The partners STRABAG SE subsidiary Ilbau Liegenschaftsverwaltung in Germany and Vienna, Austria based RAG Crude Oil Investors, have acquired the full ownership in equal parts of Geoenergy Bayernprojekt Garching an der Alz .
The purchase agreement with the previous owner Geoenergie Bayern Verwaltungs has been approved by the competition authority.
The partners founded Silenos Energy to act as the developer to carry out the geothermal energy project in the Bavarian municipality of Garching an der Alz.
The aim of the project is to tap into the geothermal resources of the south eastern Molasse Basin of the pre-Alps area in Bavaria.
The first phase of the 33-month project will commence by the end of this year. The plan is to develop a geothermal plant with an installed power generation capacity of 3.5MWe and 6.2MWth for heat production. When operational, it is expected that the plant provides up to 26GWh of electricity and 20GWh of heat per year.
High feed-in-tariff attractive for investors
While Germany’s low temperature geothermal resources are not as impressive as the high temperature resources found in Italy, Turkey and Latin America, the high feed-in-tariff of about €0.25/kWh (approximately $0.275/kWh) until the end of 2020 certainly is.
The feed-in-tariff, guaranteed for 20 years from the start of energy production, makes the region very attractive for investors.
Added to which, the stable political conditions and a tremendously large reservoir of low mineralised thermal water, are huge plusses for investors wanting to harness the geothermal potential in the Bavarian Molasse Basin.
Italian energy giant Enel entered the market in Germany one year ago with the Weilheim project.
The next few months are going to be exciting. Additional projects in the region are ready to drill, offering interesting opportunities.
Geothermal development in Europe
According to the European Geothermal Energy Council (EGEC), over the last five years (2012-2016), the use of geothermal energy, particularly for heat, has slowly but steadily increased across Europe.
Today, Europe has more than 100 geothermal power plants, with an installed capacity of approximately 2.5GWe in 2016, producing some 15TWh of electrical power annually.
The report predicts that the region’s installed capacity will grow to around 3GWe in 2020, with this major increase linked to the rapid growth of the Turkish market.
District heating and cooling is a success story for geothermal in Europe, and it looks set to see rapid and dynamic expansion in the future, says the report.
Between 2012 and 2016, 51 new plants have entered into operation representing an average annual growth of 10%. The total installed capacity in Europe is currently 4.9GWth with the main markets for future years being France, Netherlands, Germany, and Hungary.
“While geothermal energy is on its way to becoming a key player in Europe, there is a need for long-term financial and regulatory stability”, said EGEC President Ruggero Bertani.
“The EU legislative proposals currently on the table in Brussels do not provide sufficiently strong incentives to increase the share of the most efficient renewable heating and cooling technologies and to develop the next generation of flexible renewable electricity,” he added.