EAVOR LOOP (IEU GT)

Promoter – Financial Intermediary

EAVOR ERDWAERME GERETSRIED GMBH

Location

• Germany

Description

The project represents the first commercial scale implementation of an innovative closed loop geothermal technology to generate baseload combined heat and power, through heat conduction transfer between rocks in the subsurface and a wellbore-isolated cycling fluid. This is expected to progress the feasibility, competitiveness and scalability of the technology by demonstrating its application to diverse geological settings, with the potential to be applied to a wider range of locations compared to conventional geothermal energy.

Additionality and Impact

The Project supports the deployment and integration of a sustainable renewable combined heat and power source (geothermal) applying innovative technologies. It generates positive externalities in the form of reduced greenhouse gases and other hazardous emissions through the switching to a baseload source of sustainable energy. The Project also contributes at increasing learning-by-doing through the first commercialisation stage of an innovative sustainable technology, which should support costs reductions over time. The Project contributes to the 2030 national RE penetration targets of Germany, i.e. 80% RE in the power sector and 65% RE in the heating sector. The Project also contributes to maintaining or increasing safe delivery of energy.

The Project therefore addresses the following market failures: reducing carbon and air pollution externalities, security of supply and costs reduction of innovative low-carbon technologies.

The Project is aligned with EIB's Energy Lending Policy (Decarbonising Energy Supply and Innovation) and Climate Action (Mitigation / Renewable Energy) eligibility criteria and the policy contribution for Renewable Energy Sources is thus rated as Excellent.

The Project also complies with the eligibility criteria set out in Annex I-A of the InvestEU Agreement, in particular in relation to eligibility as per article 8.2, as the operation falls under the Thematic product (generation of clean, safe and sustainable renewable energy sources and solutions), through a technology at TRL 8. As a first-of-a kind commercial demonstration operation, the Project entails a

number of risks (credit, tehnology, construction, offtake) which cannot be fully mitigated due to its early-stage nature. This is combined with the limited experience of the Promoter as a start-up company.

EIB will be a key lender that will provide adequate terms and capacity to attract other specialized institutions to complete the funding plan of this project. The EIB financing further complements the EU Innovation Fund grant to provide a financial package which covers the distinctive risks of the Project. The Project would therefore not have been carried out (to the same extent) by the EIB without the InvestEU support.

Objectives

The objective is to support the integration of geothermal heat and power in the energy system and as a baseload source of energy with the aim to reduce emissions of greenhouse gases, in line with the EU and national renewable energy targets. The project will also contribute to further innovative technologies in the energy sector and thus support learning-by-doing and positive knowledge externalities.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 75 million

Total cost (Approximate amount)

EUR 368 million

Environmental aspects

Based on their technical characteristics, the subsurface components of the project fall within Annex II of the Environmental Impact Assessment Directive (EIA) 2014/52/EU amending 2011/92/EU, which requires the national competent authority to determine the need for an EIA. The EIA screening-out decision was issued in 2021 and the project main operating plan (Hauptbetriebsplan) was approved in 2022. The environmental impacts are overall expected to be minor and mostly temporary during construction. The specific impacts related to drilling, completion and subsurface operations are expected to be limited with the implementation of appropriate mitigation measures and as the geothermal subsurface system will operate as a closed loop.

Procurement

The promoter, as a private undertaking operating in the utility sector, is not subject to the EU Public Procurement Directives. The project, which will be supplying utilities already active in the energy sector, is deemed to not benefit from any special or exclusive rights, within the meaning of the Utilities Directives. Therefore, the private procurement procedures used by the promoter are acceptable for the project.

Status

Signed - 26/04/2024