The clean energy solution could form an important part of Germany’s climate transition pathway, according to Olaf Beyme, Renewable and Powers Lead at ING Germany.
In the quest for sustainable energy solutions, geothermal energy is a compelling alternative to fossil fuels. As the world grapples with climate change, the need to adopt cleaner, renewable energy sources is more pressing than ever. Geothermal, with its vast potential and relatively low environmental impact, offers a promising path forward.
For a country like Germany, geothermal energy could form an important part of its transition pathway.
More than half of Germany’s energy requirements are used for heating or industrial purposes. Around 85% of this heat has so far been generated using fossil fuels such as oil, gas and coal. This is set to change. In addition to familiar forms of renewable energy generation such as wind power, solar energy and biomass, geothermal energy is increasingly coming into focus.
The case for geothermal energy
Geothermal energy harnesses the heat from the Earth’s core to generate electricity and provide heating solutions. Unlike solar and wind energy, which are intermittent and depend on weather conditions, geothermal energy is a reliable and consistent source of power. This reliability makes it an ideal partner to other renewable energy sources, ensuring a stable energy supply.
In central Europe, the temperature increases by around 3°C per 100 metres into the ground. The conversion of geothermal energy into electricity and useful heat is free of CO2 and flue gas emissions. Experts estimate that 50 to 75% of Germany’s heating requirements could be covered by geothermal energy in the future.
In Germany, the transition from fossil fuels to renewable energy has been a significant policy focus. The country’s ambitious Energiewende (energy transition) plan aims to reduce greenhouse gas emissions, phase out nuclear power, and increase the share of renewables in the energy mix. While wind and solar power have received much attention and investment, geothermal energy remains an under-utilised resource that could play a crucial role in achieving these goals.
Germany’s geothermal potential
Germany is geologically suited for geothermal energy production. The country sits on several geothermal hotspots, particularly in the Bavarian Molasse Basin and the Upper Rhine Graben. These regions offer high geothermal gradients, making them ideal for both deep and shallow geothermal projects.
In Bavaria, for instance, a geothermal energy project is being built that is breaking new ground – and has the potential to change the way geothermal energy is used in the future.
In Geretsried, not far from Lake Starnberg, the Eavor-Loop is a geothermal power plant that will supply the entire region with district heating in the medium term. The Eavor-Loop is a self-contained system that functions like a gigantic underground heat exchanger. Two vertical boreholes are connected to 24 parallel horizontal boreholes at a depth of 4,500 to 5,000 metres, forming a circuit of 12 loops. A fluid circulates in this circuit, which is heated in the ground. Due to its physical properties, the heated fluid rises to the Earth’s surface through one of the vertical pipes. The heat can be fed directly into the district heating network or with the help of a power plant converted into electricity. The liquid from which the heat has been extracted sinks back into the circulation system through the second pipe.
As the circuit is self-contained, the Eavor-Loop does not require thermal water – and can therefore be used at more locations where energy is required than conventional geothermal energy.
The process also offers further advantages. In conventional geothermal energy, the heated water is brought to the Earth’s surface with the help of pumps and later fed back into the rock. With the Eavor-Loop, the heated liquid flows upwards solely due to the temperature difference, which requires no further energy input and reduces operating costs. As no fluids are extracted from layers of earth and pumped back in the closed system, the risk of seismic movements is non-existent.
The technology has been successfully tested in Canada since 2019; the project in Geretsried is the first commercial deployment. ING is part of a consortium of banks financing this project, directing finance to sustainable energy sources and further aligning the bank with its goal to reduce the CO2 emissions of its own loan book to net zero by 2050.
Economic and environmental benefits
The economic benefits of geothermal energy are manifold. Initial investments in geothermal plants are substantial, but the long-term gains are considerable. Geothermal plants have low operational and maintenance costs compared to fossil fuel plants. Furthermore, they provide energy at a stable price, shielded from the volatility of global fossil fuel markets.
Environmentally, geothermal energy is a low-carbon solution. It produces minimal greenhouse gas emissions compared to coal, oil, and natural gas. Another benefit of geothermic energy is that it’s considered to be gentler on the landscape because the majority of the required pipeline systems are laid underground, and the surface can be re-naturalised or used for other purposes once the drilling has been completed. This makes them an attractive option for densely populated regions or areas with limited space for renewable energy installations.
Challenges and solutions
Despite its potential, geothermal energy – like most elements of the energy transition – comes with its own challenges. High upfront costs and financial risks associated with drilling are significant barriers. Additionally, the technology and expertise required for geothermal development are still evolving, necessitating further research and investment.
To overcome these challenges, government incentives – such as subsidies and tax breaks – can mitigate financial risks for developers. Public-private partnerships can also play a crucial role in sharing costs and expertise. Furthermore, investing in research and development will enhance technological capabilities and reduce costs over time.
The way forward
Geothermal energy represents a largely untapped resource that could significantly contribute to Germany’s renewable energy portfolio. Its reliability, economic benefits, and low environmental impact make it a viable alternative to fossil fuels.
By embracing its geothermal potential, Germany can further drive its energy transition, setting a precedent for other nations to follow. The time is ripe for policymakers, industry leaders, and the public to recognise, finance and invest in the potential of geothermal energy, ensuring a sustainable and resilient energy future.
The clean energy solution could form an important part of Germany’s climate transition pathway, according to Olaf Beyme, Renewable and Powers Lead at ING Germany.
In the quest for sustainable energy solutions, geothermal energy is a compelling alternative to fossil fuels. As the world grapples with climate change, the need to adopt cleaner, renewable energy sources is more pressing than ever. Geothermal, with its vast potential and relatively low environmental impact, offers a promising path forward.
For a country like Germany, geothermal energy could form an important part of its transition pathway.
More than half of Germany’s energy requirements are used for heating or industrial purposes. Around 85% of this heat has so far been generated using fossil fuels such as oil, gas and coal. This is set to change. In addition to familiar forms of renewable energy generation such as wind power, solar energy and biomass, geothermal energy is increasingly coming into focus.
The case for geothermal energy
Geothermal energy harnesses the heat from the Earth’s core to generate electricity and provide heating solutions. Unlike solar and wind energy, which are intermittent and depend on weather conditions, geothermal energy is a reliable and consistent source of power. This reliability makes it an ideal partner to other renewable energy sources, ensuring a stable energy supply.
In central Europe, the temperature increases by around 3°C per 100 metres into the ground. The conversion of geothermal energy into electricity and useful heat is free of CO2 and flue gas emissions. Experts estimate that 50 to 75% of Germany’s heating requirements could be covered by geothermal energy in the future.
In Germany, the transition from fossil fuels to renewable energy has been a significant policy focus. The country’s ambitious Energiewende (energy transition) plan aims to reduce greenhouse gas emissions, phase out nuclear power, and increase the share of renewables in the energy mix. While wind and solar power have received much attention and investment, geothermal energy remains an under-utilised resource that could play a crucial role in achieving these goals.
Germany’s geothermal potential
Germany is geologically suited for geothermal energy production. The country sits on several geothermal hotspots, particularly in the Bavarian Molasse Basin and the Upper Rhine Graben. These regions offer high geothermal gradients, making them ideal for both deep and shallow geothermal projects.
In Bavaria, for instance, a geothermal energy project is being built that is breaking new ground – and has the potential to change the way geothermal energy is used in the future.
In Geretsried, not far from Lake Starnberg, the Eavor-Loop is a geothermal power plant that will supply the entire region with district heating in the medium term. The Eavor-Loop is a self-contained system that functions like a gigantic underground heat exchanger. Two vertical boreholes are connected to 24 parallel horizontal boreholes at a depth of 4,500 to 5,000 metres, forming a circuit of 12 loops. A fluid circulates in this circuit, which is heated in the ground. Due to its physical properties, the heated fluid rises to the Earth’s surface through one of the vertical pipes. The heat can be fed directly into the district heating network or with the help of a power plant converted into electricity. The liquid from which the heat has been extracted sinks back into the circulation system through the second pipe.
As the circuit is self-contained, the Eavor-Loop does not require thermal water – and can therefore be used at more locations where energy is required than conventional geothermal energy.
The process also offers further advantages. In conventional geothermal energy, the heated water is brought to the Earth’s surface with the help of pumps and later fed back into the rock. With the Eavor-Loop, the heated liquid flows upwards solely due to the temperature difference, which requires no further energy input and reduces operating costs. As no fluids are extracted from layers of earth and pumped back in the closed system, the risk of seismic movements is non-existent.
The technology has been successfully tested in Canada since 2019; the project in Geretsried is the first commercial deployment. ING is part of a consortium of banks financing this project, directing finance to sustainable energy sources and further aligning the bank with its goal to reduce the CO2 emissions of its own loan book to net zero by 2050.
Economic and environmental benefits
The economic benefits of geothermal energy are manifold. Initial investments in geothermal plants are substantial, but the long-term gains are considerable. Geothermal plants have low operational and maintenance costs compared to fossil fuel plants. Furthermore, they provide energy at a stable price, shielded from the volatility of global fossil fuel markets.
Environmentally, geothermal energy is a low-carbon solution. It produces minimal greenhouse gas emissions compared to coal, oil, and natural gas. Another benefit of geothermic energy is that it’s considered to be gentler on the landscape because the majority of the required pipeline systems are laid underground, and the surface can be re-naturalised or used for other purposes once the drilling has been completed. This makes them an attractive option for densely populated regions or areas with limited space for renewable energy installations.
Challenges and solutions
Despite its potential, geothermal energy – like most elements of the energy transition – comes with its own challenges. High upfront costs and financial risks associated with drilling are significant barriers. Additionally, the technology and expertise required for geothermal development are still evolving, necessitating further research and investment.
To overcome these challenges, government incentives – such as subsidies and tax breaks – can mitigate financial risks for developers. Public-private partnerships can also play a crucial role in sharing costs and expertise. Furthermore, investing in research and development will enhance technological capabilities and reduce costs over time.
The way forward
Geothermal energy represents a largely untapped resource that could significantly contribute to Germany’s renewable energy portfolio. Its reliability, economic benefits, and low environmental impact make it a viable alternative to fossil fuels.
By embracing its geothermal potential, Germany can further drive its energy transition, setting a precedent for other nations to follow. The time is ripe for policymakers, industry leaders, and the public to recognise, finance and invest in the potential of geothermal energy, ensuring a sustainable and resilient energy future.
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