Medium-depth geothermal energy is a key technology for local, climate-neutral heat supply. While the technology is already widely used in southern Germany, there have been only a few projects implemented so far in northern Germany, in the so-called North German Basin. The economic viability of geothermal projects plays a central role in their widespread rollout. Geothermal projects are capital-intensive projects with long payback periods and are also characterized by what is known as the “discovery risk”: there is a risk that, after deep drilling, little or no thermal water will be produced. At the same time, these plants are relatively inexpensive to operate and can thus make an important contribution to a socially responsible and resilient heat supply.

The Warm-Up research project has conducted calculations on the economic viability of medium-depth hydrothermal geothermal energy in the North German Basin. The results show that, under favorable subsurface conditions, geothermal power plants can be competitive with alternative centralized renewable heat generation technologies. The key factor here is, above all, the production rate, which has a greater impact on economic viability than, for example, the depth of the reservoir or the temperature of the extracted thermal water.

In addition to subsurface conditions, the above-ground consumption structure plays an important role in the economic viability of medium-depth geothermal energy. This is because an economically viable business model for a geothermal project can only be developed if the extracted heat can be consumed above ground. With regard to the consumption structure, there are sometimes significant differences between rural and urban areas. Since geothermal plants generally feed into district heating networks, the question of the economic viability of medium-depth geothermal energy cannot be answered in isolation from the question of the fundamental economic viability of district heating networks. In addition to the issue of economic viability, it is also important for municipalities to consider the economic benefits and employment opportunities that geothermal drilling can generate in the region. To ensure that these benefits remain in the region, the authors recommend involving local businesses in the installation and operation of the facilities.