Eavor Demobilizes Rigs from Geretsried: What It Really Means for Closed-Loop Geothermal For three years, two drilling rigs on a farm estate near Geretsried, a Bavarian town about 40 km south of Munich, stood as the symbol of the world's most ambitious closed-loop geothermal experiment. Now in October 2026, Eavor Technologies, the Calgary-based developer of the Eavor-Loop, has told the town and its heating utility that both rigs would leave the site . The company said keeping idle rigs and specialist services on site was costly, and that releasing them would help put the project in the strongest position to continue with Loop 2 once its commercial structure is reworked . On the surface, this is a logistics decision. Underneath, it is one of the clearest signals yet about where first-of-a-kind geothermal technology stands, and how hard it is to turn a technical proof into a bankable business. This article explains exactly what happened, what the move means and what it does not mean...
Serbia Advances Geothermal Drilling for the Mišeluk District Heating Plant in Novi Sad
Serbia is moving forward with plans to develop a geothermal district heating system in Mišeluk, a rapidly urbanizing area of Novi Sad. The project is intended to place geothermal energy at the centre of a new low-carbon heating network, supported by solar power and natural gas backup.
Exploratory drilling and construction of the heat distribution network are being carried out by JKP Novosadska toplana, Novi Sad’s public district heating utility. The initiative is supported through the United Nations Development Programme’s “Geothermal Energy in Serbia” programme, with financial backing from Slovakia.
The Mišeluk project is important not only because it could provide a new renewable heat source for Novi Sad, but also because it demonstrates how geothermal energy can be integrated into urban development from the earliest planning stages. Rather than retrofitting a geothermal system into an established neighbourhood, the municipality is developing the district’s heating infrastructure alongside housing, commercial buildings and other essential services.
Exploratory Drilling Marks a Key Project Milestone
On June 9, 2026, Novi Sad Mayor Žarko Mićin visited the exploratory drilling site for the planned Mišeluk geothermal district heating plant. He was accompanied by Jakup Beriš, resident representative of the United Nations Development Programme in Serbia, and Michal Pavúk, ambassador of the Slovak Republic to Serbia.
The visit highlighted the political and institutional support behind the project. It also marked visible progress in the preparation of a geothermal heating plant designed to serve a new urban district in the Syrmian part of Novi Sad.
At this stage, exploratory drilling is particularly important because it will help confirm the subsurface conditions required for a viable heating system. Geothermal projects depend on several factors, including temperature, depth, flow rate, water chemistry, reservoir permeability and the long-term sustainability of production.
A geothermal resource may appear promising in geological studies but still require further investigation before commercial development can proceed. Exploration therefore reduces uncertainty by providing information about the temperature and behaviour of the underground resource.
For a district heating project, the resource must also be evaluated against the expected heat demand of the connected buildings. The success of Mišeluk will depend on whether the geothermal source can provide sufficient thermal energy at an economically competitive cost while maintaining stable operation throughout the heating season.
UNDP and Slovakia Support Serbia’s Geothermal Programme
The Mišeluk project forms part of the “Geothermal Energy in Serbia” programme. The programme is implemented by UNDP with financial support from the Slovak Ministry of Finance, in cooperation with Serbia’s Ministry of Environmental Protection and Ministry of Mining and Energy.
Its objective is to help Serbian public institutions incorporate geothermal energy into their energy systems. Support includes feasibility studies and preparatory exploration works, two activities that are often difficult for municipalities to finance independently.
Geothermal development can face a financing challenge at the earliest stages. Drilling is expensive, while the resource remains uncertain until wells are completed and tested. This creates a risk gap between initial geological assessment and the point at which commercial lenders or private investors are prepared to participate.
Public and development finance can help address this challenge. By supporting feasibility studies, geological analysis and exploratory drilling, institutions such as UNDP can help municipalities establish a stronger technical and financial basis for future investment.
This form of assistance is especially relevant for public district heating systems. Municipal utilities may have strong long-term demand but limited access to risk capital. They may also be responsible for keeping heat affordable, making it difficult to absorb the cost of unsuccessful exploration.
The Serbian programme reflects a broader approach to energy transition in which international organisations, national governments and local utilities share project-development responsibilities. It also shows that geothermal energy policy requires more than setting renewable energy targets. It requires mechanisms that help projects move from national strategy to bankable infrastructure.
Novi Sad is not the only Serbian location benefiting from the programme. Another site containing a thermal spring was selected under the same project call for a separate feasibility study focused on heating public facilities. This indicates that Serbia’s geothermal strategy is not limited to one city or one type of resource.
Why District Heating Is a Strong Geothermal Application
Geothermal energy is particularly well suited to district heating because it can provide continuous thermal output without relying on weather conditions. Unlike solar and wind power, geothermal heat can operate day and night and throughout the winter, subject to resource and system limitations.
This makes geothermal energy valuable in countries where heating demand is concentrated during cold periods. A district heating network can distribute hot water from a central plant to residential, commercial and public buildings, reducing the need for individual boilers.
The Mišeluk system is expected to use geothermal energy as its principal heat source. Solar energy would provide an additional renewable contribution, while natural gas would serve as backup.
This combination creates a hybrid heating model. Geothermal energy would provide the stable baseload supply, solar power could contribute during suitable conditions, and gas-fired equipment could cover peak demand or periods when the geothermal system is unavailable.
A hybrid system can improve operational resilience. District heating networks must respond to variations in demand caused by weather, occupancy and building use. If the geothermal wells cannot cover the entire peak load, supplementary technologies can ensure that customers continue to receive reliable heat.
Natural gas backup also provides flexibility during the early years of operation. The geothermal system may be commissioned before the district reaches full occupancy, meaning heat demand could initially be lower than the network’s eventual design capacity. Over time, the utility could optimise the mix as more buildings are connected.
However, the role of natural gas should remain carefully defined. If gas equipment operates frequently, the system may deliver fewer emissions reductions than expected. The economic and environmental performance of the project will therefore depend on geothermal availability, system design, building efficiency and the operating strategy adopted by JKP Novosadska toplana.
Mišeluk Is Being Planned Around Its Energy System
One of the defining features of the Mišeluk development is that the heating infrastructure is being planned before the district is fully built. The municipality has already developed basic infrastructure, including the heat distribution network, while housing and commercial development continues.
This sequencing offers several advantages. A new district can be designed with the location of the heating plant, transmission routes, substations and building connections in mind. Engineers can also consider energy efficiency, pipe sizing and future demand before construction patterns become fixed.
Retrofitting a district heating network into an established urban area is often more complex. Roads may need to be excavated, existing utilities relocated and building owners persuaded to connect. Construction can disrupt traffic and local businesses, while the cost of installing new pipes may be higher.
Mišeluk provides an opportunity to avoid some of these challenges. By treating the heating system as part of the district’s basic infrastructure, the municipality can develop a more integrated energy network.
The approach also supports long-term planning. A district heating system is most effective when it has sufficient connection density and a predictable customer base. New urban development can provide that customer base if the network is installed in parallel with building construction.
The project’s performance will nevertheless depend on the pace of urbanisation. If construction or occupancy is slower than expected, the network may initially operate below capacity. That could affect revenues, asset utilisation and the timing of investment recovery.
For this reason, demand forecasting will be a crucial part of the project’s next phases. Planning should account for existing buildings, future residential units, commercial facilities, public institutions and potential changes in energy efficiency standards.
Role of JKP Novosadska Toplana
JKP Novosadska toplana is responsible for drilling works and construction of the heat distribution network. As Novi Sad’s public district heating utility, the company has direct experience with heat production, network operation and customer service.
Its involvement could help connect the geothermal project to the city’s existing energy infrastructure and institutional framework. A municipal utility understands local heat demand, network conditions, billing systems and the operational requirements of district heating customers.
The utility will also be responsible for translating the geothermal resource into a dependable service. That includes managing production wells, heat exchangers, pumps, water treatment systems, transmission pipes and building-level substations.
A geothermal district heating plant generally separates geothermal fluids from the customer-side heating circuit through heat exchangers. This can protect the distribution network from mineral scaling, corrosion or other water-chemistry problems associated with underground fluids.
Depending on the resource characteristics, the project may require reinjection wells. Reinjection returns geothermal water to the subsurface after heat has been extracted, helping maintain reservoir pressure and reduce the risk of resource depletion.
The final technical configuration will depend on drilling results and feasibility studies. Key design decisions may include the number of wells, production temperature, flow rate, peak heat capacity, reinjection strategy and the use of heat pumps.
If the geothermal water temperature is relatively low, heat pumps could increase the useful heat delivered to the network. They would require electricity but could improve the economics of a resource that might otherwise be unsuitable for conventional district heating.
Serbia’s Geothermal Potential Requires Careful Interpretation
Serbia is frequently described as having significant geothermal potential, but estimates vary considerably depending on how potential is defined. Some studies refer to theoretical national resources, while others focus on identified or operating installations.
The EnergyNews report notes that an older estimate covers Serbia’s total theoretical potential, whereas a more recent UNDP-commissioned report assesses the aggregated capacity of already identified and operational sources. These figures describe different categories and should not be treated as directly comparable.
This distinction is essential for policymakers and investors. Theoretical potential represents the heat that may exist in the subsurface under favourable assumptions. Technical potential accounts for geological and engineering limitations, while economic potential considers whether a resource can be developed profitably.
A resource can therefore be large in geological terms but limited in practical terms. Depth, drilling cost, temperature, permeability, water chemistry, environmental restrictions and proximity to heat consumers can all determine whether development is feasible.
For district heating, location is especially important. Heat cannot be transported economically over unlimited distances. A moderate geothermal resource near a dense urban load may be more valuable than a hotter resource located far from customers.
Mišeluk’s planned urban development could improve the commercial case because the heat network and customer base are being developed together. Nevertheless, the project still requires accurate reservoir data and realistic demand forecasts.
Clear communication about geothermal potential is also important for public policy. Overstated figures can create unrealistic expectations, while overly narrow estimates may discourage investment. Serbia would benefit from consistent resource classification, transparent datasets and project-level reporting based on comparable methodologies.
Connection With Serbia’s Energy and Climate Strategy
The Mišeluk development supports Serbia’s objective of increasing the share of renewable energy in gross final energy consumption. The country’s integrated national energy and climate plan establishes targets for electricity, heating and cooling, and transport.
Heating deserves particular attention in energy-transition planning. Renewable electricity deployment often receives more visibility, but space heating and hot water account for a large share of energy demand in many countries. Decarbonising heat therefore requires technologies that can operate at scale during winter.
Geothermal district heating can contribute to this effort by replacing or reducing fossil-fuel consumption in buildings. Its effect will depend on the resource, the efficiency of the network and the carbon intensity of backup systems.
The project may also improve energy diversification. A district that depends on a single fuel is exposed to supply interruptions and price volatility. A geothermal resource, once developed and properly managed, can provide a locally controlled source of heat with low exposure to imported fuel prices.
Serbia’s progress in increasing its renewable energy share has been described as modest compared with the European Union average, according to the source article. This makes practical projects such as Mišeluk relevant as demonstrations of how renewable energy can be applied in the heating sector rather than only in electricity generation.
The project could also provide institutional experience. Public authorities and utilities can use the lessons from Mišeluk to improve permitting, procurement, drilling supervision, resource assessment and geothermal network operation in other Serbian municipalities.
Technical and Financial Challenges Ahead
The transition from exploratory drilling to a fully operating geothermal district heating plant will involve several risks. The first is resource risk: the wells must deliver adequate temperature and flow for the expected heat demand.
Drilling risk is followed by construction and integration risk. The heat distribution network must be completed to the required technical standard, and the plant must be connected to customer buildings as the district develops.
Financing will remain another major consideration. Exploration support can reduce early-stage risk, but later phases may require substantial capital for production wells, reinjection infrastructure, heat exchangers, pumps, controls, substations and network expansion.
The project’s business model should account for the gradual growth of heat demand. It may be necessary to phase investment so that capacity expands in line with the construction and occupation of the district.
Operating costs will depend on electricity consumption for pumping, maintenance requirements, water treatment and the need for supplementary heat. Geothermal systems typically benefit from low fuel costs, but they are not maintenance-free and can be affected by corrosion, scaling and well-performance decline.
Environmental management is also essential. Geothermal fluids may contain dissolved minerals or gases that require controlled handling. Reinjection, monitoring and compliance with water and environmental regulations should be incorporated into the project from the beginning.
Finally, customer connection rates will influence financial performance. A technically successful plant cannot achieve its full potential if too few buildings connect to the network. The municipality and utility will need to align construction schedules, connection policies and heat tariffs.
Lessons for Geothermal District Heating Development
The Mišeluk project offers several lessons that may be relevant to other cities considering geothermal heating.
Plan Heat Infrastructure Early
Integrating geothermal energy into a new district is generally more straightforward than retrofitting an existing neighbourhood. Urban planners can reserve land for wells and plant equipment, coordinate pipe corridors and establish connection requirements before construction is complete.
Use Public Finance to Address Exploration Risk
International and public funding can help municipalities undertake feasibility studies and drilling before commercial financing becomes available. This reduces uncertainty and improves the quality of later investment decisions.
Combine Geothermal Energy With Flexible Backup
A geothermal source may provide the majority of annual heat while solar energy and backup gas cover additional requirements. The system should be designed to minimise fossil-fuel operation while preserving reliability.
Separate Theoretical and Commercial Potential
National resource estimates should distinguish between theoretical, technical and economically developable potential. Project decisions must be based on well data, heat demand and local costs rather than broad national figures alone.
Build Institutional Capacity
Successful geothermal development requires cooperation among municipalities, utilities, geological agencies, regulators, financiers and international partners. Projects such as Mišeluk can strengthen this institutional base.
Outlook for Novi Sad’s Geothermal Heating Project
The Mišeluk geothermal district heating plant remains under development, with exploratory drilling and heat-network construction representing important preparatory steps. Its ultimate capacity, operating configuration and commercial performance will depend on the results of exploration and subsequent feasibility work.
If the geothermal resource proves suitable, the project could become a significant example of renewable heat deployment in Serbia. It would demonstrate how a public utility can combine geothermal energy with solar generation and backup capacity to serve a planned urban district.
The project could also support Serbia’s wider effort to diversify district heating sources. By developing local renewable heat, Novi Sad may reduce dependence on conventional fuels while creating a replicable model for other municipalities with suitable geothermal conditions.
Mišeluk’s greatest significance may therefore extend beyond the boundaries of the district itself. It represents a test of whether Serbia can turn geothermal potential into practical, bankable and reliable urban infrastructure. The answer will depend on the quality of the wells, the strength of the heat network, the pace of urban development and the ability of public institutions to maintain long-term project support.
For now, the project marks a concrete step toward a more diversified heating system in Novi Sad. With continued technical assessment, transparent resource evaluation and coordinated financing, geothermal energy could become an increasingly important part of Serbia’s renewable heating strategy.
Source: Energy News
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