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Germany allocated $30 million in research funding to geothermal in 2011

Germany allocated $30 million in research funding to geothermal in 2011 Unterhaching Geothermal Power Plant, Germany (source: flickr/ sanfamedia.com, creative commons)
Alexander Richter 5 Sep 2012

The German Federal Ministry for the Environment spent a record $30 million in ongoing and new research projects for geothermal projects in 2011, which represents only one third of what each solar PV and wind projects have received.

A newly released report by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, it is reported that about 10% of all research funding for ongoing and new renewable energy technologies projects in 2011 went to geothermal.

The Annual report on research funding in the German Renewable Energies Sector highlights the fact that Germany has started its turn around in energy policy to “reach ambitious climate protection targets” and to phase out the use of nuclear energy.”

About EUR 250 million ($315 million) have been spent as part of the program in 2011. Of this overall funding ca 45 percent have gone to projects at research institutions and 49 percent to projects with corporate involvement.

In 2011, geothermal has seen a record funding for newly approved projects of EUR24 million. This is an increase of more than EUR 9 million over spending in 2010. At the same time it only represents about one third of funding available to each Photovoltaics and Wind projects.

The share for allocated funding for ongoing projects was 9 percent, while for newly approved projects about 9.8 percent.

Some of the highlights for funding for geothermal include “Aiding acceptance” (public acceptance of geothermal technology and PR a project with the company Enerchange) and “lower costs and faster drilling with improved rotary drill drive” (a project with drilling specialist Herrenknecht).

The report describes that “despite becoming more widely used, there is still an extensive need for research into and optimisation of deep geothermal systems.”

“However, the exploration risk remains high. One important research priority, as specified in BMU’s latest funding announcement, is therefore to develop exploration methods for the selection of further potential sites. Above all, this will make the costs calculable for investors, and therefore facilitate more projects in the long term. Another priority area is to increase acceptance of geothermal projects („PR work for greater acceptance“). By improving the information available to the general public on the technologies used and the benefits of this form of energy, we can pave the way for additional projects.

Above all, however, the cost of projects needs to be further reduced to allow the technology to be costeffectively used. Technological advancement throughout all the different project phases will contribute to this: at the planning and exploration phase, the drilling/construction/assembly phase, as well as the test and operational phase.

In particular, drilling needs to become less expensive and faster, since this currently accounts for the bulk of investment costs. Once completed, plant operation must be efficient, low-maintenance and reliable; last but not least, research projects must help lay the foundations to make geothermal suitable for nationwide use. In the field of geothermal research, in 2011 BMU approved a total of 42 new projects with a total funding volume of around 24.1 million euros (2010: 30 new projects and 15.1 million euros). At the same time, 11.6 million euros went to ongoing research projects (2010: 9.9 million euros).

Apart from funding carefully selected research projects, the Federal Government is also creating incentives for new projects by remunerating geothermal electricity under the Renewable Energy Sources Act (EEG) and by offering subsidies towards drilling costs. Since the amendment to the EEG was adopted by the Bundestag (Lower House of Parliament) in late June 2011, the framework conditions for promoting geothermal energy have been improved since the beginning of 2012. In order to mitigate the current high risks for investors, the subsidy for geothermal electricity has been increased to 25 cents per KWh.

The use of petrothermal techniques also attracts a subsidy of 5 cents per KWh as of 2012. With these new rates, the Government is hoping to encourage further advancement of geothermal energy, since construction of new capacity has fallen short of expectations to date. In order to set a realistic time frame for the commissioning of projects while at the same time pushing for fast implementation, the degression of subsidy rates has been postponed until 2018.”

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, “Innovation Through Research, 2011 Annual Report on Research Funding in the Renewable Energies Sector” (pdf)