Geothermal Risk Mitigation Schemes in Germany

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 sector-specific risks. This paper introduces insurance schemes mitigating the exploration risk of deep geothermal projects in Germany.
Terms and conditions of insurance solutions in the private market sector as well as the new German federal risk mitigation program are summarized. Based on practical experience from insurance negotiations, an insight is given on status, applicability, challenges and pitfalls of the insurance schemes. Improved possibilities for risk coverage are an important market incentive and will facilitate the further development of deep geothermal projects.