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Digging Deep for a Sound Investment

Digging Deep for a Sound Evaluating a Deep Geothermal Energy Investment in Germany

Geothermal power plants tap the Earth’s natural heat through drill holes anywhere from 400 meters to several kilometers deep. In contrast to shallow geothermal power, deep geothermal holes yield heat at very high temperatures, which can then be supplied directly for district heating or utilized for electricity. Because of its special geology with relatively high temperature gradients in conjunction with a high feed rate, the Molasse Basin in southern Germany is a suitable area for geothermal power plant projects.

The leading Swiss energy company Axpo AG was considering a 30-percent investment in the development of a geothermal power plant in southern Germany and needed reliable information for assessing risk and deciding whether to take a stake in the project. To support their decision-making process, Axpo called upon well known German experts with geothermal experience to carry out a due diligence review to assess economic, technical and legal considerations. The expert team also assessed whether the current plans of the project developer for the €60 million power plant project could be implemented as planned.

We carried out a due diligence analysis of the technology—power plant and heat discharge—and supported experts in the economic and legal evaluation. Based on the results of the due diligence analysis, Axpo was able to make an informed and safe investment decision.

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Axpo AG, Switzerland