Djibouti Pays KenGen: A $1 Million Offer on a Five-Year-Old Geothermal Drilling Debt Djibouti has finally moved to pay part of what it owes Kenya Electricity Generating Company (KenGen) for drilling work done near Lake Assal. The amount is small next to KenGen's balance sheet. What it says about selling geothermal drilling services across Africa matters a lot more. KenGen's latest annual report says Djibouti's state geothermal agency, the Office Djiboutien de Développement de l'Énergie Géothermique (ODDEG), has offered a first instalment of about $1 million (Sh129 million) against outstanding invoices of $2.13 million (Sh276.03 million), according to Business Daily. "ODDEG has acknowledged the debt and has proposed an initial payment of $1 million as the first instalment towards settlement," KenGen said in the report. KenGen is Kenya's largest power producer, with about 54% of the market. The Kenyan government owns 70% of the company and the public holds t...
Deep Geothermal Powering Graz: How OMV and Energie Steiermark’s “Tiefenkraft” Project Is Transforming District Heating
Deep geothermal energy is quietly becoming one of Europe’s most powerful tools for decarbonizing heat, and the new “Tiefenkraft” project by OMV and Energie Steiermark in the Graz region shows exactly why it matters – and how it will work in practice.
Why Deep Geothermal Matters Now
Across Europe, the heat transition has become the missing piece of the climate puzzle: electricity is decarbonizing fast, but buildings still rely heavily on fossil fuels for heating. District heating systems offer a way to decarbonize entire cities at once, and geothermal energy is uniquely suited because it delivers constant, weather-independent heat. In Graz and Styria, the deep geothermal potential of the subsurface is now being tapped at scale, promising a regional, climate-friendly heat supply that can run 24/7 for decades.
The “Tiefenkraft” Project At A Glance
“Tiefenkraft” is the name of a joint deep geothermal initiative by OMV and Energie Steiermark focused on the greater Graz area in Styria, Austria.The long-term ambition is to supply up to 670 GWh of geothermal heat per year by around 2037, which corresponds to roughly half of the district heating demand in the region. First heat feed-in is targeted as early as 2030, meaning the project could start decarbonizing Graz’s district heating network within just a few years.
From Seismic Lines To Subsurface Models
Between late 2025 and spring 2026, the project team ran an extensive seismic survey campaign across the greater Graz region.Around 900 kilometers of local roads were used as measurement lines, allowing geophysicists to build up a detailed picture of the subsurface down to several thousand meters. These data are now being processed into a subsurface model that will guide drilling: identifying hot water-bearing formations, estimating reservoir properties, and reducing geological risk before the first well is drilled.
The First Exploration Well: “Petersdorf 2”
With seismic work complete, “Tiefenkraft” is moving into the next decisive phase: drilling. The first exploration well, “Petersdorf 2,” is planned in St. Marein near Graz, with preparatory site works scheduled to start in September 2026 and drilling expected to begin in the fourth quarter of 2026, subject to permits. Drilling and testing are projected to take three to four months and will provide hard data on reservoir temperatures, productivity, and the overall geothermal potential of the target formation.
How A Geothermal Doublet Works
If the exploration results are positive, the next investment decision will cover development of the first geothermal “doublet,” a pair of wells that form the basic building block of a deep geothermal heat system. One well is the production well, which brings hot water up from the reservoir; the other is the injection well, which re-injects cooled water back underground after its heat has been extracted. This closed-loop design maintains reservoir pressure, minimizes environmental impact, and allows long-term, sustainable heat extraction from depths of several kilometers.
Aquifer Thermal Energy Storage (ATES) Potential
Alongside the first doublet, the partners are considering additional wells to test the feasibility of an Aquifer Thermal Energy Storage (ATES) system. ATES uses underground aquifers as giant thermal batteries, storing surplus heat in the subsurface during periods of low demand and recovering it seasonally when heating needs spike. For a city like Graz, integrating ATES into deep geothermal operations could flatten demand peaks, increase overall system efficiency, and reduce reliance on backup fossil-fuelled plants.
The Pipeline Link To Graz
Even the most productive geothermal reservoir is only useful if its heat can reach homes and businesses, which is where Energie Steiermark’s infrastructure expertise comes in. As part of the “Tiefenkraft” project, Energie Steiermark is responsible for constructing and operating an approximately 20‑kilometer water pipeline that will transport geothermal-heated water from the production site into Graz’s district heating network This transmission pipeline represents an investment volume of around EUR 150 million and is crucial for integrating geothermal energy into the regional heat supply at scale.
A Clear Industrial Partnership Structure
The collaboration between OMV and Energie Steiermark follows a clear industrial setup with defined responsibilities and an explicit sharing of risks. Drilling, subsurface development, and power generation are handled by a joint development company in which OMV holds a 75% stake and Energie Steiermark 25%, reflecting OMV’s strong background in geology and drilling, and Energie Steiermark’s regional role. The pipeline infrastructure and integration with the district heating network are managed by Energie Steiermark, while Energie Graz is expected to handle last‑mile distribution to end users.
OMV’s Role In The Heat Transition
OMV, traditionally known as an oil and gas major, is repositioning itself as an integrated sustainable energy, fuels, and chemicals company. In Styria, OMV brings decades of experience in subsurface geology, drilling technology, reservoir management, and large-scale project development to the geothermal space. The company has explicitly framed deep geothermal energy as a key lever for delivering independent and climate‑neutral heat supplies in Austria, and “Tiefenkraft” is a flagship example of that strategy.
Energie Steiermark’s Regional Strength
Energie Steiermark, headquartered in Graz, is one of Austria’s largest energy and infrastructure companies and already relies exclusively on renewable sources such as hydropower, wind, solar, and biomass for its electricity generation. With more than 2,200 employees and around 600,000 customers, it has long experience operating grids, heat networks, and e‑mobility infrastructure across the region. In “Tiefenkraft,” Energie Steiermark’s role in infrastructure, system integration, and heat distribution makes it a key player across the entire value chain from pipeline construction to district heating integration.
Economic Scale And Investment Signals
For Energie Steiermark, “Tiefenkraft” represents the largest single investment in the company’s history, underscoring the strategic importance of deep geothermal energy for its future portfolio.The scale is also evident on OMV’s side, where geothermal in Graz forms part of a broader diversification away from purely fossil-based revenues toward low‑carbon energy and long-term heat contracts.Together, these investments signal confidence in geothermal’s ability to deliver high‑volume, baseload heat at competitive cost once the initial exploration and infrastructure phase is complete.
Timelines: From Survey To First Heat
The overall development timeline spans several years, starting with seismic surveys and culminating in commissioning and heat delivery. Seismic work was carried out along hundreds of kilometers of roads from late 2025 to early 2026; exploration drilling at Petersdorf 2 is scheduled for late 2026; and, if successful, the first geothermal doublet and associated infrastructure could be operational by around 2030.[1][5][4] Full build‑out, including all planned production and injection wells, ATES installations, and the complete pipeline connection, aims to reach up to 670 GWh per year of heat supply by 2037.
What It Means For Graz And Styria
For the greater Graz area, the “Tiefenkraft” project could cover around half of district heating demand with local, renewable geothermal energy once fully implemented. That would significantly cut fossil fuel consumption, reduce CO₂ emissions from buildings, and shield consumers from volatile gas prices over the long term. Just as importantly, the project keeps value chains regional: heat is produced locally, transported through local infrastructure, and consumed by households and businesses in Styria, reinforcing energy autonomy and resilience.
Deep Geothermal As A Model For Other Cities
Although “Tiefenkraft” is specific to Graz and Styria, its architecture is widely relevant: comprehensive seismic exploration, pilot wells, doublets, seasonal storage, and dedicated transmission pipelines are the core elements of modern deep geothermal district heating.[1][6][3][4] Other European cities with favorable geology can follow a similar path, integrating geothermal into existing heat networks as a baseload, then complementing it with heat pumps, solar thermal, and waste heat.[3][4] As projects like “Tiefenkraft” move from plan to operation, they will help prove at scale that the earth’s own heat can reliably warm our cities—and that the heat transition can be both climate‑friendly and economically sound.
Source: OMV
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