The technology to develop fully engineered geothermal “reservoirs” (the Enhanced Geothermal Systems) is still under development. The major challenges are the cost-effective drilling and fracturing of deep crystalline rocks, and achieving a sustained circulation of fluids at a high enough rate. Although the ultimate benefits of EGS technology are substantial, the necessary experiments for developing Enhanced Geothermal Systems are also large and expensive, requiring the drilling of boreholes 4-5000m deep at a cost of several million euros each.

Why do we need research?

• It should be clear from the foregoing that continued technological research is required before pilot plants can convincingly demonstrate the practical and economic aspects of HDR/EGS systems. Geothermal reservoirs are large and evolve slowly, so the time constant is large. Several years of successful operation will be required before the utilities could be expected to develop confidence in the systems.
  
• On the other hand, such systems are likely to be much less site-specific than conventional geothermal developments, so research and demonstration in this sector is a prime candidate for international co-operation.

What research is necessary for EGS?

Research on HDR/EGS systems is approaching the pilot plant stage. Success in these developments will greatly increase both the scale of the usable resource and the number of countries that can benefit from this large indigenous energy resource. Specifically, research and technology development is needed in the following areas:

• Development of more cost-effective drilling, stimulation and completion technologies;
  
• Improved real-time reservoir characterisation and monitoring, including high-temperature tracers;
  
• Improved numerical reservoir modelling for the design of engineered geothermal systems;
  
• Improved reservoir management techniques and more cost-effective power cycles.
  
• Implementation of HDR technologies, and co-ordination of activities, at different sites in Europe where HDR operations are underway or in preparation.

Why is EU support necessary?

Clearly, the development of EGS technology should be addressed at the European level, because the scale and demands of developing EGS technology, in terms of both finance and expertise, are too great for any one country to undertake:

• Enhanced Geothermal Systems cannot be done on a small scale; they require several full depth (3000-5000m) boreholes and hence large investments (estimated average M€5-10 per year per site). The size of experiments also implies long time constants (several weeks per test), hence testing is also expensive. Few individual countries can either afford the costs or recruit all the specialists who are needed.
  
• EGS development requires the integration of several disciplines (earth science, reservoir engineering, drilling, mechanical engineering and economics). There is only a limited number of specialists available throughout Europe, let alone on a national level.

What are the major non-technical barriers to be overcome?

In many cases, the major inhibitors to growth are non-technical issues such as lack of public awareness, an inappropriate regulatory environment, and the difficulty of competiting with conventional energy sources. Public bodies at both the national and international level can contribute to the resolution of these issues.

The overall competitiveness of geothermal energy is to a large extent determined by comparison with both conventional and other renewable energy sources. Usually the cost of energy is based upon standard economic and financial analyses. The funding of geothermal projects by the main international financing agencies is currently based on strict application of a least-cost analysis as part of their procedure for granting loans for energy projects. It should be stressed that at present in Europe, the low cost of fossil fuels, especially natural gas, makes only the best geothermal resources competitive from a strict financial comparison. Nevertheless, geothermal energy could become more competitive compared with conventional sources of energy if the comparison is not limited exclusively to strict financial criteria, but also takes account of other factors such as shadow costs and their economic consequences (so-called “externalities”).

In the specific case of EGS, the same non-technical and institution barriers as exist for conventional systems will also need to be addressed. The difference will be that, as the new technology should be applicable in many countries currently regarded as effectively non-geothermal, legislative and regulatory issues will need to be addressed in those countries also. No developer can be expected to invest capital in a resource where the regulatory questions (and even, in some cases, the ownership) remain undefined.

• What is geothermal energy?
• What are the key advantages of enhanced geothermal systems (EGS)?
• R&D supported by the European Commission