Advantages and disadvantages of geothermal energy in Germany and Bavaria

_ Dr. Erwin Knapek, President, Federal Geothermal Association. Munich, October 29, 2020.*

Southern Bavaria, the Rhine Valley and north-eastern Germany have the greatest geological potential for geothermal energy in Germany.

In 2019, the share of geothermal energy in the electricity mix in Germany was 0.03 percent. In the power generation structure in Bavaria, it was less than 0.6 percent.

The maximum technical possible electricity production in Bavaria with geothermal energy amounts to approx. 4TWh. That is a maximum of 4.8 percent of the total electricity generation structure in Bavaria in 2019.

The advantages of geothermal energy are as follows:

  • It is a renewable and carbon-neutral energy source.
  • It is a baseload electricity source, because there are, e.g., no dark doldrums. Furthermore, it can be started up and shut down quickly as required.
  • It makes a contribution to energy sovereignty since the energy source is based in the German national soil. It is decentralized and therefore also not as vulnerable to cyberattacks.
  • A district heating network of geothermal systems of the municipalities is possible in order to cushion any local technical failures and to increase the base load capacity.
  • The productivity rate (water pressure) does not decrease. Some geothermal systems have been running in Germany without interruption since 1969. On the contrary – the extraction temperature tends to rise.
  • With geothermal energy one can generate heat, electricity and cooling, i.e. it can and is already used for industrial cooling.
  • In the Rhine valley, high-quality lithium can be extracted as a by-product of geothermal energy.
  • Geothermal systems can also be used to store energy by pumping heated water into the earth, which remains hot there.
  • Geothermal energy is a capital and know-how-intensive industry that creates new employment.

The disadvantages of geothermal energy are as follows:

  • The commercial use of geothermal energy is currently only possible through the German Renwable Energies Act (EEG) feed-in subsidy.
  • The average electricity production costs of geothermal energy in Bavaria are 25 euro cents per KWh. If more geothermal systems were to be built, economies of scale could reduce average costs to less than 10 euro cents per KWh. The average break-even point per communal geothermal system is 6-7 years for pure electricity generation and 10-15 years for heat and electricity generation.
  • With geothermal energy, heat generation is technically a priority. Geothermal energy has a relatively low technical capacity for generating electricity. In Bavaria and Germany the generated temperature is mostly below 100 degrees.
  • Geothermal energy is best suited for urban agglomerations above or near geothermal sources. The demand quantity is decisive for the profitability of geothermal energy.
  • There may be a potential co-production of radioactive heavy metals. However, this does not apply to Bavaria.
  • There are currently not enough training programs and qualified engineers in Germany for this energy sector. There are also not enough drilling capacities and drilling companies in Germany. In 2020, the drilling capacity in Germany (i.e. the number of usable drill heads and crews) was two times lower than in 2000. Because of the shortage of skilled workers, drilling companies from Kazakhstan are already being commissioned in Germany for drilling.
  • There are significant bureaucratic hurdles. The approval procedures, e.g. according to German groundwater and mining regulations, are much higher in Germany than, e.g. in the USA and Mexico. This is one of the reasons why Siemens AG operates geothermal systems there, but not in Germany.


Geothermal energy is a renewable, steady and flexible source of energy. But because of its low availability and high cost, it is no alternative to nuclear energy and natural gas. In the course of the energy transition (EEG surcharge, phasing out nuclear and coal energy), geothermal energy is a potentially interesting option for generating heat and electricity in individual cities and municipalities near geothermal hotspots. In Bavaria these are, for example, Munich, Rosenheim and Memmingen.

Policy recommendations:

  • State subsidies for geothermal energy violate the principle of the free market economy and should therefore be abolished.
  • It would be better to reduce potential excessive red tape and taxes for geothermal projects.
  • Research and development as well as geothermal training programs must be promoted. Here, too, potential unnecessary bureaucratic hurdles and taxes must be cut.
  • Potential further measures put up for discussion could be: state guarantees for loans taken up by municipalities for geothermal projects; state insurance programs for (failed) drilling projects of municipalities; as well as state requirements for the coal industry to invest a part of their income into geothermal projects, e.g. via an additional surcharge.

*Summary by Yuri Kofner of his lecture  for the Desiderius Erasmus Foundation.

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