Market Integration Pathways for Enhanced Geothermal Systems in Europe

TL;DR

This paper analyzes future pathways for Enhanced Geothermal Systems (EGS) in Europe, highlighting their potential for heat and electricity, the importance of cost reductions, and the need for coordinated stakeholder efforts.

Contribution

It provides scenario-based insights into EGS deployment in Europe, emphasizing the role of cost reductions and spatial considerations in market competitiveness.

Findings

EGS can support 20-30 GWth in Europe at current costs.

A 60% reduction in drilling costs makes EGS competitive for electricity.

Spatial mismatch affects EGS market potential and requires coordinated learning.

Abstract

Enhanced Geothermal Systems (EGS) can provide constant, reliable electricity and heat with minimal emissions, but high drilling costs and uncertain cost reductions leave their future unclear. We explore scenarios for the future adoption of EGS in a carbon-neutral, multi-sector European energy system. We find that in a net-zero system, heat (co-)generating EGS at current cost can support 20--30 GWth of capacity in Europe, primarily driven by district heating demands. When drilling costs decrease by approximately 60%, EGS becomes competitive in electricity markets, expanding its market opportunity by one order of magnitude. However, the spatially dispersed rollout of district heating contrasts with the confined overlap of high geological potential and low potential for other renewables, which conditions the competitiveness of electricity-generating EGS. This results in a challenge where the majority of EGS market potential depends on pan-European technology learning for cost reductions, emphasising coordination is crucial in stakeholders' efforts to reduce EGS cost.