hungary – from gas to geothermal
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Hungary – from Gas to Geothermal. Árni Magnússon Managing Director, Renewable Energy & Transmission August 27, 2014. Trust Open- mindedness Knowledge Well-being. Mannvit at a glance. - PowerPoint PPT PresentationTRANSCRIPT
TrustOpen- mindednessKnowledgeWell-being
Hungary – from Gas to GeothermalÁrni MagnússonManaging Director, Renewable Energy & TransmissionAugust 27, 2014
Mannvit at a glance
An international consultancy offering a wide range of services in the fields of engineering, consulting, management, operations and EPCM contracting.
• Founded in 1963. • Employee-owned by over 100
shareholders• Management Systems certified:
ISO 9001, ISO 14001, OHSAS 18001
Headquarters in Reykjavík and 8 office in Iceland
HUNGARY
UK
NORWAY
USA
GERMANY
CHILE
ICELAND
Mannvit‘s Offices
Mexico (agent)
Kenya (agent)
HUNGARY
Mannvit has been active in
Hungary since 2006. The Budapest
office, which is the base for
Mannvit‘s Central and Eastern
Europe operations, was
established in 2008. The office is a
multi-market, multi-disciple
consultancy capable of offering a
broad range of engineering,
technical, research & project
management services to its clients.
Hungarian Heat MarketGreat potential for geothermal development
• Hungary has 220 district heating systems in 92 cities supplying around 650,000 homes with heat and hot water. A total of 16% of the housing stock.
• Natural gas is the main source of district heating, accounting for around 75-80% of the market.
• Heat producers sell to district heating service providers which sell to end-users.
• The end-user price is mainly comprised of a base tariff (e.g. system usage fee) and a heating tariff based on consumed amount (HUF/GJ for heat, HUF/m3 for hot water).
• Prices differ from city to city, can be up to a 40% difference.
• Municipalities aim to reduce district heating prices by 10-20%.
• The National Action Plan on District Heating and Power Plants aims to reduce both the base and heating tariff.
Geothermal District HeatingSimple technology
Secondary LoopHeat Service Provider
Primary LoopHeat Producer
Benefits of Geothermal Geothermal energy offers several advantages over natural gas
• Lower heat price for end-users‒ In the current environment geothermal district heating can
reduce the heat price to end-users by 10-20%
• Energy independence‒ Important for municipalities to be independent of external
factors when it comes to energy supply
• Sustainable resource‒ Unlike natural gas, geothermal energy is a sustainable source
of energy which can provide a consistant base-load of heat
• Clean energy‒ Geothermal energy is considered a zero-emissions
technology
Funding PossibilitiesGrant schemes, banks and equity investors
• Two grant schemes available to geothermal district heating developers‒ KEOP (Környezet és Energia Operativ Program, Environment and Energy Operational Program)‒ EFTA (Iceland, Liechtenstein, Norway & Switzerland)
• Awarded grant amounts vary but can cover up to 30-50% of project cost
• Majority of the grant amount is drawn down in parallel with project development
• Debt financing available to developers, although banks reluctant to finance production drilling
• Equity required to complete production drilling
• Projects generate returns in the high teens for equity investors
Project ExampleSzentlörinc geothermal district heating system
• A district heating system in Szentlörinc, a town in the southwestern part of Hungary
• Project data:‒ 3.1 MWth; 1,820m; 87°C; 26 l/s‒ 55,000 GJ annual deliverable heat‒ 900 flats and two schools‒ End-user price reduced by 5-10%
• Project cost:‒ €4 million (with a 34% subsidy)
• Mannvit’s role:‒ Geological & geophysical studies‒ Licensing & permitting‒ Well siting, design & testing‒ Drilling supervision‒ Reservoir modelling‒ EPCm contractor
www.mannvit.com