The exploration risk of geothermal projects is the biggest challenge for deep geothermal projects. In addition to existing solutions, new models are being developed and will be presented at this year’s Investment in Geothermal Conference (IGC Invest), to be held on 25-26 June 2024 in Frankfurt (Main), Germany.
A session on state and private sector solutions for risk-sharing in geothermal exploration will be part of the programme of the upcoming IGC Invest with presentations by Munich Re, the Swiss Federal Office of Energy and the French AFPG.
The realization of a geothermal project is accompanied by various risks for which comprehensive insurance solutions are available. The most significant risk is the exploration risk, which describes the possibility of deep water not being tapped in sufficient temperature or quantity. To minimize this risk, extensive preliminary studies are carried out during the exploration phase to identify underground structures in which deep water can flow.
Despite gravimetric, 2D, and possibly 3D seismic measurements, an uncertainty remains, as deep water cannot be localized at depths of several kilometers using indirect geophysical methods. Only a look into the depths, whether with cheaper slim holes or exploratory boreholes that can be used directly for operational purposes, can provide information about the water at depth, as well as the temperature, quantity and chemical composition. However, this is associated with costs of several million euros, which can be lost if deep water is not found.
This is also where the so-called discoverability insurance comes in. In Germany, there was already a state program, but there are also private sector solutions. In many European countries, state indemnity schemes cover the risk of discoverability, for example in France, Hungary and Switzerland. In addition to the private-sector solution currently available, a state-run exploration risk insurance scheme is also being intensively planned for Germany. Here, a coverage of about 90% of the risk is discussed. For geothermal utilization and the heat transition, such a state program would be a game change and facilitate the projects among the local utilities to feed there district heating grids.
The fifth edition of the IGC Invest Geothermal brings together experts, investors, and policymakers to highlight opportunities and discuss strategies for overcoming financing challenges for infrastructure energy projects. Registration for the event is still open.
The post Exploration insurance for geothermal projects to be highlighted at IGC Invest first appeared on ThinkGeoEnergy – Geothermal Energy News.