September 28, 2022

Greece proposes changes to geothermal regulatory framework

4 min read

Geothermal fields have been identified in about thirty regions all over Greece. These can be exploited with limited environmental footprint and meet a range of energy needs such as heating of fish farms, greenhouse crops, drying of agricultural products, heating and cooling of homes, schools and hospitals , water desalination, and bathing facilities.

© 2019 “A small but important step” Adrian Baros

A presentation of new legislation by the Ministry of the Environment and Energy, which was scheduled in the Greek Parliament recently, a special “chapter” was introduced that deals with research, exploitation, and management of the geothermal potential of the country.

A basic change is the categorization of geothermal fields. The distinction between low and high temperature has been abolished and replaced by distinguishing resources as local (product temperature 30-90 °C) and national interest (temperature above 90 °C). The minimum geothermal potential setting temperature has been increased to 30 °C from 25 °C, enabling agricultural drilling to be utilized for irrigation. For the first time, the Geothermal Interest Area (PGHE) has been defined as the largest area where there are indications of a geothermal potential of up to 90 °C.

The responsibility for the research, exploitation, and management of geothermal potential in areas of national interest and non-designated areas belongs to the PEN minister. In the areas of local interest and PGHE, administration remains decentralized. It has also been clarified that the survey may coexist with the exploitation: if a geothermal potential is identified during the survey, a pilot exploitation project is allowed with the payment of relevant dues.

For the first time, the concepts of “exploitation” and “management” of geothermal potential have been defined to include all the activities (1) aiming at productive extraction of the product and by-products and the safe disposal of the by-product, and (2) regulating the exploitation of the geothermal fluid from the underground thermal systems for the purpose of its sustainable utilization.

The leasing of areas of national interest takes place after a competition. In areas of local interest and in PGHE, the lease is made after a tender or following a public call for expressions of interest. An interested party must submit a request within thirty days of the posting of the invitation. The bids will be evaluated by a committee with the participation of a representative of the new Public Geological Authority (EAGME), which has a leading role in the exploitation of geothermal potential.

The duration of the lease of the right to explore is set to five years with the right to extend for two additional years for the areas of national interest, and up to three years with the right to extend for a further one year for the areas of local interest. The lease term of the right to manage and exploit, or only the exploitation, is up to thirty years with the right to extend up to twenty additional years.

The utilization of the decentralized administration’s potential will take place in the framework of Geothermal Potential Development Plans, with the ultimate goal of rationalizing their use and protecting the resilience of the natural resource. The first draft of the plans must be submitted within five years of the passing of the law.

The licensing process will be different if a greenhouse, dryer, desalination plant, power plant, etc. is installed.

In terms of rents, the obligation to pay an annual proportionate rent on the basis of the energy consumed since the start of the operation and a minimum proportion of 30% of the consumption provided for under the contract, which begins two years after the signing of the contract, is described in more detail. No rent shall be due for the investigation period unless there is a pilot exploitation.

The provision of 10% and 5% of the annual rents is provided for the first-rate municipalities with the geothermal exploitation and for EAGME, respectively.

Giorgos Stathakis: Local communities are at the center

© 2019 Adrian Baros

As Minister George Stathakis said in Sunday’s “Dawn”, the government’s new policy to support geothermal energy, in addition to capitalizing on national capital, puts at the center the strengthening of local communities. It also highlights the key role of the local producer in the primary sector, local government, and local small and medium-sized enterprises.

The new arrangements aim to distribute the geothermal wealth to local productive potential and promote decentralized management with the support of the new public geological principle being created, while enhancing the local economy and society.

As the new regulatory framework comes to fruition, a development perspective is emerging. Hopefully, this develops the necessary climate of trust with local communities that is built on the principles needed for the successful transition to clean energy.

Adrian Baros