Vulcan Energy inks 20-year geothermal energy supply deal with Germany’s MVV

MVV Energie AG

05/04/2022 12:28

BERLIN, April 5 (Reuters) - Vulcan Energy  VUL.AX  has
signed a deal with Germany's fifth biggest utility firm MVV
Energy  MVVGn.DE  for at least 240 gigawatt hours per year of
geothermal energy starting in 2025, the company said on Tuesday.
    Under the agreement, valid for twenty years, Vulcan Energy
will provide up to 350 gigawatt hours of energy per year -
enough to supply around 25,000 households - from geothermal
wells in the area around the city of Mannheim, transferring heat
via grids and underground pipes to local buildings.
    "Geothermal renewable energy on a mass scale combined with
lithium extraction from the same geothermal source can and will
play an important part in achieving Europe and Germany's energy
security and independence," Vulcan's managing director Francis
Wedin said in a statement.
    Vulcan Energy, which is listed both in Australia and
Frankfurt, has obtained licences for more than 1,000 kilometres
of land in southwest Germany where it plans to extract super-hot
lithium-rich brine from underground reservoirs, using the heat
to produce electricity and extracting lithium from the brine.
    The company has signed contracts with automakers Volkswagen
(VOWG_p.DE), Stellantis (STLA.MI) and Renault (RENA.PA) as well
as Umicore and LG Chem's (051910.KS) battery unit LG Energy to
supply up to a combined total of 282,000 tonnes of lithium
hydroxide over five to six-year terms.
    Geothermal power has the advantage of being more stable than
weather-dependent renewables, but has not seen equivalent growth
or investment to wind and solar in the region in part due to
high upfront costs and complex licensing processes for drilling.
    Innargi, founded by the holding company behind shipping
giant Maersk, signed a deal in January for a geothermal plant in
Denmark which it said could provide 20% of the country's second
biggest city Aaarhus' heating demand starting in
2029. urn:newsml:reuters.com:*:nL8N2TU2N3    

 (Reporting by Victoria Waldersee
Editing by Madeline Chambers)
 ((Victoria.Waldersee@thomsonreuters.com;))