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Geothermal energy has a long tradition in human history, from thermal baths to heating and power generation. It represents an important resource of renewable energy.

Geothermal heating plants can come in a variety of types depending on the geological conditions, availability of geothermal water and the needed supply temperatures in the heating system. Depending on the configurations and available resources, geothermal water can be used directly if at sufficiently high temperatures, using heat exchangers. Alternatively, heat pumps can be utilized to raise the temperatures to the needed levels. If geothermal water is not available, other mechanisms can be used to exploit available energy from underground with or without heat pumps.

Source: Geothermal Technologies Office - Community Geothermal Heating and Cooling Design and Deployment. 1) Inside the energy station, heat is transferred to or from closed ground loops using heat pumps or heat exchangers. 2) Closed loop geothermal systems circulate fluid through tubing buried in the ground or underwater (or water from a river). 3) In the winter, the energy station pumps hot water through pipes to heat buildings in the district system, and the cooled water returns to the energy station for reheating; In the summer the energy station pumps cold water through pipes to cool buildings on the district system, and the warmed water returns to the energy station for freecooling. 4) Geothermal district-scale systems can provide heating and cooling to residential, commercial, and community buildings. 5) The pipes are about the depth of an average natural gas system.

The drilling works represent the majority of the costs of these systems so the depth at which energy sources are available will have a significant impact on the viability of the exploitation of geothermal energy.

Geothermal energy has a strong potential to be used in a cascading way from power generation at high temperatures to heating, healthcare, pools and greenhouses as the temperatures are reduced. In case higher temperatures are available, it is recommended to use geothermal energy for both power and heat production. For heating purposes, temperatures that are up to 100°C are used, either directly or with help of a heat pump.

Geothermal resources vary widely from one location to another, depending on the temperature and depth of the resource, the rock chemistry and the abundance of groundwater.

Ground temperature and hydrogeological conditions are key parameters for many engineering applications, such as the design of building basements and underground spaces and the assessment of shallow geothermal energy potential.

The scalability and profitability of geothermal projects is now being reassessed with the advance of hydrocarbon industry technology. Horizontal drilling or HPHT (High Pressure and High Temperature technology) is one such example, as it can be used to drill deeper, and access hotter geothermal fluids. This would make previously ignored locations, geothermally accessible and worthy of investment. Also, our geological understanding in several areas has increased, ironically brought on by the shale boom, a facet of the hydrocarbon industry that has been historically controversial. It may still hold some of the answers to support de-risking geothermal project investment.

Reusing existing infrastructure can further decrease both risks and costs. By repurposing existing heat, such as re-using disused mine waters (already produced to mitigate against potential water resource pollution) can be an effective way to heat spaces. A great example of this is the Seaham Garden Village in County Durham, UK. The other return on investment is, of course, the benefits in supply. To put some numbers in perspective, typical coal power plants have average availability of 75% (i.e. producing energy more than 75% of the time) or thereabouts. In comparison, geothermal plants are closer to 90% and are available 24 hours a day, 365 days a year!

Policy and regulatory/legal framework:

Exploitation of our natural resources is generally heavily regulated, and rightly so. To protect people and environment these regulations must be strictly enforced. Many regulations and permits differ from country to country, and in many cases, between regions in a single country. This can make the process complex leading to confusion, slowing down project delivery and in some cases cancelling a project all together. Some of the existing loans and subsidies in EU countries are:

Tax benefits in Hungary and France;
Loans in Germany, Lithuania (theoretically) and Slovenia;
Direct subsidies in Belgium, Germany (limited), Lithuania and Slovenia;
Various forms of indirect support in most countries;
Guaranteed incentive prices (still only for electricity):
- Germany: 8-15 €-ct/kWh
- Hungary: 12-14 €-ct/kWh
- Slovenia: 5.86 €-ct/kWh
- Austria: 7 €-ct/kWh
Green certificates in Hungary and Romania;
Carbon credits in Romania (first positive experiences in geothermal energy with Denmark as a partner, 5 €/t of reduced CO2), Germany, Poland (they exist, but do not yet have an impact on geothermal energy);
Geothermal risk coverage, which is crucial for private investors.,

From the support measures mentioned above, 3 successful measures stand out, namely:

Loans/subsidies for installation;
Incentive prices (in accordance with relevant regulations);
Carbon credits.

Funding and financing:

Subsidies from governments, incentives that include risk insurance, shared costs of drilling between public and private sectors are just some of the other ways to mitigate initial capital risk.

Horizon Europe, NER 300 programme, European Climate Infrastructure and Environment Executive Agency (CINEA), European structural and investment funds (ESIF), LIFE, Prize for renewable energy islands

Early risks will naturally be closely followed by early costs. For example, the US Department of Energy (UoE) estimates that the initial cost for the field and power plant could be around $2500 per kW installed. While that is not something to scoff at, it's important to remember that the return on that investment could be much faster than you might expect. Carbon taxes would be the first and most obvious example associated with a new geothermal energy plant. Exploration costs could also be reduced by increasing the publicly available geological data, (although this often requires mandatory regulatory compliance). Access to old mine records or previously drilled wells would help to further reduce assessment costs, streamline the permitting process and regulatory compliance. With robust cost modelling, a geothermal project can be planned in such a way as to reduce upfront spend, mitigate and, in some cases minimise the risk of well exploration. Subsidies from governments, incentives that include risk insurance, shared costs of drilling between public and private sectors are just some of the other ways to mitigate initial capital risk.

One of the main challenges that geothermal energy faces, is the ignorance of the general public. In the case of geothermal power generation, the absence of a favourable regulatory framework results in the complete lack of power plants.

In many cases, the high initial costs of applying geothermal energy represents a barrier, even though the system's total cost for the entire period of use is very satisfactory.

Promoting and marketing geothermal heat pumps can be presented as pedagogical or educational challenges. Marketing arguments that should be highlighted and appreciated when promoting a geothermal heat pump are environmental protection and comfort of use.

Energy prices, which only partially reflect the external costs of different energies, are a significant obstacle in some European countries. Even if heat pumps are economically competitive, the difference in energy costs may be too small to decide on heat pumps despite other benefits that the heat pump system offers (such as reducing CO2 emissions, more comfort, etc.) This barrier can only be overcome by offering subsidies, tax breaks for renewable energy that uses heat pumps, exemption or reduction of taxes for CO2 reduction, etc.

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