Cindrigo has signed a term sheet with Zukunft Geowärme GmbH (ZGW), a German geothermal project developer, to acquire a majority interest in three geothermal energy projects, which have a total licence area of c.125km2 (12,500 hectares).

The projects, located in the Upper Rhine Valley, have an initial target of c.80 MW, and a combined target installed potential capacity exceeding 300 MW, encompassing both geothermal power and heat generation. There is also an indicated lithium potential.

The Upper Rhine Valley is a renowned geothermal region and Germany is one of Europe’s most promising geothermal markets. The region has the highest subsurface temperatures measured so far in Germany with over 170 °C recorded at a depth of 3km and is a mature, producing field, with >1,000 oil & gas and 24 deep geothermal wells
already drilled.

Government support and targets
Germany has a clear target in place to increase its geothermal output by 2030 and is targeting 10 TWh of geothermal output, which equates to at least 100 additional geothermal projects. In support of this the German Renewable Energy Sources Act (EEG) offers a stable and transparent support scheme for electricity generation using geothermal resources, with a feed-in tariff for geothermal power of 25 euro cents per kilowatt-hour (kWh), during a 20 year term.

Additionally, German federal funding is available under the “Bundesförderung für effiziente Wärmenetze” (BEW) a subsidy programme for geothermal district heating which covers up to 40% of construction capital expenditure for heat production facilities.

The German Ministry of Economic Affairs and Climate Action has also commissioned federal development bank KfW to develop a new insurance policy to cover the risk and cost liability of explorative geothermal drilling. Namely, once a company has completed explorative geothermal drilling, if the heat output is zero, i.e. the drilling has not found anything, the full insurance amount is paid out to the company that conducted the drilling, or if it is below expectations, the insurance pays a portion. This insurance policy underpins the German government’s commitment to and support of new geothermal projects, in a country where the success rate of geothermal heat projects to date is 100%.