Netherlands: Green light for large scale geothermal project

Trias Westland gets the go-ahead. 49 companies are jointly going to drill for geothermal heat at an impressive four kilometers of depth - a first in the Netherlands.

The contracts were signed at the end of April and by now preparations have started at the drilling site at the Lange Broekweg in Naaldwijk. The greenhouses that are still there, are currently being removed. In June, the conductor will be placed, this is a kind of protective sleeve for the drilling. During the summer the preparatory earthworks will be initiated. Among others more than two hundred piles will be driven in to support the drilling rig, after which the drilling rig will be assembled. In the fourth quarter of 2017, the drilling must actually start. It will take about one hundred days, the same as the second drilling. It is expected that the first companies can be connected to the heating system in the summer of next year. The drilling rig is supplied by KCA Deutag and a number of important services by Schlumberger.

In October 2016, a provisional award was given to VB Geo Projects for the aboveground part of this appealing project. Now that TRIAS Westland has met all the conditions of the project financing, the provisional award has become definitive. VB Geo Projects will immediately start with the preparations and, after a positive well test, is expected to start the assembly works in early 2018. VB Geo Projects is specialized in the design and realization of the entire aboveground installation for the application of geothermal heat and has extensive experience. In the Netherlands, the company has realized more than ten geothermal heat projects. This comprises the section from the well connection up to the heat distribution to the participants in the project.

Earlier drilling in the Netherlands went up to about 2.5 kilometers of depth into the so-called Under chalk layer. Trias Westland investigates whether sufficient hot water can be collected from the Trias earth layer at four kilometers of depth. A test-well must prove whether the intended heat is actually present and recoverable to enable to connect all participating companies to geothermal heat. If it appears that the Trias earth layer is not suitable for recovering sufficient heat, a second regular geothermal well will be drilled to approximately 2.5 kilometers in depth so that a number of the companies can be connected.

In total, nearly 50 companies are involved in the drilling. "This is a project by and for the growers," is the opinion of Trias Westland. "It is significant that they cooperate with each other and with large regional parties through their own cooperative society."

For the connection to the heating network, the growers pay a fixed amount annually based on actual costs. The supply of heat will be charged at actual cost, thereby taking advantage of any windfall. The part that they do not use can be traded mutually; thus they can keep costs low and optimize the use of the heat source. After fifteen years, the geothermal heat company will be fully owned by the Westland heat cooperative.

The Rabobank and BNG Bank jointly provide the bank funding. At Trias Westland, both Rabobank Westland (supported from the DIT fund for the first drilling) and Rabobank Project Finance are involved. This 'branch' advises and structures (complex) project financing transactions. BNG Bank, since its inception in 1914, has been focusing on sustainability. The bank supports government policy by providing low-cost financing on the basis of its AAA ratings and is an important financier of the sustainability of corporate real estate and energy transition in the Netherlands. Trias Westland is the second geothermal project funded by BNG Bank. Unique is that this project was funded on the basis of ‘non-recourse project financing’. That is, a loan whereby the bank is entitled to repayment from the proceeds of the project without liability of shareholders or third parties. That's why the banks have very thoroughly investigated the technical aspects and funding of the Trias Westland project beforehand.

Furthermore, financial arrangements were used that are made available by the Ministry of Economic Affairs. The regular regulations for geothermal energy, SDE + and RNES- warranty also apply to Trias Westland. The deep drilling to the Trias-layer is carried out, made profitable and insured with Topsector Energy subsidy (DEI) and a GreenDeal warranty (€ 3.6 mln.). The province of Zuid-Holland has also contributed to this project through the ‘Opportunities for West’ program, aimed at giving the regional economy in the Randstad an innovative boost. The program is to a large extent funded by the European Regional Development Fund (ERDF).

More information about this project can be found at www.triaswestland.nl.

More information about VB Geo Projects can be found at www.vb-group.nl/en/geo.