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Summary of our market study
The global geothermal market is growing, with forecasts predicting an increase in production capacity from 92 TWh to 282 TWh by 2030.
The United States remains the leading producer, with around 19 TWh of geothermal energy, followed by Indonesia and the Philippines.
Geothermal energy in France: untapped potential
In France, geothermal energy is a high-potential market that remains largely under-exploited. The Bouillante power plant in Guadeloupe is a notable producer, contributing 110 GWh, or 6% of the island's energy output.
The Soultz-sous-Forêts project in Alsace has a production capacity of 1.7 MW (12 GWh per year), and other regions such as the Massif Central and Languedoc-Roussillon have additional potential.
Despite a slight increase in recent years, geothermal energy's share of heat and power production in France remains below that of conventional energy.lectricity in France remains below 5% and 4% respectively, with a production potential of over 3,000 MW for geothermal electricity.
The regulatory framework is evolving, and the government's 2023 action plan aims to increase the number of deep geothermal projects by 40% by 2030, while doubling the number of geothermal heat pump installations by 2025.
Geothermal energy accounts for less than 4% of heat production in France.
Geothermal installations provide heating, hot water and cooling for over 1.2 million French residents, equivalent to around 1.8% of the total population.
The heat pump market plays a major role in the demand for geothermal energy. It is showing strong growth, with a 30% increase in sales of air-to-water heat pumps and a 7% rise for geothermal heat pumps between 2021 and 2022.
Heat pumps account for 12% of French renewable energy production. This contribution is set to rise to 34% by 2035, and almost 50% by 2050.
Geothermal energy falls into two categories: shallow geothermal on the one hand, and deep geothermal on the other, the latter including both hydrothermal and advanced systems exploiting higher temperatures between 200°C and 600°C.
Installation costs naturally vary according to the complexity of the technology, and for a typical shallow geothermal installation, you can expect to spend around €19,600.
Players in the French geothermal energy market
- Électricité de France (EDF) dominates the electricity generation landscape.
- Local distribution companies (ELD) form regional entities within the market, responding to specific local energy needs
- Engie and TotalEnergies, companies that have diversified into renewable energies and geothermal energy.
- Réseau de Transport d'Électricité (RTE), the transmission system operator, ensures that electricity generated, including from geothermal sources, flows efficiently and reliably on the high-voltage transmission grid. A subsidiary of EDF, RTE plays a crucial role in balancing the national grid and facilitating the integration of renewable energies.
- Enedis, distribution network operator
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Summary and extracts
1 Market overview
1.1 Introduction
Geothermal energy is the use of the natural heat of the ground or groundwater as a means of heating or producing energy( mainly electricity). Collectors are buried in the ground and connected to a boiler to generate constant heat for heating a home in winter and cooling it in summer. At a depth of 60 cm, for example, the ground temperature is a constant 14°. There are several different types of geothermal energy: shallow, low-temperature geothermal energy, deep, high-temperature geothermal energy and very deep, high-temperature geothermal energy. There is also high-energy, low-energy and very low-energy geothermal energy.
Geothermal energy accounts for less than 4% of heat production in France and 5% of electricity production. France's potential for geothermal energy production is over 3,000 MW of geothermal electricity, which is a significant figure; 90% of the country could be covered by surface geothermal energy. This market brings together around a hundred companies in France and more than 15,000 jobs in energy companies and geothermal specialists.
Despite tax credits, the geothermal market has been slow to take off in the residential sector (whereas it was booming in the was booming in the 1970s, it came to a halt with the fall in oil prices in the 1980s). Nevertheless, in 2023, the geothermal heat pump market is up 19% in value terms on 2022, and the recovery of the new housing market could boost this market segment over the next few years.
In 2023, against a backdrop of rising electricity and hydrocarbon prices, geothermal energy is becoming an alternative to traditional energy sources, and the government has launched an ambitious plan to promote this still little-known energy source.
1.2 Overview of the global geothermal market
Geothermal energy has been growing steadily since the early ****s. Indeed, geothermal energy production capacity has risen from ** TWh to ** TWh in ****. This segment of renewable energies is set to continue growing in the future: forecasts suggest that production capacity will rise to *** TWh.
Geothermal energy production in the sustainable development scenario, World, ****-****, in TWh IEA
The United States is the leading producer of geothermal energy. In fact, as the following graph shows, the United States' national production of geothermal energy amounted to **.* TWh. Indonesia and the Philippines are also major global producers, with **.* TWh and **.* TWh of geothermal energy respectively. Main geothermal electricity-producing countries World, ****, in TWh EDF
1.3 Geothermal energy in France: a high-potential, under-exploited market
In France, only the Bouillante power plant in Guadeloupe produces geothermal electricity on an industrial scale. With a capacity of **.* MWe divided between two units, it produced *** GWh in ****, i.e. *% of the island's electricity production. By ****, Bouillante's electricity production should be increased by **MWe. [***]
Initiated in ****, the Soultz-sous-forêts (***) program aims to perfect geothermal technology by extracting heat from rocks. In ****, the laboratory center became an industrial site for electricity production. With a capacity of *.* MW, the site is able to produce ** GWh per year, equivalent to the electricity consumption of *,*** homes.
Other sites in the Massif Central and Languedoc-Roussillon regions, as well as in Martinique and Réunion, have the potential to host geothermal sites. These correspond to the most volcanic areas in France.
The graph below shows that over the long term, geothermal energy production in France has been on the rise in recent years, despite a slight downturn in ****, stabilizing in ****.
Primary production of geothermal energy for thermal use in France from **** to **** France, **** - ****, ktoe French Ministry of the Environment, Energy and the Sea
Nevertheless, the potential of geothermal energy in France is still under-exploited, as shown by the sales figure for geothermal energy in renewable ...
1.4 The effect of the COVID-19 pandemic
As the graph below shows, the Covid-** epidemic led to a drop in the sector's sales. This was due to the unprecedented economic slowdown, which led to a drastic drop in electricity consumption in the tertiary and industrial sectors. Industry, particularly manufacturing, saw its consumption fall by almost **%, and by **% for the rail sector. The slight increase in household consumption over the same period failed to offset this decline.
Monthly index of revenues from electricity generation, transmission and distribution France, **** and ****, base *** in **** Source: ****
On the other hand, the share of renewable energies in the energy mix has increased. It appears that coal- and gas-fired power plants hardly operated at all, while renewable power plants continued to operate normally. (***)
2 Demand analysis
2.1 Trends in electricity consumption in France
The **** Energy and Climate Act sets a target for France of **% of energy produced from renewable sources in gross final energy consumption by ****. By ****, thermal and waste energyproduction will account for **% of total primary energy production, as a result of the investments made to promote its development.
Renewable energy consumption by sector France, ****, in
The Programmation Pluriannuelle de l'Énergie (***), which sets out France's energy transition strategy for the period ****-****, sets targets for geothermal heat production. The table below summarizes these targets in terms of geothermal energy production.
Geothermal heat and electricity production targets (***) **** **** **** low target **** high target Heat (***) Geothermal heat pumps *,* *,* * * Deep geothermal *,** *,* * *,* Electricity (***) Deep geothermal * ** ** **
2.2 Geothermal energy demand in France
Heating networks and all geothermal installations assisted by heat pumps supply around ***,*** housing equivalents, of which ***,*** (***). Thus, residential demand remains an important determinant of geothermal energy demand in France
Focusing on household use of electricity in a residential context, it appears that heating accounts for the majority of electricity expenditure. In ****, heating accounted for **% of household electricity expenditure, down * points on **** and ** points on ****.
Breakdown of household consumption in their dwellings France, ****-****, in % Source: ****
Criteria for choosing a supplier Among residential customers, **.*% changed electricity supplier in ****. Switching supplier therefore remains in the minority, which explains EDF's dominance despite the opening up to competition. However, the reasons for switching are indicative of the decisive criteria in choosing a supplier. The graph below shows that price and price stability are the main criteria taken into account by households. Quality of service, the eco-responsibility of the offer and the existence of an advantageous price in the first year are also important factors. What would be the main reason for you to change electricity supplier? France, ****, %
2.3 Heat pump market drives demand for geothermal energy
The heat pump market in France is enjoying strong growth.In ****, the geothermal heat pump market was up **% in value terms on **** , while sales of air-to-water heat pumps reached a new all-time high in ****, up **% on ****.
Overall, the market is set for very strong growth between now and ****: heat pump use represented **% of renewable energy consumption in ****, and will rise to **% in **** and **% in **** in France[***].
Forecast share of heat pumps in residential renewable energy consumption France, ****-****, in % source : ADEME
The share of ground-source heat pumps remains low compared to air-to-water and air-to-air heat pumps.
Number of pumps sold by heat pump type France, ****-****, thousands Source: ****
In addition, over the entire ****-**** period, the number of geothermal heat pumps installed is falling, but has been rising for two consecutive years.
Number of geothermal heat pumps (***) delivered for domestic use France, ****-****, units sold Source: ****
France's balance of trade in heat pumps is positive, with a balance of ***% in **** (***). This means that France is exporting a large number of heat pumps, illustrating the sector's dynamism.
Heat pump trade balance France, **** to ****, in millions of dollars Source: ****
3 Market structure
3.1 The electricity value chain: generation, supply, transmission and distribution
On the electricity market, we can distinguish four types of player, depending on the major stages in the organization of the sector:
Electricity producers: they operate nuclear or conventional thermal power plants (***) to create electricity. Electricity suppliers: they buy electricity from producers and sell it to consumers Transmission System Operators (***): ensure long-distance electricity transmission and network stability. In France, this role is performed exclusively by RTE, an EDF subsidiary Distribution System Operators (***): these are responsible for delivering electricity to end customers. In France, this role is performed exclusively by Enedis, an EDF subsidiary
Electricity suppliers are often also producers. This is the case of EDF, ENGIE, Direct Energie, etc.
3.2 Energy producers and suppliers in France
Since the French electricity and natural gas markets were fully opened up to competition on July *, ****, consumers have been free to choose their energy supplier.
Following this opening, non-incumbent suppliers, known as alternative suppliers, have entered the retail electricity market, and consumers can choose between two types of offers:
market offers, whose prices are freely set by suppliers regulated sales tariffs, set by the public authorities and offered by the incumbent suppliers (***)
By June **, ****, **% of residential and non-residential sites were on the regulated sales tariff, and **% were on a market offer (***), an increase of * points compared to ****.
In addition, **% of electricity consumption is supplied at the regulated sales tariff and **% by market offers (***). [***]
Market shares of electricity supply types by consumption volume France, ****, % Source: ****
The market share of alternative electricity suppliers has risen sharply, to the point of reversing the relationship with the incumbent suppliers (***), who previously dominated the market. The opening up of the market to competition dates back to **** for business customers and **** for residential customers, but it wasn't until **** or even **** that alternative suppliers gained the upper hand over the incumbents.
Particularly in the case of residential customers, according to the latest figures from the Commission de régulation ...
3.3 The role of geothermal energy in France's energy transition
In mainland France, the potential of geothermal energy for power generation has yet to be fully exploited. The Soultz-sous-Forêts project uses Enhanced Geothermal System (***) technology, which involves heating water to nearly ***°C by injecting it deep into hot rock. When the water returns to the surface in gaseous form, it is harnessed to generate electricity.
To generate electricity from geothermal energy, we need to work in a relatively high temperature range: reservoirs with temperatures between ***°C and ***°C are sought in mainland France. Several exclusive research permits for reservoirs of this type have been granted, or are currently being processed, testifying to a real future dynamism in this sector.
As we can see below, the PPE sets a number of objectives to be achieved in terms of installed capacity and energy production.
Alongside the quantitative targets set by the PPE, several general guidelines have been put in place:
Use of an open-window support system to develop the first high-temperature geothermal projects Setting up a fund to cover geological hazards, to ensure the emergence of an industry capable of exporting, Once the first projects are up and running, provide for a reduction in the level of support for electricity production, to ...
4 Offer analysis
4.1 Geothermal energy supply
Geothermal energy supply typology
*. Shallow geothermal energy (***)
From just a few meters below the surface, the Earth's temperature is constant all year round. This individual form of geothermal energy draws energy from the subsoil using one (***) vertical probes, generally at a depth of between *** and *** meters. At this depth, the ground temperature is between **° and **°.
Liquid is injected into a U-shaped tube. It heats up on contact with the heat of the subsoil, then rises to the surface. The heat recovered is not sufficient, and must be recovered by a heat pump to supply radiators or underfloor heating. In summer, this low temperature can be used to cool a home.
*. Deep geothermal energy (***)
Hydrothermal exploitation is one of the techniques for recovering this energy.
A pump recovers the water present in the ground by means of a "production" borehole. Thanks to a heat exchanger, the thermal energy of this water is extracted and injected into another liquid destined for a district heating network. If the temperature is not high enough, it can be raised using a heat pump. If the temperature of the geothermal fluid is high enough, electricity can be generated. Water from the production borehole is reinjected ...
4.2 Geothermal energy price trends in France
The cost of deploying a geothermal company varies according to the type of installation. Almost half the start-up costs are for equipment. As for the cost of a geothermal heat pump, the majority of the price comes from the manufacturing phase.
It should be borne in mind that acquisition and preparation costs vary considerably depending on the geography of the location, and that drilling costs are dependent on the location and depth of the resource.
Breakdown of geothermal power plant development costs France, ****, in AFPG
Average geothermal LCOE France, ****, in €/MWh Geothermal
Based on energy prices in ****, we can see that Geothermal heat pumps are the most economical sources (***).
Prices of main energy sources France, ****, in centimes/kW Source: ****
5 Regulations
5.1 Regulatory framework
A number of often outdated regulations governing energy in France hinder the development of renewable energies. In fact, France has regulatory texts that have enabled the development of technologies that were sometimes non-existent at the time they were drafted; the geothermal sector is no exception to this rule. In terms of regulations, geothermal energy has been separated into high and low energy. In the case of very low-energy geothermal energy, also considered to be of "minimal importance", complex derogations still exist, reinforcing the inappropriate nature of current legislation. Even so, the French regulatory "mille-feuille" remains better adapted than many of the provisions in force in our European neighbors. In short, the regulatory texts that apply to geothermal energy come under four different codes.
The Mining Code
The Mining Code and its implementing regulations mainly stipulate that any work at a depth of over **m must be declared. Operations are classified as high or low temperature above or below ***°C. High-temperature operations are governed by two **** decrees, one relating to mining titles and the other to workings. These require the submission of authorization files, subject to public inquiry and the award of a mining permit. Low-temperature geothermal energy is governed by a ...
5.2 Grants and subsidies: the government's geothermal action plan for 2023
Energy efficiency plan
In October ****, the Energy Sobriety Plan was presented in the context of the current energy crisis. The aim is to reduce overall consumption by **% by **** and by **% by ****.
The main measures are as follows:
Households that reduce their energy consumption will be entitled to a on their gas and electricity bills. For businesses, the temperature is limited to ** degrees (***), and you should try to stagger the start and end of heating by ** days if conditions allow. Up to *,*** euros in assistance to switch from a gas-fired boiler to a heat pump in single-family homes and MaPrimeRenov', which allows an average of *** euros per apartment to be spent on connecting an apartment building to a heating network.
Link to sobriety plan presentation: ecologie.gouv
Close-up on the PrimeRenov' geothermal heat pump scheme
Through the MaPrimeRénov' Parcours par geste/accompagnéfrench people can benefit from up to €**,*** in assistance for a geothermal or solarothermal heat pump. A total of ***,*** "gestures" were recorded in **** for the installation of PACs (***), representing **% of the work carried out in France that benefited from the bonus, and **% of the energy savings achieved.
Geothermal energy is therefore the solution encouraged by the bonus that has ...
6 Positioning the players
6.1 Segmentation
- BDR Thermea (De Dietrich, Remea, Baxi)
- Engie Groupe
- Tryba Energies (Groupe Tryba)
- Euro énergies (Poujoulat Groupe)
- TLS Geothermics
- Gaz de Ferme
- Total Energies
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