Geothermal power is also known as geothermal power or deep geothermal energy. What are they? The energy derived from the surface of the earth is more than five hundred meters deep. For this market, Rabobank shares recent figures and trends.
Geothermal energy in practice
Hot water of between 60 and 95 degrees Celsius is collected from the deep underground for geothermal energy.
This extraction is done from so-called development wells in the Netherlands that are mostly 1500 to 3000 meters deep.
After the heat has been drained, the cooled water is returned to the same stratum where it was extracted through an injection well.
Until now, this energy production system has been used primarily to heat horticultural greenhouses.
With a market share of approximately 90 percent, after the first project in the Netherlands in 2006, Rabobank has acquired a large reference system and comprehensive experience.
This implies that Rabobank is in a good position to choose projects which offer opportunities.
In addition to the further expansion of geothermal power in the horticultural greenhouse market, existing developments are:
Research is being carried out on the prospect of making geothermal heat more sustainable for district heating.
700 to 1,000 meters of “Shallow Geothermal Energy.” Although this has a lower capacity, for individual horticultural companies it can be interesting.
Geothermal Energy Ultra-Deep (UDG). This concerns depths of more than 6,000 meters where the temperatures are so high that electricity can also be produced from steam and (via steam turbines).
For light industry applications (e.g. milk, breweries/malt houses, and paper production), these high temperatures are essential.
It is not expected that the first groundbreaking UDG pilot project will commence until 2021.
Economy and SDE
The Netherlands has a more than 7 percent share of renewable energy, with a target of 14 percent for 2020.
In order to avoid projects from coming to a standstill after the initial subsidy period, this leads to extended and expanded SDE subsidy budgets.
SDE stands for Sustainable Energy Development Enhancement Scheme (SDE). In this way, the government subsidizes the increased costs of the generation of renewable energy versus energy from fossil fuels to create a level playing field.
For 2020, the government needs the SDE to be more focused on reducing CO2 emissions.
This year, the scheme will be sorted out and it is still unclear what changes this will cause in the types of projects that have the greatest SDE possibility.
In contrast to most other renewable sources of energy, also under the amended system, Rabobank expects geothermal energy to be in a strong starting place.
This is because the subsidy needed per ton of decreased CO2 is favorable.
More and more businesses and society as a whole are on the agenda of reducing fossil fuels and greenhouse gases and improving the carbon footprint.
Consider the different national and international climate deals, for instance. Geothermal energy fits well with this objective, but sadly, since suitable hot water-carrying earth layers are not available everywhere, it can not be used everywhere.
A further complicating factor is that heat can only be stored locally, unlike electricity.
It also turns out to be a tough challenge to profitably balance the underground heat power with the demand above ground.
Geothermal “reservoir” exploration is carried out using almost the same drilling rigs used to drill for oil and gas.
For decades, this method has been known. Innovation takes place predominantly in composite casings, which reduce the possibility of steel corrosion and/or scaling (precipitation).
Furthermore, geological simulation software has been enhanced to increase the probability of discovering interesting sources of heat.
Geothermal energy is seen as a renewable method of heat generation, which in the Netherlands is largely gaining positive attention.
With this, the horticulture industry specifically profiles itself in contact with retail and customers.
Furthermore, it is commonly known that in the Netherlands we must get rid of “Groningen gas”.
Of course, geothermal energy must be safely and responsibly operated in such a way that no geothermal (very salty) water is mixed with drinking water and the risk of earthquakes is reduced.
Laws and regulations
Geothermal energy is subject to laws and regulations that are very stringent.
The appropriate competent authority is the Ministry of Economic Affairs and Environment (EZK) with SODM (State Supervision of Mines) as a supervisor.