Published October 31, 2014
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Manual for implementing sustainable support schemes for GEODH
Description
- Support schemes are crucial tools of public policy for geothermal to compensate for market failures and to allow the technology to progress along its learning curve. By definition, they are temporary and shall be phased out as this technology reaches full competitiveness;
- Geothermal heat technologies are heading for competitiveness, but support is still needed in certain cases. Financial support schemes should be adapted to the level of maturity of markets, notably in emerging markets and where a level-playing field does not exist.
- Innovative financing mechanisms should be adapted to the specificities and the maturity of geothermal technologies;
- In addition, there is a need for an in-depth analysis of the heat sector, including about the best practises to promote geothermal heat, the synergies between energy efficiency and renewable heating and cooling, and barriers to competition.
- A Geothermal Risk Insurance Fund is seen as an appealing public support measure for overcoming the geological risk. As costs decrease and markets develop, the private sector will be able to manage project risks with, for example, private insurance schemes, and attract private funding;
- Innovative support schemes have to be developed on the regional level too. Based on a better knowledge of the local ecosystem, such support schemes respond more quickly and effectively to the regional environmental targets;
- Whatever the support scheme, it has to be set up on a long-term basis to offer enough visibility to GeoDH project developers;
- Alternatives to public investment have to be found; the development of third party financing is essential. To reach this aim, it is important to increase the communication about the profitability of GeoDH projects in order to encourage private investment.
Notes
GeoDH - IEE
Files
4-1-Report-on-support-schemes-for-GeoDH.pdf
Files
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