| Abstract |
Similarly to other types of renewable energy geothermal also faces with low density of energy and relatively high cost of investment. Thus profitability of projects aiming at using renewables is mostly insufficient for commercial financing. In order to fulfill the goal for extension renewables and reducing emission of greenhouse gases governments, at least in Europe, need to provide financial support either in the form of contribution to the costs of investments either ensuring feed-in-tariffs for renewable energy producers. Spending taxpayers’ money for subsidies will work as long as the social acceptance of renewable energies is high. Obviously, it will not last forever. Actors of renewable industry need to be prepared for the time when state funds dry up. After 2020, according to some non public news, the Hungarian government intends to drastically reduce subsidies for renewables. The main user of geothermal energy in Hungary is, behind agriculture, the district heating. In the last 8-10 years, thanked to supports, about one and a half dozens of new geothermal district heating systems were built in the country. By examining cost structure of some of these new projects it shows that a significant proportion of the investment costs were spent for the transmission and distribution network of geothermal heat. These investment elements proved avoidless if existing district heating network had not been operated before. Due to the lack of heat supply infrastructure geothermal developments thus faced with additional expenses. Such infrastructure type elements can be recognized in almost every geothermal projects, and the financial share reached, in some cases, up to half of the total investment costs. This is a serious competitive disadvantage for geothermal energy, which, furthermore, does not occur with the other forms of renewable energy sources. If such non-geothermal-related costs are detached from the budget for renewables and financed by a separate source, uncommon opportunities will expand for geothermal energy, and dependence on state aid will also be abolished. |