| Title | New State aid rules and market design in the European Union: What impact on geothermal electricity projects? |
|---|---|
| Authors | Angelino, L |
| Year | 2016 |
| Conference | European Geothermal Congress |
| Keywords | State aid, markets, support schemes, electricity, business models, ancillary services, flexibility |
| Abstract | This paper presents a number of exogenous factors which can influence the development of new geothermal power projects in the European Union (EU), including in terms of business model. The revised European Union’s State aid rules are drastically changing operating aid for renewable electricity. While the shift from feed-in tariffs to premiums is by now a reality, the obligation for geothermal power operators to participate in the market will be inevitable even in countries which have hitherto chosen a softer transition. Meanwhile, geothermal power technology is ready to adapt to the new electricity system, revolutionised by a significant penetration of fluctuating electricity generation from solar photovoltaic (PV) and wind. New binary technology can be flexible and provide ancillary services products. But this will be possible at a large extent only if tailor-made support continues to be provided for at least the next decade and electricity markets are deeply reformed to adapt to the new reality. The author finds that it is very likely that the above factors will affect business models of geothermal power operators. However, any detailed forecast maybe be premature. Future business models will depend on the regulatory evolution in different countries, on the size and nature of the economic actors involved as well as on future technological developments. |