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Geothermal Energy Systems Assessment - A Strategic Assessment of Technical, Environmental, Institutional and Economic Potentials in Central and Eastern European Countries 5. Concluding RemarksThrough this comprehensive assessment of geothermal energy potentials in the CEECs, a number of factors and challenges of relevance to future development have been identified and analysed. It is obvious from the outcome of this study that geothermal energy development is currently underestimated in relation to national energy policy reforms and planning in the CEECs. In order to promote geothermal energy development in the CEECs, more focus on the creation of incentives and frameworks for this particular energy source is therefore needed. It has been confirmed that the technical and environmental potentials of geothermal energy systems are extensive in Central and Eastern Europe. Considerable reservoirs of high-quality hot water exist in the underground of most of the CEECs examined in this study, and calculations and studies of environmental accounts demonstrate significant positive effects from geothermal energy plants. Major geo-political forces and environmental policy developments are expected to increase the tendency to internalise more and more environmental accounts directly into the economic system(s) that governs both economic decision makers and the "invisible" hand of the markets. From an economic point of view - and considering that the CEECs still are transitional economies - the ongoing process of changes in all focus countries was found to improve future conditions for geothermal energy development. However, it was also found that the CEECs demonstrate rather different levels of preparation towards making GE an attractive "economic business". In some countries, donor funding will be required to demonstrate efficient geothermal project models, whereas in other CEECs, focus should be directed more towards how to attract private/national investors. The relative imperfection of insurance systems to cover geological risks is one important factor impeding inflow of private capital into geothermal projects. From a political and institutional point of view, this report has identified the major challenges to the future of GE in the CEECs. Both politically and institutionally, there is a certain amount of inertia in most of the countries investigated. GE faces established interest groups and mindsets. It also faces existing infrastructures, legislation and other rules and patterns that are not always conducive to the development of the GE sector. These challenges have been listed throughout this report and are addressed by the strategy outlined and proposed. The geothermal projects evaluated have been launched on an individual basis as separate projects initiated from a bottom-up approach. The experiences so far from these projects have been translated into a list of lessons learned, which are presented throughout this report. Eventually, these lessons were converted into a set of best practice criteria to be used as a base for future selection of geothermal projects for financing within the CEECs. Know-how and technologies built into the Danish district heating systems, and the institutional environment surrounding it, serve to make the Danish low-temperature district heating systems highly relevant for export in relation to geothermal projects in the CEECs. The effort and experiences generated by Danish geothermal experts have proved very useful in several CEECs, where geothermal energy sources have been integrated into district heating systems. One of the major outcomes of this study is that in order to achieve most value and environmental impact for the DEPA funds in the CEECs, geothermal energy projects should in the future be considered as more than just isolated projects. Indeed, a much more comprehensive approach is needed, both in relation to the CEECs, but also taking into consideration the various existing and potential actors and their comparative strengths and weaknesses. The timing of this geothermal study has been excellent. The fact that for most CEECs the period of transition is gradually nearing completion, and that integration into the European Union is within sight, offers new perspectives. In this context, promotion of geothermal energy at a wider scale presents new opportunities, but indeed also a range of challenges, which must be faced and handled by all actors involved. Another, and more unpredictable, result of this study and its timing has been the great and active interest from international as well as Danish actors within the geothermal field in following the study from the sideline and contributing to the discussions and development of operational action proposals in favour of geothermal development in the CEECs. The increasing international attention on the potentials of geothermal energy was documented at the International Workshop on "The Future of Geothermal Energy in the CEECs", carried out on October 8th and 9th 2001 in Copenhagen, as part of this study. The workshop was attended by representatives from international financial institutions involved in geothermal project activities, such as the EBRD, EIB and NEFCO/NIB, and by other international geothermal organizations and programmes like the UNEP/GEF Network and the Geothermal Implementing Agreement (GIA). From Denmark representatives from DEPA, DEA, Danish Investment Funds and private companies assisted at the workshop. The workshop also paved the way for further concerted action and contact between both international and national geothermal actors. The workshop indeed confirmed that DEPA, due to its flexibility and experience so far, can become a main player in creating a future "take-off" for geothermal energy development in the CEECs. This study has documented that sustainable development of geothermal energy projects in the CEECs will not only require a better mix of financial and technical assistance inputs. It will also require that the institutional and policy framework will be prepared to support such inputs. Moreover, with an adequate institutional framework in place, foreign investments will be encouraged and GE projects may be implemented easier and faster than before. When compared to the IFIs, a major reason why DEPA has a pivotal role in promoting geothermal energy is the "scaling problem". This problem is evident when, for instance, the European Investment Bank and the World Bank voice its preference for "large" projects. This situation creates a need for someone to fit project and promoters and help "tailor" projects, including packets of finance. Maximising the additionality of DEPA in comparison to IFIs and bilateral donor organisations is an important objective in this process. With this report, DEPA moves towards a strategic process designed to optimise the environmental impact and benefits for DEPA funds. As outlined in this study, coherent and integrated support to geothermal energy development in the CEECs presents highly positive and promising potentials for environmental investments. Through a strengthening of its central position within the geothermal field, DEPA will therefore contribute significantly to achieve the objectives of the DANCEE programme, within an area where Danish experts and companies possess relevant competencies and experiences.
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