GEOFAR is a project that wants to overcome financial barriers in geothermal energy projects by providing tailored financial schemes for early phases in deep geothermal projects, from exploration to deep drilling.

1. GEOFAR
Geothermal Finance
and Awareness in
European Regions
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 1

2. GEOFAR - Overview
Project summary
GEOFAR will support the fostering of the deep geothermal sector
across Europe by providing new financing and funding schemes and
raise awareness among the target group
GEOFAR aims to
– reduce financial barriers hindering the initial stages of geothermal
energy projects
– raise awareness of industrial geothermal applications
– improve the know-how and awareness on geothermal energy among
regional decision makers
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 2

3. GEOFAR - Overview
Project summary
Outputs and results:
– A set of new financing schemes
– Financial institutions checking due dilligence of the proposed financial
scheme
– Involvement of financial experts
– Awareness seminars in key countries for raising awareness of regional
stakeholders
– Documentary film on geothermal energy
– Stimulating investment in geothermal energy
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 3

4. GEOFAR - Overview
Situation of geothermal energy
A renewable energy source with extremely high potential.
One important building block towards sustainable use of energy.
Multiple usage: electricity generation, heating & cooling, desalination
and process heat.
Limited exploitation of deep geothermal energy fields.
Technology for the exploitation of geothermal energy is proven.
Lack of exploitation mainly due to non-technical barriers during the
early stages of geothermal energy projects:
– Inappropriate funding schemes
– Inappropriate legal frameworks
– Ignorance of local decision makers regarding the potential of geothermal energy
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 4

5. GEOFAR - Overview
Vision
Combating and overcoming non-technical / financial barriers via
– developing and proposing appropriate and innovative financing and
funding schemes
Boosting the exploitation of geothermal energy via
– promoting (industrial) geothermal applications, and
– raising the awareness / knowhow among local and regional decision
makers.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 5

6. GEOFAR - Overview
Objectives
GEOFAR aims to
reduce financial barriers hindering the initial stages of geothermal
energy projects through the development and proposal of
appropriate financing and funding schemes.
promote and raise the awareness of emerging (industrial)
geothermal applications. The awareness raising activities are mainly
directed towards local and regional decision makers and other
potential stakeholders.
improve the know-how and awareness among regional decision
makers by exchanging experience and know-how among the target
group.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 6

7. GEOFAR - Overview
Main steps
Identify and describe the non-technical barriers in selected countries
Describe and present existing and emerging industrial applications
suitable to increase the profitability of geothermal power plants
Develop (new) appropriate and tailored financing and funding
schemes
Discuss and validate funding schemes with experts
Outline constitutive elements for the modification of existing and/or
new dedicated EC Directives or communications.
Disseminate industrial applications and financial schemes
to key stakeholders
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 7

8. GEOFAR - Overview
Geographical coverage
Geographical coverage: Germany, France, Greece, Spain, Portugal,
Bulgaria, Slovakia, Hungary
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 8

9. GEOFAR - Overview
Expected Result
Direct outcome
Financial scheme – validated by experts – and checked for due dilligence
by financial institutions
Reports and fact sheets
Non-technical barriers and the respective situation of the geothermal energy
sector in selected countries - Report
Case studies for selected operations - Report
Innovative geothermal technologies - Factsheet
Financial instruments for the support for the exploitation of geothermal
energy - Report
Emerging financing scheme for fostering investment in the Geothermal
Energy sector - Report
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 9

10. GEOFAR - Overview
Dissemination
Media
GEOFAR-Website www.geofar.eu
Documentary Film on geothermal energy
Dissemination
5 Awareness Seminars in target countries
1 Europe-wide large-scale Conference
10 Newsletters available under www.geofar.eu
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 10

11. GEOFAR - Overview
Partners
BRGM, France
Energo Group, Greece
Erlangen AG, Germany
IENE, Greece
IGME, Greece
IGME, Spain
Rödl & Partner, Germany
ARENA, Portugal
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 11

12. GEOFAR - Analysis
Analysis
The GEOFAR consortium analysed
– the respective situation of the geothermal energy sector concerning
direct use of geothermal water and electricity production and non-
technical barriers for the target countries Germany, France, Greece,
Spain, Portugal, Slovakia, Bulgaria and Hungary.
– Output: Non-technical barriers and the respective situation of the geothermal
energy sector in selected countries - Report
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 12

13. GEOFAR - Analysis
Main non-technical barriers in geothermal
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 13

14. GEOFAR - Analysis
Main non-technical barriers in the target countries
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 14

15. GEOFAR - Analysis
Non-technical barriers - Conclusion
The development of geothermal energy ranges from one country to
another. This historical development and the current trend are
naturally linked to the available resources, but there are other
reasons that boost or hinder development of deep geothermal
energy.
The main identified barrier is the geological risk of the non discovery
of the resources in adequacy of the expectation of the project:
money has to be spent meanwhile success of the project has not
been proven.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 15

16. GEOFAR - Analysis
Non-technical barriers - Conclusion
Globally, the current approach for the decision to launch or not a
geothermal energy project is mainly economic and financial.
Developing a European financial support instrument could lead to a
multiplication of operation, the mutualisation of competences and
knowledge could have a positive impact at different level: Facilitating
insurance proposal, raising awareness among financial institutions
that work at European level, decreasing drilling costs…
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 16

17. GEOFAR - Analysis
Analysis
The GEOFAR consortium analysed
– 40 case studies from Germany, France, Portugal, Spain, Greece,
Hungary, Slovakia and Bulgaria to give an overview on geothermal
projects in order to raise the target groups´ awareness on what is
possible and on how projects can be realised.
– Output: Case studies for selected operations - Report
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 17

18. GEOFAR - Analysis
Overview on selected geothermal projects
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 18

19. GEOFAR - Analysis
Case studies - Conclusion
The diversity of geothermal operations across Europe is due to the
needs and depends on the geothermal resources available. The
resources available and their properties play a major role on the
investment costs of the project.
New projects are currently being developed all across Europe. This
is indispensable to meet target concerning development of
geothermal energy, expected to take part in the future energy mix.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 19

20. GEOFAR - Analysis
Analysis
The GEOFAR consortium analysed
- innovative geothermal application to underline the multiple possibilities
of use of geothermal energy and the potential and emerging
technologies that could in the future boost the development of
geothermal energy to meet the set targets.
- Output: Innovative geothermal technologies - Factsheet
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 20

21. GEOFAR - Analysis
Innovative geothermal applications
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 21

22. GEOFAR - Analysis
Innovative geothermal applications - Conclusion
Innovative geothermal applications improve the energetic and
economic profitability within the objective to develop new environment
friendly solutions.
All these new developments are ways to exploite the great potential of
development of deep geothermal energy.
The co-use of geothermal energy for the traditional electricity
production and heating and cooling as well as for innovative
applications will boost the profitability of geothermal energy
exploitation and higher profitability will trigger new investments in
geothermal energy and reduce the costs per unit.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 22

23. GEOFAR - Analysis
Analysis
The GEOFAR consortium analysed
- 44 financial instruments from national, European and international level
on their potential to overcome the main financial barriers.
- Output: Financial instruments for the support for the exploitation of geothermal
energy - Report
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 23

24. GEOFAR - Analysis
Overcoming financial barriers
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 24

25. GEOFAR - Analysis
Strength/weaknesses of financial instruments
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 25

26. GEOFAR - Analysis
Project stages tackled by financing instruments
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 26

27. GEOFAR - Analysis
Differences in tax reductions/excemptions
l
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 27

28. GEOFAR - Analysis
Feed in tariff – most common financial instrument
Feed-in Tariffs in Target Countries (c€/kWh)
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Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 28

29. GEOFAR - Analysis
Financial Instruments - Conclusion
Across Europe a lack of harmonisation in financial instruments is
visible and a European support environment is not given.
The development of geothermal financial instruments at the
European level can overcome this lack.
A European solution has to solve two main aspects: the lack of
financing for the exploration phase and the risk of an inappropriate
quality or quantity of the geothermal resource.
The GEOFAR project has worked out an appropriate funding
scheme (“GeoRIMI”) that will be installed as European solution for
supporting geothermal energy projects.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 29

30. GEOFAR - Analysis
Outputs
Reports and fact sheets
Non-technical barriers and the respective situation of the geothermal energy
sector in selected countries - Report
Case studies for selected operations - Report
Innovative geothermal technologies - Factsheet
Financial instruments for the support for the exploitation of geothermal
energy - Report
All reports can be downloaded under www.geofar.eu
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 30

31. GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)
GeoRiMi will follow the hereafter mentioned principles
- Support for geothermal investment focuses on the exploratory
stage and the drilling stage.
- Private investors must provide a significant part of the total
investment in both the exploratory and the drilling stage.
- Publicly-funded support to be limited in time and total amount.
- Publicly-funded support to be provided to cover exploration and
drilling risk only.
- For all other purposes publicly-funded support uses the normal
business-financing conduits.
- Regional and local public authorities must be supported in their
efforts to understand and develop geothermal resources in their
jurisdiction.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 31

32. GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)
The proposed GEOFAR Financial Scheme “GeoRiMi” will cover
three instruments tackling different project stages and beneficiaries
- Instrument I proposes co-financing prefeasibility studies to be
commissioned exclusively by regional and local authorities in areas with
geothermal potential in which public awareness of that potential is
inadequate.
- Instrument II proposes extending partial guarantees to the exploratory
stage of qualified geothermal energy projects.
- Instrument III proposes extending partial guarantees to the production-
drilling stage of qualified geothermal energy sources.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 32

33. GEOFAR - GERIMI
Geothermal Risk Mitigation (GeoRiMi)
Steps to go for the implementation of GeoRiMi
- Reality check with national and international financial institutions
- Due diligence of GeoRiMi
- Preparation of an EU-framework for embedding GeoRiMi
- Planned finalisation: February 2011
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 33

34. GEOFAR
Contact
Erlangen AG
Marco Wendel
Henkestraße 91
91052 Erlangen
Germany
Tel: 0049 – 9131 – 530 280 1
Fax: 0049 – 9131 – 530 13 92
E-Mail: m.wendel@erlangen-ag.de The sole responsibility for the content of this presentation
lies with the authors. It does not necessarily reflect the
opinion of the European Communities. The European
Commission is not responsible for any use that may be
made of the information contained therein.
Contract Number: IEE/07/668/SI2.499707 Project Duration: 09/2008 - 02/2011 Updated: 31.03.2010 Page 34