Geothermal energy in the support scheme SDE+ in the Netherlands

Abstract

The Dutch government intends to stimulate the development of geothermal energy by opening support schemes. Three schemes are installed: investment, guarantee/insurance and exploitation subsidy schemes. The support schemes attracted a relatively large number of applications and can be regarded as successful instruments for the development of geothermal energy. The investment subsidy was granted to proposed innovative energy concepts in the horticultural sector. Application of geothermal energy for the heating of greenhouses was such an innovative investment. The guarantee scheme is an insurance system for the geological risk: the underperformance of a doublet with respect to the pre-drill P90 geothermal power estimate due to disappointing aquifer characteristics. The exploitation scheme (SDE+) is a subsidy on produced geothermal heat to level the difference between conventional heat cost price and the cost price of geothermal heat. All projects in the guarantee scheme and most projects in the exploitation scheme are granted on a pre-drill estimate of the geothermal power to be realised. This implies that the schemes have to deal with large predrill uncertainties, predominantly in the estimated geothermal power. Both schemes use a dedicated software package to estimate the indicative geothermal power, including the uncertainty range. Based on the outcome of this program, the guarantee scheme insures the P90 geothermal power. The SDE scheme makes a budget reservation for the future subsidy (feed-in premium) required for the geothermal energy produced over a 15 year production time. This future subsidy reservation is based on the calculated P50 geothermal power. The subsidy amount is calculated by subtracting the conventional heat cost price from the cost price for generating geothermal heat. The calculation of the cost price of geothermal heat is done using reference projects with an estimated cost structure and heat produced.