European Geothermal Risk Insurance Fund Egrif

• Main Authors: Fraser, Sara, Calcagno, Philippe, Jaudin, F., Vernier, Romain, Dumas, Philippe
• Format: Text
• Language: English
• Published: Zenodo 2013
• Subjects: geothermal energy; non technical; europe; financing; Bali; Iceland
• Online Access: https://dx.doi.org/10.5281/zenodo.1283845; https://zenodo.org/record/1283845

Geothermal energy is a renewable energy with many advantages: It is base load, local and environmentally friendly. However, its penetration into the energy market remains difficult. Although profits can easily be made from a geothermal project, investors consider the geothermal resource as a risky parameter. GEOELEC promotes geothermal electricity generation in the EU and aims at removing notably financial barriers. Investors should be encouraged to take part in its promising development. In this respect, this report puts forward a scheme for an EU Fund mitigating the risk associated with the geothermal resource and facilitating investments in geothermal electrical generation projects. As explained in this report, where knowledge of the geothermal resource is lacking, exploration is of crucial importance to collect relevant data before drilling. Beyond exploration, the bankability of a geothermal project is threatened by the geological risk. The geological risk includes the risk not to find an adequate resource (short-term risk) and the risk that the resource naturally declines over time (the long-term risk). Risk insurance Funds for the geological risk already exist in some European countries (France, Germany, Iceland, The Netherlands and Switzerland). The geological risk is a common issue all over Europe. Collaboration between Member States to remove it will allow them to save money. It is the reason why the GEOELEC project calls for the establishment of a Geothermal Risk Insurance Fund at the EU level. This Fund could insure deep geothermal projects in the different EU countries. This idea is not new. For about 15 years, the topic is discussed within the geothermal sector. But for the first time, this report proposes how such a structure could be established and managed. : GEOELEC - IEE : {"references": ["Handbook on planning and financing geothermal power generation, Energy Sector Management Assistance Programme, The Investment Bank for Reconstruction, April 2012", "European Insurance Scheme to cover Geological Risk related to Geothermal Operations, Final Report, June 1997, report coordinated by the BRGM for the European Commission", "Emerging financing scheme for fostering investment in the geothermal energy sector, GEOFAR project, 2011, report coordinated by Erlagen AG", "Geothermal electricity and combined heat and power, European Geothermal Energy Council, 2009", "UNEP, 2011, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication", "Probability analysis and risk management for geothermal projects, Dr. T.Reif, GHC Bulletin, January 2008", "Probability concepts for the evaluation of the risk concerning temperature and the production and injection rate in hydrothermal reservoirs, H.Kreuter and C.Hecht, proceedings European Geothermal Congress 2007, Unterhaching, Germany, 30 May-1 June 2007", "Quantification of exploration risks for hydrogeothermal wells, R.Schulz et al., Proceedings European Geothermal Congress, >Unterhaching, Germany, 30 May-1 June 2007", "Resource risk and its mitigation for the financing of geothermal projects, S.K.Sanyal and J.B. Koenig, World Geothermal Congress, Florence, Italy, May 1995", "Geothermal market-based insurance schemes, H.Kreuter and C.Schrage, GeoFund-IGA Geothermal Workshop, Turkey, Istanbul, February 16-19, 2009", "Geothermal Energy Plant Unterhaching, Germany, B.Richter, Proceedings World Geothermal Congress, Indonesia, Bali, 25-29 April 2010", "Private and State Risk Mitigation Programs for Geothermal Exploration Risk, H.Kreuster and C.Schrage, GRC Transactions, Vol.33, 2009", "Managing the risk in renewable energy, A report from the Economist Intelligence Unit sponsored by Swiss Re, 2011"]}