Energy crisis is driving growth and investment in geothermal energy in EU

The main focus of renewable energy investors is on solar and wind energy. Investments in the development of green hydrogen and storage technologies are also becoming a segment of the energy transition that is increasingly attractive to investors. But renewable energy sources have a strong potential for the development of other segments as well, which can really contribute to greater energy diversification in the coming decades. This aspect of the energy transition is extremely important because sustainability and stability will be ensured in the long term only through adequate diversification, that is, expansion of the possibilities and supply. Stability is one of the key things in energy.

The energy crisis and the uncertainty prevailing in the world markets may bring with it uncertainty and some stagnation, but it is already clear that the current situation will accelerate the development of the sector of renewable energy sources. As they say – crisis is an opportunity, this really best describes the potential of renewable energy sources. Investor caution is still at a high level, but it seems that the sector of renewable energy sources does not lose its attractiveness despite certain policies that are not favorable. Investments in this sector enable a good positioning in a strategic sector and also offer an opportunity to earn money.

On the other hand, the energy crisis accentuates the need for energy at lower prices, and this trend will certainly continue. The solution to lower-cost energy is an investment in renewable energy sources. Hence, investors are looking for investment opportunities in different types of renewable energy sources, in addition to the attractive ones – sun and wind.

Geothermal energy offers enormous potential, and this segment of the renewable energy market is developing at a slower pace. According to analyses and research, the European Union market for geothermal energy will grow in the next period, and there is huge potential for it. It is estimated that the current installed capacity of 3.9 GWt will increase through investment in new projects to 6.2 GWt by the end of this decade. It has a huge growth potential of almost 58%, and the realization of these projects is estimated at about 7.4 billion dollars. Such forecasts make the geothermal energy sector attractive to investors and large international financial institutions.

However, for the development of this sector and the provision of fresh capital for new projects, it is necessary to improve certain conditions for investing in the geothermal energy sector. A big determining factor is the administrative obstacles and long procedures, and not fewer problems in the field are caused by insufficiently specified regulations.

The lack of expertise is also a problem that needs to be addressed. The development of geothermal energy, which uses the energy from the earth and provides thermal energy for heating and cooling and mainly aimed at the housing sector. Generally, these projects are implemented with local institutions and authorities, whose administrative capacities should be increased. The high cost of developing geothermal energy projects is also a problem that needs to be addressed.

All these open aspects related to the development of geothermal energy can be solved and the conditions for investment can be improved. There is no doubt that investment interest in this sector, which has been particularly stimulated by the war in Ukraine and the high cost of energy, will put pressure on the faster removal of administrative obstacles, opening the way for the growth of the geothermal energy market, investment opportunities and earnings.