry because it offers better pay.”

The lack of attractiveness of the geothermal sector means also that there are not many projects under development and public funding will be essential to make geothermal projects economically viable and market-ready.

“Heat is a different type of business because it addresses people, communities and cities directly,” notes Mr Antics. “For example, a geothermal project in Switzerland faced significant protests, indicating not everyone supports geothermal energy. To attract talent, we need a robust market for them to work in.”

EGEC and other organisations have experienced growth, but now they need to double their personnel due to the increasing number of projects.

“Finding skilled workers is particularly challenging in Central and Eastern Europe due to issues like data access problems, lack of funding and low attractiveness for governments or investors,” he highlights. “In France, for instance, the Heat Fund supports renewable energy projects, providing subsidies of 15-20 per cent for geothermal projects. With EU funds, we could ensure subsidies, state support, community support and financial support, fostering the development of geothermal energy and attracting investors. We need an EU-wide reshaping mechanism to support these efforts.”

The new rules set at the EU level at the end of 2023 have an indicative target of at least a 49 per cent renewable energy share in buildings by 2030. Specifically, renewable targets for heating and cooling will gradually increase, with a binding increase of 0.8 per cent per year at the national level until 2026 and 1.1 per cent from 2026 to 2030. This will undoubtedly impact the growth of geothermal energy in Europe

“To decarbonise buildings currently heated with gas, it’s crucial to reduce their energy demand and then transition to geothermal energy, which is one of the easiest ways to achieve decarbonisation,” states Mr Antics. “By investigating all renewable energy options available in a given territory, geothermal stands out as the right choice because it can be used 24/7. We are also seeing an increase in hybrid plants and energy storage solutions, making geothermal an even more attractive option for meeting these ambitious targets.”

The revision of the Renewable Energy Directive also includes some new permitting rules and requirements for driller certification. Yet, challenges remain. Mr Antics reminds us that certification is important, but there aren’t enough certified companies to execute geothermal wells.

“We currently lack a comprehensive code of practice for deep geothermal and sufficient drilling companies,” he says. “To address this, we need to create a business environment conducive to setting up drilling companies and training personnel, similar to EGEC Geo Training. While it’s easier for shallow drilling, we need to establish multiple training centres to avoid long wait times for certification.”

According to him, a code of procedures must be respected and overseen by a regulatory body. He recalls that, for deep drilling, there are currently only two standards: one from New Zealand and one in Germany. However, these aren’t universally game-changing.

“The establishment of the International Drilling Contractors Association could provide guidelines to secure future deep geothermal wells and be a significant step forward in standardising and ensuring the safety and efficiency of geothermal drilling,” he adds.

Speaking about innovations, it was often noted that geothermal takes many technologies from the oil and gas industry and the other way around.

“The geothermal sector has been borrowing a lot of technology from the gas industry, including drill rigs and innovations from offshore wells,” the President of EGEC says. “For instance, subhorizontal wells and multilateral well architecture have been adopted. These advancements are not just in technology but also in practice. In France, for example, geosteering and geonavigation are used to assess resource properties, enabling better project planning.”

He goes on by saying that, for a long time, geothermal energy relied on water drilling techniques, but now it is getting more advanced, which secures future projects and reduces their risks.

“By addressing higher temperatures common in oil and gas operations, we are also able to innovate and benefit both sectors through mutual technology exchanges,” he continues. “This includes advanced geothermal systems that utilise direct conduction and circulating fluids to extract heat efficiently. However, the capital expenditure (Capex) for geothermal is still higher than for oil and gas, while the energy density is lower. Therefore, continuous innovation is needed to make geothermal wells better, cheaper, and safer. These technological advancements are crucial for accelerating the adoption and improving the efficiency of geothermal energy.”

The last, but not least important aspect, concerns the financing opportunities, especially following the Electricity Market Design reform which allows geothermal to apply for two-way Contracts for Difference (CfD).

“In the European context, geothermal electricity production is viable only in certain locations,” points out Miklos Antics. “To accelerate geothermal adoption, implementing feed-in tariffs for electricity and subsidy schemes for heat, like the Heat Fund, is essential. These measures would drive the multiplication of geothermal projects.”

And, in his view, political changes after elections won’t alter this course significantly.

“The Hungarian presidency can accelerate geothermal development due to its abundant resources and progress in permitting,” he notes. “Hungary has drawn significant inspiration from the French risk-sharing mechanism. If we can get everything in place, we aim to have a European geothermal strategy ready by the end of the year.”

Indeed, a risk-sharing mechanism becomes also an important aspect. In the past, Central and Eastern European exploration was funded by government resources, with all data made public.

“Now, these governments lack the funds for exploration, so a risk-sharing mechanism must be established to mitigate risks,” Mr Antics concludes. “The recent surge in fuel prices due to geopolitical events led governments to subsidise fuel heavily, with amounts reaching up to 16 billion euros. However, such substantial financial support has not been available for geothermal projects. Establishing robust financial mechanisms and risk-sharing frameworks is vital to ensure geothermal energy can compete and thrive in the current energy market.”

Sign up for our newsletters

    Monthly newsletter – Delivering the most important energy stories of the month selected by our Editor-in-chief
    Weekly Oil&Gas roundup - All major news about the oil and gas industry, LNG developments, the upscaling of new gases and related EU regulations arriving in your mailbox every Monday.
    Weekly Renewables&Climate roundup - All major news about investments in renewable energy sources, environment protection, green hydrogen and new innovative ways to tackle the climate crisis arriving in your mailbox every Tuesday.

    Most Popular