New report estimates 4,000 MW installed capacity for Europe by 2016
A new report estimates the European Geothermal Energy Market to reach close to 4,000MW in 2016 once drilling costs are reduced and become more independent of the oil and gas industries.
A new study released by Frost & Sullivan, “finds that the European Geothermal Energy Market reached installed capacity of 1,558MW in 2009 and estimates this to reach close to 4,000MW in 2016 once drilling costs are reduced and become more independent of the oil and gas industries. Growth rates are expected to pick up in the next few years, with a CAGR of 13% between 2010-2016, with established countries such as Italy and Iceland continuing to invest in geothermal power and new countries such as Germany and France exploring their opportunities.”
Personally I would feel this numbers to be very optimistic and would have expected the growth to be slower. The projects, e.g. in Germany, are individually very small and will in summary not reach very high numbers in the next 5-6 years.
The release note continues saying that “The European geothermal energy market emerged relatively unscathed from the financial crisis compared to other renewable energy sources, and today the largest European markets for geothermal energy are: Italy, Iceland, Turkey, Germany and France, followed by Portugal, Austria, Spain, Hungary and the UK. While for some countries like Iceland, geothermal is the main electric power or energy resource, for others including Italy, Turkey and Germany, it will complement other energy sources.
“Recession has slowed-down and will slow-down the sector until the end of 2010, but this market has not been as hard hit as other renewable energy sectors such as wind and solar. Continued government support will bolster growth rates, while falling costs due to economies of scale in countries like Italy and Iceland will eventually eliminate high initial investment costs,” says Frost & Sullivan Industry Analyst Gouri Kumar, who has just published a study on this market. “Established countries will continue to invest in geothermal power and new countries such as Germany and France will explore opportunities. This will lower initial capital costs and attract drilling and other companies to invest in the sector.”
Improved information regarding resources in emerging markets will allow more companies to enter the industry, especially those with multiple synergies with the geothermal industry such as oil and gas (O&G) service companies. Drilling companies in the O&G sector have diversification opportunities in the drilling and exploration phase of geothermal energy projects. There are also a number of techniques and expertise that can be transferred from O&G to geothermal and therefore better co-operation between the sectors is necessary.
As with other renewable energy sources, individual countries and Europe as a whole need a geothermal electricity target to spur governments to achieve them. The growth in new technologies must be complemented with government support. “As suggested by some market participants, clustering of wells leading to bigger power plants will help reduce costs and thus make geothermal power a more competitive source both with conventional and other renewable energy sources,” concludes Gouri Kumar.
“As in most electricity markets, grid is key. Countries need to research, invest and build new grid infrastructure to accommodate higher loads. Large scale investment should be earmarked for infrastructure, drilling and resource exploration. Society and investors should be educated about the benefits of geothermal energy.”
Source: Release by Frost & Sullivan via Earthtimes