RWE Innogy has set up a joint venture with a specialist drilling firm to help it realise its ambitions to develop Germany’s geothermal energy potential.

The German firm has signed an agreement with Dalrup & Söhne (D&S) to develop, plan and construct a range of geothermal power stations both in Germany and other European countries. The move follows an announcement by RWE in October 2008 that it had obtained permits for two deep geothermal projects in south-west Germany.

“The use of geothermal heat for the production of electric power and heat has great potential – not just in Germany, but also in southern and south-eastern Europe. This joint venture enables us to ensure the systematic development of a relatively young form of energy in our latitudes and to use this energy on a major technical scale,” said Prof. Fritz Vahrenholt, Chairman of the Board of Directors of RWE Innogy.

The joint venture will initially focus on developing RWE’s existing deep geothermal drilling areas as well as on applying for further permits. The deal requires the approval of Germany’s antitrust authority.

RWE’s existing permits are for two projects in the Swabian rural district of Oberallgäu in Bavaria. RWE and D&S will spend three years investigating the geothermal potential of the area, which covers some 100 km2, before drilling up to 4000 m into the ground.

Interest in geothermal energy in Germany is being driven by the introduction of a feed-in tariff under the German Renewable Energy Act (EEG). A 2003 study put the country’s total technical potential for geothermal energy at 300 000 TWh, while over 150 permits have been granted to develop sites in Germany’s key geothermal areas.

The Bavarian projects are located in the Bavarian Molasse Basin, an area that is ideal for the exploitation of geothermal energy.