EUROPEAN GEOTHERMAL RISK INSURANCE FUND EGRIF
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 p...
| Main Authors: | , , , , |
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| Format: | Article in Journal/Newspaper |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | https://zenodo.org/record/1283845 https://doi.org/10.5281/zenodo.1283845 |
| Summary: | 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 |
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