Geothermal heat (primarily from shallow, low-temperature sources) is responsible for 3% of the total renewable heat supply in the 12 nations examined. Most of the heat generated is captured in geothermal heat pumps whose markets have grown considerably in recent years (Section 3). Good potential exists for the expansion of both shallow and deep geothermal technologies.
Less policy attention appears to have been directed toward geothermal heat than either solar thermal or biomass. Most political support for geothermal technologies has been based around electricity production and the limited support for geothermal heat has mainly focused on heat pumps. Geothermal heating can also encounter political barriers inapplicable to the other renewable heating technologies such as fees placed on mining/drilling and groundwater use that increase the gap between the costs of geothermal and conventional heat.
Less that half of the global geothermal direct heat use is provided from deep geothermal resource development and much of this comes from the use of separated hot water from geothermal power developments (a form of CHP), or from deep wells drilled into geothermal resources that were previously proven as part of exploration for electricity generation. For the few cases where unproven deep geothermal resources are specifically developed to provide heat, resource exploration incurs significant additional costs. Unproven resource availability implies a high degree of uncertainty as to the success of geothermal development (Firke-Mariam, 2006). As such, there is perhaps a higher degree of economic risk for geothermal heat than for either solar or biomass heat. Risk guarantee funds that offer to cover the loss of unproductive geothermal wells are one solution to mitigate the risk of geothermal exploration. The German development bank, KfW, offers such incentives for projects in developing nations.
In summary most of the policies in place today to support renewable heat generation are carrot – based incentives offering direct financial support. The budget allocated per capita vary significantly for each policy and national package of policies as do their time-spans, technologies applicable, and eligible parties. Policies are generally technology specific and most have been focused on support for solar thermal and biomass heat. The few policies supporting geothermal heat have concentrated on geothermal heat pumps.
Countries which have been most successful with biomass heat uptake have employed a combination of support schemes, often including incentives for CHP and district heating. The whole supply chain needs to be addressed when designing policies in support of biomass. In addition to direct financial support, the importance of guidance-based policies has been marked regarding the development of solar thermal. Stick-based policies have become more common, mainly based on regional policies supporting solar thermal heat. Such regulations may be a good basis for the future design of policies as much of the public financial burden is removed. Policies designed to support solar thermal should incorporate aspects for heat storage because of the intermittent nature of the solar resource, although few countries have done so.
REHC is an opportunity for countries to fulfil their overall renewable energy targets. As the support for renewable heat increases, more and more policies are tailored to individual technologies, resource availability, and numerous external factors compromising individual national frameworks. Since REHC technologies are at different development stages and levels of cost competitiveness, it follows logically that the types and packages of support should vary by technology type. In other words, policies well – suited for biomass may not necessarily be suitable for the development of solar thermal or geothermal heat. Therefore, the definition of national goals is important so that the design of incentive schemes can be tailored appropriately.