GEOFAR
                                  Geothermal Finance
                                   and Awareness in
          ...
GEOFAR - Overview
Project summary

    GEOFAR will support the fostering of the deep geothermal sector
    across Europe b...
GEOFAR - Overview
Project summary

    Outputs and results:
      – A set of new financing schemes
      – Financial insti...
GEOFAR - Overview
Situation of geothermal energy

    A renewable energy source with extremely high potential.
    One imp...
GEOFAR - Overview
Vision

    Combating and overcoming non-technical / financial barriers via
      – developing and propo...
GEOFAR - Overview
Objectives

GEOFAR aims to
  reduce financial barriers hindering the initial stages of geothermal
  ener...
GEOFAR - Overview
Main steps

    Identify and describe the non-technical barriers in selected countries
    Describe and ...
GEOFAR - Overview
Geographical coverage

    Geographical coverage: Germany, France, Greece, Spain, Portugal,
    Bulgaria...
GEOFAR - Overview
Expected Result

Direct outcome
    Financial scheme – validated by experts – and checked for due dillig...
GEOFAR - Overview
Dissemination

Media
  GEOFAR-Website www.geofar.eu
  Documentary Film on geothermal energy

Disseminati...
GEOFAR - Overview
Partners

                            BRGM, France
                                                     ...
GEOFAR - Analysis
Analysis

    The GEOFAR consortium analysed
      – the respective situation of the geothermal energy s...
GEOFAR - Analysis
Main non-technical barriers in geothermal




Contract Number: IEE/07/668/SI2.499707   Project Duration:...
GEOFAR - Analysis
Main non-technical barriers in the target countries




Contract Number: IEE/07/668/SI2.499707   Project...
GEOFAR - Analysis
Non-technical barriers - Conclusion

    The development of geothermal energy ranges from one country to...
GEOFAR - Analysis
Non-technical barriers - Conclusion

    Globally, the current approach for the decision to launch or no...
GEOFAR - Analysis
Analysis

    The GEOFAR consortium analysed
      – 40 case studies from Germany, France, Portugal, Spa...
GEOFAR - Analysis
Overview on selected geothermal projects




Contract Number: IEE/07/668/SI2.499707   Project Duration: ...
GEOFAR - Analysis
Case studies - Conclusion

    The diversity of geothermal operations across Europe is due to the
    ne...
GEOFAR - Analysis
Analysis

    The GEOFAR consortium analysed
      - innovative geothermal application to underline the ...
GEOFAR - Analysis
Innovative geothermal applications




Contract Number: IEE/07/668/SI2.499707   Project Duration: 09/200...
GEOFAR - Analysis
Innovative geothermal applications - Conclusion

    Innovative geothermal applications improve the ener...
GEOFAR - Analysis
Analysis

    The GEOFAR consortium analysed
      - 44 financial instruments from national, European an...
GEOFAR - Analysis
Overcoming financial barriers




Contract Number: IEE/07/668/SI2.499707   Project Duration: 09/2008 - 0...
GEOFAR - Analysis
Strength/weaknesses of financial instruments




Contract Number: IEE/07/668/SI2.499707   Project Durati...
GEOFAR - Analysis
Project stages tackled by financing instruments




Contract Number: IEE/07/668/SI2.499707   Project Dur...
GEOFAR - Analysis
Differences in tax reductions/excemptions




                                                          ...
GEOFAR - Analysis
Feed in tariff – most common financial instrument

                                       Feed-in Tariff...
GEOFAR - Analysis
Financial Instruments - Conclusion

    Across Europe a lack of harmonisation in financial instruments i...
GEOFAR - Analysis
Outputs

Reports and fact sheets
    Non-technical barriers and the respective situation of the geotherm...
GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)

        GeoRiMi will follow the hereafter mentioned principles
     ...
GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)

    The proposed GEOFAR Financial Scheme “GeoRiMi” will cover
    th...
GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)

    Steps to go for the implementation of GeoRiMi
      -    Reality...
GEOFAR
Contact

Erlangen AG
Marco Wendel
Henkestraße 91
91052 Erlangen
Germany
Tel: 0049 – 9131 – 530 280 1
Fax: 0049 – 91...
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Geothermal Finance

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GEOFAR is a project that wants to overcome financial barriers in geothermal energy projects by providing tailored financial schemes for early phases in deep geothermal projects, from exploration to deep drilling.

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Geothermal Finance

  1. 1. GEOFAR Geothermal Finance and Awareness in European Regions Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 1
  2. 2. GEOFAR - Overview Project summary GEOFAR will support the fostering of the deep geothermal sector across Europe by providing new financing and funding schemes and raise awareness among the target group GEOFAR aims to – reduce financial barriers hindering the initial stages of geothermal energy projects – raise awareness of industrial geothermal applications – improve the know-how and awareness on geothermal energy among regional decision makers Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 2
  3. 3. GEOFAR - Overview Project summary Outputs and results: – A set of new financing schemes – Financial institutions checking due dilligence of the proposed financial scheme – Involvement of financial experts – Awareness seminars in key countries for raising awareness of regional stakeholders – Documentary film on geothermal energy – Stimulating investment in geothermal energy Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 3
  4. 4. GEOFAR - Overview Situation of geothermal energy A renewable energy source with extremely high potential. One important building block towards sustainable use of energy. Multiple usage: electricity generation, heating & cooling, desalination and process heat. Limited exploitation of deep geothermal energy fields. Technology for the exploitation of geothermal energy is proven. Lack of exploitation mainly due to non-technical barriers during the early stages of geothermal energy projects: – Inappropriate funding schemes – Inappropriate legal frameworks – Ignorance of local decision makers regarding the potential of geothermal energy Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 4
  5. 5. GEOFAR - Overview Vision Combating and overcoming non-technical / financial barriers via – developing and proposing appropriate and innovative financing and funding schemes Boosting the exploitation of geothermal energy via – promoting (industrial) geothermal applications, and – raising the awareness / knowhow among local and regional decision makers. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 5
  6. 6. GEOFAR - Overview Objectives GEOFAR aims to reduce financial barriers hindering the initial stages of geothermal energy projects through the development and proposal of appropriate financing and funding schemes. promote and raise the awareness of emerging (industrial) geothermal applications. The awareness raising activities are mainly directed towards local and regional decision makers and other potential stakeholders. improve the know-how and awareness among regional decision makers by exchanging experience and know-how among the target group. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 6
  7. 7. GEOFAR - Overview Main steps Identify and describe the non-technical barriers in selected countries Describe and present existing and emerging industrial applications suitable to increase the profitability of geothermal power plants Develop (new) appropriate and tailored financing and funding schemes Discuss and validate funding schemes with experts Outline constitutive elements for the modification of existing and/or new dedicated EC Directives or communications. Disseminate industrial applications and financial schemes to key stakeholders Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 7
  8. 8. GEOFAR - Overview Geographical coverage Geographical coverage: Germany, France, Greece, Spain, Portugal, Bulgaria, Slovakia, Hungary Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 8
  9. 9. GEOFAR - Overview Expected Result Direct outcome Financial scheme – validated by experts – and checked for due dilligence by financial institutions Reports and fact sheets Non-technical barriers and the respective situation of the geothermal energy sector in selected countries - Report Case studies for selected operations - Report Innovative geothermal technologies - Factsheet Financial instruments for the support for the exploitation of geothermal energy - Report Emerging financing scheme for fostering investment in the Geothermal Energy sector - Report Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 9
  10. 10. GEOFAR - Overview Dissemination Media GEOFAR-Website www.geofar.eu Documentary Film on geothermal energy Dissemination 5 Awareness Seminars in target countries 1 Europe-wide large-scale Conference 10 Newsletters available under www.geofar.eu Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 10
  11. 11. GEOFAR - Overview Partners BRGM, France Energo Group, Greece Erlangen AG, Germany IENE, Greece IGME, Greece IGME, Spain Rödl & Partner, Germany ARENA, Portugal Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 11
  12. 12. GEOFAR - Analysis Analysis The GEOFAR consortium analysed – the respective situation of the geothermal energy sector concerning direct use of geothermal water and electricity production and non- technical barriers for the target countries Germany, France, Greece, Spain, Portugal, Slovakia, Bulgaria and Hungary. – Output: Non-technical barriers and the respective situation of the geothermal energy sector in selected countries - Report Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 12
  13. 13. GEOFAR - Analysis Main non-technical barriers in geothermal Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 13
  14. 14. GEOFAR - Analysis Main non-technical barriers in the target countries Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 14
  15. 15. GEOFAR - Analysis Non-technical barriers - Conclusion The development of geothermal energy ranges from one country to another. This historical development and the current trend are naturally linked to the available resources, but there are other reasons that boost or hinder development of deep geothermal energy. The main identified barrier is the geological risk of the non discovery of the resources in adequacy of the expectation of the project: money has to be spent meanwhile success of the project has not been proven. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 15
  16. 16. GEOFAR - Analysis Non-technical barriers - Conclusion Globally, the current approach for the decision to launch or not a geothermal energy project is mainly economic and financial. Developing a European financial support instrument could lead to a multiplication of operation, the mutualisation of competences and knowledge could have a positive impact at different level: Facilitating insurance proposal, raising awareness among financial institutions that work at European level, decreasing drilling costs… Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 16
  17. 17. GEOFAR - Analysis Analysis The GEOFAR consortium analysed – 40 case studies from Germany, France, Portugal, Spain, Greece, Hungary, Slovakia and Bulgaria to give an overview on geothermal projects in order to raise the target groups´ awareness on what is possible and on how projects can be realised. – Output: Case studies for selected operations - Report Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 17
  18. 18. GEOFAR - Analysis Overview on selected geothermal projects Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 18
  19. 19. GEOFAR - Analysis Case studies - Conclusion The diversity of geothermal operations across Europe is due to the needs and depends on the geothermal resources available. The resources available and their properties play a major role on the investment costs of the project. New projects are currently being developed all across Europe. This is indispensable to meet target concerning development of geothermal energy, expected to take part in the future energy mix. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 19
  20. 20. GEOFAR - Analysis Analysis The GEOFAR consortium analysed - innovative geothermal application to underline the multiple possibilities of use of geothermal energy and the potential and emerging technologies that could in the future boost the development of geothermal energy to meet the set targets. - Output: Innovative geothermal technologies - Factsheet Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 20
  21. 21. GEOFAR - Analysis Innovative geothermal applications Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 21
  22. 22. GEOFAR - Analysis Innovative geothermal applications - Conclusion Innovative geothermal applications improve the energetic and economic profitability within the objective to develop new environment friendly solutions. All these new developments are ways to exploite the great potential of development of deep geothermal energy. The co-use of geothermal energy for the traditional electricity production and heating and cooling as well as for innovative applications will boost the profitability of geothermal energy exploitation and higher profitability will trigger new investments in geothermal energy and reduce the costs per unit. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 22
  23. 23. GEOFAR - Analysis Analysis The GEOFAR consortium analysed - 44 financial instruments from national, European and international level on their potential to overcome the main financial barriers. - Output: Financial instruments for the support for the exploitation of geothermal energy - Report Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 23
  24. 24. GEOFAR - Analysis Overcoming financial barriers Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 24
  25. 25. GEOFAR - Analysis Strength/weaknesses of financial instruments Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 25
  26. 26. GEOFAR - Analysis Project stages tackled by financing instruments Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 26
  27. 27. GEOFAR - Analysis Differences in tax reductions/excemptions l Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 27
  28. 28. GEOFAR - Analysis Feed in tariff – most common financial instrument Feed-in Tariffs in Target Countries (c€/kWh) 30 25 20 Max 15 Min 10 5 0 ly y in ia y nd l d d s ga ar an Ita an an ea ak a la Sp rtu ng m nl nl rs ov Is er Hu ai Po ai ve Sl e M M G ec O e ce re ce ec G an an re Fr G Fr Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 28
  29. 29. GEOFAR - Analysis Financial Instruments - Conclusion Across Europe a lack of harmonisation in financial instruments is visible and a European support environment is not given. The development of geothermal financial instruments at the European level can overcome this lack. A European solution has to solve two main aspects: the lack of financing for the exploration phase and the risk of an inappropriate quality or quantity of the geothermal resource. The GEOFAR project has worked out an appropriate funding scheme (“GeoRIMI”) that will be installed as European solution for supporting geothermal energy projects. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 29
  30. 30. GEOFAR - Analysis Outputs Reports and fact sheets Non-technical barriers and the respective situation of the geothermal energy sector in selected countries - Report Case studies for selected operations - Report Innovative geothermal technologies - Factsheet Financial instruments for the support for the exploitation of geothermal energy - Report All reports can be downloaded under www.geofar.eu Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 30
  31. 31. GEOFAR - GERIMI Geothermal Risk Mitigation (GeoRiMi) GeoRiMi will follow the hereafter mentioned principles - Support for geothermal investment focuses on the exploratory stage and the drilling stage. - Private investors must provide a significant part of the total investment in both the exploratory and the drilling stage. - Publicly-funded support to be limited in time and total amount. - Publicly-funded support to be provided to cover exploration and drilling risk only. - For all other purposes publicly-funded support uses the normal business-financing conduits. - Regional and local public authorities must be supported in their efforts to understand and develop geothermal resources in their jurisdiction. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 31
  32. 32. GEOFAR - GERIMI Geothermal Risk Mitigation (GeoRiMi) The proposed GEOFAR Financial Scheme “GeoRiMi” will cover three instruments tackling different project stages and beneficiaries - Instrument I proposes co-financing prefeasibility studies to be commissioned exclusively by regional and local authorities in areas with geothermal potential in which public awareness of that potential is inadequate. - Instrument II proposes extending partial guarantees to the exploratory stage of qualified geothermal energy projects. - Instrument III proposes extending partial guarantees to the production- drilling stage of qualified geothermal energy sources. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 32
  33. 33. GEOFAR - GERIMI Geothermal Risk Mitigation (GeoRiMi) Steps to go for the implementation of GeoRiMi - Reality check with national and international financial institutions - Due diligence of GeoRiMi - Preparation of an EU-framework for embedding GeoRiMi - Planned finalisation: February 2011 Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 33
  34. 34. GEOFAR Contact Erlangen AG Marco Wendel Henkestraße 91 91052 Erlangen Germany Tel: 0049 – 9131 – 530 280 1 Fax: 0049 – 9131 – 530 13 92 E-Mail: m.wendel@erlangen-ag.de The sole responsibility for the content of this presentation lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein. Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 34
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