The second day of the informal meeting of European energy ministers under the Hungarian Presidency of the EU Council, on Tuesday 16 July, was marked by the overwhelming support of most of the European energy ministers, secretaries of state and ambassadors present for the introduction of a political strategy dedicated to the development of geothermal energy.
“The simple task of the Hungarian Presidency is to strengthen Europe’s competitiveness”, said Hungarian Energy Minister Csaba Lantos, but also to focus on new issues “that have not received much attention previously”, referring to the development of geothermal energy, in particular deep geothermal energy, to produce electricity as well as heat and cold.
As this is hugely influenced by the geological context, Hungary intends to be a leader in this field. It already has the largest geothermal heating system in Europe outside of Iceland, in the town of Szeged.
Sanjeev Kumar, EU Policy Officer for the European Geothermal Energy Council (EGEC), who was invited to take part in the discussions, welcomed the enthusiasm and support of the vast majority of governments, saying that this informal meeting marked “the first day that geothermal energy has become a key element in the EU’s energy transition strategy”.
No EU country came out against the initiative. Only Member States such as Latvia, which have no experience in the field of geothermal energy, are said to have expressed reservations about the cost and indicated that their market was not sufficiently mature, but expressed their support nonetheless.
Potential future European Industrial Alliance
The conclusions that the Hungarian Presidency is due to adopt on the subject in December could potentially include a recommendation for the creation of a European Industrial Alliance for geothermal energy, as EGEC has long wanted (see EUROPE 13424/4).
The European Commission, for its part, has recognised the “immense untapped potential” of geothermal energy, and is expected to put an updated strategy for heating and cooling on the agenda of the new European Commissioners, including an inventory of geothermal potential, as well as the specific potential of heat pumps, for which the relevant dedicated strategy had previously been abandoned by the European Commission.
In a second phase, a strategy devoted exclusively to geothermal energy, in the same vein as the action plan for networks (see EUROPE 13302/8), could eventually see the light of day.
In addition, the Executive Director of the International Energy Agency, Fatih Birol, had announced earlier in the day that the Agency will be preparing a roadmap, by the end of the year, to accelerate the development of geothermal energy worldwide.
Hedging financial risks
However, several European sources point out that there are still a number of hurdles to overcome in order to unblock investment and ensure the economic viability of geothermal projects across Europe.
“We’re only at the beginning of the process”, said several European sources, who felt that the political impetus was there, but that it was too early to say what kind of subsidies, loans and guarantee mechanisms might be available for the development of geothermal energy.
What’s more, investors are still often faced with the need to carry out costly drilling to analyse the subsoil’s potential, and with a lack of local geological data.
Poland has reportedly suggested that the European Investment Bank (EIB) should provide some form of guidance to cover these financial risks. The country has also undertaken to continue the work begun by Hungary on geothermal energy starting January 2025, when it takes over the Presidency of the Council of the EU.
Energy competitiveness
The day’s other discussions focused on achieving the 2030 climate and energy goals and the National Energy and Climate Plans (NECPs), the development of networks and the importance of the energy sector for European competitiveness.
On this last point, the Director General of BusinessEurope, Markus Beyrer, speaking to Agence Europe, said that he had emphasised to the ministers the urgent need to “further reduce the gap in energy competitiveness” pointing out that, according to a scenario of delayed investment in infrastructure and clean technologies, the average cost of producing electricity in the EU will be 2 to 3 times higher than in the United States and China in 2040 and 2050 (see EUROPE 13446/16). (Original version in French by Pauline Denys)