In a recent opinion article for Dansk Fjernvarme, Lars Anders of Geoop in Denmark highlights the importance for geothermal heat for district heating networks in the country to reach its climate targets. His company is pushing development with a new business model that helps take exploration risk from developers, such as district heating operators.
In a guest post for Danish District Heating (Dansk Fjernvarme), Lars Andersen, Director at Danish company Geoop, argues that geothermal is necessary if Denmark plans to reach its climate targets and that geothermal heating will play a central role in the conversion of the heating sector and electrification of the energy system.
For years, the [Danish] energy sector has widely agreed that geothermal energy had a great future for itself in Denmark’s energy system. But after a few initial projects got off the ground, geothermal energy development was more or less put too rest. But there is hope again.
This is last but not least due to one player helping to eliminate the risk for consumer and district heating developers.
“Geoop takes the investigation risk and has a clear and simple business plan that makes geothermal activity attractive both economically and environmentally for consumers,” says Lars Andersen, Director at Geothermal Operations Company (Geoop). Geoop emerged as a collaboration between the energy company E.ON and drilling companies Ross DK and Iceland Drilling Company.
The three companies have thus pooled their experiences of geothermal and heat pumps together. At the same time, they also have the necessary financial robustness to take the investigation risk.
Geothermal Heating can almost match the price of biomass
In addition, Lars Andersen also believes that there is a political headwind with a possible breakthrough for geothermal energy in Denmark.
“The framework conditions have been improved. Now it is for the district heating industry to beginn to take geothermal energy seriously and involve it in their planning for heat supply. So the clear address by Andersen.
“There are now drilling activities places in Thisted and other places, where geothermal energy is known as a good source of heat, but only a fraction of the potential is used, and it is a long path following other European cities such as Paris, where half of district heating comes from geothermal energy, so Lars Andersen.
He points out that biomass is currently the cheapest solution, but there it only takes a little before geothermal energy can match the price of biomass.
According to Geoop, geothermal heat is necessary in order to switch the district heating cost efficiently, so Denmark can reach its long-term climate targets. In combination with heat pumps, geothermal energy has an estimated potential to up to 30 percent of the heating requirement in the district heating system of the country.
Lars Andersen is not afraid that Geoop will fall in the same trap as previously mistaken geothermal projects.
“In future geothermal projects, there must be the necessary technical skills, financial robustness and, not least, political will – and so it is important that the decision-makers are technically based and committed to trustful and professional cooperation,” says Lars Andersen.
“Throughout many projects, many projects have been characterized by excessive optimism on the performance of one doublet (two wells drilled). Focus has been placed on the temperature and performance of each well. This leads to ending in unrealistic budgets. It requires more than one well pair to achieve stable operation. Projects might have promised too much and got too little, he says.
Removing risk from district heating companies
Geoop offers two different business models: One where Geoop establishes, owns and operates wells and plants incl. heat pumps throughout the life of the plant; and one where Geoop establishes wells and plants, incl. heat pumps, and the district heating company then purchase turnkey installations of Geoop. But common to both of them is that the company takes the investigation risk.
“This means that if it appears that there is not enough hot water in the subsoil after Geoop has drilled an exploration well, we will not send any bill to the district heating company,” says Lars Andersen.
– Denmark is now ready to pick up geothermal energy below our feet. The underground of Denmark is suitable and Geus’s mapping means that we can quickly get the necessary geothermal resources and drill in areas where geothermal energy is available in the subsoil, says the director.