View over Graz from Schlossberg to southwest

In a city council meeting in mid-December 2024, the city of Graz in Austria unanimously approved a binding decarbonization plan for the district heating supply. This has also been now been set up as binding within the Board of Directors of local energy company Energie Graz GmbH for the further development of the district heating system in the greater Graz area.

An elementary part of the decarbonization plan is the development of a geothermal heat project with a targeted heat generation capacity of 140 MWth and an expected eyar heat supply of 400-500 GWh. With a current heat demand of 1,365 GWh for the whole greater Graz area, with 1,160 GWh for the city itself it is expected that demand will grow to 1,400 GWh for 2030 and up to 1,500 GWh for 2040.

Interesting are then the concrete plans with the project “Tiefengeothermie fuer Graz”. (deep geothermal for Graz).

The project targets the drilling of four doublets to a depth of 3,000 to 4,000 meters, as well as the 2 aquifer thermal energy storage reservoirs at doublette 3 and 4 at a depth of 700 to 800m.

The geothermal project is the most important single project for the decarbonisation plan of 2024 and would be crucial in reaching the 80% criteria for highly efficient heat.

A Pre-feasibility study was contracted in 2021 and has been an important first step.

For the project, Energie Graz Gmbh is now in negotiations on the following contracts:

Framework contract with the joint venture of OMV Green Energy GmbH & Energie Steiermark AG with Energie Steiermark Waerme GmbH

Heat Supply contract with the JV (OMV & Energie Steiermark)

Power supply contract with the JV, and

Contract for the offtake infrastructure with Energie Steiermark Waerme GmbH

For Energie Graz it is reported, that no significant investments are expected, the refinancing for the joint venture company will take place through the agreed price for the heat delivery to Energie Graz GmbH. OMV, together with Energie Wien is currently developing a geothermal project in Vienna, Austria and is also pushing geothermal development for heat in Germany.

Price discounts from the basis price are set up in the contract in the case of improved economics in the project development. These are envisioned if there is less demand for directional drilling or no superchrome 13 casing might be needed. Subsidies over EUR 6 million per doublette would also reduce the agreed on price. Price increases are excluded. With project success of a heat deliver of 500 GWh, for additional heat supply up to 625 GWh no remuneration is to be paid. For heat delivered beyond that there will be a large discount from the basis price.

Target of the first heat deliver from first doublette is 2030 with an (indicated) heat contract term of 40 years.