How to Make the Most of Geothermal Energy?

Panonia lies on geothermal sources that experts say could make Croatia green and self-sufficient in the production of electrical and thermal energy, but bureaucracy creates problems; however, the authorities claim that Croatia is an example of good regulation and that investors do not complain about it.

The energy geothermal potential of Panonia is greater than that of the Nuclear Power Plant Krško, say some experts. The first results of drilling in Legrad are more than encouraging as it has been shown that there are abundant hot water deposits.

Does bureaucracy hinder investors?

The Ministry of Economy and Sustainable Development recently announced a competition for the issuance of permits for exploratory drilling in six exploration areas: Leščan, Međimurje 5, Kotoriba, Pčelić, Sječe, and Ferdinandovac-1. This refers to the geographical area of the Drava Basin where significant geothermal potential has been proven.

The potential of the exploration areas was identified in earlier drillings conducted for the purposes of oil and gas exploration, which significantly reduces the risk and costs for future investors.

The temperature of geothermal water at all locations allows for the production of electricity, and the total potential of all locations is estimated at around 600 thousand megawatt-hours of electricity, emphasized the Ministry of Economy and Sustainable Development after the announcement of the competition results. Sixteen bids from various bidders were received for five of the six offered exploration areas. No bids were received for the field in Ferdinandovac.

All of this might seem like the beginning of a good story, but it appears that its end is not so close, says the mayor of Legrad, Ivan Sabolić (SDP), in whose area the second exploratory well has been established. Because, he emphasizes, from the beginning of exploratory work to the construction of power plants, greenhouses, cooling, and heating systems, the standard Croatian problem has intervened.

It is a sea of dysfunctional bureaucracy that hinders investors in the construction of facilities that would convert hot water from underground into energy and then distribute it to consumers.

Our laws and regulations are not as life-friendly as in countries like Turkey and Hungary, where they cater to investors. It’s as if we are not aware that we are sitting on a wealth that every country desires in an effort to produce energy while leaving as small a carbon footprint in the atmosphere as possible, says Sabolić.

In the area of Legrad, investors are putting the second exploratory well into operation after the first showed more than desirable results.

Prompted by Sabolić’s assessment of the inaccessibility of bureaucracy in obtaining permits for the utilization of geothermal sources, we sought a comment from the Ministry of Economy and Sustainable Development.

Ministry: Croatia is an example of clear and transparent regulation

In it, they claim that Croatia is an example in Europe of a country that has clearly and transparently regulated procedures for the exploration and exploitation of geothermal waters, and all previous information from investors is exactly the opposite of the claims in the inquiry.

– As an example, we can mention a Turkish investor who is exploring geothermal waters for energy purposes in the area of the exploration space Legrad-1, who received a permit for exploration in December 2020 and is currently working on his second well, with the first having started in February 2023, so this fact alone supports that the procedure for exploring geothermal waters does not take years – the response came from the Ministry.

The head of Legrad, Ivan Sabolić, says that the granting of concessions for exploration is transparent, but that problems arise when investors try to obtain permits for the construction of power plants and pipelines.

Laws and rules are not made by people from the field

In addition, the concessionaire, even before starting exploratory work, at a time when he is still unsure whether he will find a suitable geothermal water deposit, must lease quotas for renewable energy sources from the Croatian Transmission System Operator (HOPS). This investment further complicates the uncertainty, explains Sabolić.

Moreover, the HOPS competition for electrical energy consent is published only once a year and lasts only two months, and the rules and laws in the competent ministry are written by people who have never been in the field, and they are the biggest obstacle for investors, claims Sabolić.

He states that several ministries are involved in issuing part of the permits, which is nonsense, as all of this could be put under one umbrella and the procedures expedited.

– If everything is ideal and the procedure is flawlessly smooth, then why do we have only one power plant in Croatia relying on geothermal sources, and there are legal disputes related to it – asks Sabolić.

He claims that Hungary can serve as a good example of utilizing geothermal sources for energy purposes, where, he says, investors do not wander through the hallways of various ministries, but everything is resolved under one roof and efficiently.

He also emphasizes that the problem lies in the fact that our legislator lumps wind power plants, solar energy, and geothermal energy together without considering the specificities of each of these sources of green energy.