Key Components of Legal Framework

• 1. Ownership and access to geothermal resources

• 1.1 What are the rules on ownership of geothermal resources? Can private parties hold ownership of geothermal resources?

  The ownership of geothermal resources is subject to the Federal Mining Act (Bundesberggesetz – BBergG) and supplementary mining ordinances. The Federal Mining Act sets forth a specific regime for public mineral resources (bergfreie Bodenschätze). These are mineral resources of a high relevance for the public, such as – inter alia – geothermal resources, coal and hydrocarbons. Public mineral resources are ownerless. They are legally separate from real property and are thus excluded from the scope of surface ownership (Oberflächeneigentum). They must be distinguished from private mineral resources (grundeigene Bodenschätze) which belong to and can be extracted by the landowner without a mining right. Private mineral resources are those of lesser relevance, such as certain types of quartz and clay as well as kaolin and roof slate.

• 1.2 Who can grant access to geothermal resources, only state or also landowner?

  The regional mining authorities grant access to geothermal resources by granting mining licenses and – before any mining activities may actually be carried out – approvals of operating plans (see below). 

• 2. Involvement of administrative bodies

• 2.1 Which administrative bodies (ministry and/or governmental agencies) are involved in the licensing of geothermal resources, including licensing and developing?

  Regional mining authorities are competent for licensing of geothermal resources as exploration licenses (Aufsuchungserlaubnis), exploitation licenses (Gewinnungsbewilligung) or mining property (Bergwerkseigentum) (see below). In detail, the provisions regarding to the competence depend on the federal state. Prior to making a decision on the application, the competent mining authority shall ensure that the authorities responsible for safeguarding the public interest are given the opportunity to express their opinion. For research activities on the continental shelf the Federal Maritime and Hydrographic Agency (Bundesamt für Seeschifffahrt und Hydrographie – BSH) has to be involved.

• 2.2 Do administrative bodies assign any of their respective roles to a third party, including but not limited to a peer review, during the period of exploration, exploitation and/or production of geothermal resources?

  No.

• 2.3 Is there a government policy in place concerning geothermal resources? If so, what is the object and to what end?

  The federal government targets a 65 % share of renewables in electricity production by 2030. The expansion of the use of geothermal resources is promoted by a legally guaranteed feed-in tariff and granted subsidies by a market incentive programme (Marktanreizprogramm) of the Federal Ministry of Economics and Energy (BMWi) (see below). Moreover, the government intends to increase the use of renewables for heating. In 2009, a legal obligation has been introduced that in new buildings a certain part of thermal energy has to be produced by renewable energies. This obligation can be fulfilled, if 50 percent of the thermal energy is obtained from geothermal heat.

• 3. Allowed Exploitation

• 3.1 Is exploitation of resources subject to licensing? Do landowners have the right to exploit recourses without a license? If yes, to what extent?

  Yes, the exploitation of geothermal resources is subject to a license requirement under the Federal Mining Act. Licenses are granted as exploration licenses (Aufsuchungserlaubnis), exploitation licenses (Gewinnungsbewilligung) or mining property (Bergwerkseigentum – a right that is comparable to real property. The mining property has lost its practicality with the establishment of exploration and mining licenses when the Federal Mining Act entered into force in 1982). The holder of a license has the exclusive right to explore and/or produce and to acquire the respective mineral resources in the allocated license area. However, the license does not allow for carrying out mining activities. Any exploration and exploitation activities may only be carried out on the grounds of approved operating plans (see below).

  Landowners may however without any license utilize near-surface geothermal energy from the ground of their property for building use on the property, e.g. heating with heat pumps. The landowner must notify the mining authority of drillings with a depth of more than 100 m.

• 4. Role and voice of landowner or “project affected people” in the licensing procedure and land lease agreements

• 4.1 Does the landowner or any “project affected people” have a role in the process of granting a license for:
     (i) exploration,
     (ii) exploitation, and
     (iii) power plant (generation license)?

  The landowner is not involved in the licensing procedure for exploration and exploitation. Construction and operation of a power plant does not require a mining license. 

  However, any mining activities such as exploration, exploitation and construction and operation of a geothermal power plant require approval of an operating plan (see below). In the approval procedure, the mining authority conducts a hearing of specialised authorities, affected municipalities and affected surface landowners. If an EIA is necessary (see below), the authorities have to conduct a public participation procedure (which is not limited to not only for project affected people).

• 4.2 Will an opposition of a landowner or any “project affected people” have a bearing on the process of granting a license for:
     (i) exploration,
     (ii) exploitation, and
     (iii) power plant (generation license)?

  Neither the landowner nor any project affected person is involved in the procedure for granting an exploration or exploitation license. Therefore, their opposition cannot change the granting of the license. 

  However, exploration, exploitation and construction and operation of a power plant require approval of an operating plan. In the approval procedure the mining authority has to consider the interests of a surface landowner and of project affected people.

  Exploration and exploitation licenses as well as operating plan approvals or other permits are issued without prejudice to the rights of third parties. With respect to above-ground installations, the holder of the license therefore needs to reach an agreement under private law with the landowner. If no agreement can be reached the license holder can request an expropriation/begin procedure. In the latter instance, the expropriation authority shall consider the interest of the landowner.

• 4.3 Are the terms of land lease agreements regulated and if so, (i) what is a general timeframe of land lease agreements and (ii) what are the obligations for decommissioning at the end of the term?

  The provisions of the German Civil Code (Bürgerliches Gesetzbuch – BGB) regarding land lease agreements do not contain specific provisions as to the timeframe or decommissioning duties. However, under the Federal Mining Act the operator is obliged to take preparatory measures for restoring usability of the surface. If the operator intends to cease operation (or parts) of the mining activities, he must submit a decommissioning plan (Abschlussbetriebsplan) to the mining authority for approval. The decommissioning plan must describe all measures which are necessary to avoid long-term dangers for the public or the environment or other detrimental effects and to re-cultivate the affected surface. After execution of the approved decommissioning plan the operator will be released from the supervision of the mining authority (Bergaufsicht) either in total or with respect to the installations, areas or activities addressed in the decommissioning plan if no dangers or detrimental effects are to be expected.

• 5. Criteria for granting of a license

• 5.1 Which documents need to be submitted and what is the criteria for obtaining a license for:
     (i) exploration,
     (ii) exploitation, and
     (iii) power plant (generation license)?

  (i) exploration: The applicant needs to submit a written application. The mining authority shall grant the license if the application documents demonstrate:

  • Specification of the mineral resources to be explored
  • Specification of the proposed exploration field in a location plan
  • Work programme (kind, scope and purpose of exploration, time schedule)
  • Commitment of the project developer to notify the mining authority of the results of the exploration on demand and without delay on completion or at the latest with the expiry of the license 
  • Commitment of the project developer to grant in certain cases other holders of licenses for overlapping fields the right to participate in the exploration
  • Reliability of the applicant
  • Evidence of sufficient financial capacities (e.g. financial statements, bank statements)
  • Efficient and well-planned exploration of public and mineral resources is not impeded
  • Mineral resources that have to be protected in the public interest are not at risk
  • No overriding public interest precludes exploration in the proposed field.

  (ii) exploitation: The applicant needs to submit a written application. The mining authority has to grant the license if the application documents demonstrate:

  • Specification of the mineral resources to be explored
  • Specification of the places where the mineral resources were found (position, depth) in a location plan
  • Specification of the proposed production field in a location plan
  • Evidence that the discovered mineral resources can in fact be recovered, considering their position and quality
  • Work programme (technical execution, underground and surface facilities, time schedule)
  • Reliability of the applicant
  • Evidence of sufficient financial capacities (e.g. financial statements, bank statements)
  • Efficient and well-planned exploration of public and mineral resources is not impeded
  • Mineral resources that have to be protected in the public interest are not at risk
  • No overriding public interest precludes exploration in the proposed field.

  (iii) power plant: N/A. 

  As regards the operating plan for mining operations (exploration, exploitation and power plant), the operator must describe the scope, the technical execution and the duration of the project. Based on this description, the mining authority will assess the project with respect to operational safety and protection of workers, surface protection, prevention of public damage and other issues.

• 6. Duration of Licenses and Renewal

• 6.1 What is the maximum duration of a license for:
     (i) exploration,
     (ii) exploitation, and
     (iii) power plant (generation license)?

  (i) exploration: Five years (may be prolonged if the exploration field is not sufficiently explored).

  (ii) exploitation: Fifty years (may be extended until the reservoir is depleted).

  (iii) power plant: N/A. 

• 7. Terms of License

• 7.1 What are the general terms of the license for:
     (i) exploration,
     (ii) exploitation, and
     (iii) exploration drilling and other drilling,
     (iv) power plant (generation license)?

  (i) exploration: The license grants the exclusive right to undertake the necessary measures to examine a certain field (Erlaubnisfeld) in order to determine if, where and in which amount a specified mineral resource is available. As far as necessary for the exploration, resources may be exploited.

  (ii) exploitation: The license grants the exclusive right to exploit a specified mineral resource in a certain field (Bewilligungsfeld). The license holder may build and run the plants needed for the exploitation.

  (iii) exploration drilling and other drilling: A license for exploration/exploitation includes necessary drillings, so it can be referred to the terms above.

  (iv) power plant: N/A. 

• 7.2 Are exploration license holders granted pre-emptive rights with regards to exploitation or do exploration licenses automatically convert into exploitation licenses if the resource has been substantiated? If so, are there any conditions?

  The exploration license does not automatically convert into an exploitation license. An exploitation license has to be applied for separately. Usually, the mining authority has to grant an exploitation license to the holder of an exploration license for the same field. Under the Federal Mining Act, the mining authority has to inform the holder of an exploration license for a certain field of third party applications for exploitation licenses for the same field. The holder of the exploration license may then file an application for an exploitation license. His application is given priority over the third party application.

  The holder of the exploration license has to file his application for an exploitation license within three months from receiving the above mentioned information.

• 7.3 Is an exploitation license included in a power plant license or are these licenses separate?

  No. Exploitation licenses are granted separately from the operating plan approval for any actual geothermal mining activities (exploration, exploitation, construction and operation of power plant).

• 7.4 Are there any encumbrances in place for the licence holder to keep a license, once granted?

  No, neither the exploration/exploitation license nor the operation plan grants an encumbrance or any other real right.

• 8. Termination and revision of licenses

• 8.1 What actions by the license holder would warrant revision of exploration-, exploitation- and power plant (generation) licenses?

  Under the Federal Mining Act, the mining authority constantly exercises mining supervision, in particular compliance with the work programme. If the holder of a license/approval does not fulfil the conditions of the license/approval, the mining authority would issue orders and may revise the granting of the license/approval.

• 8.2 Does the license granting authority license have the power to revoke or terminate licenses? If yes, what actions of the license holder would warrant the termination of the license?
     (i) exploration license,
     (ii) exploitation license,
     (iii) power plant (generation license)?

  (i) exploration: Yes. Under the Federal Mining Act, the mining authority shall revoke exploration licenses if subsequently facts occur, which, had they occurred earlier, would have made it imperative to deny the license. The exploration license shall also be revoked if for reasons for which the holder of the license is responsible, the exploration has not commenced within one year after the license was granted or if the systematic exploration has been interrupted for more than one year. The competent authority may, for an important reason, extend that term by another year. The exploration license may be revoked if the holder fails to apply for an exploitation license with regard to a mineral resource covered by that exploration license, although the prerequisites for granting the exploitation license exists and a reasonable time limit set by the mining authority for filing the application has expired. 

  (ii) exploitation: The mining authority shall revoke exploitation licenses if subsequent facts occur, which, had they occurred earlier, would have made it imperative to deny the license. The exploitation license shall also be revoked if the production has not commenced within a term of three years after the license was granted or if the systematic production has been interrupted for more than three years. This does not apply as long technical or economic reasons make it necessary for the license holder to delay the commencement or the resumption of the production in the field covered by the exploitation license until a later time or if the interruption was caused by other reasons outside the responsibility of the license holder.

  (iii) power plant: N/A. 

  As regards approvals of operating plans for geothermal mining activities (exploration, exploitation and power plant), the approval may be revoked under extraordinary circumstances only. A substantial cause is required and the consequences for the permit holder have to be taken into consideration. A reason for revocation may be that the conditions to the approval are not fulfilled or if the authority would be entitled, as a result of a subsequent change in circumstances, not to issue the approval and if failure to revoke it would be contrary to the public interest.

• 8.3 Can the license granting authority set forth conditions into licenses which provide for (i) stricter terms and conditions of licensees or (ii) more lenient terms and conditions for licensees, when such terms and conditions (whether stricter or more lenient) are not otherwise provided for by law?

  The Federal Mining Act sets out requirements for terms and conditions for licenses (and the respective operating plan approvals). Basically, terms and conditions (Nebenbestimmungen) are only admissible if and to the extent that they are necessary to ensure compliance with the law. Thus, the mining authority cannot provide for stricter terms and conditions. At the same time, the mining authority may circumvene the statutory requirements for licenses (and operating plan approvals) by providing for more lenient terms and conditions.

• 8.4 What remedies does the License granting authority have in order to enforce compliance to the terms and conditions of a license, other than by revoking the license?

  The mining authority monitors compliance with the terms and conditions of a license and the respective operating plan approval. The mining authority can order implementation of the measures needed to implement mining law and counter risks. If non-compliance with the terms and conditions of an operating plan approval results in immediate danger for employees or third parties, the mining authority may order a preliminary stoppage of operations.

• 9. Regulatory and information obligation

• 9.1 Briefly outline the surveillance carried out by the regulatory authorities during the license period, e.g. with regards to reporting duties and/or on-site visits.

  Under the Federal Mining Act, all mining activities are subject to mining supervision. The mining authority monitors compliance with the provisions of mining law. The holder of a license is required to submit to the mining authority the documentation and to give the information required for enabling the authority to carry out the mining supervision.

  The mining authority is – inter alia – authorised to enter the premises, office rooms and installations and to carry out certain tests, inspect mines and take samples at the expenses of the operator and inspect the business and operation records.

  The mining authority can order implementation of the measures needed to implement mining law and counter risks. 

• 9.2 Which information is required to be submitted to regulatory authorities during the license period for the holder of a license for:
     (i) exploration,
     (ii) exploitation,
     (iii) power plant (generation license)?

  (i) exploration, (ii) exploitation: The Federal Mining Act and supplementary (state) mining ordinances set forth comprehensive reporting obligations. The holder of an exploration or an exploitation license needs to submit annual reports to the mining authority. The mining authority must – inter alia – be informed of the status of the exploration/exploitations works. Any changes and continuations of the work program must be disclosed and justified.

  (iii) power plant: N/A.

  As regards operating plans for geothermal mining activities (exploration, exploitation, power plant), the Federal Mining Act does not provide for general reporting obligations. However, the operator needs to store comprehensive operational documentation and submit it upon request to the mining authority. The authority can also set up reporting requirements in the approval of the operating plan. Further, certain reporting obligations may result from special mining ordinances.

• 10. Power purchase agreements

• 10.1 Are general terms and conditions, such as duration of Power Purchase Agreements regulated? If no, are there any soft law or general recommendations in place in your jurisdiction?

  No.

• 10.2 What is the permitted or general duration of PPA's?

  Duration of PPA is not regulated by law. PPA usually provide for a fixed duration of one or two years with annual prolongation option. However, in individual cases longer duration is agreed.

• 10.3 Are public and/or national regulatory authorities involved in any way in forming the terms of PPA's, either directly or indirectly?

  No.

• 11. Incentives

• 11.1 Is there any governmental support or funding available for exploration activities?

  There is basically no support or funding available for exploration activities.

• 11.2 Are there any incentives offered by the government or local authorities for utilization of geothermal energy? If yes, in what form (e.g. tax and/or feed-in tariffs) and what are the maximum amounts permitted?

  Generally, the feed-in tariff is not subject to recovery. However, the feed-in tariff can - all or in part - be claimed back in case the plant operator is in breach with formal and/or technical requirements under the EEG. For example, if the plant operator failed to register his plant with the Federal Network Agency (Bundesnetzagentur), the network operator may claim back any payments which have already been made. Also, a failure of the operator to comply with certain technical requirements (see above) may entitle the network operator to a repayment claim.

• 11.3 What requirements must the project fulfil in order to be eligible to receive such incentives?

  Generally, the EEG does not distinguish between different types of geothermal energy plants. Therefore, every geothermal energy plant is generally eligible for the feed-in tariff under the EEG. However, certain technical requirements must be fulfilled in order to obtain the feed-in tariff. For example, the network operator must be put in the position to remotely control the electricity production of the geothermal energy plant. Also, the network operator must be able to check the actual feed-in of electricity at any time.

• 11.5 In the case of production of electricity from geothermal, are there any incentives/rewards for utilizing the geothermal energy for other than producing electricity, such as waste heat?

  Measures to use renewables for heating are supported by a market incentive programme (Marktanreizprogramm – MAP) of the Federal Ministry of Economics and Energy (BMWi). Besides other funding measures, the KfW banking group grants loans for construction and expansion of geothermal projects used for heat production if the drilling depth goes beyond 400 m and the nominal heat output exceeds 4,000 kW_th. Under certain conditions, the KfW grants a redemption grant for the construction of a heat and power plant and the drilling costs. Some federal states, e.g. Bavaria, offer additional subsidies.

• 12. Participation and authority of indigenous people

• 12.1 Are the rights of indigenous peoples in connection to geothermal resources regulated?

  N/A

• 12.2 To what extent are indigenous municipalities involved in the process of granting licenses?

  N/A

• 13. Alteration of law and regulation

• 13.1 What are the principles regarding retroactivity of laws and regulations, can changes in such rules affect license holders?

  It is a general principle in Germany that laws may not be retroactive. However, under German law, a distinction must be made between true retroactive effect and pseudo retroactive effect. The latter is permitted and applies e.g. when a legislator changes the law for ongoing mining operations for the future and thereby affects existing legal positions. Protection of legitimate expectations is preserved by transitional regulations. As regards feed-in-tariffs, they may not be reduced once the renewable power plant has been commissioned.

• 14. Taxation and capital controls

• 14.1 How does taxation in the sector affect license holders?

  License holders are taxed in the same manner as other legal entities in Germany. 

• 14.2 Please describe and provide information on the applicable tax rate and resource tax.

  Resident and non-resident license holders are generally subject to German corporate income tax (Körperschaftsteuer) and trade tax (Gewerbesteuer) amounting to approx. 30% in total, the exact tax rate depending on a municipal trade tax multiplier.

  Moreover, the Federal Mining Act establishes a mining royalty of 10 percent of the resource’s market value. But most of the German federal states have exempted the use of geothermal energy from this tax.

• 14.3 Is the sale of energy subject to VAT?

  Yes, the VAT on the sale of electricity is 19%. 

• 14.4 Is VAT refundable and what is the procedure for VAT refunding?

  VAT invoiced by license holders is not refundable for license holders but generally is refundable for the recipients of the electricity in case these recipients qualify as taxpayers for VAT purposes (i.e. are businesses and not private individuals). 

• 14.5 Is the flow of foreign capital restricted with capital controls? If so, briefly describe the nature of such controls.

  In general, European Union Law guarantees the free movement of capital both inside the member states of the European Union and between an EU member state and non-member countries. The Foreign Trade Regulation (Außenwirtschaftsverordnung) establishes numerous information duties towards the German Central Bank about foreign capital.

• 15. Environmental Impact Assessment

• 15.1 What demands are there regarding environmental impact assessment prior to exploration, exploitation and or production of geothermal energy?

  1) EIA requirement:

  Projects requiring an Environmental Impact Assessment (EIA) are listed in sec. 1 of the Ordinance Concerning EIA for Mining Projects (Verordnung über die Umweltverträglichkeitsprüfung bergbaulicher Vorhaben – UVP-V Bergbau) and Annex I of the Act on Environmental Impact Assessment (Gesetz über die Umweltverträglichkeitsprüfung − UVPG).

  A full EIA is required for: 

  • drilling of deep wells with a depth of 1,000 m or more in nature protection areas or Natura 2000 sites (protected areas under the Habitats Directive 92/43 EWG and the Birds Directive 2009/147/EG) for the purpose of exploration and exploitation of geothermal heat 
  • drilling of deep wells for the purpose of exploration and exploitation of geothermal heat by applying hydraulic fracturing (with certain exemptions).

  Further, EIA may be required

  • for drilling of deep wells with a depth of 1,000 m or more:
  • for the purpose of exploitation on the basis of a general case-by-case screening 
  • for the purpose of exploration on the basis of a location-related case-by-case screening,
  • provided that significant adverse impacts on groundwater-dependent ecosystems have to be expected for withdrawal of at least 5,000 m³ and less than 100,000 m³ ground water per year on the basis of a location-related case-by-case screening,
  • for withdrawal of at least 100,000 m³ and less than 10 million m³ water per year on the basis of a general case-by-case screening, 

  if the screening pursuant the Act on Environmental Impact Assessment comes to the result that the project could have significant environmental impacts.

  2) Scoping:

  If EIA is required, the responsible authority shall upon request of the project developer or if the authority considers it necessary discuss with the project developer the subject, extent and methods of the EIA as well as other questions of significance for the conduct of the assessment according to the respective state of planning and on the basis of suitable documents provided by the developer. For this purpose, other authorities, experts and third parties may be called in. The competent authority shall inform the developer on the probable scope of the assessment as well as on the type and scope of the documents probably to be provided.

  3) Environmental Impact Assessment:

  The Environmental Impact Assessment is an integral part of the permitting procedure for the framework operating plan (see below). The project developer has to present to the competent authority the documents which are of significance for a decision on the project’s environmental impacts at the beginning of the permitting procedure.

  The documents have to contain at least the following information:

  • a description of the project giving details on the site, design and size of the project as well as the amount of land required,
  • a description of the type and the quantity of the emissions and residual substances to be expected, in particular of the air pollutants, wastes and waste water as well as other information which is necessary for determining and assessing significant impacts on the environment by the project,
  • a description of measures by which significant impacts on the environment may be prevented, reduced or set off as far as possible, as well as of substituting measures in the case of interventions in the natural surroundings and landscape which cannot be set off but which have priority nonetheless,
  • a description of the significant effects of the project on the environment which pays regard to the general level of knowledge and the generally acknowledged assessment methods,
  • an outline of the main alternatives studied by the developer and an indication of the main reasons for his choice, taking into account the environmental effects.

  A non-technical summary shall be enclosed.

  Based on the documents provided by the developer, the statements made by other authorities and the opinions raised in the public participation procedure, the mining authority shall summarise the project’s impacts on the protection objectives of the EIA, including interactions. The competent authority then assesses the project’s environmental impacts on the basis of this summary and takes into account this assessment when deciding upon approval of the project with regard to efficient prevention of environmental damage.

• 16. Other regulatory requirements or permits needed

• 16.1 What other licenses are needed in order to commence exploration, exploitation and/or production with geothermal energy?

  All significant mining operations such as exploration, exploitation and construction and operation of the power plant or other subsurface and above-ground facilities which are connected to the mining operation and directly serve their operation may only be performed based on one or more operating plans approved by the mining authority (Betriebsplanzulassung). Projects that require an EIA need approval of a mandatory framework operating plan (Rahmenbetriebsplanzulassung). The approval will be issued by the mining authority in a formal plan approval procedure including a comprehensive EIA and participation of the public. The approval of a mandatory framework operating plan concentrates basically all involved parallel permits (one-stop shop). Mining operations are subject to substantive standards and procedural rules provided in the Federal Mining Act and certain implementing ordinances, most of them aiming at a high safety level and at minimizing environmental effects. 

  Some installations and operations require additional authorisations pursuant to other laws. This is in particular the case with regard to the use of water such as extraction and reinjection of thermal water. Such use requires a permit (Erlaubnis) under the Federal Water Management Act (Wasserhaushaltsgesetz – WHG). Gas-fired compressor units and gas heating facilities may require a permit under the Federal Immission Control Act (Bundes-Immissionsschutzgesetz – BImSchG) depending on their thermal input. Buildings usually require a permit (Baugenehmigung) under the State Construction Acts (Landesbauordnungen).

• 16.2 Which other regulatory requirements are in place, including but not limited to the need to provide insurances or guarantees, in connection with the commencing or continuing of exploration, exploitation and/or production of geothermal energy?

  An applicant has to prove sufficient financial capacities for proper exploration and exploitation activities to obtain a license.

  As regards the approval of an operation plan, the mining authority may condition the approval upon the operator providing securities (Sicherheitsleistung), if this is necessary to ensure compliance with the substantive standards set out in the Federal Mining Act, e.g. fulfilment of the decommissioning and re-cultivation duty. If the authority demands the provision of a security, it is entitled to determine the form of security it considers suitable including bank or parent company guarantee, security assignment (Abtretung), pledging (Verpfändung) of saving accounts (Sparguthaben) and insurance.

  The type and level of securities required may depend on the credit-worthiness of the operator and (in particular in case of a parent company guarantee) of its shareholders.

• 17. Legislation

• 17.1 Have there been any recent amendments to the legislation for licensing, exploration and/or exploitation of geothermal energy in the last 15 years? If so, have these amendments made a noticeable impact on the increase or decrease of production of electricity from geothermal resources?

  There were no fundamental amendments to the legislation for licensing, exploration and/or exploitation of geothermal energy in general. In 2016, the duty to conduct an EIA case-by-case screening for all drillings exceeding 1,000 m was introduced.

  Furthermore, the requirements for exploration and exploitation by applying hydraulic fracturing were tightened up. In 2016 an EIA got obligatory. Moreover, since 2017 the Federal Water Management Act explicitly requires a permit for hydraulic fracturing. This permit has to be denied in numerous protected areas, e.g. if the public water supply may be affected. In 2021 the German Federal government will evaluate the restrictions for hydraulic fracturing.

• 17.2 Have any other factors made a strong impact on the production of electricity from geothermal in the last 15 years? If so, for what reasons.

  The development of geothermal energy has been promoted by a legally guaranteed feed-in rate according to the Renewable Energy Act (EEG). Moreover, the Federal Government has supported the expansion financially. In the past 15 years, the gross electricity production has increased from zero to 175 GWh in 2017.

• 17.3 Is there a specific legislation in place regarding geothermal extraction?

  No, geothermal extraction is ruled by the general rules, in particular of the Federal Mining Act and the Federal Water Management Act.

• 18. Alternative or cascade use of resources

• 18.1 When applying for a licence, is it possible to apply for one license or authorization, which provides for multiple or cascade use of the resource, e.g. direct and indirect utilization (generation of electricity, district heating and cooling)?

  Exploration and exploitation licenses are not granted for a specific use of the resource. The operating plan approval covers the mining activities including all necessary facilities. The operating plan shall include a description of the scope, technical execution and duration of the project. In addition to the operating plan, further permits may be required, e.g. permits under the Federal Immission Control Act, building permits or water law permits. Only in case of a mandatory framework operating plan approval (i.e. in case of an EIA-obligation), the approval covers basically all other permits which may be required for the intended use.

• 18.2 Could mineral extraction from geothermal fluid be included under such cascade usage clauses?

  The answer depends on the mineral extracted: In particular brine and various salts are public mineral resources (bergfreie Bodenschätze) and ownerless. In general, for the exploitation of these minerals a license (Gewinnungsbewilligung) is necessary. The exploitation of geothermal energy and other specified minerals may be permitted by the same license. If the exploitation of the mineral is an inevitable consequence of the exploitation of geothermal energy, its exploitation is automatically part of the license. The rights of other license owners have to be regarded. Furthermore, the mineral exploitation has to be part of the approved operating plan.

  If the extracted mineral is a private mineral resource (grundeigener Bodenschatz), it belongs to the landowner. An extraction needs his approval, but not an exploitation license.

  Furthermore, re-injection of geothermal fluid (with or without prior mineral extraction) into a water body requires a permit under the Federal Water Management Act.

• 19. Water rights

• 19.1 Once an exploitation license has been granted for the operation of a power plant, along with access to fresh water for power plant operation, can the licence allow for sales and distribution of fresh water to local communities?

  Use of fresh water for the operation of a power plant is not covered by the exploitation license but by a separate water law permit. Usually, the water law permit is granted for withdrawal of water, geothermal use and re-injection. However, based on a water law permit for withdrawal only, it is basically possible to sell and distribute fresh water. The requirements of the Drinking Water Regulation (Trinkwasserverordnung) have to be met.