As a key part of the low-carbon transition, Vermilion is leveraging the proof-of-concept established in France to develop alternative energy projects in our operations in The Netherlands. There, the Dutch Energy Agreement (DEA) targeted a 400% increase in renewable energy contribution from 4% in 2013 to 16% in 2023. We are playing an important role by demonstrating that, beyond using natural gas as a lower carbon transition fuel, synergies exist between natural gas production and green or renewable energy. We are also using our core business, based on geoscience expertise and our existing infrastructure, to investigate several important avenues for supporting the DEA’s target.
In Harlingen, we have partnered with SPF Group, a producer of sustainable fuels, to investigate the use of our Harlingen Treatment Centre location for their biogas production site. The location includes a quay that makes it possible to receive raw materials via water, thereby limiting truck transportation, and it offers existing buildings instead of new builds, which supports the sustainability principle that all parties involved are pursuing. It can also make use of Vermilion’s extensive gas infrastructure there. As of June 2022, SPF Group has located their head office at our location.
This work in Noord Holland focused on developing geothermal assessment plans on new gas drilling prospects so that a single drilling operation can address the potential of both natural gas and geothermal energy opportunities. It makes good economic sense: geothermal projects are currently economically viable only in very good reservoirs and with subsidies. Combining gas and geothermal exploration increases the return on investment significantly; however, current regulations do not allow for this combined approval approach.
Vermilion was one of seven companies to partner with the Dutch government, EBN (a natural gas exploration and production company owned by the government) and TNO (a Dutch non-profit for applied scientific research) to investigate ultra-deep (4,000 metres) geothermal energy that would produce the high heat needed by industrial energy customers. We signed the Green Deal in 2017 as an important step in establishing the regulations, technologies, standards and understanding needed to develop ultra-deep geothermal energy. Companies involved participated in pilot projects in various regions (Heerenveen for Vermilion), with the intention to develop those projects by 2020.
As part of our participation, we undertook a geological evaluation of the available 3D seismics. From this, we have concluded that the required Dinantien carbonate platform in Heerenveen is probably not present. So, although we certainly see the possibilities for ultra-deep geothermal in the Netherlands, we consider the opportunities for the successful development of a project at this specific location in Heerenveen within the frameworks outlined to be too small. This means that our consortium was not able to sign the cooperation agreement that marks the next phase of the Green Deal program. We are proud of what has been achieved in a short time within the partnership in the Green Deal UDG, however, and are pleased that the other six consortia will continue the program. While the project identified that this is not currently practical in our area of operation, our participation demonstrates our partnership approach to developing new products and services through research and development.
Our project to convert two of our depleted gas wells in Middenmeer, in North Holland, to geothermal production is on hold while the technical and economical aspects are further analyzed.