KenGen Risks Losing Olkaria Wells Over 18-Year Licence Blunder Kenya Electricity Generating Company (KenGen) faces a serious legal and operational risk at Olkaria after an error in the coordinates of its geothermal licence left part of the company’s wells, steam infrastructure and other assets outside its legally recognised area. The licensing mistake, made nearly two decades ago, remains unresolved despite the Ministry of Energy and Petroleum acknowledging the problem in 2017. The dispute has raised questions about the security of KenGen’s investments, the government’s management of geothermal resources and the potential consequences for Kenya’s electricity supply. Olkaria is the country’s most important geothermal centre and accounts for the overwhelming majority of Kenya’s installed geothermal generation capacity. Licence Error Exposes Strategic Assets The problem dates back to September 19, 2008, when the Ministry of Energy and Petroleum issued KenGen a licence covering ...
France raises Minimal Geothermal Energy (GMI) threshold to 2 MW , Boosting surface geothermal deployment for buildings, districts and public facilities
France raises Minimal Geothermal Energy threshold to 2 MW: what it means for surface geothermal deployment
On 25 June 2026 the French government published Decree No. 2026-537, raising the Minimal Geothermal Energy (GMI) threshold for ground probes from 500 kW to 2 MW. This regulatory change — which took effect for online declarations of the opening of works from 1 June 2026 — simplifies the administrative pathway for many surface geothermal projects and is expected to accelerate their rollout across urban and suburban contexts. The decision reflects years of advocacy, stakeholder consultation and alignment with France’s National Geothermal Action Plan. For building owners, developers and local authorities, the new threshold opens new opportunities for decarbonizing heating and cooling with shallower geothermal systems while reducing project lead times and permitting complexity.
What the decree changes
Under the previous rules, probes and other very shallow geothermal installations producing at least 500 kilowatts of thermal output fell under a more burdensome regulatory regime. Decree No. 2026-537 revises that limit and several associated provisions:
- The GMI threshold for probes increases from 500 kW to 2 MW, meaning many installations between these capacities will now benefit from the simpler declaratory regime rather than a heavier permitting route.
- The reform applies to online declarations of the opening of works submitted from 1 June 2026 onward.
- The decree also introduces regulatory clarifications for certain very superficial operations and adjusts penalties tied to mining works.
- Importantly, the change applies to surface geothermal probes; the GMI on groundwater is not affected and remains under existing rules, with work continuing on other groundwater-specific GMI changes.
Taken together, these adjustments reclassify a swathe of projects — especially in the tertiary (commercial) sector, collective housing, public facilities and eco-districts — into a faster, lower-friction administrative path.
Why the change matters now
Several converging factors explain why raising the GMI threshold matters at this moment:
- Climate and energy targets: France and the EU continue to pursue ambitious decarbonization and energy-efficiency targets for buildings. Heating and cooling account for a large share of energy use in buildings, and surface geothermal can deliver low-carbon thermal energy at scale.
- Urban deployment potential: Surface geothermal systems (often called ground source heat pump systems using vertical or horizontal probes) are particularly suitable for urban and suburban sites where shallow geothermal resources can be accessed without deep drilling.
- Administrative bottlenecks: Prior permitting thresholds constrained many mid-sized projects with moderate thermal outputs, forcing them into a lengthy authorization process. Raising the threshold removes administrative friction and can shorten time-to-first-heat.
- Market readiness: Technology and contracting capacity in the geothermal sector have matured over recent years. Manufacturers, installers and engineering firms are prepared to scale, but regulatory hurdles were limiting uptake.
For stakeholders in the development pipeline, the new threshold can reduce both direct regulatory costs and indirect delays associated with securing permissions, helping projects reach financial close faster.
Who benefits
The revised threshold will have a broad impact across several segments:
- Tertiary buildings: Office blocks, shopping centers and mixed-use developments that use large heat pumps and distributed probe fields will find it easier to deploy geothermal heating and cooling.
- Collective housing: Multi-unit residential buildings, co-operative housing and social housing projects can integrate geothermal systems as a primary or hybrid heat source, making low-carbon heating more cost-effective at scale.
- Public facilities: Schools, hospitals, municipal offices and cultural centers — often constrained by public procurement timetables and budget cycles — will benefit from a more streamlined approval process.
- Eco-districts and urban redevelopment: Large urban renewal projects that plan integrated heating networks can incorporate geothermal at scale, supporting local decarbonization targets.
- Temperate loop networks: Shared shallow geothermal networks that supply clusters of buildings (neighbourhood loops) can operate with fewer administrative hurdles for medium-sized installations.
Beyond these specific categories, smaller commercial and industrial thermal loads that previously sat above the 500 kW line but below 2 MW will now fall into the declaratory regime, reducing the need for complex environmental or mining permits.
Practical implications for project development
Project developers and facility managers should take several practical steps to capitalize on the new threshold:
- Re-evaluate pipeline projects: Contracts and feasibility studies for projects between 500 kW and 2 MW should be re-reviewed to see if simpler permitting shortens timelines or reduces costs.
- Update procurement and tender documents: Public authorities and developers can specify the new regulatory baseline in RFPs and project documentation to reflect shorter approval expectations.
- Adjust financing assumptions: Reduced permitting risk can improve project bankability. Revisit financing terms, interest rates and contingency lines tied to regulatory milestones.
- Coordinate with local authorities: Even with streamlined declarations, early engagement with municipal planning and environmental officers will help identify local constraints (e.g., urban excavation limits, utilities conflicts).
- Ensure technical compliance: The declaratory regime still requires adherence to technical norms and best practices for probe design, soil investigations and thermal interactions. Maintain robust site surveys and thermal response testing as part of due diligence.
- Consider shared networks: Developers of eco-districts or multi-building sites may find economies of scale by aggregating loads and designing neighbourhood-scale loop networks.
These changes do not eliminate the need for rigorous technical and environmental assessments — they simply reduce the administrative overhead for a significant set of projects.
Regulatory and environmental safeguards remain important
Raising the GMI threshold does not mean reduced environmental scrutiny across the board. The declaratory regime requires accurate reporting and compliance with standards intended to protect subsurface integrity, groundwater and neighbouring installations. Key safeguards include:
- Proper site investigations: Soil and subsurface characterisation, including thermal conductivity tests and probe siting assessments, remain required to ensure system performance and avoid interference with other underground networks.
- Groundwater protection: The decree explicitly leaves groundwater-specific GMI rules unchanged. Projects interacting with aquifers or using groundwater heat exchange must still comply with the existing, often stricter, regime.
- Monitoring and maintenance: Operators should implement monitoring to detect thermal interference, probe integrity issues or performance degradation over time.
- Penalty framework: The decree updated some aspects of the penalty regime for mining works, which underscores that non-compliance still carries meaningful consequences.
Maintaining environmental safeguards and technical rigor will be essential to ensure public acceptance and the long-term sustainability of expanded geothermal deployment.
Market and economic impacts
Short-term market responses are likely to include an uptick in project inquiries, shifts in procurement, and increased demand for installation capacity. Over the medium term, the economic impacts may include:
- Construction and services growth: More projects moving forward will stimulate demand for drillers, heat pump manufacturers, engineering consultants and O&M providers.
- Cost reductions: Higher deployment volumes and standardised procurement can bring down equipment and installation costs through economies of scale.
- Local job creation: Urban geothermal rollouts can generate skilled jobs in drilling, system design, and maintenance — often concentrated within regions pursuing district- or city-scale programmes.
- Competitive heating markets: As geothermal becomes easier to implement, it may compete more directly with gas boilers, electric resistance heating and other district heating fuels, accelerating fuel-switching and reducing fossil-fuel demand.
- Investment flows: Private investors and institutional capital tend to favour projects with lower regulatory risk. The threshold change could stimulate greater project finance and blended-finance structures for geothermal heat projects.
Municipalities and regional authorities that proactively plan for geothermal networks can capture larger shares of these economic benefits, particularly where integrated urban planning supports shared loops and energy districts.
How this fits into France’s strategy
The revision aligns with France’s National Geothermal Action Plan, which aims to scale up geothermal heating as part of broader decarbonization objectives. By smoothing administrative steps for medium-scale surface geothermal installations, policymakers seek to lower deployment barriers and accelerate the substitution of fossil-based heating. This regulatory change is one element in a suite of measures — including incentives, public procurement goals and technical standards — intended to grow the country’s renewable thermal capacity.
At the European level, the move also supports EU priorities for efficient, low-carbon heating and cooling, helping France meet its national and bloc-wide energy transition commitments. It demonstrates a pragmatic approach: preserve environmental protections while making regulatory pathways proportionate to project risks and technical realities.
Remaining challenges and next steps
While the threshold change is significant, several challenges remain:
- Groundwater regulation: Groundwater-related GMI rules were not changed by this decree, so projects using groundwater exchange will still face the existing permitting requirements. Further work is ongoing.
- Workforce scale-up: The sector needs to ensure the availability of trained drillers, installers and designers to meet increased demand without compromising quality.
- Local planning integration: Many municipalities will need guidance and templates to evaluate and incorporate shallow geothermal into zoning, excavation coordination and permit workflows.
- Data and monitoring: Building a robust evidence base on long-term performance and thermal interactions will help refine best practices and inform future regulatory adjustments.
- Financing support: Targeted incentives or blended finance could accelerate projects in lower-income or underserved areas where upfront capital costs remain a barrier.
Policymakers, industry associations such as the AFPG, and local authorities will need to collaborate to address these gaps. Continued stakeholder engagement and knowledge-sharing will help convert regulatory progress into on-the-ground deployment.
Practical example: a municipal retrofit scenario
Consider a mid-sized French town planning to retrofit a municipal school and two neighbouring administrative buildings. Under the previous 500 kW threshold, the developer faced a longer permitting route for a clustered geothermal design sized at 1.2 MW. With the threshold raised to 2 MW, the project can proceed under the declaratory regime, shortening lead times and reducing upfront regulatory costs. The town can then allocate savings to improved energy-efficiency measures and community engagement, combine loads across buildings to reduce unit costs, and implement a monitoring plan to demonstrate replicability for other neighbourhood retrofits.
What stakeholders should do next
- Developers and building owners: Reassess projects in the 500 kW–2 MW range for permitting advantages and update project timelines and budgets accordingly.
- Local authorities: Prepare guidance notes for applicants explaining the new threshold, and coordinate with utilities and planning departments to streamline implementation.
- Installers and consultancies: Scale up capacity planning, invest in training, and standardise procurement bundles to capture emerging demand.
- Financial institutions: Revisit lending criteria and risk assessments for geothermal heat projects; consider product offerings tailored to medium-scale shallow geothermal.
- National associations: Continue outreach and education, provide technical templates and case studies, and advocate for complementary measures (skills, incentives).
Conclusion
Raising the Minimal Geothermal Energy threshold from 500 kW to 2 MW represents a pragmatic regulatory step that removes a key administrative barrier for many surface geothermal projects in France. The change should speed deployment across tertiary buildings, collective housing, public facilities and eco-districts, while preserving environmental safeguards and leaving groundwater-specific rules intact. To convert this regulatory win into measurable emissions reductions, the sector must align project pipelines, scale the workforce, and coordinate local planning and financing. With these pieces in place, the decree can help catalyse a broader shift to low‑carbon heating and cooling in French towns and cities .
Source: AFPG
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