On Monday 24 July, the European Commission announced that it had authorised a French State aid scheme to set up a guarantee fund for deep geothermal energy operations.
Under the scheme, the French Environment and Energy Management Agency (ADEME) will contribute up to €140 million to set up a guarantee fund. This fund will be used to cover the risk associated with the high degree of uncertainty of the deep geothermal resource during drilling, in the context of deep geothermal projects with a capacity of around 30 MW.
Payments from project sponsors wishing to benefit from the guarantee, provided in the form of contributions, will amount to €55.6 million.
The maximum amount of compensation per project, in the event of failure concerning the quality or quantity of the geothermal resource, will be €17 million. The fund will be set up for a period of 10 years.
The Commission assessed the scheme in particular in the context of its guidelines on State aid for climate, environmental protection and energy for 2022 (“CEEAG”) (see EUROPE 12878/28). (Original version in French by Émilie Vanderhulst)