News

Recent tender for geothermal licenses in Denmark sees increased interest by developers

Map of geothermal license areas, tender and bids (source: Danish Energy Agency)
Alexander Richter Alexander Richter 2 May 2018

With increasing interest in geothermal district heating in Denmark, a recent tender for geothermal exploration and production licenses showed competition on some of the five license areas offered.

Earlier this year on February 1, 2018, five license applications for exploration and production of  geothermal energy for district heating in the areas of Aalborg, Aarhus and Tønder in Denmark were filed.

As the map published by the Danish Energy Agency, a rather interesting situation has appeared, as interest was  bigger than anticipated.

There is competition in the Aalborg and Aarhus areas. Geothermal Operating Company (Geoop) as well as APMH Invest IV ApS, an A.P. Møller Holding A/S owned company, have applied for geothermal licenses in the same areas. Geoop is owned by E.ON, Iceland Drilling Company and Ross DK. APMH Invest IV ApS is an A.P. Møller Holding owned company. E.ON has recently sold their oil and gas business – just like Maersk Oil & Gas was sold to TOTAL.

The Danish Energy Agency has to assess the applications based on technical and financial capacity and on the work programmes offered in the applications. Recently, draft guidelines regarding technical capacity were distributed in a hearing process. The guidelines emphasize that knowledge of and expertise within geothermal energy and risk assessment and mitigation of the technical risks are key parameters when assessing technical capacity among applicants for geothermal licenses.

It is expected that the Danish Energy Agency will be ready with their recommendation to the Danish parliamentary committee on Energy and Climate around June 1, 2018.

It will be interesting to follow what happens in Denmark.

Background

The district heating network in Denmark is large – it covers approx. 65% of the households in Denmark. At the same time the geothermal potential is good and has been documented by GEUS.

Geotermisk Operatørselskab – Geothermal Operating Company (Geoop) was founded in 2016, as it was considered that there was an obvious gap in the market.

Geoop’s mission is to develop and deliver geothermal energy and heat storage as full-service turnkey solutions. Geoop wants to become equity partner (licensee/asset owner) and operator on selected geothermal licenses in Denmark and later on other European countries. Development and execution of geothermal project requires a professional industry partner who has in-depth knowledge of geothermal energy and has the subsurface and drilling subject-matter expertise to assess and mitigate the technical risks in a geothermal project. A geothermal project requires the same skills and competences as required for oil and gas projects.

In 2017 E.ON and Iceland Drilling Company went into a partnership with Geoop. E.ON’s intention behind the partnership with Geoop is to pursue the business potential in geothermal energy in a number of larger cities in Denmark. Geothermal is a green investment which matches E.ON’s other businesses. E.ON has long expertise and experience with operating 34 combined heat and power plants and 4 district heating companies which receive heat from sustainable energy sources and surplus heat.

Iceland Drilling Company is a specialized geothermal drilling contractor with experience from drilling more than 300 geothermal wells in different parts of the world.

The perfect partnership to realise the geothermal potential.

E.ON sees geothermal energy as a way to secure a low and stable heat price for the consumers and at the same time replace the consumption of black energy with green energy.

The partnership between E.ON, Iceland Drilling and Geoop is an opportunity to reduce the time-to-market for geothermal energy as a mature energy source.

It is all about technical competences, innovation and industrialization among the partners.

 

We thank Lars Andersen of Geoop on sharing this piece with us