A recent report by the Joint Research Centre, the European Commission’s in-house science service, analyses the geothermal energy sector in the EU and assesses the status of technology, ongoing developments, related policies and markets [Sigfusson and Uihlein 2015]. This article presents some key findings from the report.

Geothermal energy is a renewable source of energy that can provide constant power and heat. Geothermal resources have been used by mankind in some form for thousands of years. Depending on the temperature of the resource, it may be used for power production, supply of heat or a combination of both. Geothermal energy is derived from the thermal energy generated and stored in the interior of the earth. This energy is accessible, as groundwater transfers the heat from rocks to the surface either through boreholes or natural cracks and faults.

The geographical distribution of heat within the Earth's crust is highly variable. The highest heat gradients are observed in areas associated with active tectonic plate boundaries and volcanism. The geologic potential (heat in place) for geothermal power in Europe and the world is very large and exceeds the current electricity demand in many countries. However, only a small portion of the heat in place can be realistically extracted due to technical and economic barriers.

The geothermal sector relies on diverse technologies that need to be adapted to the resource depth and temperature as well as to water availability at any given location. So far, no general consensus has been agreed on how to classify geothermal heat sources and production. The JRC report followed the classification which has been adopted by Eurostat and national statistics offices: power generation; direct use; and ground source heat pumps.

The three types of geothermal energy use differ in terms of available resources; while heat from shallow depths is available almost everywhere, hydrothermal resources are limited in Europe (Table 1). The technologies applied in the different sectors are of variable maturity and may therefore need different forms of public financial support to reach the state needed for further commercial deployment. For all three types, research, development & demonstration (RD&D) should focus on developments that allow cost reductions and increases in efficiency (e.g. drilling costs and design optimisations).

Table 1 Overview of technology status, current RD&D focus and development areas

	Power generation	Direct use	Ground source heat pumps
Resource	Limited size of hydrothermal resources, large scale deployment requires engineered geothermal systems (EGS)	Widespread resource available at economic drilling depths	Heat from shallow depths, available almost everywhere
Technology status	Proven technology (dry, flash, binary), pilot projects (EGS)	Proven technology, use of conventional equipment	Proven technology
Main RD&D focus	Lowering costs for drilling and heat exchangers	Improved economics of direct use projects	Further increase efficiency and reduce costs
Development areas	Cost reduction of injection and production wells Increase efficiency (improve heat transfer, mechanical efficiencies) Scaling-up of EGS demonstrations Control deep-rooted fractures (exceeding 5 km) in order to create a large area for heat transfer and ensure sufficient mass flow between wells and minimise the risk of induced seismicity	Extend lifetime of doublet design projects by drilling a third production well (triplet system) Smaller systems with shallower resources, used in combination with large heat pump systems Low-medium temperature resources used in combined heat and power applications (binary cycle and subsequent direct use)	Ease of maintenance and repair Improve control systems More efficient working fluids Increased efficiency of auxiliaries (e.g. pumps, fans) Improve ground collectors (e.g. optimisation of design, grouting material) New antifreeze fluids (environment, thermal characteristics)
Recommendations	Demonstrate EGS technology under different geological conditions (proof of concept)	Integration of old buildings being refurbished into district heating networks (short term) Integrated local/regional approaches (reduce cost, increase security of supply)	Optimise all components of borehole heat exchangers (especially pipe materials & thermal transfer fluids

In general, the leading markets for geothermal energy are America, Europe and Asia. On the global and European geothermal energy market, the installed capacity of ground source heat pumps is greatest (about 33.1 GW), followed by direct use (about 15.3 GW) and power generation (about 10.7 GW). Some countries have significant shares for ground source heat pumps (GSHP) while in others power generation dominates. The highest total installed capacity of geothermal energy is in the United States, followed by China, and Sweden. The top 10 countries account for about 75% of total installed capacity worldwide.

The installed GSHP capacity in the EU has reached about 14.9 GW with the main markets being Sweden, Germany, France, and Austria. The number of installed units increased by about 6% in 2011-2012. The EU GSHP market has been shrinking in recent years because the market is very much dependent on the new building market. As the construction sector continues to shrink and fewer houses are being built, fewer GSHP units are sold [Observ'ER 2013]. However, the market is expected to recover over the next few years.

The installed capacity for direct use of geothermal energy for heat in the European Union was about 3.0 GW in 2012, with the highest direct use in Italy, Hungary, and France. Direct use increased by almost 25% between 2011 and 2012. However, an improved methodology to calculate direct use was introduced between 2011 and 2012, which leads to higher capacity, especially for therapeutic baths in Italy. The main direct uses in the EU are heating networks (about 50%) and therapeutic baths (about 20%). Geothermal district heating currently accounts for about 0.5 % of the total district heating market [Euroheat 2014].

The installed capacity of the 51 power plants in operation in the EU is about 0.95 GW. In 2013, new plants were added in Germany (16 MW), Italy (1 MW), and Romania. Production of electricity in the EU reached about 5.4 TWh in 2012 [Eurostat 2014] and electricity production from geothermal energy in the EU has been relatively stable over the past ten years. In 2012, geothermal energy provided about 0.2% of the total final electricity demand (about 2800 TWh) and 0.9 % of the electricity generated by renewable sources (about 660 TWh) in the EU.

Power production in 2012 (TWh)	Potential power production in 2050 (TWh)
Source: EGEC 2013, Eurostat 2014	Based on data from van Wees et al 2013

The geothermal industry is small with few companies active in the supply chain. The activities in the power and direct use sectors range from exploration, drilling and engineering, to construction and plant operation. One strategy pursued is vertical integration. Most of the integrated companies play a major role in the geothermal sector of a certain region or country and are now aiming to expand their footprint globally. Other companies in the geothermal sector offer highly specialised services such as drilling, geothermal engineering, or act as suppliers of specific plant components.

The European GSHP market has developed from a market with many small local companies to a market dominated by major heating and air-conditioning manufacturers. The manufacturers' countries of origin very much mirror the main GSHP markets, with many big producers coming from Germany and Sweden. Asian manufacturers, which have been focussing on air/air heat pumps and air conditioning in the past, are now more active on the European GSHP market.

There are several EU directives affecting the geothermal sector, the most important one being Directive 2009/28/EC on the promotion of the use of energy from renewable sources adopted on 23 April 2009 [EU 2009]. This Directive introduces National Renewable Energy Action Plans (NREAP) that each Member State must adopt. These lay out how the Member State will achieve the mandatory 20% of energy from renewables target by 2020. NREAP include the use of geothermal for power production as well as heating and cooling and 19 Member States have adopted one or more geothermal categories into their NREAP.

In 2012, the installation of geothermal power plants and heat production from GSHP exceeded EU NREAP targets for the year (Table 1). However the results fell slightly short of EU targets for direct heat production. The JRC analysis shows that the situation varies by country and for each type of geothermal energy. Some countries have already reached their 2020 targets (especially for GSHP), while others have yet to reach their 2012 targets and some have yet to initiate geothermal power production, even though they have set targets.

Table 2 Geothermal power capacity and heat production in the EU-28 in 2012 and NREAP targets in 2012 and 2020

Type	Unit	2012 reported values1)	2012 targets	2020 targets
Shallow geothermal (mainly GSHP)	Heat production (GWth)	27080	18946	49340
Direct use	Heat production (GWth)	9404	10440	30589
Power generation	Installed capacity (MWe)	876	787	1612
1) Source: [Antics et al. 2013]

For power generation, the 2020 NREAP targets are far below the projected economic potential of 2050 [van Wees et al 2013]. Currently Italy (2.6 %), Iceland (1.4 %) and Portugal (0.25 %) are the only countries where power production is above 0.1% of projected 2050 economic potential. Only 12 countries have included geothermal power production in their 2020 NREAPs. However, although geothermal power production is currently not economically feasible in many Member States, in the long term, geothermal power production may be considered a viable option provided technological bottlenecks are overcome and EGS technology is proven to be commercially successful.

Currently, the market share of geothermal energy in Europe is still small. Large scale deployment of geothermal power production requires the demonstration of successful EGS projects and a reduction of drilling costs. The most important market push instrument for geothermal power production would be the implementation of a European geothermal risk insurance to ease investments in geothermal electricity projects.

The future deployment of shallow geothermal energy and direct-use resources for district heating is very much linked to the recovery of the building sector. During refurbishment, heating and cooling systems of existing buildings should be integrated into district heating and developers of new buildings and infrastructures should be made aware of the flexibility and benefits of geothermal resources.

For more information and references:

https://setis.ec.europa.eu/publications/jrc-setis-reports/2014-jrc-geothermal-energy-status-report