Budapest to install geothermal district heating system of up to 20 MW

Local district heating company FŐTÁV and Icelandic group Arctic Green Energy have signed a cooperation agreement for the construction of geothermal district heat generating units in Budapest with the capacity of 10 MW to 20 MW.

The first large-scale geothermal project is to be installed and integrated with the heat supply in the capital of Hungary. The city’s district heating firm FŐTÁV Nonprofit signed a cooperation agreement with Arctic Green Energy from Iceland for adding between 10 MW and 20 MW to the district heating system.

In search of potential locations for wells

The deal entails the exploration of potential locations, obtaining the necessary permits and the overall technical, economic and legal preparations, the two entities said. According to its Green District Heating Programme, Hungary intends to cut the share of natural gas in district heat generation from 70% to 50% by 2030.

The European Union set a 32% goal for the share of energy generated from renewable sources in gross final energy consumption and proposed a 55% cut in greenhouse gas emissions by 2030 from the level registered in 1990.

Budapest targets geothermal capacity of 150 MW to 200 MW

The geothermal project in Budapest may save up to 21,000 tons of carbon dioxide emissions a year, according to the announcement. District heat generation is regulated through administrative prices in the Central European country, so the pricing for geothermal heat generating units will also be controlled by the Hungarian Energy and Public Utility Regulatory Authority.

In the longer run, FŐTÁV aims to install 150 MW to 200 MW in geothermal heat generating capacity in Budapest. It said it is open for other endeavors with Arctic and other partners.

The Icelandic developer and operator of green energy said it has 508 heat centrals and 4.1 GW of thermal energy production capacity, serving 50 million square meters. It also has major expansion plans for Poland, Germany and other European countries. Furthermore, its biggest business is a 49%-owned joint venture with Sinopec in China. Arctic says the firm has a 35% market share in the most populous country.