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GEOSMART and the Gas Energy Crisis

Wed, 08 June, 2022

The EU answer to the next gas energy crisis may come through geothermal energy*

Geothermal power plants have always boasted exceptional continuity of production, but today they can play one more decisive card in breaking their dependence on gas: flexibility.

Natural gas is the main responsible factor in the energy crisis that is causing the drastic increase in European and Italian energy bills. Italy imports 96% of its natural gas and around 40% of what is consumed comes from Russia; the invasion of Ukraine has only accentuated the price escalation that had already begun in summer 2021, with the price of gas rising to €50/MWh, while the cost of electricity has reached €300/MWh.

The European Commission, through its RePowerEu communication, has begun to take corrective action, but much still needs to be done, including a revision of the European electricity market to break the link that binds it to gas price trends. There is therefore a need to design new market structures and define ad hoc incentives capable of making the most of the renewable resources available in Europe and at home. From this point of view, geothermal energy can offer a particularly valuable contribution to the elimination of gas dependency, as explained by the European research project GEOSMART, in which the Consortium for the Development of Geothermal Areas (CoSviG) participates together with 18 other partners scattered across Europe and coordinated by the British TWI Ltd.

Among these, geothermal energy is able to play a decisive role due to its unique characteristics in terms of continuity, stability of supply and flexibility of production, which make it an outstanding candidate to replace gas-fired power plants. It has long been known that the capacity factor of geothermal power plants is the highest of any power plant, as the percentage of energy that is produced compared to the maximum amount that can be produced is very high. This factor makes geothermal energy very reliable for covering the so-called baseload demand - the minimum or baseload level of electricity required by the market - without emitting climate-changing gases. In addition, all possible ways to utilise geothermal energy with the necessary flexibility in the electricity market are being explored at GEOSMART, e.g. by diverting geothermal heat into district heating/cooling networks via combined heat and power plants, or by using the ground for underground thermal energy storage. The technologies are already available and there are no technical limitations to the flexibility of geothermal power plants in the electricity market.

The obstacles are mainly economic (geothermal power plants have yet to reach full market maturity in most of Europe) and regulatory. In other words, the technical advantages that geothermal power plants can provide must be reflected in the price at which the energy they produce can be sold.

To fully exploit geothermal energy and break away from gas dependency, the rules of the European electricity market must first be adjusted. The GEOSMART project suggests in particular to: align the capacity remuneration mechanisms (CRM) with the European Renewable Energy Directive (RED); promote cost indicators that can highlight the value of flexibility and production reliability over the entire lifecycle of plants, as the LCOE fails to do to date; introduce appropriate mining risk mitigation schemes in the geothermal field, so as to spread the development of power plants impose strict requirements so that neither the EU nor member states can support fossil fuel projects, especially if renewable alternatives such as geothermal are available; looking beyond the perimeter of the electricity market, define an appropriate legislative package to prevent future gas price crises.

In conclusion, the European Union must make every effort to build a decarbonised internal market, both for electricity and heat for heating/cooling, and Italy can make a valid contribution in this sense, as it has always been the European Union's leading geothermal power.


*This article was originally published in Italian by CoSviG, the Consortium for the Development of Geothermal Areas in Italy. You can see the original article here.


The GEOSMART project has received funding from the European Union's Horizon 2020 research and innovation programme. Grant agreement 818576.

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