1. INNOVAATILISED LAHENDUSED ENERGEETIKAS: MAASOOJUSENERGIA

2. Economic Aspects of Geothermal District Heating and Power Generation German Experience Transferable? Dr. Thomas Reif, Sonntag & Partner

4. 1. Deep geothermal potential and its use in Germany a) Hydrothermal sources in Germany source: Bayerischer Geothermieatlas North German Basin Molasse Basin Upper Rhine

5. b) Geological situation in the Bavarian Molasse Basin fresh-water Molasse upper sea Molasse lower sea Molasse Eocene shalkstone malm dogger crystal source: Bernried Erdwärme AG marine transgression disturbance zones  North Geothermal gradient: ca. 3°C per 100 m TVD Hot water aquifer with good flow rates! South 

6. c) Major district heating and electricity generation projects district heating projects electricity projects - Straubing - Erding - Riem - Pullach - Simbach/ Braunau - Unterschleisheim - Aschheim/Feldkichen/ Kirchheim - Unterföhring Neustadt-Glewe Waren / Müritz Neubrandenburg Prenzlau Offenbach a.d. Queich Speyer Unterhaching Landau Dürrnhaar Kirchstockach Mauerstetten Sauerlach Bad Urach Insheim Soultz-sous-Forêts Landau

7. d) Geothermal project-features source : GeotIS, Geothermische Vereinigung

8. e) Low enthalpy - but huge contribution to energy supply source : KESS GbmH 6.200 geothermal load increased geothermal load 10.700 temperature: 84°C flow rate: 55 kg/s Example 1 district heating: annual load duration curve 10.000 inhabitants

9. source : KESS GmbH temperature: 84°C flow rate: 55 kg/s 6.200 geothermal load 13.000 increased geothermal load Example 2 district heating: annual load duration curve 30.000 inhabitants

10. 2. Business environment for heat and electricity generation geothermal electricity generation geothermal district heating feed-in tarif based on the Renewable Energy Sources Act (EEG)‏ Fixed price per MWh - subsidized by all power customers Geothermal energy supplies base-load! market heat-price „ marketable“ price competitive to traditional energies oil, gas, biomass etc. (Almost) no subsidies!

12. 3. Economic analysis electricity generation a) Project features

13. b) Investment overview SUM  ca. 2,5 Mio.€ / 1.000 m MD (wells >4.000 m TVD and 8 1/2 “ diameter at total depth including typical “troubles” / contingencies)‏

16. e) Profitability and geology - geology is crucial to secure by discovery insurance 7% increase in temperature  >30% increase in profitability  and vice versa

17. f) Profitability and investment (flow rate 120 l/s)‏ 10 % increase in investment  ca. 10 % loss of profitability  and vice versa

18. 4. Economic analysis heat generation a) Project features (e.g.: town with ca. 30.000 inhabitants)

19. b) Investment overview Distribution system is by far dominating

20. c) Project profitability Usually 5 - 15 years to break-even, if a distribution network has to be built up Losses accrued

22. d) Heat production costs Decrease in cost of heat / MWh because of increase in connected customers (= economies of scale and scope)‏ Increase in cost of heat / MWh, primarily because of increase in cost of material (biomass, electricity, oil)‏

23. e) Energy prices vs. geothermal heat prices price basis: 1998 Based on a typical escalation clause for the geothermal district heating energy rate (e.g. 10% oil, 20% electricity, 30% biomass, 30% invest, 10% wages)‏

24. 5. Project design - project optimization (CHP)‏

29. 7. „Simulation“ of an EGS electricity project in Estonia a) Project features

30. b) Investment overview SUM EGS / HDR / HFR  ca. 2,5 Mio.€ / 1.000 m MD (wells >5.000 m TVD and 6 1/8 “ diameter at total depth including contingencies)‏

31. c) Electricity generation costs 3 years construction period (2009 - 2011)‏ End of depreciation of wells and plant

34. 8. „ Simulation“ of a district heating project in Estonia a) Project features (with ca. 30.000 inhabitants)

35. b) Investment overview

36. c) Energy concept (Estonian town with 30.000 inhabitants)‏ source : KESS GmbH temperature: 105°C flow rate: 50 kg/s 10.050 geothermal load 17.300 Increased geothermal load

37. d) Heat production costs Usual increase in cost of heat / MWh, because of increase in cost of material (biomass, electricity, oil)‏ Decrease in cost of heat / MWh because of lower cost of network construction than in Germany and significant economies of scale concerning capital costs of the wells.

39. 9. Summary “ Affordable” differences in exploration costs at least for heating purposes

42. 10. Geothermal systems a) Open / closed systems geothermal heat collector - closed distribution network - use: heating and cooling of small building geothermal probe - closed U-tube in wells to 150 m depth - use: heating and cooling of buildings deep geothermal probe - closed double tube in wells of 2.000 to 3.000 meter depth - use: heating for industry, large building, network closed systems: shallow geothermal energy also: deep geothermal probe (> 400m)‏ source: fesa e.V. Freiburg

47. 11. About us a) S&P geothermal-team Dr. Thomas Reif Dipl.-Volkswirt, Rechtsanwalt, Fachanwalt für Steuerrecht Birgit Maneth Rechtsanwältin, LL.M., Fachanwältin für gewerblichen Rechtsschutz Dr. Martina Vollmar Rechtsanwältin, Fachanwältin für Steuerrecht, Steuerberaterin Karin Gohm Rechtsanwaltsfachangestellte Gerd Wolter, C.P.A. Dipl.-Kaufmann, Steuerberater, Wirtschaftsprüfer Irene Lang Dipl.- Betriebswirtin Ramona Trommer Dipl.-Kauffrau, Wiss. Assistentin Gerd Wolter, C.P.A. Harald Asum Dipl.-Betriebswirt

49. Dr. rer. pol. Thomas Reif Dipl.-Volksw., Rechtsanwalt, Fachanwalt für Steuerrecht www.geothermiekompetenz.de Sonntag & Partner Wirtschaftsprüfer Steuerberater Rechtsanwälte Schertlinstraße 23 · 86159 Augsburg Telefon 0821/57058-0 · Telefax 0821/57058-153 Elektrastraße 6 · 81925 München Telefon 089/2554434-0 · Telefax 089/2554434-9 www.sonntag-partner.de

50. INNOVAATILISED LAHENDUSED ENERGEETIKAS: MAASOOJUSENERGIA