Spain – Promotion of geothermal project studies

published on 10th July 2023

Order TED/467/2023, issued on 28 April 2023 by the Spanish Ministry of the Environment, regulates bases for the granting of support for feasibility studies on the use of deep geothermal energy in Spain. The subsidies are intended to enable the development of geothermal projects which help achieve the EU climate targets. The Order sets out the conditions for the eligibility of projects, the type of supported activities and the procedures for filing applications and project assessment.

General conditions:

According to the Order, the feasibility studies for geothermal projects must meet the following conditions in order to be eligible for funding:

The project must aim to use deep geothermal energy to generate heat or electricity.
The feasibility study must address the project’s technical, economic and financial feasibility.
The project must be implemented in Spain.
The project must comply with the applicable regulations on environmental protection and safety.

Supported study objectives

The feasibility studies must cover the following objectives:

Geological, geophysical and hydrogeological studies to characterise the subsurface and to assess the site suitability for the use of deep geothermal energy.
Technical studies to assess the feasibility and design of the geothermal power plant, including the type of the drilling, the fluid and of the heat exchanger.
Economic and financial studies to assess the costs and benefits of the project, including the assessment of risk and financing options.
Environmental and safety studies to assess the effects of the project on the environment and public health, and to define measures to avoid and mitigate these effects.

Eligible study costs

According to Article 12(4) of Order TED/467/2023, the following costs, among others, are considered eligible:

Costs up to the limit of EUR 10,000 for consultancy services of advisory firms engaged in the process of applying for funding;
Costs of carrying out geological, geophysical and geochemical surveys and analyses;
Costs for the preparation of reports and documentation.

As per Article 12(6), the following costs, among others, are considered not eligible for funding:

Costs incurred before applying for state funding;
Costs of the staff involved in the preparation of the feasibility study;
Costs of obtaining permits and approvals required to perform the feasibility study, including the costs of environmental impact assessments and other permits.

Application, evaluation and the level of financial support

According to Article 14 et seq., the application requires that a call (convocatoria) for filing funding applications must be published in the Official Gazette of Spain. According to the information provided by the Spanish Institute for the Diversification and Saving of Energy (Instituto para la Diversificación y Ahorro de la Energía – IDAE) in mid-May, the first announcement is expected before the end of June. Further information on financial support will be available on the website of IDAE (www.idae.es).

Subsequently, the Evaluation Committee of the Spanish Institute IDAE will evaluate applications and their eligibility for funding. The Evaluation Committee will assess the project proposals based on such criteria as innovative content, contribution to achieving the European climate goals, technical and economic feasibility and their environmental impact. In the final step, the Committee will prepare an assessment report and select projects to be awarded state funding.

The Order does not mention any specific amounts of such funding. The exact amounts of state funding will be determined on the basis of eligible project costs by the competent national or regional authorities responsible for awarding of state funding.