| Abstract |
Geothermal project development has several risky components, the most important one being the resource risk. Beyond exploration, the bankability of a geothermal project is threatened by this geological risk which includes: - The short-term risk of not finding an economically sustainable geothermal resource after drilling; - The long-term risk of the geothermal resource naturally depleting rendering its exploitation economically unprofitable. Until the first borehole has been drilled into the geothermal reservoir, developers cannot be sure about the exact parameters (temperature and flow rate) of the planned geothermal electricity or h&c project. Once drilling has taken place, in situ pump tests, temperature and hydrological measurements then reduce the resource risk and make it possible to attract external capital. Risk insurance Funds for the geological risk already exist in some European countries (France, Germany, Iceland, The Netherlands, Denmark, Flanders in Belgium and Switzerland). However, such Funds have been not existing in several countries prospective for geothermal deployment (including eg. Greece, Hungary, Poland). The geological risk is a common issue all over the world. Outside Europe, the Geothermal Development Facility (GDF) for Latin America and the Geothermal Risk Mitigation Facility (GRMF) for Africa offer some risk mitigation tools. With the notable exception of these regions, project developers have very little capability to manage this financial risk. The establishment of such risk mitigation scheme all over the world to cover the exploration phase and the first drilling (test) is key for a large development of deep geothermal. But it appears clear that a risk mitigation scheme must be designed, especially the involvement of private financers, according to the market maturity of the sector in each country and region. The diversity of existing schemes however allows to consider different type of programmes that can be implemented to best tailor to the specific risk profile of the geothermal sector according to market maturity. In the European framework of the H2020 programme, the GEORISK project, which started in October 2018 for 30 months, aims at establishing such risk insurance schemes all over Europe and in some key target third countries to cover the resource and the technical risks. The objective of this paper is to present the main project results and the methodology adopted to support the establishment of insurance schemes, and provide perspective on the establishment of such schemes in Europe and beyond. |