Geothermal projects are growing all over Europe, delivering already electricity to 11 million consumers and heating and cooling to about 20 million people and 400 cities and factories.
The geothermal heating and cooling sector continues its growth in traditional markets; individual buildings, district of 5,000 inhabitants and greenhouses. But new markets are reached: new technologies; geothermal smart heat networks (5th generation), deep closed loop systems…, new countries or new regions. Sales and new installations of geothermal heat pumps were strong across nearly all countries (growth of ca 12%), with a new record in annual sales: about 155,000 units in 2023. In terms of overall capacity installed, the market was still dominated by Germany, the Netherlands, Finland and Sweden, which represent half the installed geothermal heat pumps in Europe and nearly half the annual sales. If we take, for example, the case of Germany, despite a positive first trimester, 2023 saw the number of sales slightly declining. On a macro-level, factors impacting the GHP market in Germany were primarily the current increased interest rates and their impact on the building construction and renovation markets, together with high electricity prices and taxation in comparison with fossil gas. This is valid not only for Germany but for the whole of Europe. The number of new geothermal district heating projects also continued to grow. 8 new district heating and cooling projects were commissioned last year in the European Union: 1 in Germany, 3 in Finland, 1 in the Netherlands, 2 in Romania and 1 in Slovakia. 2023 saw fewer plants put into operation than during the last years, especially in comparison with 2022 and 2021, with 14 new installations being inaugurated. Three reasons can explain this situation: 1) Delay in project development due to permitting, disruption in supply chain or longer drilling and commissioning phases; 2) Harder competition with fossil fuels; 3) Longer project development duration with projects in green field areas and project portfolio approach. Geothermal electricity continued its march towards market maturity in key markets such as Italy, Croatia, Germany and Turkey, even though changes to the Turkish incentive framework caused uncertainty for project developers. 143 Geothermal electricity plants are in operation all over Europe, generating about 20 TWh/year in 2023 (7 TWh in the EU). About 50 geothermal power plants are under development at different stages: exploration, drilling or connecting to the grid. 8 new projects have started development in 2023. The renewed interest in base load and local electricity supply makes geothermal energy a valuable option. Geothermal is proven to provide a stable and secure supply of power while meeting base load demands and being able to supply 10% of our EU electricity demand.
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