Europe’s volcanic and sedimentary basins harbor abundant geothermal resources. High-temperature geothermal resources driven by magma are primarily found in Iceland, Italy, Greece, and Turkey, and are mainly used for power generation. Medium- and high-temperature geothermal resources suitable for direct utilization are concentrated in basin regions, such as France, Germany, Poland, Italy, Hungary, and Romania. Meanwhile, with the development and application of ground-source heat pump technology, shallow geothermal resources have become readily available everywhere, and have been widely adopted and promoted especially in countries like Austria, Switzerland, Germany, and Sweden.

Currently, Europe categorizes geothermal energy utilization into three main types: geothermal power generation, direct use, and ground-source heat pumps. All three of these geothermal utilization sectors hold significant market positions. According to a report by the Joint Research Centre (JRC) of the European Commission, the global installed capacity of geothermal energy was approximately 82 GW in 2015, with ground-source heat pumps accounting for the largest share at 61%. Among them, Europe boasts the largest market for ground-source heat pumps. Looking at specific countries, the top 15 nations with the highest total installed geothermal capacity account for 85% of the world’s total installed capacity, ten of which are located in Europe.

Across Europe as a whole, three geothermal utilization methods—geothermal power generation, direct use, and ground-source heat pumps—are all being well applied and developed, and each already boasts mature, established technologies. Currently, the focus of research and technological breakthroughs is on further reducing costs to make geothermal utilization more competitive in the market.

High-temperature geothermal power generation dominates, while medium- and low-temperature geothermal power generation is gaining strong momentum.

In Europe, geothermal power generation has become an environmentally friendly and sustainable energy supply method, enabling the European geothermal power market to secure a prominent position on the global stage. As of the end of 2014, the global installed capacity of geothermal power plants reached 12 GW, with Europe accounting for approximately 2,060 MW (megawatts) of this capacity—roughly 17% of the global total.

Over the past decade, global geothermal power generation has continued to grow at an average annual rate of around 3%. In 2014, global geothermal power generation reached 74 terawatt-hours (TWh). Among this total, Europe’s 88 geothermal power plants generated a combined output of 12 TWh, accounting for 16.2% of global geothermal electricity production. Moreover, with an average annual growth rate of 6.3% over the past decade, Europe’s growth rate has even exceeded the global average. Currently, geothermal power generation in Europe is concentrated primarily in three countries: Italy, Iceland, and Turkey, which account for 44%, 43%, and 10% of Europe’s total geothermal capacity, respectively. In recent years, the increase in geothermal power generation has been mainly driven by Turkey and Iceland, while Italy’s geothermal output has remained relatively stable. Due to trial operations and maintenance activities in 2014, the capacity utilization rate of European geothermal power plants stood at around 76%, roughly equivalent to the level observed in previous years.

In terms of power generation technologies, the main ones include dry steam power generation, flash steam power generation, and organic Rankine cycle (ORC) power generation. Among these, dry steam and flash steam technologies dominate the European market, accounting for 40% and 42% respectively. For example, Italy is dominated by dry steam power generation technology; Iceland, with its geothermal resources consisting of high-temperature wet steam, almost exclusively employs flash steam power generation technology. However, over the past decade, organic Rankine cycle (ORC) power generation technology—used to harness medium- and low-temperature geothermal energy—has been developing rapidly. Given Turkey’s abundant reserves of medium- and low-temperature geothermal resources, ORC power generation has become the mainstream technology there.

In 2014, Europe’s geothermal power generation capacity increased by 170 MW compared to 2013, all of which came from Turkey. From the perspective of power generation technologies, the newly added capacity was entirely concentrated in ORC systems, largely driven by the expansion of medium-temperature geothermal power generation. However, conventional power plants still remain dominant. To make more efficient use of geothermal resources, Iceland, France, Germany, and Turkey have launched integrated geothermal utilization projects centered on geothermal power generation. These projects primarily focus on combined heat and power (CHP) or combined cooling, heating, and power (CCHP) systems, which not only generate electricity but also provide heating or cooling services to residents in surrounding areas. This approach will significantly enhance the efficiency of local geothermal resource utilization.

Direct geothermal utilization technology is already mature, and new technologies are emerging less frequently.

The direct uses of geothermal energy primarily include district heating, heating for bathing and swimming pools, greenhouse heating, aquaculture pond heating, industrial process heat, agricultural drying, and snow melting. Currently, district heating remains the most active sector for direct geothermal utilization in Europe. According to statistics from the European Geothermal Energy Council (EGEC), in 2014, Europe saw an increase of approximately 80 GWh (gigawatt-hours) in geothermal heating output, bringing the total to 4,260 GWh—a share accounting for 40% of all direct geothermal applications. In 2015, the total installed capacity for direct geothermal utilization in Europe was estimated at 4,701.7 MW, with Iceland, Turkey, France, and Hungary being the leading countries in terms of utilization. Currently, there are a total of 257 geothermal district heating plants across Europe, mainly located in countries such as France, Iceland, and Hungary; 23 new plants were added in 2014 and 2015 combined.

Geothermal direct-use technologies have now reached a mature stage. Recently, apart from some new developments in the integrated use of geothermal energy for building heating, there haven't been many new patents in the field of direct geothermal utilization. Currently, the heating sector remains the most powerful driver of direct geothermal utilization. Since geothermal fluids are often unsuitable for direct distribution into district heating networks, the advancement of direct geothermal utilization depends on the development of advanced heat-exchanger technologies in other industries. In terms of geothermal resource development, a new concept known as the "triple-system" has been proposed. This concept involves drilling a new production well while simultaneously converting the first two wells into injection wells, thereby extending the operational life of the project. This concept has already been implemented in France and can extend the service life of geothermal energy systems by up to 30 years. Currently, an increasing number of heating systems are beginning to adopt this triple-system approach.

Ground-source heat pump technology is booming, and eco-friendly technologies are becoming a focal point of attention.

Ground-source heat pump technology has been widely adopted and promoted in Europe. At the 2013 European Geothermal Congress (EGC), ground-source heat pumps were categorized separately as an independent type of geothermal utilization for statistical purposes. According to the JRC’s 2015 report, the global installed capacity of ground-source heat pumps is approximately 50 GW, with Europe accounting for 19 GW—representing the largest share worldwide at around 38%. The Americas and Asia follow next.

According to EGEC data, Sweden, Germany, France, Switzerland, and Norway currently lead the European geothermal heat pump sector. The combined installed capacity of geothermal heat pumps in these five countries accounts for 69% of Europe’s total. The European geothermal heat pump market has evolved from a past landscape dominated by numerous small, local companies into a large-scale market primarily driven by heating and air-conditioning manufacturers. Currently, the European heat pump and geothermal heat pump market is largely controlled by several major producers, most of whom come from Germany and Sweden—countries where geothermal heat pump technology has developed particularly rapidly.

Currently, the primary goals of geothermal heat pump technology development are to enhance the efficiency of geothermal heat pump systems and reduce operating costs. Key advancements include: lowering maintenance and upkeep costs, improving control systems, using more efficient working fluids, and boosting the operational efficiency of auxiliary equipment such as pumps and fans. At present, the coefficient of performance (COP) of geothermal heat pumps—used to evaluate the energy conversion efficiency of heat pumps—typically ranges from 3 to 4. Therefore, optimizing the design to increase the COP of heat pumps has become a major focus of current technological development. Meanwhile, the development of environmentally friendly antifreeze solutions with superior thermal properties is also receiving significant attention in geothermal heat pump technology. Additionally, reducing the borehole thermal resistance (RB) to improve the "Hörlström efficiency" of shallow geothermal systems holds great promise. It can be anticipated that these technological advances will all contribute to enhancing the overall efficiency of geothermal heat pump systems.

Launch a series of supporting policies tailored to different utilization approaches.

The development of geothermal resource utilization in Europe is inseparable from a series of support policies and joint action plans launched by the European Union at the regional level. Through its “Research and Innovation Framework Programme” and other incentive mechanisms, the EU supports the development of geothermal resources and promotes their orderly and healthy growth by establishing appropriate legal and policy frameworks. From the establishment of the European Geothermal Energy Council in 1998 and the European Heat Pump Association in 2000, to the launch of the EERA Geothermal Joint Programme in 2010 and the Geothermal ERA-NET Programme in 2012, the platforms and joint initiatives for geothermal energy development in Europe have been continuously refined and improved. From the drafting of a resolution by the European Economic and Social Committee in 2004 to promote geothermal development, to the publication of “Strategic Research Priorities for Geothermal Technology” in 2012—which clearly defined the direction and objectives for geothermal development in Europe—Europe’s support policies for geothermal energy development have become increasingly detailed.

With regard to the development and utilization of geothermal energy, the European Union has established a range of diverse policy support mechanisms. These support policies vary across different member states and also differ depending on the current stage of development of the three distinct geothermal utilization methods: power generation, direct use, and ground-source heat pumps.

The European Union offers a variety of subsidy schemes for geothermal power generation, yet progress has been relatively slow. Geothermal power projects typically involve substantial upfront investments and long development periods—often taking at least three years, with an average development time ranging from five to seven years. In light of this, in 2009 the EU enacted legislation requiring that, where feasible under conventional power system operating conditions, renewable energy sources should be given priority in power generation scheduling. The main policy support mechanisms for geothermal power in the EU include: risk insurance funds, feed-in tariff (FIT) subsidies, renewable energy premium mechanisms (FIP), tradable certificates, bidding processes, and soft loans. Although market-based mechanisms such as FIT and FIP are generally applicable to a wide range of new energy technologies, their implementation in geothermal power projects has not been particularly successful. Consequently, relatively few EU countries provide similar policy support for geothermal power. Currently, nine countries—including Austria, France, and Germany—have adopted FIT policies, while only four countries—such as Italy and the Netherlands—have implemented FIP mechanisms.

Currently, direct utilization of geothermal energy and ground-source heat pump technology in Europe have reached a relatively mature stage, and government subsidies are gradually being reduced. The main forms of government financial support include investment grants, tax reductions, carbon-emission-tax exemptions, insurance coverage, and low-interest loans. At present, most EU countries retain only investment grants as their primary support policy, while only a handful of countries still offer multiple financial support measures—for instance, France provides support in the form of investment grants, tax reductions, carbon-emission-tax exemptions, and insurance coverage. According to EGEC, from a cost perspective, geothermal heating technologies (excluding enhanced geothermal systems) have become increasingly competitive compared to fossil-fuel-based heating technologies, which has prompted governments to progressively reduce subsidies for direct geothermal utilization and ground-source heat pump technologies. However, at the same time, the substantial upfront investment required for geothermal development continues to pose a significant barrier to the advancement of geothermal-related technologies. Therefore, it is necessary to introduce innovative financing mechanisms, such as energy service companies (ESCOs) or offering discounts on electricity consumption by ground-source heat pump systems.