Geothermal district heating in the city of Kecskemét MLEI GeoKec – City of Kecskemét (HU) 21/03/2013-20/03/2016 IEE/12/064/SI2.645706 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 M5 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 Distribution System Heating Company Proprieraty Two independent distribution system Total heated space: 2 023 929 m3 No. of heated flats: 11 234 Supplied heat amount: 405 167 GJ No. of heat transfer stations: 309 Heat provider: Termostar Kft. Owners: 69.5% - Municipality 30.5% - EDF DÉMÁSZ Zrt. 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

Temperature distribution chart Produced geothermal heat Installed Geothermal Capacity Temperature distribution chart 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 Optimal capacity Optimal capacity Produced geothermal heat

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

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

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

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 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) Kecskeméti Termálrendszer Beruházó Kft. Imre KOVÁCS imre.kovacs@eu-fire.hu