Geothermical energy like never before, in Budapest

During the informal Energy Council of 16th and 17th July, EU ministers discussed about the decarbonisation process with a particular stress for the geothermical subject. Such subject was never considered as crucial as it currently is for the Hungarian presidency.

The introduction of geothermal energy

As the European Parliament resolution of 18 January 2024 on geothermal energy explicitally says, “The geothermal energy still often plays a peripheral role in the discussion on renewable energy; draws attention to the fact that geothermal installations do not require critical raw materials to the same extent as other renewables; notes that, based on a sustainable life-cycle approach, geothermal has low environmental impact and typically requires limited land use and can easily be integrated into the landscapes and that geothermal energy offers long-term benefits that can outweigh the high upfront costs associated with its development, such as its being a sustainable source of energy with a low environmental impact, stable and predictable energy costs, low operating costs, long lifespan and reliability that creates business and employment opportunities in local communities, and helps to reduce dependence on imported fuels”.

As the resolution states, geothermal energy is described as “a locally available source of renewable energy that can provide, in a cost-effective way, dispatchable electricity, heat, or a combination of both.” Moreover, the recently adopted Electricity Market Regulation listed geothermal energy among the technologies crucial for the decarbonization of the energy system as a non-fossil source for new electricity generation which, in the case of direct support, should be backed by two-way contracts to guarantee the revenue of the investments. Still, there is a need to ramp up private investments, especially to overcome drilling risks and reduce upfront investment costs.

As Europe aims to enhance its energy security and decrease reliance on fossil fuels, geothermal technology presents an opportunity for consistent energy and pricing, offering increased autonomy and security for the continent. With fuel-based heating becoming more costly, local governments are increasingly considering geothermal energy. In addition to the surge in gas prices in 2022, authorities are also facing more frequent carbon taxes or outright bans due to the detrimental effects on air quality. Shallow geothermal energy boasts the benefits of being widely accessible and secure, as it operates independently. For instance, geothermal energy powers the new NATO headquarters in Brussels and the Elysée Palace in Paris.

What the Council agrees on

The informal Energy Council aimed to find solutions for encouraging geothermal investments, raising public awareness, and developing cooperation between European countries. As Minister of Energy of Hungary, Csaba Lantos, said during the press conference on the margins of the Council: “The EU is still reliant on third countries; geothermal energy from underground is a renewable energy, and it is always available.” Geothermal energy represented just 0.5% of the global renewable electricity market in 2022 and produced 0.2% of the electricity in the EU. That’s why “geothermal energy needs to be adopted. There are several areas identified in the EU that can be used for geothermal,” continued Lantos. “We need to implement geothermal energy. There is no debate on that.”

It is not just a matter of energy but also competitiveness. “If we want to compete with the USA or China, we need to decarbonize using this renewable energy.” This goal requires a lot of money: “67 billion euros for the EU’s decarbonization and, as a consequence, global competitiveness.”