Geothermal Energy in the city of Peace and Justice

The Hague to become new Global Centre of Excellence in Geothermal Energy

The Hague is positioning itself to become a global hub in deep geothermal energy, city officials and industry representatives told a delegation of the International Geothermal Association at a conference in the coastal city. The Hague has been preparing this move for years, Deputy Mayor Liesbeth van Tongeren revealed: it boasts a new international research centre for sustainable geo-energy, a recently revitalised geothermal production plant within the city limits, world-leading horticultural greenhouses that are increasingly shifting from natural gas to geothermal energy, and world-class energy research institutions. It is also home to the headquarters of Shell and other major oil and gas companies that are committed to developing geothermal as an alternative form of energy, noted Van Tongeren.

The Hague & Partners Business Agency and Convention Bureau managed to organise a rare corona-proof event in the Hilton Hotel in The Hague on 23 September. It was one of the first live conferences in the country since the lockdowns in March. The Hague Geothermal Reception, as it was called, included a fact finding mission, as well as a round table and conference with delegates from the International Geothermal Association (IGA), the Dutch Association of Geothermal Operators (DAGO) and other industry organisations and research institutions.

Liesbeth van Tongeren, Deputy Mayor and Alderman for Sustainability, Environment and Energy Transition, revealed that The Hague has been working hard for a long time to gear itself up as a new Global Centre of Excellence in the geothermal energy space. “We have organised a coalition of the willing to bring it together and have organised the political and financial support to back up our play,” she said.

Unique

Van Tongeren presented a number of trump cards her city has assembled for its geothermal drive. One is the new Rijswijk Centre for Sustainable Geo-Energy that was opened in March of this year at the premises where Shell used to have one of its major oil and gas research centres. The Rijswijk Centre, said Van Tongeren, is a unique field laboratory where geothermal projects can be tested in reality with advanced drilling equipment. The centre, which has 20 installations that cover the entire spectrum of underground drilling, including a large drilling rig, hydraulic presses, pressure vessels and piping systems, is accessible to companies that want to test new drilling techniques and materials. It provides them with access to modern facilities that would otherwise be expensive to build.

Marit Brommer, Executive Director of the IGA said, “There is no country in the world that has anything like this.” In addition to the Rijswijk Centre, The Hague has another unique geothermal asset, said Van Tongeren: one of the world’s few inner-city geothermal production installations. This facility, Haagse Aardwarmte Leyweg (HAL), is a 7 MW doublet (a production well and injection well) that produces heat at 76 degrees Celsius from a depth of two kilometres, which is used to heat homes in the neighbourhood of the plant. Yet another local geothermal force to be reckoned with, said Van Tongeren, is the horticultural sector. The region of The Hague is the centre of the world-famous Dutch greenhouses, which are a key factor in making the Netherlands, despite its small size, one of the largest food exporters in the world. The horticultural sector is highly energy-intensive and has long relied on natural gas as its main heating fuel.

But this is about to change, Piet Broekharst of trade association Glastuinbouw Nederland told the conference. The sector aims to become climate-neutral by 2040. A big part of this effort will come from geothermal, which is to provide one third of its energy by then. At this moment horticultural companies are already the main developers of geothermal wells in the Netherlands.

Revolutionary impact

A relatively new player in the geothermal sector, but one that may well have a revolutionary impact, is the traditional oil and gas industry. The Hague has for many decades been the home not just of the global head offices of Shell, but also of the national headquarters of the big oil and gas companies active in the North Sea as well as most engineering companies that service them. Some 7,400 highly qualified people work in this sector in The Hague.

Now the oil and gas industry has definitely set its sights on geothermal energy, said Tony O’Reilly, Director of London-based dCarbonX, who advises private equity investors on the possibilities of this alternative energy source. O’Reilly, who came over from the UK to attend the conference, noted that the entire oil and gas sector is currently looking for alternative energies to invest in. “If the oil and gas companies bring their technical and organisational skills to bear on the geothermal industry, this could revolutionise the sector, and make it much more professional.” Jeroen van Duin, Shell Geothermal, who attended the event confirmed that his company regards geothermal energy in the Netherlands as an important engine of growth for the future. Shell and other major energy companies, such as Engie, have become active participants in many geothermal projects in the Netherlands over the past few years: “This means you don’t just have local players anymore, but also players that are active in a number of different projects. Shell is the operator in the consortium Warmte Leeuwarden, which will be realised soon now. That will help to create a learning curve that will bring costs down”.

The Geothermal Decade

But The Hague’s geothermal drive does not just rely on local resources. It also has national support. Van Tongeren noted that EBN (Energie Beheer Nederland), a Dutch state-owned company that traditionally is one of the main investors in oil and gas projects, has a total asset value of €60 billion and recently got the green light to invest in geothermal energy as well. Indeed, under a new Dutch law EBN will be assigned to participate financially in all deep geothermal energy projects in the future, showing the firm commitment the Dutch government has to backing up its geothermal ambitions.

EBN not only provides financial support, noted Van Tongeren. Together with TNO (Netherlands Organisation for Applied Scientific Research), the internationally renowned energy research institute based in The Hague, EBN has been constructing a seismic map of the entire subsurface of the Netherlands, which will soon be publicly available. It will show investors exactly which areas in the country have the most potential for geothermal energy sector.

Marit Brommer, the IGA’s Executive Director, said that geothermal energy is on the verge of a major worldwide expansion. “We have 375 geothermal power plants in the world that are very successful. But they are essentially all local initiatives. What I see happening now is that geothermal energy is becoming a globally recognised energy resource, not just for power but for heating as well. It is increasingly understood that it is an essential instrument to achieve the Paris climate targets. The 2020s will be the Geothermal Decade.”

According to Brommer, The Hague and the Netherlands are showing the way forward for the geothermal sector. “What I see here is an entire geo-energy community getting together, providing financial, political, technological and business support. This will create a new business model for geothermal energy that we can take to other countries in the world, which is precisely what we as IGA are looking for.”

Unique window of opportunity for geothermal energy in the Netherlands

The Netherlands aims to increase its geothermal energy production ten-fold over the next ten years, said Radboud Vorage, Chairman of the Dutch Association of Geothermal Operators (DAGO), at the Geothermal Reception event in The Hague.

Currently, the Netherlands produces 5.6 PJ (petajoule) of geothermal heat, enough to heat 110,000 homes. The government has set a target to increase this to 50 PJ by 2030 and over 200 PJ by 2050, noted Vourage. That would be enough to supply 20% of all heating demand in the Netherlands.

The ambition of DAGO, said Vorage, is to create “a thriving geothermal business community in the Netherlands, aimed at technological innovation, cost reduction, international cooperation and good communication with the public.”

Geothermal energy is presented with a unique window of opportunity, Vorage pointed out. “Under the Dutch Climate Accord, all municipalities have to come up with a plan to decarbonise their energy systems, which means in particular: to gradually eliminate natural gas. About half of future heating demand for houses is expected to be met by new and existing district heating networks, for which geothermal energy can be an important resource.”

EBN, the Dutch state-owned gas operator, has just released a detailed study (in Dutch) on the potential of geothermal energy for the Netherlands. This concludes that geothermal can provide 290 PJ of heat at competitive costs by 2030, if the industry manages to reduce costs by 30% over the next ten years. Of this amount, 88 PJ can be used to heat 2.6 million houses, over a quarter of the total in the Netherlands. Another 55 PJ can be used in horticulture, which would cover 58% of that sector’s heating needs, and 147 PJ in low-temperature industrial processes, equivalent to 28% of that sector’s heating demand.

Contact

If you have any questions regarding the content of this article or would like to get some clarification, please contact Philip Mulder, The Hague & Partners Business Advisor New Energy - p.mulder@thehague.com ; Mobile: +31686843715