Is geothermal energy the climate fix everyone forgot?

Green groups have criticised the plan for lacking financial backing. And the far-right, represented by Sylvia Limmer, a German MEP and a member of the far-right nationalist party Alternative fur Deutschland, dubbed the targets "overly ambitious .... political climate madness."

Somebody forgot about something?

But a more levelled critique came from the geothermal energy sector.

"Ignoring geothermal has resulted in an expensive and doubtful modelling exercise rather than the inclusive, rapid and cheapest pathway to climate neutrality," said Philippe Dumas, who is the secretary-general of the European Geothermal Energy Council (EGEC), a non-profit founded in 1998 to promote the sector.

According to conservative estimates, geothermal energy can provide 75 percent of all of the heating and cooling consumed in Europe by 2040 and supply 15 percent of its power needs.

It is a technology that’s been around for decades. Experts understand its potential well, and it is already being used for district heating and power generation. But what is plaguing the field is that, essentially, nobody else knows what it is.

"We don’t fit into any boxes," Sanjeev Kumar, head of policy at EGEC, told EUobserver. "In renewables, everything is about electricity," he said.

When it comes to decarbonising heat, all the glory so far has gone to household heat pumps.

Electric heat pumps have the potential to decarbonise all household heat, and between 78 percent (using today’s technology) and 98 percent of all industrial heat, according to a 2019 study by the Potsdam Institute on climate research in Germany — together, this makes up another 47 percent of total energy use.

Energy analysts have described it as the next "half-trillion dollar" market in the clean-tech space, following renewables and electric vehicles.

What many people don’t realise is that utility-scale geothermal energy, while following the same principle, is far more efficient and can power or heat entire cities and industry clusters.

But before we get to that, we must first take a detour and look at electricity.

Grids, grids, grids

Last year, environmentalists started using the slogan ‘Electrify Everything’ as a rallying cry to demystify the transition to clean energy.

As a by-effect of the energy crisis, renewables, heat pumps and electric vehicles surged, making people realise that plugging in is the most straightforward way to get rid of fossil fuels and that climate targets are actually attainable — no matter what the far-right Limmers of this world say.

Fossil fuels are rapidly being replaced with (renewable) electricity in both the power system and road transportation, which together make up 40 percent of the energy system. Heat pumps can essentially do the rest.

But there is a snag: it is getting harder to connect ‘everything’ to antiquated power grids.

In a study published late last year, the International Energy Agency in Paris found that 1,500 gigawatts of renewable power — equivalent to 310 large wind turbines or 2.5 million solar panels — is delayed globally because grids are not modernising fast enough.

With power demand set to grow by 60 percent, the EU Commission launched an action plan for grid development in November last year. The aim is to "unlock" €584bn in grid financing by 2030.

Much of this will have to come from private investors, so it remains to be seen whether enough incentives have been built in to get to this number.

On a deeper level, this means that to achieve the 2040 targets, ‘Electrifying Everything’ means plan-makers have to work as efficiently as possible to achieve the 2040 targets.

This is where geothermal energy comes in.

District heating: everything, everywhere, all at once

Other than intermittent wind and solar power, geothermal energy installations provide power continuously and can be used to stabilise the power grid. This lessens the risk of grid overloads and blackouts and reduces the need for backup gas plants.

But where geothermal energy really shines is in so-called ‘district heating.’

Large-scale geothermal installations are more efficient than the smaller air-source heat pumps often used in households— producing 3.5 units of heat per kilowatt of energy versus 2.7 units according to EGEC data, respectively — thus avoiding stress put on power grids, especially in colder areas.

Operating costs of district heating are low. Although costs vary, the French energy agency (ADEME) found that the lowest levelized cost of geothermal district heating was €15 per megawatt-hour, compared to €30 for gas today.

Detailed cost data on district heating is rarely publicly available, but a 2018 study published by the Danish think tank Green Energy Association estimated the cost of geothermal district heating systems to be 31 percent lower than individual water-based heat pumps.

One reason not to go for large-scale geothermal district heating is that the initial costs are high, but start-up costs can be brought down with public subsidies and as Kumar pointed out large scale installations are vastly more efficient from a planning perspective.

"It is going to take a very long time for individual households to plan, to hire individual teams of people to customise, order and build individual heat pumps," said Kumar. "It is much more effective for local authorities to do an entire city, town or block simultaneously," he added.

"You could do whole cities in a couple of years," he also said.

It is in planning and coordinating where larger installations win out on the haphazard installation of individual heat pumps.

"Local authorities all want to do it, but they usually can’t finance it by themselves, so you need a way to support them," said Kumar. "That is where top-down coordination at the EU lever really helps," he added.

One example of where local and supranational authorities successfully worked together is the Hungarian city of Szeged.

After a local university proved geothermal energy could be used to heat two of their buildings, the local authorities decided to install the biggest geothermal heat system in continental Europe.

The city received €67m in EU cohesion funds, allowing it to replace gas geothermal heat for 135,000 people, halving their heating bills — all within four years.

"The ‘Szeged model’ can be replicable in many other cities," said cohesion commissioner Elisa Ferreira at last year’s inauguration of the project.

Momentum shift?

"We’re now where [solar photovoltaic] was in 2003," Kumar said about the sector’s prospects.

France, Germany, Poland, Croatia, Austria, Ireland and regions such as Wallonia in Belgium and the Province of North Brabant in the Netherlands already have fleshed out national and regional geothermal strategies.

And in January, the EU Parliament almost unanimously — bar two votes — approved a non-binding resolution calling on the commission to develop a geothermal strategy soon.

EU energy commissioner Kadri Simson has been a vocal advocate of geothermal energy for years, and her colleague commissioner Didier Reynders told MEPs when accepting the resolution that the commission "was at the right moment to propose measures."

But concrete plans will only be presented well into the next commission’s term.

"The EU already has a hydrogen, wind, solar, heat pumps and hydrogen strategy," Kumar said. "Given its potential, geothermal deserves a strategy of its own," he said.

"Geologists have already mapped out where the best potential is," he added. "What we need now is vibility," Kumar said.