Geothermal district heating in the city of Kecskemt

Geothermal district heating in the city of Kecskemét MLEI Geo. Kec – City of Kecskemét (HU) 21/03/2013 -20/03/2016 IEE/12/064/SI 2. 645706 20/03/2016

Municipality of Kecskemét - General economic data Capital of Bács-Kiskun county Economic, administrative, educational, and cultural centre Population: 113. 275 (2011), number of households: 42. 541 Important investors (e. g. , Mercedes-Benz factor opened in 2012) Economic structure: § 48. 3% service § 41. 39 % industry § 10. 31% agriculture § Perfect location § M 5 Motorway § 85 km from Budapest § 70 km from the airport § NATO airbase to be transformed for civil use § § §

Scheme of the Existing district heating system Heating Company Proprieraty • Heat provider: Termostar Kft. • Owners: • 69. 5% - Municipality • 30. 5% - EDF DÉMÁSZ Zrt. Distribution System • Two independent distribution system • Total heated space: 2 023 929 m 3 • No. of heated flats: 11 234 • Supplied heat amount: 405 167 GJ • No. of heat transfer stations: 309 Széchenyiváros System • Capacity requirement: 38 MW • Hot water requirement: 3 MW Árpádváros System • Capacity requirement: 19 MW • Hot water requirement: 1, 5 MW Gas Engines • Covers hot water heat requirements • Capacity: • 6, 6 MW thermal capacity • 6, 2 MW electric capacity

District heating system – Future plans § Connection of the two separate networks financed by the Environment and Energy Operational Programme (Structural Funds) - executed § Use of geothermal energy in the district heating system § Installation of efficient gas boilers replacing the old ones § Further extension of the district heating system with residential and industrial consumers is possible and considered

Project plan

Layout of the geothermal system

Installed Geothermal Capacity Total no. of days 200. 00 Temperature distribution chart Optimal capacity • Length of the heating season: 182 days • Peak time capacity is required in very few days a year • Produced heat amount is not linear in function of the installed capacity 150. 00 100. 00 50. 00 -15 -14 -13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 Ambient temperature [°C] 60 MW Produced geothermal heat 50 MW 40 MW 30 MW 20 MW 10 MW Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Execution Phases (1) Phase 1 • Install geothermal heat plant in heat Advantages • Safety – Reduce drilling risk • Adapted milestones • Earlier operation • Income • Subsidy transfer station no. 202. • Drill 1+1 wells • Pre-heat secondary loop return water Phase 2 Energy produced • • • Phase 1: 3, 5 MW capacity; 38 400 GJ heat Phase 1+2: 18, 3 MW capacity; 254 500 GJ heat Phase 1+2+3: 28, 2 MW capacity; 382 100 GJ heat • Connect Széchenyiváros system into geothermal heat plant • Drill 3+3 wells (total 4+4 operates) • Pre-heat primary loop return water Phase 3 • Connect Árpádváros system into geothermal heat plant • Drill 2+2 wells (total 6+6 operates) • Pre-heat primary loop return water Supply and Reinjection Pipeline • 3 parallel pipeline is installed (2 small + 1 large) • Large pipeline is unused in phase 1 • 2 small pipelines reinject in phase 3

End users (present and future consumers of the heat) Termostar (district heating company) 69% municipality of Kecskemét Actors involved Municipality of Kecskemét EU-FIRE Ltd. 31% EDF Kecskeméti Termálrendszer Beruházó Ltd. Financial investors (project company) 7% Municipality of Kecskemét 93% EU-FIRE Ltd. Contractual relation Ownership relation Contractors Additional professional investors

Financing of the proposed investments (1) Investment Cost Drilling Execution Total Investment Cost Phase 1 3 000 € 8 375 000 € Phase 1+2 11 900 000 € 10 275 000 € Phase 1+2+3 17 800 000 € 12 575 000 € 11 375 000 € 22 175 000 € 30 375 000 € Phase 1 40 000 GJ Phase 1+2 250 000 GJ Phase 1+2+3 380 000 GJ 581 000 €/year 3 013 000 €/year 4 758 000 €/year 601 000 €/year -20 000 € 1 388 000 €/year 1 625 000 € 2 006 000 €/year 2 752 000 € Yearly Net Income Heat Amount Revenues Sale price: 2500 HUF/GJ Expenditures Operating income Financial Results with 15% discount rate Subsidy 20% Sale price: NPV IRR 2500 HUF/GJ 4 422 000 € 20, 8 % The project is feasible, if the following criteria can be fulfilled • Discount rate is less than 15% OR • Sale Price: greater than 2500 HUF

Overview of the workplan § § § § 1: Management 2: Preliminary studies 3: Licensing and permitting 4: Technical and financial engineering of the geothermal plant and system 5: Procurement 6: Financing 7: Communication 8: EACI Dissemination Activities

Partners & Contacts Name of the beneficiary Contact person E-mail Municipality of Kecskemét Megyei Jogú Város Önkormányzata Zoltán BALOGH balogh. zoltan@kecskemet. hu EU-FIRE Ltd. EU-FIRE Kft. Péter KOVÁCS peter. eufire@gmail. com Project Company (KTRB) Imre KOVÁCS Kecskeméti Termálrendszer Beruházó Kft. imre. kovacs@eu-fire. hu