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How geothermal energy can transform local economies – interview with József Ribányi, Rapporteur, European Committee of the Regions

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

Ahead of the Budapest Geothermal Energy Summit, we spoke with József Ribányi, Rapporteur and member of the ENVE (Environment, Climate Change and Energy) Commission of the European Committee of the Regions about the crucial role of municipalities and local communities in enhancing geothermal energy investments, generating new workplaces and overall creating sustainable and affordable places to live.

According to Mr Ribányi, there are five key components of the upcoming European geothermal strategy that must be taken into consideration. First of all, he mentions the importance of accessing geothermal data, which varies significantly between Member States.

“In Hungary, for example, we are in a good position because there are different services and organisations (for example the State Geological, Geophysical and Mining Data Store operated by the Mining and Geological Survey of Hungary, or the VITUKI Hungary Engineering Office) that share geothermal data for public use,” he says. “However, private actors in fossil energy-related projects are not obliged to share their data. The hydrocarbon industry should be motivated to share their data by creating a general pool where they could profit from obtaining information for future projects.”

The second key component he refers to is speeding up the development of a European-wide authorisation procedure.

“The third aspect is to mitigate the high risk associated with drilling by providing guarantee schemes,” he continues. “The fourth is to dedicate EU funding specifically for geothermal projects, particularly for their preparation, because our baseline opinion is that geothermal energy is accessible all over Europe. The challenge is how to tailor and adjust technology to different geological regions.”

Finally, Mr Ribányi underlines the importance of bridging the unhealthy division between geothermal water use and heat pump use. “Both utilise ground heat and could be seen as identical geothermal energy sources,” he says. “The main message should be that when we talk about geothermal energy, we are referring to both heat pumps and water.”

In his view, municipalities should be central actors in this change, primarily in operating and developing the system and managing the economic interests of the system.

As a successful example, he mentions several cities in Hungary, where geothermal energy increased local energy security and independence. For instance, Tura, where the country’s first geothermal plant to produce electricity was installed in 2016. Or the Miskolc Geothermal Project which replaced natural gas and in 2013 was considered as Central Europe’s largest geothermal heating system in operation. Or the city of Veresegyház where about 350 apartments are heated solely by geothermal waters as well as many various public and private facilities. In other words, geothermal energy made it possible for the city to thrive economically by providing cheap energy and attracting new investments.

For this to happen on a larger scale, “the State should facilitate access to data, engage different actors (both private and public) and provide the necessary guarantees and subsidies or grant systems,” points out Mr Ribányi. “A collaborative effort involving municipalities, the private sector and the academic sphere is crucial. The State must support and facilitate this collaboration, acting as a supportive figure in the background.”

In particular, there is a growing need for financial and technical support to aid local and regional authorities (LRAs) in developing geothermal energy projects.

“In the municipal sector, there is a wide variety of people working, with mayors coming from different backgrounds. It is up to the mayor and the assembly to prioritise areas like culture, tourism, or geothermal energy,” Mr Ribányi emphasised. “Geothermal energy needs to be put into the mayors’ mindset. An alliance of municipalities should work as an umbrella organisation to promote the use of geothermal energy towards the leaders of individual municipalities.”

When speaking about such an alliance, Mr Ribányi clarifies that it should be something similar to the already existing Covenant of Mayors that operates at European level.

“Such national or local umbrella organisation can demonstrate that geothermal energy is important for increasing environmental value, reducing costs and lowering CO2 emissions, making municipalities better places to live,” he says. “Therefore national associations of municipalities could engage with smaller ones that may not be fully aware of the benefits of geothermal energy. To be effective, the process should come from the bottom up, not the top down.”

Specifically speaking of communities, there are several ways to maximise the social and economic benefits of geothermal energy, such as job creation and local economic development while, at the same time, increasing public awareness and support for geothermal energy.

“Different uses of geothermal energy through the cascade use (industrial, social, health, tourism, well-being, agriculture) generate job opportunities,” says Mr Ribányi. “For example, using cheap geothermal energy in agriculture can lead to more jobs and farm expansion. High-temperature geothermal energy requires highly skilled workers, benefiting not just municipalities, but also local people. For instance, a local paper-producing company can obtain energy at a low cost, benefiting both industry and private actors.”

He goes on by highlighting that geothermal energy can also address energy poverty, a task often undertaken by municipalities.

“If energy companies are owned by municipalities, the cost of energy for residents can be lower, especially if geothermal energy is used for heating,” he notes. “Mayors aiming for re-election will act in the interest of local people. Small settlements losing population can attract inhabitants by offering locally produced, cheap energy. Geothermal energy can provide affordable and green energy sources for newly built houses and renovations of old buildings, acting as a driver for the growth of the housing sector.”

Geothermal is often described as a bridge between fossil and renewable sectors. As it is happening with the coal phase-out (for example, with solar power plants installed in areas used by former coal mines), Hungary is home to many examples where a successful transition from fossil fuel sites to geothermal took place. For example, Mr Ribányi recalls that in 1969, oil rigs in Tamási found water that is now used for heating.

“For this type of transition, we need data on the types of wells available and a connection between the private sector and municipalities,” he underlines. “State-owned drilling companies in the 1960s and now municipalities are also involved. However, in Western Europe, these companies are privately owned, so municipalities might not be aware of the opportunities. Spain and Poland are good examples where coal mines are using heat for district heating by filling mines with water and utilising geothermal energy.”

On the other hand, geothermal can also be combined with renewable energy sources to enhance local supply, bringing once again advantages to local communities.

“The temperature of thermal water can be utilised for different purposes,” the EU rapporteur explains. “Water above 100 degrees Celsius can be used for generating electricity, while water at 60-70 degrees can be used for district heating. The remaining heat can be used for tourism, such as thermal baths and health treatments, and also for agricultural and aquaculture uses.”

There is also an important use for heat pumps.

“With 30 degree Celsius water, heat pumps can still generate extra energy, producing 3.5 to 4 times more energy compared to the input energy need of operating those heat pumps,” he concludes. “The electricity needed to run the heat pump can be supplied by wind or solar power, thus making the entire system sustainable and affordable.”

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