Different but Similar: Geothermal Energy and the Role of Politics in Germany, Iceland and the United States

This article looks into the role of the state in geothermal energy development. Based on the findings in three countries studied, it demonstrates that the demand for political intervention is strongly tied to the state of the technological and industry development. While government’s most important role in the early stages is R&D-support and regulatory guidelines, the relevance of market-based instruments and network support kicks in later. Between these two phases is a period where both ‘toolkits’ of political intervention (direct investment and indirect support efforts) have to be provided by state actors. Furthermore, the project timeline has to be kept in mind. Supporting project economics alone is not sufficient if project-internal barriers exist that cannot be overcome without specific support. The installation of an insurance scheme for dry wells in Germany and a similar mechanism in Iceland can be regarded as outstanding examples of this. However, it is important to note that geothermal energy generally will not be developed without strong public support in all development phases. The common cross-case barriers alone are sufficient for project developers and investors to be cautious about entering the industry. But if governments engage with the right instruments at the right time, there is reason to say that geothermal energy can provide a contribution to the energy turn towards renewable energies in many parts of the world, even apart from high-enthalpy regions.