Private and State Risk Mitigation Programs for Geothermal Exploration Risk

Abstract

The financial risks associated with deep geothermal projects form a major obstacle to accelerated industry development. Different approaches have evolved in order to mitigate the sectorspecific risks. This paper introduces insurance schemes mitigating the risks of deep geothermal projects focusing on the exploration risk. The topic is presented using the example of Germany. Terms and conditions of insurance solutions in the private market sector as well as the new German federal risk mitigation program are summarized. The author’s practical experience from insurance negotiations allows an insight on status, applicability, challenges and pitfalls of these insurance solutions. Improved possibilities for risk coverage within a growing competitive market are an important market incentive and will facilitate the further development of deep geothermal projects.