Having potential and experience Croatia needs bold step towards geothermal transition

Velika Ciglena geothermal power plant by Turboden in Croatia (source: Turboden)
Alexander Richter 30 Apr 2020

With the potential and experience in tapping geothermal resources, Croatia could see much more of interest in geothermal development, yet requires a bold step towards a geothermal energy transition in the country.

In an article shared by Dragutin Domitrovi?, project manager of construction of the first Croatian geothermal power plant, “Velika 1”, he describes the potential and the experience in Croatia and that a bold step towards a geothermal energy transition is needed.

I am happy to see in the media these days an overwhelming support for the Green Revolution and the renewed momentum of renewable energy sources: from European political leaders, through Croatian (and global) eminent businessmen and energy experts, to Croatian citizens who texted their opinions to “Otvoreno” (evening discussion program on Croatian TV) several days ago – it seems like there is hardly anyone willing to go back to the old and well-established practices of dominating fossil fuels. Perhaps a large number of our fellow citizens, both in Croatia and across the planet (which perhaps never seemed so small to us), in the frightening and enthusiastic momentum of saving themselves and the world from the virus, realized that climate change is also a kind of pandemic, but the one that kills much slower and far more thoroughly.

My happiness from the previous paragraph, however, is slightly offset by the fact that, in all praises to renewable energy sources, geothermal energy is mentioned only occasionally and seemingly shyly: it’s mostly solar, wind, hydro and biomass that is talked about. I can somehow understand this restraint towards geothermal energy on an experiential level: sun, wind and water we can all feel on our skins, so they are easy to understand; and each of us has at some point in our lives put a log into a stove, or at least saw someone doing it. Geothermal energy is not so intuitive. Hot geothermal water is miles deep in the pores and fractures of rocks deposited millions of years ago. Deep and technically demanding wells have to be drilled into these rocks to bring water to the surface. Then the water heat is used to drive turbines or to heat buildings, dryers and greenhouses, and afterwards cooled water is returned by underground pipes to reinjection wells, which return it to the same rock at the same depth from which it originally came – without anyone either seeing or experiencing this water. When to all of this one adds exploratory geological and geophysical activities which determine from surface which is the best place to drill production and injection wells… to a non-professional it all must seem very complex and exotic. So complex, by the way, that to date I have never seen a symbol that would clearly, uniquely and recognizably represent geothermia: such a symbol for wind energy is a wind turbine, sun has solar collectors, biomass is usually represented by a leaf, but geothermal energy is probably too complicated for such a simple icon. (I urge designers to refute me and come up with some ingenious graphic solution! I offer all possible technological clarifications for free.)

Exotic or not, geothermal energy is below our feet and is begging to be used. In continental Croatia, hot water is at quite accessible depths: the above-average geothermal gradient of this area means that a temperature of 150 degrees Celsius will be found at a depth of about 3000 meters, and temperatures of more than 200 degrees Celsius will be reached at slightly higher depths. In some other parts of Europe, a temperature of 150°C is found at depths greater than 5000 meters, which makes drilling geothermal wells significantly more expensive and technically demanding.

Equally important for successful exploitation of geothermal resources is the fact that the Pannonian part of Croatia, due to decades of history of oil and gas extraction, has been highly explored: in the second half of the 20th century, the then INA-Naftaplin drilled more than 4,000 exploration and development wells in that area, so regional understanding of the subsurface is very good. Therefore, the likelihood of finding favourable geothermal reservoirs is high (or, using business jargon: geological risk is low).

Just over two months ago, I referred to the information from Croatian Hydrocarbon Agency when stating that Croatia has capacity for construction of 500 MWe of geothermal power plants, but in the meantime the diligent engineering team of the Agency continued to analyze the available data from those thousands of wells I mentioned earlier. To date, they have reached the possible total power of geothermal power plants in excess of 830 MWe, which is almost two and a half times more than Croatian share in the Krško nuclear power plant! I believe that such energy capital should simply not be neglected.

If we consider those 830 MWe as a reference and compare it with the contracted power of 10 MWe continuously delivered by the first (and so far only) Croatian geothermal power plant in Ciglena near Bjelovar, the calculation will show that at this moment only a little more than 1 percent of Croatian geothermal electric capacity is utilized, while the remaining 99 percent is yet to be brought to production.

It should be noted that this does not yet cover the amount of thermal energy available for direct use in district heating, industry and agriculture. For such applications geothermal reservoirs with significantly lower temperatures, usually found at lower depths, are also acceptable. The importance of direct use of geothermal heat as a substitute for fossil fuels was recognized by the German Federal Council, the Bundesrat. At their session held on 13 March this year they discussed the draft of Coal Abandonment Act (Kohleausstiegsgesetz) and stated in conclusions of that session: “With the help of geothermal energy, greenhouse gas emissions from the grid-distributed heat supply can be significantly reduced. Additionally, there is the possibility of generating emissions-free baseload electricity.” Several measures aimed at facilitating the use of geothermal energy were proposed at the same session. In Croatia there are also many interesting locations for development of geothermal heating, and one example is the city of Karlovac, which wants to switch the supply of its existing district heating system from fuel oil to geothermal sources. That is why the city founded a company GeotermiKA Ltd. which has recently won exploration rights for “Karlovac 1” geothermal exploration area, and preparations for the project are underway.

Recent drop of oil price has been truly dramatic: benchmark crudes such as European Brent and American WTI (West Texas Intermediate) lost two thirds of their value in a few weeks, falling from around 60 USD per barrel to just 20. Dwindling consumption due to global quarantine and overfilled US crude oil storage has at one point even triggered the unprecedented effect of the negative price of WTI futures. These bad news for oil industry hide a positive effect for geothermal power companies – a significant reduction in price of various services (which are very similar in both oil and geothermal projects), including drilling and completion of wells. This will ultimately result in a reduction of initial investments into geothermal projects, and therefore their ability to supply electricity at a more favourable price.

Additional benefits for investors into geothermal projects and resulting relaxation of electricity purchase price could also be achieved by transferring the role of drilling exploration wells to the Ministry of the Environmental Protection and Energy or the Croatian Hydrocarbon Agency, using properly planned EU funds for these investments. This would be a very concrete way of putting to practice the EU aspirations for energy sustainability and autonomy, as expressed by the European Green Deal. Recent proposed amendments and modifications of Croatian Hydrocarbon Exploration and Exploitation Act (which also covers geothermal waters) indicate that legal prerequsites are created to prepare the Agency for exactly such a role. In addition, there are mechanisms to attract financing from specialized investment funds, whose purpose is not only maximizing the return on investment, but also to promote the implementation of renewable energy sources, especially geothermal energy.

Politicians are always (rightly) emphasizing the opportunities for creation of jobs, although since we have been experiencing economical downturn due to the effects of the coronavirus pandemic, the discussion has mainly concentrated on keeping the existing jobs. I would like to emphasize that geothermal projects can also help with this. Namely, almost 70 percent of the total investment made during construction of the geothermal power plant in Ciglena was realized by Croatian companies, and during year and a half of the most intensive activities on the site, several dozen workers were engaged there all the time. With the completion of the power plant and its commissioning, 10 quality jobs were created in local community. (Whoever thinks this is not a significant number of jobs has to consider it from the perspective of ten local families, who now have regular income and will not consider moving away from their homes.) Multiplying these figures by dozens of similar possible projects, the impact of geothermal investment on local and regional economy could be significant, and it would be a shame to miss the strong interest of investors which exists at this moment.

Finally, I sincerely hope that in the near future even the largest energy companies in Croatia – HEP (national electric company) and INA (national oil company) – will reach for the hot water from Croatian depths as an opportunity to expand their portfolio, each of them in their own way. HEP has already shown the willingness to enter the world of renewable energy by intensive investments into RES projects last year, so it is likely that in case of interesting opportunities they will be ready to join the initial wave of development of Croatian geothermal resources. INA, on the other hand, already has significant reserves of hot water among its current resources: some producing oil and gas fields have aquifers with temperature ranging from 120 to 190 degrees Celsius. There is also a large number of oil and gas wells which have watered out over time, so they have actually become better candidates for producing geothermal energy than hydrocarbons. Considering the long and extensive experience of INA petroleum engineers and geologists, as well as many similarities between petroleum and geothermal operations, their move towards geothermal transition should not be too dramatic.

The article was initially published for Renewable Energy Sources Croatia (OIEH)