There is a reason why vulcan wants to expand in to France side.

EUR 195M guarantee fund approved for deep geothermal projects in France

Carlo Cariaga

2 weeks ago

The European Commission has approved a EUR 195 million guarantee fund to de-risk deep geothermal drilling operations in France.

The European Commission has approved under EU state aid rules a French aid scheme to set up a guarantee fund for deep geothermal operations. The fund will be implemented for a period of 10 years and may provide compensation for deep geothermal projects, providing some protection against the risk linked to the high degree of uncertainty of deep geothermal resources during drilling.

More specifically, the Commission authorized a contribution from the French Environment and Energy Management Agency (ADEME) of a maximum of EUR 140 million, for the constitution of the guarantee fund. Contributions (in the form of subscriptions) from project promoters wishing to benefit from the guarantee will amount to EUR 55.6 million.

The fund will provide grant guarantees for drilling operations of deep geothermal projects of approximately 30 MW capacity. The maximum amount of compensation per project will amount to EUR 17 million and will be paid to project leaders in the event of failure on the quality or quantity of the geothermal resource.

The Commission has assessed the scheme under EU State aid rules, in particular its Guidelines on State aid for climate, environmental protection and energy for 2022 (CEEAG). The European Commission has noted that the aid granted by ADEME will contribute to the objectives of energy efficiency and the production of energy from renewable sources, in line with the environmental objectives of the EU.

Furthermore, the European Commission has found that any distortions of competition due to state support will be kept to a minimum, given among other things that the aid will be paid in the form of a guarantee with compensation only in the event of the drilling failure . On this basis, the Commission cleared the French scheme under EU state aid rules.

In early 2023, the French Government published a six-point action plan that aims to make France a leader in geothermal energy. The action plan proposed changes to accelerate the development of the country’s shallow and deep geothermal facilities.