The Netherlands' production of geothermal heat increased once again in 2024. This is badly needed, states industry association Geothermie Nederland upon publication of the figures. A huge catch-up is still needed to reach the target of 40-50 PJ in 2035. In 2024, 7.9 PJ (petajoules) of geothermal heat was produced.
In the context of the need for rapid growth of the geothermal sector, the news that Shell is pulling out of geothermal projects in the Netherlands is striking. The wealthy party was involved in several projects.
In a reaction Monday afternoon, Hans Bolscher, chairman of Geothermie Nederland, does not expect Shell's withdrawal from geothermal projects to have any consequences for geothermal heat production figures. He further referred to Shell. That company was asked for a further explanation of their striking decision. Besides being active in several projects, Shell was also involved in some projects under development. For instance, Geothermal Rhineland already announced it was looking for a replacement for Shell.
Competition from CHP
Bolscher prefers to focus on the production figures for 2024, which show that geothermal energy for greenhouse horticulture was, once again, more attractive than CHP use last year. He also likes to point out what is needed at the political level to achieve the much-needed acceleration of geothermal development in the Netherlands.
"We see growing support for geothermal energy. This is driven in part by the ever-increasing need for affordable, sustainable collective heat, the desire to reduce dependence on foreign countries, and the need to combat grid congestion. But this strong support is not yet translating sufficiently into rapid growth. More new geothermal production facilities must be added soon to harness the potential for affordable, sustainable heat from domestic sources."
More predictability, less risk
As an industry, they are sticking to the ambition of 40-50 PJ as a crucial target point for 2035. "In the further future, even about 25 percent of the entire Dutch heat demand can be sustainably met by geothermal energy; in greenhouse horticulture, this figure is even towards 50 percent."
It strikes him that greenhouse entrepreneurs are not averse to a bit of risk. In the Netherlands, it was also the greenhouse horticulture companies that realized the first projects. Still, most projects are running for greenhouse horticulture, despite fierce competition from CHP. "At high electricity prices, CHP has an advantage. At normal energy prices, geothermal does." Bolscher says it can be seen from the production figures that geothermal was again more interesting for growers in 2024 than in previous years.
Nevertheless, there is still some work to be done. "The breakthrough measures we proposed as an industry have not yet materialized. A shorter and more predictable licensing process is crucial. We are also advocating a review of the subsidy system. A more appropriate financial instrument is going to lead to the faster realization of projects."
The chairman of the industry association for geothermal companies sees a lot of support among companies, citizens, and also in politics. A key area for improvement to realize even more geothermal projects is predictability. "Licensing, for example, needs to be more predictable. Not easier or less strict, because safety is important but more predictable."
Uncertainty is part of geothermal energy, he knows, because that's what comes with drilling into the ground. "But now there are also many financial risks, for example, due to the current setup of the SDE subsidy. This adds additional uncertainty for companies investing in geothermal."
There are also some risks that entrepreneurs cannot do anything about, such as gas price trends and inflation. "These are external factors with a big impact. It makes the business case uncertain, and that uncertainty is now reflected in the price for geothermal energy."
Production figures 2024
There are 28 geothermal sites in the Netherlands with a total of 42 geothermal production wells. In 2024, 28 production wells produced geothermal heat. There are eight new doublets that are not yet producing and six doublets that are not currently active.
In 2024, the share of geothermal heat in the Netherlands resulted in 426,000 tonnes less in CO2 emissions. Geothermal heat production in 2024 increased by over 16% (from 6.8 to 7.9 PJ per year) compared to 2023 and 2022.
The increase is mainly due to the fact that a large proportion of doublets had more production than the previous year. This was due to higher demand from customers and less downtime due to maintenance. There are also three new production wells that are already producing, although they are still in the start-up phase. In the coming year, these new wells will have more of an impact on production figures.
Even so, Bolscher sees that more acceleration is needed. Greenhouse horticulture works a lot with geothermal energy. Projects in the built environment are coming to fruition with difficulty. The uncertainties surrounding heat networks (and the Collective Heat Act, Wcw) are currently holding back investments in geothermal energy. The inability to get a connection to the electricity grid is also causing delays for new projects.
Shell
The consequences of Shell's move remain a mystery, as do the causes. Shell itself states in a message about winding down its role in geothermal projects in the Netherlands. "We will enter into discussions with our partners in the various projects in the coming period to ensure a smooth transition. In doing so, we will look for suitable solutions for the individual projects and licenses."
On Tuesday morning, Shell responded to additional questions. These showed that it sees opportunities in heat networks, with a geothermal source. There was no answer to the question of whether Shell is stopping geothermal because of the high financial risks.
Index photo: visit at Trias Westland geothermal project
For more information:
Geothermal Netherlands
info@geothermie.nl
www.geothermie.nl/