1. Introduction, Danish Environmental Protection Agency

Geothermal Energy Systems Assessment - A Strategic Assessment of Technical, Environmental, Institutional and Economic Potentials in Central and Eastern European Countries

1. Introduction

The Danish Environmental Protection Agency (DEPA) has, through the DANCEE programme, initiated and co-funded 6 geothermal energy (GE) projects in the Central and Eastern Europe Countries (CEECs) during the past 9 years. A USD 12 million project in Pyrzyce in the western part of Poland was the first demonstration project. Subsequently, projects were launched in Zakopane (Podhale) in the southern part of Poland, in Kleipéda (Lithuania), in Ziar nad Hronum and Kosice (Slovakia) and in Decin (Czech Republic).

The geothermal projects funded and implemented by DEPA were perceived as generally successful and the potential for future development of GE in the CEECs as promising. However, the projects have so far been launched on an individual basis, and they were, - and remain - , separate projects primarily characterised by being initiated from a bottom-up approach and only to a lesser extent guided by coherent strategies.

DEPA consequently contracted Kvistgaard Consult to carry out a Geothermal Energy Systems Assessment (GESA), including a strategic assessment of technical, environmental, institutional and economic potentials for future geothermal energy development in Central and Eastern European Countries.

The GESA was carried out by consultants from Kvistgaard Consult between April 2001 and December 2001 and was divided into 4 basic components:

1) A retrospective study, consisting of an evaluation of 8 geothermal projects (case studies) including the 6 projects co-funded by DEPA. The case studies, in turn, comprise both on site evaluation during project visits and desk analysis of existing information on each project.

2) A prospective study, based on country missions to the five DANCEE focus countries (Poland, Slovakia, Russia, Ukraine and Romania) and desk research.

3) An international workshop on the future of GE in the CEECs held on October 8th - 9th 2001 in Copenhagen. The workshop was attended by governmental representatives as well as project stakeholders from all CEECs covered by this study. Furthermore, delegates from main international financial institutions as well as from Danish Ministries, companies and investments funds attended the workshop.

4) A Strategic Action Plan (SAP), based on material collected from various sources, including actual project proposals received during country missions.

While 12 Central and Eastern European Countries have been considered for this study, special attention has been given to analyse conditions in the five countries defined by DEPA as the DANCEE focus countries: Poland, Slovakia, Russia, Ukraine and Romania. The remaining countries, - the nonfocus countries - , are either: 1) Already phased out of the DANCEE programme (Hungary); 2) Currently in the process of being phased out (Czech Republic); or 3) Subject to DEPA geothermal project funding, but to a lesser extent than the focus countries (Bulgaria, Lithuania and Latvia). Belarus has not been included in the study and Estonia was also excluded due to the country's lack of geothermal potential.

Two volumes have been produced from the GESA study:

1) Main Report (Volume I)
2) Country Profiles and Case Studies (Volume II)

Furthermore, a Strategic Action Plan (unpublished) has been prepared for DEPA, including concrete project investment proposals.

This Executive Summary comprises the main issues from the Main Report (Volume I) and is divided into three main sections:

A Retrospective Analysis (Chapter 2), where lessons learned from the DANCEE projects are presented and transformed into a best practice project design.

A Prospective Analysis (Chapter 3) containing a comparative analysis of technical, institutional, economic and environmental potentials for future development of GE projects in the five DANCEE focus countries.

Finally, a Strategic Assessment (Chapter 4) where concrete DEPA (DANCEE) action proposals are formulated in view of DEPAs current and potential role as an international key player in relation to GE development in the CEECs.