Non Technical Barriers in Developing Geothermal District Heating in the Paris Basin

1. Non Technical Barriers in Developing Geothermal District Heating in the Paris Basin Pierre UNGEMACH and Miklos ANTICS GPC IP Paris Nord 2, 14, rue de la Perdrix, Lot 109, B.P. 50030 95946 ROISSY CDG CEDEX, FRANCE e-mail: pierre.ungemach@geoproduction.fr m.antics@geoproduction.fr

2. OUTLINE MILESTONES STATUS TECHNICAL SHORTCOMINGS NON TECHNICAL OBSTACLES CONCLUSIONS

3. MILESTONES (1) 1960�s Pre-oil shock first attempt � abandoned second attempt successful doublet completion 1973-1978 Post first oil shock four completed doublets enforcement of legal framework 1979-1986 Post second oil shock 51 completed doublets >90% success ratio first well damage symptoms late 1980�s Early exploitation stages thermochemical (corrosion/scaling) damage equipment failure

4. MILESTONES (2) 1990�s Technological/managerial maturation technological improvements (R&D stimuli) debt renegotiation abandonment of 21 non economic/severely damaged doublets 2000�s Follow-up. Where to go next? Privatisation Co-generation Future prospects (development vs. sustainability issues)

5. PARIS BASIN DISTRICT HEATING SCHEME

6. PARIS BASIN DISTRICT HEATINGDOUBLET COMPLETION/ABANDONMENT STATUS

7. PARIS BASIN GEOTHERMAL HEATING

8. TECHNICAL SHORTCOMINGS Corrosion/scaling damage thermochemically sensitive geothermal brine causing well damage (corroded casing, reservoir plugging) and equipment failure Equipment failure Downhole production pumps Injection pumps Heat exchanger plugging Regulation malfunctioning Consequences Productivity losses Frequent/prolonged doublet shutdown

9. NON TECHNICAL BARRIERSFINANCIAL Massive debt charges Investment 10 M� OM costs 0.6 M� Equity 5-10 % Debt 90-95 % Low fossil fuel costs MWht natural gas < 30 � Consequences Debt repayment charge >50-60% of revenues Near to bankruptcy state

10. NON TECHNICAL BARRIERSSELECTED FINANCIAL FIGURES

11. NON TECHNICAL BARRIERSOPERATOR�S EXPERTISE Geothermal operators lacking Mining experience (well maintenance/workover, downhole production pumps, corrosive/scaling fluids handling) Heating experience in operating GDH grids, under retrofitted schemes, combining several base load, backup/relief energy sources and fuels Managerial/entrepreneurial skills No integrated management structure. Unclear definition of intervening parties duties and commitments. Inefficient marketing/negotiation of heat sales and users� subscription contracts

12. NON TECHNICAL BARRIERSFISCAL (1) VAT 19.6 % applicable to GDH operators whereas gas and electricity producers benefit from a 5.5 % rate. This is clearly unfair. IMPACT:

13. NON TECHNICAL BARRIERSFISCAL (2) Local, so called, professional tax penalises GDH grids serviced under lease/concession contracts (non deductible infrastructure neutral costs). Prejudice: GDH grid serving 5,000 equivalent dwellings #70,000 �/yr. Ecotax exemption for individual users (families) arguing that ecologic taxation do not apply to them whereas they represent ca 25% of total energy consumption (heat+power)

14. NON TECHNICAL BARRIERSIMAGE GDH difficult to apprehend & comprehend GDH remains esoteric and somewhat exotic compared to other RE and fossil fuel sources GDH regarded, in the early days, as a poorly reliable, costly and, occasionally, hazardous technology More efforts required to attract a wider social acceptance and public awareness.

15. NON TECHNICAL BARRIERSCONCLUSIONS/RECOMMENDATIONS Most NT obstacles, if not yet totally removed, are being progressively overcome WHAT IS NEEDED MOST Operators side. More integration, less dissemination, by grouping several GDH grids into single management structures with a well defined mining/heating synergy State side. A clearly stated (and applied) environmental policy explicitly by favouring RES via relevant regulation, fiscal incentives and ecologic taxation. Overall. Gain wider social acceptance via selectively targeted actions.