Geotherm-FORA Publishes Report on Major Market Trends in Geothermal Technologies
Geotherm-FORMA has released a report on the recent market developments in geothermal technologies and the outlook for the market in 2030. In the executive summary of this report, Geothermal-FORMA states that due to the war in Ukraine and the high level of inflation in the European economy (leading to higher interest rater and lower building construction and renovation rates), the energy transition is back at the highest level of policy making, with more importance than ever. The EU`s recent adoption of a Net Zero Industry Act (NZIA) gives specific attention to geothermal as one of the eight strategic net zero technologies. The EU’s Commissioner for Energy, Kadri Simson, has called on Europe to “harness geothermal energy’s potential. For too long the benefits of this sector have not been well understood – now is the time to learn.”
In the summary, Geotherm-FORMA goes on to state that geothermal is like an "unearthed energy gem, a key solution to supply base load electricity, heating and cooling for all consumers, critical raw materials such as geothermal lithium. Moreover, geothermal energy shall be regarded as the bedrock of the energy transition in Europe and in the world."
The summary goes on to to highlight that the European geothermal market is facing a "significant moment of growth and anticipation," pointing out that 2023 was a year of significant transformation for geothermal, moving from a niche market, constituting just 2-3% of the energy mix, towards becoming a major player in Europe’s energy landscape. "This development blends perfectly with our goal of supplying sustainable, local and reliable energy to all inhabitants and industry of Europe and beyond."
The report outlines the demands of a transition from "niche" to mainstream energy source, including effective and streamlined permitting rules, financial resources and investment in geothermal energy, and a consolidated and resilient supply chain which can support a Europe-wide expansion, from technology providers to service companies. The growth of geothermal energy also depends on the availability of a qualified workforce; this expansion offers opportunities to re-skill and up-skill the workforce in collaboration with regions and from the oil&gas industry. "The next generation of professionals is getting ready to drive innovation in the geothermal field," the summary states.
The summary continues: "The geothermal exploration of new regions of Europe represents an exciting challenge. We have the technologies at our disposal, but now we need to replicate best practices across the borders. Sharing knowledge and experiences will be key to overcoming geological and technical aspects in order to support the continued growth of geothermal networks in Europe."
Geothermal Market Development in Europe: Overview
The report goes on to provide an overview of the growth of geothermal projects across Europe, pointing out that they deliver electricity to 11 million consumers and heat and cool about 20 million people and 400 cities and factories. The summary of the report outlines how geothermal heating and cooling sector continues to grow in traditional markets (individual buildings, districts of 5,000 inhabitants, and greenhouses), while pointing out that new markets are also being reached: new technologies, e.g., geothermal smart heat networks (5th generation) and deep closed loop and thermal storage systems, and new countries or new regions.
"Sales and new installations of geothermal heat pumps (GHP) have been strong across nearly all countries (growth of ca 12%), with a new record in annual sales: about 155,000 units in 2023," the report continues: "In terms of overall capacity installed, the market was still dominated by Germany, the Netherlands, Finland and Sweden, representing half the installed geothermal heat pumps in Europe and nearly half the annual sales. However, market growth is influenced by many factors. If we take, for example, the case of Germany, despite a positive first trimester, 2023 saw sales slightly declining. On a macro-level, factors impacting the GHP market in Germany were primarily the current increased interest rates and their impact on the building construction and renovation markets, together with high electricity prices and taxation in comparison with fossil gas. This is valid not only for Germany but for the whole of Europe."
Additionally, Geotherm-FORA highlights the growth in new geothermal district heating projects, pointing out that eight new district heating and cooling projects were commissioned last year in the European Union: one in Germany, three in Finland, one in the Netherlands, two in Romania, and one in Slovakia. According to the report: "2023 saw fewer plants put into operation than during the last years, especially in comparison with 2022 and 2021, with 14 new installations being inaugurated. Three reasons can explain this situation: 1) Delay in project development due to slow permitting, disruption in supply chain or longer drilling and commissioning phases; 2) Harder competition with fossil fuels; 3) Longer project development duration with projects in greenfield areas and project portfolio approach."
The report continues: "Geothermal electricity continued its march towards market maturity in key markets such as Italy, Croatia, Germany and Turkey, even though changes to the Turkish incentive framework caused uncertainty for project developers. About 50 geothermal power plants are under development at different stages: exploration, drilling or connecting to the grid. 8 new projects have started development in 2023. The renewed interest in base load and local electricity supply makes geothermal energy a valuable option."
The report draws the conclusion that "geothermal is proven to provide a stable and secure supply of power while meeting base load demands and being able to supply 10% of our EU electricity demand."
Download the Full Report
The full report is available at geothermal.eu.
Source: Geotherm-FORMA
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