The establishment of a stable financial framework by the State, which will provide strong incentives to investors and allow for the substantial development of the country’s geothermal potential, is a basic prerequisite for the unfreezing of this sector and its contribution to electricity generation.
In this context, the Hellenic Geological and Mining Research Authority has recently been preparing, in collaboration with a Company of Financial Consultants, a comprehensive proposal for a special financial tool for the financing of research, exploitation and management activities of geothermal potential in areas of local interest.
The proposal is in the finalization phase and will soon be submitted to the Ministry of Environment and Energy for further action. In the meantime, interventions and incentives that will allow for the improvement of the institutional framework for geothermal energy are being examined by the competent department of the Ministry of Environment and Energy, while developments are expected in existing applications in Macedonia, Thrace and Lesvos.
As highlighted at a recent conference entitled “Geoenergy: Prospects and Challenges” co-organized by the Association of Greek Geologists and the Hellenic Geological and Mining Research Authority and with a sub-topic of “Geothermal Energy – Application and Prospects in Greece”, geothermal energy has not yet been fully exploited for electricity generation, despite the country’s comparative advantages.
Problems
The main obstacles to the development of the sector include geological risk, high capital expenditures and the lack of specialized scientific and technical personnel in geothermal issues. According to Apostolos Arvanitis – Head of the Department of Geothermal and Thermal Natural Resources of the Hellenic Association of Geothermal Engineers, “geological risk is limited by the most possible comprehensive knowledge of the geothermal field and the geothermal reservoir and, obviously, is much greater at the stage of identification and basic evaluation of the characteristics of the geothermal resource.
Geological risk and the drilling of unsuccessful wells affect the economics of a geothermal project, increasing the cost of construction of infrastructure projects and, therefore, the initial capital expenditures (CAPEX), and making it necessary to have a flexible and simplified institutional framework for licensing.”
He added that “these high costs hinder the investment decision for fear of business risk, resulting in a delay in the development of geothermal energy.”
