GEOFAR – Financing Geothermal Energy in European Regions

Abstract

The GEOFAR project aims to reduce financial barriers hindering the initial stages of geothermal energy projects through the development and proposal of appropriate financing and funding schemes. The analysis of financial instruments across Europe is necessary to this work. Feed-in tariffs are the common instruments supporting electricity production from geothermal sources. Besides bank facilities, grants, risk insurance instruments, and tax reduction are the most widespread tools. However, a lack of harmonization of these instruments across Europe is obvious. Also, not all phases of geothermal projects are covered, and their specifications are rarely taken into account by traditional financing tools. These main barriers are not overcome by all target countries. GEOFAR aims to support these countries by promoting appropriate financing and funding schemes in order to provide a targeting instrument for overcoming the barriers of high up-front costs and high investment risks.