NER300: New milestone for European EGS or wasted opportunity?

This week in Brussels met European Technology Platform GEOELEC and Geothermal Panel (RHC-Platform) Meetings, alongside with EGEC – EUROPEAN GEOTHERMAL ENERGY COUNCIL Annual General Meeting. In addition to a standard content like elections of EGEC representatives, activities review or appeals to the governments to review the National Renewable Energy Action Plans to make sure an adequate representation of geothermal energy is included there was a specific, long term awaited topic – NER300.

NER300 – officially: EU member states agreed how to allocate billions worth of EU money from the bloc's emissions trading scheme (EU ETS) to support renewable energies and emerging technology to capture carbon dioxide and store it underground. They decided on how to use first 300 million emission allowances from the scheme's to finance projects in renewables and CCS (Carbon Capture and Storage). Billions in EU funding allocated to the development of clean technologies. Great vision for 34 RES projects including 9 Bio-energy, 6 Wind and - 4 Enhanced Geothermal Systems projects. More detail you can find here.Till now everything sounds great. But…

The representatives of the Commission presented within Geoelec meeting instrument NER300 to finance geothermal projects. Not yet commercially available new technologies means considerable risk. But NER300 refunds the project only if it meets the set target 5MW for EGS power plant. So where is a risk for them? What is a difference to a bank loan? When the target is not reached, you pay the whole project from your own pocket.

After a controversial debate a majority of Geoelec members expressed their opinion that this "green" call is not applicable for the real EGS project and several unjustified preconditions indicate it was written for "special conditions". To make a 5 MW EGS power plant with available technologies is quite challenging project – problems of deep drilling, reservoir management etc.

Striking is that the DG Research wants to use millions € of taxpayers without discussion with relevant experts from the segment. For questions about technical parameters and conditions the final answer was "take it or leave it". Until now I was thinking something similar can happen only at the local level. In contrast to the U.S.A. there are very limited public sources for geothermal technology funding in the Europe. There is a legitimate concern that in several years the Europe will be behind the top state-of-the-art. A hope is that the NER300 support scheme will move the EGS projects forward to make geothermal energy more visible and preferred.