Hungary introduces geothermal project de-risking scheme
Hungary introduces de-risking scheme for deep geothermal projects to help support geothermal development in the country.
Geothermal energy is one of the least exploited renewable energy sources in Hungary, but its broader use has a key role in achieving the 2050 climate neutrality goals of the country, so an article by the GeoRisk project yesterday. Now though, Hungary becomes the 7th country in Europe to introduce a de-risking scheme for deep geothermal projects.
To foster geothermal project development, on June 8, 2021 the Hungarian Ministry of Innovation and Technology announced a Call for tender to support geothermal heating projects through covering the handling the geological risks of the first wells. With this special call Hungary joined France, Germany, Netherlands, Switzerland, Iceland and Turkey in establishing such a state-supported insurance scheme for geothermal. This has been achieved also thanks to the work done within the EU-funded GEORISK project.
In his press release, State Secretary of Energy Attila Steiner emphasized that “building on Hungary’s favourable natural assets, geothermal energy is a real option to substitute fossil fuels and as such, it perfectly fits the mid-term goals of the Energy Strategy to establish a secure, climate-friendly and innovative energy sector by 2030.”
As sustainable use of the abundant geothermal resources is a key issue in Hungary, especially regarding the low number of reinjection wells, the Call is supporting only projects with reinjection, i.e. drilling of doublets, or drilling only reinjection wells to complete already existing systems. The target depth is 1,000-2,500 m below the surface.
The total budget is HUF 6 billion (around EUR 16.6 million). The Call is open until December 31, 2021 and the application is continuous. Individual projects may range between HUF 100 million to HUF 2 billion (between around EUR 278,000 and EUR 5.7 million). Eligible costs are related to drilling and testing. The reimbursement happens after the well tests are performed. The rate of success is determined by comparing actual flow rates and temperatures to those values pre-defined in the feasibility study submitted in the application. The reimbursement rate is 30% in case of success, 40% in case of partial success and 60% in case of unsuccessful projects.
We also reported on a new interactive map tool to explore potential spots for geothermal development in Hungary earlier this year.
Call text and supporting documents are available in the home page of the Mining and Geological Survey of Hungary, which is the designated programme operator.
Hungary has been covered in various stories and has some fantastic examples on geothermal energy use, such as in the city of Veresgyhaz.
Source: GeoRisk Project Website