Geothermal energy, how underground heat works. And millions of households won’t have to renovate to be in compliance with the EU

There is a drilling rig, not far from Ferrara, that operates night and day. Nothing to do with the disputed gas and hydrocarbon drilling: here we dig in the name of sustainability and zero impact. Environment and clean energy for all are among the goals of the private company that is paying for the excavations, as well as of local governments: from the municipality to the Emilia Romagna region. One digs – one might say with a turn of phrase – to find hot water. Actually to reach those layers of the subsurface where the energy contained by magmatic rocks can be transferred to water or other fluids and brought up to the surface to power district heating plants. The first goal is to operate-and it could happen within a few months-a plant to heat 365 days a year a system of agribusiness greenhouses spread over 30 hectares. But within a few years this power plant connected to the bowels of the Earth could heat as many as 120,000 homes by itself.

The first medium-enthalpy geothermal well is being drilled in Ostellato: “We are already at – 3400 meters.” When it is ready in 2024, the plant (8 wells in all) will provide heat to district heating in the Ferrara region. A 220 million euro investment backed by the private company Fri-El Geo, which with the Pangea Project would like to dig 100 such wells throughout the Po Valley

We are in Ostellato, where the installation of the first medium-enthalpy geothermal well (a system that Enables the exploitation of the heat contained in the first subsoil layer, through the injection of a carrier fluid, by means of a heat pump) promises 100% reliability in providing energy in the form of heat-a programmable, long-term renewable source. It will also produce electricity but this is a secondary aspect, the designers point out. When? What is certain is that the excavations are well underway.: “We have reached a depth of 3400 meters, passed the critical formations and expect in a month and a half to reach the target that is the carbonate reservoir containing the geothermal fluid,” explains the entrepreneur Ernst Gostner, who together with his four sons founded Fri-ElGeo, a leading developer of medium-enthalpy geothermal plants – . However, it always takes two wells to go around, the so-called ‘doublet’: an expansion well and a re-injection well.”

So after the first excavation another one will follow, but it will be less demanding assure engineers, “Our intention is to make 4 doubles the first one will be completed in 2024.” And therefore already that year it may yield heat to our greenhouses. “A plant like the one in Ostellato will be able to produce 200 to 240 megawatt hours (MWh) thermal,” confirms Gostner from the Bolzano office. Then just a few more months and the entire system will be in operation, supplying district heating to the Ostellato industrial zone (Sipro).
One of the revolutionary aspects of the project is right here: in Ferrara as in Milan, Bergamo and Brescia-where Fri El Geo has other interventions under study-. the use of medium-enthalpy geothermal energy could solve one of the key problems of the next 12 years, namely compliance with the EU directive “Energy Performance of Building”, which imposes a stop to the marketing of stand-alone fossil fuel boilers from 2029. The goal was already anticipated in the energy-saving guidelines of the RePower EU package.

Dr. Gostner, you are certain that the Ostellato project will be able to change the energy (and household spending) prospects of thousands of Italians: why?
“This is a strong issue, as few politicians and only a small part of the public realize what the new Eu legislation on eco-sustainable houses means. In the European Commission it was determined that all buildings in member countries must be CO2 free by 2035. If I bring this kind of thermal energy to a neighborhood in an Italian city today, with district heating, there will be no need to renovate the houses anymore, as they will all be CO2 free. The system works, efficiently: experiences in Germany and the Netherlands show this.”

Meanwhile, excavations at Ostellato continue apace. To make a well requires digging up to almost 6 thousand meters: it takes more or less 120 days of work. But an algebraic sum should not be made for the realization of all 8 wells. “However, we anticipate that we should be ready in two and a half years with all four doubles completed.” Thus, the commissioning of the downstream plant will probably be effective as early as 2025, starting all 8 wells. Amazing times in the power generation business, “but that’s another great thing about medium-enthalpy geothermal,” Gostner notes, “these are not plants like nuclear plants, which take 10-15 years to build. We are already able to provide heat after two years.”

Ostellato is but the first step in your Pangea Project, which envisions at least 100 similar power plants in the Po Valley area: how much CO2 emissions per year could it save ?
“Ostellato could save 40,000 tons of CO2 per year. But overall with the Pangea Project we could get to reduce the national gas requirement by 10 to 15 percent through the construction of 100 plants. In the entire Po Valley it would mean a saving of 17 million tons of CO2.”

Geothermal energy in Italy, however, seems to receive little attention from institutions…
“Actually until now the exploitation of geothermal energy in Italy was 100 percent in the hands of Enel Green Power, thus concentrated in Tuscany. Reason why until now nothing has been done to revive it. But something is moving in the sector, particularly for medium-enthalpy plants such as those planned by Fri-El Geo. It remains clear, however, that there is a “barrier to entry” in geothermal investment, a very high cost that means that in Italy the construction of medium enthalpy plants has to be financed in full equity. We as a company, for this our first well alone, have spent about 50 million euros so far, and many more will be needed for the Pangea Project. But we have had important contacts with the Minister of Environment and Energy Security Gilberto Pichetto Fratin. I had two talks with him: he seems to me strongly convinced of the potential; he confirmed it to us and at a meeting in Confindustria.”

What are the prospects, then, on the legislative front?
“Italy suffers from legislation that is not in step with the times: there is a gap for the thermal part, which is the most important one. We hope that a new law will be made by the end of 2023. The longer this legislation is delayed, the longer it will take to make us less dependent on gas. What kind of law? We could follow the example of France, which has had a system of risk guarantees since the 1980s that facilitated the development of geothermal energy.”

Fifty million for a single well is a heavy commitment even for your newco, which is part of the Fri-El Green Power group, with 2.2 billion in revenues by 2022. Is that why in early April you opened up to new investors with the decision to mandate Equita to sell 50 percent of Fri-El Geo?
“Our Pangea Project on district heating for cities in the Po Valley, with upcoming commitments in Milan, Bergamo and Brescia, includes 100 sites, 15 of which are in fact already authorized or in the process of being authorized for exploratory phases within two years. The financial commitment will be enormous, although an equally impressive return is expected in terms of turnovers and revenues. So we are looking for 50-50 partners for Pangea. And I don’t think it will be difficult to convince investors-just look at what has been done in Germany and the Netherlands with such solutions. In the Federal Republic there are already 46 operating plants, in the Netherlands 26. Just think that if in 2022 the Germans had only 4 plants under construction (plus 12 in the authorization phase), in 2023 they have already risen to 34 sites and 82 under authorization.”

As Planet 2030 had explained in the
investigation of the Devil’s Valley plants (read here).
, among the renewable sources useful for the production of electricity, geothermal is the one that involves the least land consumption, presenting an impact five times lower than photovoltaics are the planimetric profile. The use for civilian use of the resource given by the heat contained within the Earth exploits the resources contained in the subsurface up to a depth of 4-5 km. And energy encapsulated underground could play an important role in advancing the production of electricity and heat from alternative sources in Italy without emitting greenhouse gases-“the best solution for a significant reduction in climate-changing emissions,” they claim from Bolzano. Researchers, as well as some of the institutions, are convinced of this: the Draghi government had already envisioned-with the “probes and pilot plants decree”-a simplification of the rules for authorization to install geothermal plants. Yet part of the public still has strong doubts about the industry.

There is an issue related to the alleged emissions of geothermal energy that is holding back some Italians from accepting new plants. What is the problem?
“It is actually a ‘problem’ concerning high-enthalpy geothermal energy, that of Tuscany for instance. In the case of medium enthalpy, there is no emission of either vapors or gases or unpleasant odors. There are no environmental problems of any kind, compared to the perplexities that greet traditional geothermal instead (ed. like the one in the Devil’s Valley in Tuscany, to be clear, where the geothermal fluids at the outlet are filtered by Amis plants, for the abatement of mercury and hydrogen sulfide), since with medium enthalpy the geothermal fluid can be re-injected 100 percent: there is no dispersion of vapors, of gases, of odors. The only thing the fluid gives up is heat. Technically, after the construction of the ‘doublet’ wells (two years each), the CRC plant is built with medium-enthalpy steam, i.e., at 150 degrees: instead of water, a hydrocarbon is used, which evaporates already at 70 degrees and powers special turbines in a closed circuit. In addition to the heat brought to the surface and channeled into district heating, the steam expanded in the turbines produces mechanical energy, which in turn generates electricity to cover thermal consumption that is not always constant (ed. consumption is not the same throughout the day, and excess heat can be converted into electricity: it takes 8 KWh thermal to produce 1 KWh electric). This energy will be fed back into the grid via a generator connection to the national grid.”

Are there seismic risks in drilling at 5,000 meters depth?
“They don’t exist, for the simple reason that we don’t target faults and the pressure used in the wells is so low that it doesn’t raise any risk. You can see this in all the installations already done in Holland and Germany. So the risk of subsidence (ed. of lowering of the ground) is zero. In Ferrara some old non-productive oil wells have been converted into geothermal wells producing water at about 100 degrees to feed the urban district heating network (ed. operated by the Era group). They have three wells, one injection and two production wells, that have been working for 35 years and do not have a single problem. So that experience also gives us strength.”

What percentage of the electricity needs in the Po Valley will the new medium-enthalpy wells cover? And what will it mean for air quality in the affected regions? If I am not mistaken, as many as 13 of your 15 projects in the approval process concern Padania, the area of Europe with the highest pollution rate…
“It is not a simple calculation. We are actually talking about gas and not electricity. Because if we could remove half of the boilers in use we would drastically reduce particulate matter precisely in areas where there are more population centers. Roughly speaking, the potential would allow about 260 MWe and about 2.2 GWt of green energy to be produced. But I reiterate: the target of these plants of ours is not the replacement of electricity. Rather, it is the replacement of methane gas because in Italy today, emissions from gas cover more than 50 percent of CO2 emissions; and they are mostly produced by home heating systems.”

And back to the topic of the EU Energy Performance of Building directive…
“Yes, we believe it is much more important to find a quick solution to the replacement of heating boilers. A plan that, when fully operational, would allow us to be independent of Russia and other foreign suppliers. With these plants in the Po Valley, we think we can get to halving gas boilers. And thus give a strong push for compliance with the EU directive even before 2035. It really is more important to bring heat to where it is needed than to produce electricity. Heat has no alternative to geothermal. There is no point in producing heat with the sun if I have solar collectors that work well in summer and then in winter the same heat is not there. The only large-scale solution is geothermal. And confirmation comes from the fact that several primary companies that operate district heating have confirmed it as a viable and technically feasible solution.”

Among the attractions of geothermal expansion in Italy is the issue of reduced land consumption, above ground
“Yes. We as Fri-El Green Power group already have 2 gigawatts on wind and 1.2 on photovoltaics. But we note that geothermal is very well regarded by local governments because the land requirement (the space needed to build the facilities) is very low. In addition, these are facilities that could have access to NRP funds for energy upgrading in the country.” (ed. as early as December 2022, 25.3 million euros were allocated to implement district heating in Tuscany).

Do you have plans in other areas of the peninsula besides the Po Valley?
“Yes, we have other projects both in Tuscany and in the South, but they are not as urgent as in the North, where the situation is serious because of the high level of particulate pollution. And then there are objectively difficult situations for tele-heating: for example, in Rome it would be very difficult to implement it because you cannot dig anywhere without running into an archaeological find that blocks construction sites. The same thing applies to much of Naples, although we are concluding studies of the Bagnoli underground. And in the capital of Campania, although there is no tele-heating, there is already a network of pipes (they were made for the distribution of methane gas) that have never been used: they could be used to bring heating and cooling to homes.”
“The experience of Munich also confirms that it is better to invest in the Padania region, which geologically has a carbonate basin similar to that of southern Germany. In Naples, as a group, we have recently decommissioned an 80 MWh vegetable oil power plant. And we concluded a study in Acerra (near Vesuvius) thanks to which we identified carbonates in the subsurface. So there is geothermal fluid there too, and going to 4,500/5,500 meters you could have temperatures of 160 degrees.”

In the North where will you proceed most rapidly?
“In Milan, Bergamo and Brescia. If approvals come quickly, we expect to start in 2025 with excavation. Then hand in hand with the first infrastructure to arrive in 2027 to kick off the construction of 3-4 plants. Therefore, it will take another 2.5 years. If we have the support of institutions and local governments, it could be technically feasible by 2030 or 2031. The real bottleneck will be the companies that have the facilities for tele-heating: their ability to expand networks quickly will be crucial, as demand is already 10 times higher than current availability. Many industry players still rely on fossil fuel consumption to meet demand, but under the Eu fit for 55 program they will be obliged to reduce their reliance on fossil fuel and increase renewable supplies. And I repeat: the only solution is in medium-enthalpy geothermal sources.”

How much do you expect to bill from geothermal energy?
“In the Pangea project, the first 15 plants have an investment value of 4 billion euros. They could generate 2.6 GWt and 300 MWe. But it is difficult to calculate the price of the heat we will sell: if I take the price of gas as a reference and calculate what its cost may be in 2030, I believe we could sell heat generating very high turnovers. I also postulate that the cost of producing heat itself is very low in the field of geothermal energy. Now it should be considered that this year the government will have to send Brussels the prospectus of how it intends to move forward for the EU Re-power and the
Renewable Energie Directive
. Based on the values that the politicians are going to establish, we will be able to estimate the turnovers. By necessity, the state will have to provide a value for geothermal energy that succeeds financially in meeting the costs of the plants. And then the longer you go, the less geothermal energy will cost, a because these plants will run for two thousand years and the energy source costs nothing. Unlike gas.”

FRI-EL GEO Kraftwerk