Geothermal Regulations in Europe Geothermal Regulations in Europe - - PowerPoint PPT Presentation

Geothermal Regulations in Europe Geothermal Regulations in Europe

ENGINE Workshop 6 ENGINE Workshop 6 Increasing Policy Makers Increasing Policy Makers’ ’ Awareness and Public Acceptance Awareness and Public Acceptance Sept 13 Sept 13th

th 2007

2007

Róisín Goodman (CSA Group Ltd.) Ric Pasquali (CSA Group Ltd.)

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GeoThermal Regulation - Heat (GTR-H) www.gtrh.eu

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Partners in GTR-H

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Aims of the project Aims of the project

• Review Regulatory Barriers and Deficiencies

Review Regulatory Barriers and Deficiencies in 4 target countries in 4 target countries

• Identify Legislative Solutions

Identify Legislative Solutions based on 3 Regulated countries based on 3 Regulated countries

• Create a Cooperative Network

Create a Cooperative Network for Geothermal Legislation for Geothermal Legislation

• Create a

Create a template Framework template Framework for geothermal heat for geothermal heat

• Accommodation of

Accommodation of Geothermal Energy in national legislation Geothermal Energy in national legislation

• Sectoral

Sectoral and cross and cross-

• border Investment

border Investment in Geothermal Energy in Geothermal Energy

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Background Background – – K4RES K4RES-

• H

H

Need for Need for

• ‘

‘a community level communication a community level communication’ ’ which which ‘ ‘shall foster member states to adopt a shall foster member states to adopt a coherent legislative system and to coherent legislative system and to designate a rational framework of designate a rational framework of competent authorities in order to ease the competent authorities in order to ease the application for geothermal use application for geothermal use’ ’

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Project Methodology Project Methodology

4 main stages in the project 4 main stages in the project Stage 1 Stage 1

• Establish the Legislative and Regulatory

Establish the Legislative and Regulatory deficiencies for geothermal energy/heat in the deficiencies for geothermal energy/heat in the ‘ ‘Target Target’ ’ countries countries – – Hungary, Ireland, Northern Hungary, Ireland, Northern Ireland, Poland Ireland, Poland Stage 2 Stage 2

• Establish the Legislative basis for geothermal heat

Establish the Legislative basis for geothermal heat in the in the ‘ ‘Regulated Regulated’ ’ or

• r ‘

‘Best Practice Best Practice’ ’ countries countries – – France, Germany, Netherlands France, Germany, Netherlands

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Project Methodology Project Methodology

Stage 3 Stage 3

• Development of a preliminary Framework

Development of a preliminary Framework Stage 4 Stage 4

• Consultation and amendment of the framework

Consultation and amendment of the framework to allow adaptation in the Target countries and to allow adaptation in the Target countries and beyond beyond

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GTR GTR-

• H Project Structure

H Project Structure

7 work packages: each 6 7 work packages: each 6 – – 8 months in length 8 months in length

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GTR GTR-

• H Tasks completed to date

H Tasks completed to date

• Management Committee meetings Dublin and Budapest

Management Committee meetings Dublin and Budapest – – (2 of 6 (2 of 6 throughout the project) throughout the project)

• Round

Round-

• Table discussions in Ireland, Hungary, Northern Ireland and

Table discussions in Ireland, Hungary, Northern Ireland and Poland Poland (Initial introduction of the project to the stakeholders and (Initial introduction of the project to the stakeholders and feedback) feedback)

• Analysis of barriers to the development of the Geothermal energy

Analysis of barriers to the development of the Geothermal energy sector sector -

• Questionnaire distribution

Questionnaire distribution – – (ongoing task to gauge (ongoing task to gauge participation and identify major issues) participation and identify major issues)

• Interviews in each of the

Interviews in each of the ‘ ‘Target Target’ ’ countries countries (ensuring all aspects of the (ensuring all aspects of the sector are presented) sector are presented)

• Compilation of Target country reports

Compilation of Target country reports (baseline of the legislative and (baseline of the legislative and geothermal geothermal sectoral sectoral issues) issues)

• Best Practice reports

Best Practice reports (Information gathering and planning of tours to (Information gathering and planning of tours to ‘ ‘Best Practice Best Practice’ ’ countries countries – – Germany, France, The Netherlands) Germany, France, The Netherlands)

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GTR GTR-

• H

H

Results so far Results so far

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GTR GTR-

• H

H ‘ ‘Target Target’ ’ Countries Countries – – workshop workshop attendees attendees

Stakeholder Organisations (Hungary, Ireland, Northern Ireland, Poland)

Geothermal Energy User 9% Construction, Component Manufacturers, Drillers 5% NGO 2% Other 18% Exploration or Resource Assessment Consultant 9% Geothermal Education

• r Association Facility

6% Investor 3% Industry & Technical Service Company 12% Legal Institution 1% Banking & Financial Institutions 2% Trade & Industry Association 7% National Government 10% Government Agency/Regional Authority (Water, Energy, Environment, Planning etc.) 29%

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• 127 Questionnaire Responses Across 4 target countries

(Hungary - 45, Northern Ireland/UK - 32, Ireland - 28, Poland - 40)

• 3 Main Stakeholder Proportions:

Largest - Government Agencies, Service Companies & Industry Medium - National Government, GT Energy Users, Trade & Industry Exploration/Resource Consultants Smallest - NGO, Banking/Financial, Legal, Investor, Education & Associations, Construction, Drillers, Component Manufacturers

• Other Stake Holders included: third level education, research &

development institutions, heating plant operators, engineering and planning consultants, public associations

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‘ ‘Target Target’ ’ Countries Countries – – workshop attendees and workshop attendees and feedback of issues of concern feedback of issues of concern

• Good spread within stakeholder groups

Good spread within stakeholder groups -

• Attendees reflect status of

Attendees reflect status of the sector in each state the sector in each state

• Majority

Majority -

• Government agencies and Industry

Government agencies and Industry -

• followed by National

followed by National Government & geothermal energy users Government & geothermal energy users

• Legal and financial attendance

Legal and financial attendance – – more participation as advance more participation as advance

• Ireland and Northern Ireland

Ireland and Northern Ireland – – good spread of participants good spread of participants -

• (Less

(Less well documented resources) well documented resources) -

• newness of the sector, need for

newness of the sector, need for information for potential members of this developing sector information for potential members of this developing sector

• Hungary and Poland

Hungary and Poland – – strong attendance from commercial & strong attendance from commercial & development side of the sector development side of the sector – – more developed GT industry more developed GT industry

• Diverse aspects of the sector

Diverse aspects of the sector -

• difficulty in producing a snapshot of

difficulty in producing a snapshot of the sector the sector – – multiple legislative tools multiple legislative tools

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Questionnaire Questionnaire – – Minimal or significant barriers? Minimal or significant barriers?

Legal Legal

• Lack of specific law/regulation related to geothermal?

Lack of specific law/regulation related to geothermal?

• Inadequate regulation?

Inadequate regulation?

• Lack of clarity on legal and regulation requirements?

Lack of clarity on legal and regulation requirements? Resource and exploitation Resource and exploitation

• Access to geological information on geothermal resources?

Access to geological information on geothermal resources?

• Availability of proven geothermal resource/resource risk?

Availability of proven geothermal resource/resource risk?

• Access to information on geothermal exploitation systems?

Access to information on geothermal exploitation systems? Financial Financial

• Availability of geothermal risk insurance?

Availability of geothermal risk insurance?

• Geothermal taxes?

Geothermal taxes?

• Lack of incentives / need to reduce payback period?

Lack of incentives / need to reduce payback period?

• High cost license/royalty (includes geological info. fee)?

High cost license/royalty (includes geological info. fee)?

• Cost of Environmental Impact Assessment (EIA)?

Cost of Environmental Impact Assessment (EIA)? Indirect Indirect

• Lack of standards +/or professional code of practice?

Lack of standards +/or professional code of practice?

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Northern Ireland

12 11 11 11

Lack of Incentives Access to Geological Information on Geothermal Resources Availability of Proven Geothermal Resource / Resource Risk Data Lack of Professional Code of Practice

Ireland

14 13 8

Lack of Specific Law/Regulation Related to Geothermal Resources Lack of Clarity on Legal & Regulation Requirements Inadequate Regulation

PRINCIPAL NATIONAL BARRIERS: PRINCIPAL NATIONAL BARRIERS:

Poland

25 28 29 29

Geothermal Taxes Inadequate Regulation Lack of Incentives High Cost of License/Royalty

Hungary

Lack of Incentives Lack of Clarity on Legal & Regulation Requirements Inadequate Regulation

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Questionnaire Results Questionnaire Results -

• Hungary

Hungary

Summary - Lack of specific law/inadequate regulation, lack of incentive, lack of clarity

Hungary

30 25 24

Lack of Incentives Lack of Clarity on Legal & Regulation Requirements Inadequate Regulation

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Questionnaire Results Questionnaire Results -

• Poland

Poland

Summary - Lack of incentives, high cost of licence/royalty, lack of specific law and inadequate regulation

Poland

25 28 29 29

Geothermal Taxes Inadequate Regulation Lack of Incentives High Cost of License/Royalty

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Questionnaire Results Questionnaire Results -

• Ireland

Ireland

Summary – Lack of specific law/Regulation, inadequate Regulation, lack of clarity Ireland

14 13 8

Lack of Specific Law/Regulation Related to Geothermal Resources Lack of Clarity on Legal & Regulation Requirements Inadequate Regulation

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Questionnaire Results Questionnaire Results – – Northern Ireland Northern Ireland

Summary - Access to geological information, lack of incentives, Proven geothermal resource, code of practice

Northern Ireland

12 11 11 11

Lack of Incentives Access to Geological Information on Geothermal Resources Availability of Proven Geothermal Resource / Resource Risk Data Lack of Professional Code of Practice

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INDIVIDUAL BARRIER COMPARISON INDIVIDUAL BARRIER COMPARISON

• Lack of specific regulation is perceived as a greater barrier in

Hungary and Poland rather than in the unregulated countries

• Inadequate Regulation is preventing the growth of the geothermal

sector in all 4 target countries

Lack of Specific Law/Regulation Related to Geothermal Resources

8 3 5 10 5 10 6 11 13 6 11 HU IRL NI PL 3 - medium 4 5 - significant

Inadequate Regulation

7 1 2 6

14 7 6 17 10 6 1 11 HU IRL NI PL 3 - medium

4 5 - significant

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• Proportionally Information on geothermal exploitation systems is

perceived as a more significant barrier in Ireland and N. Ireland / UK

• Geothermal Taxation is perceived as one of the most significant barriers in the

regulated countries (Hungary / Poland)

Access to Information on Geothermal Exploitation Systems

9 5 6 8 6 6 7 14 1 2 2 7 HU IRL NI PL 3 - medium 4 5 - significant

Geothermal Taxes

9 3 2 7 4 1 9 9 1 16 9 HU IRL NI PL 3 - medium 4 5 - significant

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Lack of Professional Code of Practice

5 4 7 8 6 3 HU IRL NI PL* 3 - medium 4 5 - significant

• Significant unregulated growth of GSHP installations in Ireland and N.Ireland/UK

has prompted the ‘lack of code of practice’ as a significant barrier. This is not the case for Hungary and Poland, where legislative requirements force developments to conform to existing codes of practice

• High costs of Licenses and Royalty are only perceived as a significant barrier in the

regulated countries particularly in Poland

High Cost of License/Royalty

15 1 2 8 6 1 2 8 3 21 HU IRL NI PL 3 - medium 4 5 - significant

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GTR GTR-

• H Questionnaire Comments

H Questionnaire Comments

• Confirmed need for better regulation and influence of the

Confirmed need for better regulation and influence of the lack of regulation lack of regulation (stakeholders in the sector) (stakeholders in the sector)

• Need for Regulation recognised more where there are

Need for Regulation recognised more where there are higher temperature proven resources higher temperature proven resources – – or where

• r where

inadequate water regulation is an issue (Ireland) inadequate water regulation is an issue (Ireland)

• Uncertainty in results regarding need for a separate

Uncertainty in results regarding need for a separate geothermal regulation geothermal regulation (review of the (review of the ‘ ‘regulated regulated’ ’ states will states will help clarify this) help clarify this)

• Incentives recently introduced in Ireland have been

Incentives recently introduced in Ireland have been successful (specifically in the shallow GT and GSHP successful (specifically in the shallow GT and GSHP areas) areas)

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Legislation Overview Legislation Overview -

• Ireland

Ireland

• Directive 2000/60/EC

Directive 2000/60/EC

• Directive 2006/118/EC

Directive 2006/118/EC

• Minerals Development Act,1940.

Minerals Development Act,1940.

• Petroleum & other Minerals Development Act,1960:

Petroleum & other Minerals Development Act,1960:

• Minerals Development Act, 1979

Minerals Development Act, 1979

• Minerals Development Act, 1995

Minerals Development Act, 1995

• Minerals Development Act, 1999

Minerals Development Act, 1999

• The Gas (Interim) (Regulation) Act, 2002

The Gas (Interim) (Regulation) Act, 2002

• Energy (Miscellaneous Provisions) Act 2006

Energy (Miscellaneous Provisions) Act 2006

• Electricity Regulation Act, 1999.

Electricity Regulation Act, 1999.

• Planning Act and Regulations

Planning Act and Regulations

• Various Financial Acts

Various Financial Acts

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Ireland Legislation Overview Ireland Legislation Overview

• Directive 2000/60/EC

Directive 2000/60/EC framework for community action on water policy framework for community action on water policy

• Directive 2006/118/EC on protection of groundwater against pollu

Directive 2006/118/EC on protection of groundwater against pollution/deterioration tion/deterioration

• Minerals Development Act,1940. Principal Act:

Minerals Development Act,1940. Principal Act: defn defn of minerals, mineral ownership,

• f minerals, mineral ownership,

prospecting prospecting licences licences, State mining leases etc. , State mining leases etc.

• Petroleum & other Minerals Development Act,1960: Removed Petrol

Petroleum & other Minerals Development Act,1960: Removed Petroleum from the eum from the 1940 Act, and made other minor amendments. 1940 Act, and made other minor amendments.

• Minerals Development Act, 1979

Minerals Development Act, 1979: Vests in Minister exclusive right to work privately : Vests in Minister exclusive right to work privately

• wned minerals, provides for permitting of working of minerals b
• wned minerals, provides for permitting of working of minerals by third parties,

y third parties, subject to payment of compensation. subject to payment of compensation.

• Minerals Development Act, 1995: Deals with renewals of Prospecti

Minerals Development Act, 1995: Deals with renewals of Prospecting ng Licences Licences. .

• Minerals Development Act, 1999

Minerals Development Act, 1999: Clarifies State ownership of certain minerals, : Clarifies State ownership of certain minerals, addresses transfer of right to compensation under 1979 act. addresses transfer of right to compensation under 1979 act. Finance Act (1956) Finance Act (1956) financial incentives, Additional financial Incentives in 1967 kn financial incentives, Additional financial Incentives in 1967 known as 20 year tax

• wn as 20 year tax

holiday modified in 1974 holiday modified in 1974

• Electricity Regulation Act, 1999.

Electricity Regulation Act, 1999.

• The Gas (Interim) (Regulation) Act, 2002 expanded CER jurisdicti

The Gas (Interim) (Regulation) Act, 2002 expanded CER jurisdiction to include

• n to include

regulation of the natural gas market. regulation of the natural gas market.

• Energy (Miscellaneous Provisions) Act 2006, extends the statutor

Energy (Miscellaneous Provisions) Act 2006, extends the statutory responsibilities of y responsibilities of the CER with regard to gas and electrical safety. the CER with regard to gas and electrical safety.

• EPA Act Planning Act and Regulations, Financial Acts

EPA Act Planning Act and Regulations, Financial Acts

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Ireland Regulation Overview Ireland Regulation Overview

• Minerals Development Regulations, 1979,

Minerals Development Regulations, 1979,

• Minerals Development (Amendment) Regulations, 1994

Minerals Development (Amendment) Regulations, 1994

• Minerals Development (Application Fees for certain state mining

Minerals Development (Application Fees for certain state mining facilities) Regulations, 1996. facilities) Regulations, 1996.

• Local Authority regulations

Local Authority regulations -

• Planning and EPA

Planning and EPA Planning Permission, from the Local Planning Authority and an In Planning Permission, from the Local Planning Authority and an Integrated Pollution Control tegrated Pollution Control Licence Licence, from the EPA must be obtained before the commencement of comme , from the EPA must be obtained before the commencement of commercial rcial extraction and discharge, Water Abstraction License extraction and discharge, Water Abstraction License

• Petroleum Prospecting

Petroleum Prospecting Licence Licence regulations issued under Section 9(1) of the 1960 Act regulations issued under Section 9(1) of the 1960 Act

• Undertaking to grant an Exploration

Undertaking to grant an Exploration Licence Licence ("Licensing Option ("Licensing Option” ”) issued under Section 7(1) ) issued under Section 7(1)

• f the 1960 Act
• f the 1960 Act
• Exploration

Exploration Licence Licence issued under Section 8(1) of the 1960 Act issued under Section 8(1) of the 1960 Act

• Undertaking to grant a Petroleum Lease ("Lease Undertaking") iss

Undertaking to grant a Petroleum Lease ("Lease Undertaking") issued Section 10(1) of the ued Section 10(1) of the 1960 Act 1960 Act

• Petroleum Lease issued under Section 13(1) of the 1960 Act

Petroleum Lease issued under Section 13(1) of the 1960 Act

• Reserved Area

Reserved Area Licence Licence issued under Section 19(1) of the 1960 Act issued under Section 19(1) of the 1960 Act

• Revised terms

Revised terms – – 2003 to Boost Petroleum Exploration 2003 to Boost Petroleum Exploration

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• Hungary:
• the licensing structure DID NOT grant the exclusive usage
• f water reservoir resources (Mining Act Amendment has

changed that !)

• environmental, water & energy legislation
• lack of incentives make investment in geothermal energy

a greater financial burden than in other EU countries

• environmental oppsition to geothermal energy
• Poland:
• centralised state policy for the granting of licenses lacks

coherence & administrative processes are too long

• legislation licenses surface area access and not reservoir

production area and fixes the price for GT & mineral resources

• high capital costs associated with data purchase, licensing,

review of geological assessment, EIA & infrastructure tax

• centralised system of fixed heat prices makes geothermal

energy uncompetitive profit from heat sales are not possible (VAT 22%)

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• Ireland:
• wnership of geothermal energy is undefined and is not

recognised as a natural resource

• environmental & water legislation makes reference to geothermal

energy, but are not enacted even for heat pumps

• current legislation provides a potenital good basis for regulating the

geothermal sector but is currently inadequate

• large geothermal projects are perceived as high risk by financial

institution due to the lack of deep geothermal/geological info

• Northern Ireland/UK:
• lack of resource definitions & ownership definition (depth / T ). Mining

legislation to be revised in 2009.

• lack of information of geothermal energy resource potential and risk,

data - should be made freely available

• GSHP stakeholder influence is very strong, lack of professional code
• f practice in implementing existing water/enviro legislation
• High CAPEX projects deter the interest from financial institutions /

legal sector

• lack of incentives for the development of deep geothermal projects

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Implications of results for future framework! Implications of results for future framework!

• Potential framework models for geothermal energy beginning to

Potential framework models for geothermal energy beginning to emerge as country geothermal emerge as country geothermal ‘ ‘profiles profiles’ ’ are compiled. In each case a are compiled. In each case a different different ‘ ‘natural fit natural fit’ ’ within existing legislation within existing legislation (framework will have to be (framework will have to be flexible enough to accommodate this). flexible enough to accommodate this). ‘ ‘Civil Civil’ ’ versus versus ‘ ‘Common Common’ ’ law as law as basis for legislation basis for legislation

• Identified

Identified Barrier Topics Barrier Topics are similar but are similar but specific legislative specific legislative implementation varies implementation varies from country to country from country to country

• Specific

Specific barrier topics barrier topics need to be identified during WP 2 will be need to be identified during WP 2 will be ‘ ‘backbone backbone’ ’ of the template framework

• f the template framework
• Attention will be given to the wider applicability of the templa

Attention will be given to the wider applicability of the template te framework to the EU 25 as the project progresses framework to the EU 25 as the project progresses

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GTR GTR-

• H

H Quantification of success Quantification of success

• Matching solutions from the regulated countries to the existing

Matching solutions from the regulated countries to the existing problems in the non problems in the non-

• legislated target countries.

legislated target countries. ( (Each existing barrier will have an identified solution) Each existing barrier will have an identified solution)

• Adoption of Framework

Adoption of Framework ( (4 member states will be actively using framework to form the bas 4 member states will be actively using framework to form the basis for is for new legislation through the involvement of new legislation through the involvement of MEPs MEPs and local MPs at a and local MPs at a national level) national level)

• Website Registration (after project completion) will give access

Website Registration (after project completion) will give access to to framework data and documentation framework data and documentation

• Increased Number of geothermal exploration license granted

Increased Number of geothermal exploration license granted (5 licenses within 2 years of the regulation being adopted) (5 licenses within 2 years of the regulation being adopted)

• Increase in the geothermal energy contribution to RE heat in the

Increase in the geothermal energy contribution to RE heat in the EU. EU. (500 (500 MWth MWth increase of geothermal energy contributed to RES heat) increase of geothermal energy contributed to RES heat)

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GTR GTR-

• H

H -

• next stage of the project

next stage of the project

Workpackage Workpackage 3 3

• Review of the

Review of the ‘ ‘Regulated Regulated’ ’ countries countries – – Germany, Germany, France and Netherlands (Sept France and Netherlands (Sept ’ ’07 07 -

• Feb

Feb ’ ’08) 08)

• Tours/workshops/interviews to meet the

Tours/workshops/interviews to meet the stakeholders and review the success of the stakeholders and review the success of the regulation regulation -

• provide a view of the regulation in

provide a view of the regulation in

• peration (Sept
• peration (Sept –

– Oct Oct ’ ’07) 07)

Thank You Thank You

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