Geothermal energy FAQ

This area is dedicated to the most important economic and legal issues of deep geothermal energy which is the only form of renewable energy available worldwide for the provision of base load power which can be controlled to generate either electricity or heat. The following provides potential investors interested in geothermal energy, including private investors, institutional investors or local authorities, with all the latest information from Rödl & Partner concerning the use of CO2-free energy gained from deep geothermal energy.

Questions relating to deep geothermal energy 

• What is geothermal energy?
• Where is deep geothermal energy possible in Germany?
• What are the special advantages of geothermal energy for local authorities?
• What are the main risks with a geothermal project and how is it possible to reduce them?​

 
What is geothermal energy?

 

Where is deep geothermal energy possible in Germany?

	The map on the side indicates the areas where hydrothermal deep geothermal energy has already been realised in Germany or areas where geological experts estimate there is exploitation potential.
	The Molasse basin geological formation located in the south of Germany is particularly worthy of mention. Numerous successful heat supply projects here have clearly proven the feasibility of such projects and a lower exploration risk (to find sufficient volumes of thermal water) can be assumed.
	The water-bearing layer in the Molasse basin (the Malmkarst) slopes from the north to the south. This affects borehole depths and the temperature of the water. The graphic on the side shows a section of the Molasse basin. The existing boreholes indicate that the borehole depths and temperatures rise towards the south.

What are the special advantages of geothermal energy for local authorities?

The graphic on the side compares the price development between geothermal energy and energy derived from fossil fuels. The calculation was made using the price indices of the German statistics office extrapolated backwards for the last twenty years.
 

What are the main risks with a geothermal project and how is it possible to reduce them?

• Up to now the biggest barrier to investment in geothermal energy generation has been the exploration risk. Nobody can predict how much thermal water can be accessed until the borehole has been sunk and the corresponding testing work has been concluded. This is in turn decisive for the economic success and feasibility of a geothermal energy generation project.
   
• Insurance cover can provide some protection against the risk of exploration. This has been implemented for the first time with a geothermal project in Unterhaching on a privately financed basis according to a concept from Rödl & Partner. The insurability and premiums depend strongly on the respective project and its risk structure and therefore require adjustment and examination according to the project.
   
• Prior to the investment the economic risk is analysed with detailed investment planning. The correct definition of the input parameters for this analysis such as fill and temperature forms the basis for the definition of the return which in turn is based on the taking out of insurance against exploration risk. The part of the investment covered for the first borehole and amount of the premium are therefore defined by the willingness of the investor to take a risk with the defined profitability. This is based on the above-mentioned profitability analysis which therefore becomes very important in relation to the complete concept.
   

• The required capacity in terms of manpower to manage the project is frequently underestimated. The success of the project according to a defined schedule requires the perfect co ordination of geological, technical, economic, legal and organisational areas of responsibility. The mutual interference of these areas makes a supervising body absolutely essential. This position in Unterhaching was managed by Rödl & Partner. Due to the high daily cost of operations decisions often have to be taken under extreme time pressure, in particular during the drilling phase. The choice of partners with the required degree of economic competence and capacity is therefore a high priority.
   
• According to section § 114 ff. German Federal Mining Act there is absolute liability for injuries to persons and damage to materials. Therefore the project company is exposed to a risk in situations where, for example, the drilling operations trigger seismic activity. An insurance solution for this has to be taken into account. Rödl & Partner also has the required experience to manage this.