Open mindedness Knowledge Wellbeing Hungary from Gas to Geothermal Árni Magnússon Managing Director Renewable Energy amp Transmission August 27 2014 Mannvit at a glance An international consultancy offering a wide range of services in the fields of engineering consulting man ID: 310027
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Slide1
TrustOpen- mindednessKnowledgeWell-being
Hungary – from Gas to Geothermal
Árni Magnússon
Managing Director, Renewable Energy & Transmission
August 27, 2014Slide2
Mannvit at a glanceAn 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 18001Slide3
Headquarters in Reykjavík and 8 office in Iceland
HUNGARY
UK
NORWAY
USA
GERMANY
CHILE
ICELAND
Mannvit‘s Offices
Mexico (agent)
Kenya
(agent)Slide4
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
. Slide5
Hungarian Heat Market
Great 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.
s
ystem usage fee) and a heating tariff based on consumed amount (HUF/GJ for heat, HUF/m
3
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.Slide6
Geothermal District Heating
Simple technology
Secondary Loop
Heat Service Provider
Primary Loop
Heat ProducerSlide7
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
technologySlide8
Funding Possibilities
Grant 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 investorsSlide9
Project Example
Szentlörinc 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 studiesLicensing & permittingWell siting, design & testingDrilling supervision
Reservoir modellingEPCm contractorSlide10
www.mannvit.com