Finish investor buys into large geothermal project in Germany
Finish financial company is to finance the large scale geothermal project of Icking near Munich, Germany.
In a release today, Finish financial house Taaleri announces that it will finance Germany’s largest power generation project utilising geothermal energy. Planned to be implemented in the municipality of Icking, south of Munich, the project has the mining permits, and works can be started.
“For Taaleri, this project is part of a larger strategic whole. Together with our customers, we have invested in renewable energy for a several years already, first in Finland and now also internationally. Geothermal energy is a new and interesting area for which we have sought skilful partners,” says Taaleri Deputy CEO Karri Haaparinne.
The project has been developed by the local development company, Erdwärme Bayern. Together with its customers, Taaleri will be responsible for the equity financing of the construction stage. Erdwärme Bayern will remain in the project as a minority owner.
The overall value of the project is approximately EUR 160 million ($192 million), and it will be the largest-capacity power plant utilising geothermal energy in Germany so far. The project consists of five wells to be drilled and the power plant to be built over them.
“In the projects of our Energy business, Finnish capital benefits the international renewable-energy construction and therefore also works for the benefit of the climate. Using Finnish capital in these projects also yields competitive profits to investors,” says Haaparinne.
Estimated to be completed in 2020, the plant will pump 150-degree water from a depth of approximately four kilometres, utilising thermal energy of the hot water to generate electrical power. The target power generation capacity is 30 MW, or the equivalent of the power consumption of 50,000 households.
“We have strong expertise in geothermal projects. In Germany, the geology is ideal for deep drilling. Successful implementations have already been carried out in the area. Because the energy is generated deep in the reservoir, the project does not require outsized structures on the surface. Nevertheless, drilling to the depth of several kilometres is always a demanding venture,” says Erdwärme Bayern CEO Markus Wiendieck.
Geothermal energy is a renewable and carbon-free energy source. The energy in the depths of the earth heats the water. When this thermal energy has been extracted from the pumped water to generate electricity, the water is routed back underground for it to reheat. The surface area used for the project is comparatively small for the amount of renewable energy produced.
There are several hundreds of geothermal facilities in Germany, most of them producing heat. The German government supports geothermal power generation with a long-term production subsidy, which is currently set at EUR 252 per MWh for 20 years. In many places in Germany and especially in Bavaria, the conditions are favourable for the production of geothermal energy: the reservoir is a permeable limestone formation in a depth of 3–5 kilometres, many times proven to be a productive aquifer.
For the investment, Taaleri utilises the co-investment model where Taaleri invests capital with its customers. The collection of capital took place in the spring, so the investments will be launched right away.
An aerial picture of the project location can be downloaded here (pdf, source: Municipality of Icking)
Source: Company release via Globe Newswire