Estonia Drills Into Its Own Backyard: Why Three Small Towns Could Shape the Future of Baltic Heating Estonia has started looking for heat under its own soil. In October 2026, the Geological Survey of Estonia began exploratory drilling at three locations in the south of the country to find out whether open-loop geothermal energy pilot plants can work there, according to CEENERGYNEWS, citing the Estonian Ministry of Climate. Work starts in Rõuge, then moves to Põlva municipality and Tõrva. The campaign is part of a research programme called AVATAR. On paper, this is a small story: a few boreholes, some pumping tests and a careful statement from a state agency. It is also one more step in a deliberate effort by a small Baltic country to treat geothermal energy as a real option for heating whole communities, and not only single houses. Estonia has long winters, energy security is a political issue there, and moving away from fossil fuels is now fixed policy. So the drilling matters more th...
Estonia Drills Into Its Own Backyard: Why Three Small Towns Could Shape the Future of Baltic Heating
Estonia has started looking for heat under its own soil. In October 2026, the Geological Survey of Estonia began exploratory drilling at three locations in the south of the country to find out whether open-loop geothermal energy pilot plants can work there, according to CEENERGYNEWS, citing the Estonian Ministry of Climate. Work starts in Rõuge, then moves to Põlva municipality and Tõrva. The campaign is part of a research programme called AVATAR.
On paper, this is a small story: a few boreholes, some pumping tests and a careful statement from a state agency. It is also one more step in a deliberate effort by a small Baltic country to treat geothermal energy as a real option for heating whole communities, and not only single houses. Estonia has long winters, energy security is a political issue there, and moving away from fossil fuels is now fixed policy. So the drilling matters more than the size of the rigs suggests.
What Is Actually Happening
The aim of the drilling campaign is simple. It will collect geological and groundwater data at each of the three sites to find out whether local aquifers hold enough water to support an open-loop geothermal system. The work fits a broader goal: assessing how geothermal energy could be used in both small towns and larger settlements, and developing renewable heating solutions suited to Estonian conditions.
Helena Gailan, Head of the Subsurface Energy Department at the Geological Survey of Estonia, was careful not to overpromise. "Drilling work provides a precise overview of the geological cross-section and groundwater potential at each location," she said, adding that "decision makers have not made a final determination on the construction of a pilot plant. Assessment of feasibility can occur only after post-drilling research and pumping tests conclude."
That caution is worth noting. This is not a construction announcement. It is a fact-finding exercise, and the outcome could be that one, two or none of the three sites are suitable. Good geothermal programmes are built on this kind of patient, data-first approach.
Open Loop Versus Closed Loop
Most people who have heard of geothermal heating in Northern Europe know the closed-loop version. A sealed pipe filled with a heat-transfer fluid runs down a borehole, picks up heat from the surrounding rock, and brings it back up to a heat pump. The fluid never touches the ground directly. These systems are reliable, well understood and very common in Estonia. According to GeoExpro, closed-loop shallow geothermal boreholes drilled to around 200 metres are already quite common in the country.
An open-loop system works differently. It extracts groundwater through one well, transfers the water's thermal energy into a heating network through a heat pump, and then returns the water underground through a second well. Instead of heating a fluid indirectly through rock, the system uses the groundwater itself as the heat carrier.
The advantage is efficiency. Water moves heat far better than rock does, and an aquifer with good flow can deliver a large, steady amount of energy from relatively few wells. Under suitable geological conditions, open-loop configurations offer higher efficiency than closed-loop alternatives. For a district heating network serving a town rather than a single building, that difference can decide whether a project makes economic sense.
The catch is in the words "suitable geological conditions." Open-loop systems depend completely on what is underground. The aquifer must yield enough water. The water chemistry must not clog or corrode equipment. The reinjection well must be able to take the water back without problems. Maps and old records cannot fully answer these questions, so someone has to drill, pump and measure. That work has now started in southern Estonia.
A Technology That Stalled
The Geological Survey's own reporting includes a telling detail. In its 2025 yearbook, the agency notes that no new open-loop geothermal systems have been installed in Estonia since 2022. For that reason, it plans to build an open-loop test station in southern Estonia under AVATAR, to collect more hydrogeological and technical data and to assess the conditions under which open-loop systems could be developed further.
In other words, the market has not taken this technology forward by itself. That is common for energy solutions with high upfront risk. A private developer or a small municipality cannot easily afford to drill wells that may turn out to be dry or unsuitable. When the state takes on that early exploration risk and publishes the results, it lowers the barrier for everyone who follows. So the drilling in Rõuge, Põlva and Tõrva does more than test three towns. It builds knowledge that engineers, utilities and local governments across the region can use.
The Origins of AVATAR
AVATAR has been in preparation for some time. The Ministry of Climate approved the project to better understand geothermal resources held in sedimentary formations, and to assess whether such solutions are technically and economically feasible in Estonia. , the project is financed from the State Budget Strategy 2024–2027 under a programme supporting climate and energy policy pilot projects, with a budget of up to EUR 1.25 million over three years.
The plan follows a clear order. First, identify geologically suitable areas. Next, run tests, including geophysical measurements. Only then consider building a pilot plant. The current drilling is the point where desk studies are checked against physical evidence. AVATAR aims to use geothermal energy from Quaternary sediments, with one pilot installation planned for southern Estonia, complementing the mapping and use of geothermal resources across the country.
Building on GEOENEST
AVATAR is easier to understand alongside the project that came before it. In August 2021, the Estonian state began a three-year research effort, led by the Geological Survey, to study geothermal potential at various locations and build two test stations. That project had a budget of EUR 3.8 million, funded from the sale of greenhouse gas emission allowances. It became known as GEOENEST.
GEOENEST focused on medium-depth closed-loop systems in the north and centre of the country, and it produced working installations. According to the European Geothermal Congress 2025 country update for Estonia, two borehole systems were commissioned in 2024.
The first, in the Tallinn metropolitan area, uses geoenergy from a depth of 505 metres, delivers 74 kW of thermal output and serves a 4,400 m² residential area, at a total cost of about EUR 381,000. The second, in Roosna-Alliku in central Estonia, uses four 500-metre boreholes and one 365-metre borehole, delivers 400 kW and serves a 6,500 m² area.
The Roosna-Alliku station shows what these projects are meant to replace. The Geological Survey reported that the station would supply environmentally friendly heat to buildings on the local district heating network, including a kindergarten, an elementary school and a municipal service centre, instead of the shale oil boiler used before.
A third GEOENEST site followed at Arbavere in Lääne-Viru County. Its 712.5-metre borehole, currently the deepest thermal borehole in the country, now heats and cools the Geological Survey's research centre buildings, with a thermal capacity of 40 kW and the first use of coaxial pipe architecture in Estonia.
AVATAR builds on that work but takes a different route. GEOENEST tested how deep closed loops could reach into hard rock in the north. AVATAR tests whether the water-bearing sediments of the south can feed more efficient open-loop systems. The two projects cover two geothermal approaches for two different geological settings.
Why Southern Estonia
Geology varies across Estonia. In the north, crystalline basement rock lies beneath a relatively thin layer of sediments. Geothermal gradients of up to 35°C per kilometre have been measured in basement rocks in northern Estonia, compared with 18°C per kilometre elsewhere, which makes the north attractive for deeper closed-loop drilling. Officials have long compared northern Estonia with southern Finland, where many cost-effective geothermal heat plants already operate.
The south is different. It has thicker sedimentary layers and groundwater systems that may suit open-loop extraction. Rõuge, Põlva and Tõrva are small towns, which makes them practical places to test the idea. If open-loop geothermal can serve settlements of this size, the model could be repeated in the many small district heating areas across rural Estonia and the wider
Baltic region.
The Bigger Picture: Heating in Estonia
Heating is a major part of Estonia's energy use. About 60% of the population uses district heating, and the country has more than 200 district heating areas. The International Energy Agency's 2023 Energy Policy Review of Estonia found that space heating made up 71% of residential building energy demand in 2021, covered mainly by bioenergy and district heating.
Estonia has made real progress in cutting emissions from heating. The IEA review notes that the fuel mix of district heating has moved away from natural gas, oil shale, oil and peat toward solid biomass and waste, cutting the carbon intensity of district heating supply by more than half between 2008 and 2021. According to the European Commission, renewables made up 66.7% of district heating in 2023, and the country aims to move away from fossil fuels in heating and cooling of buildings by 2040.
That progress has a weakness: it depends heavily on wood. Bioenergy in Estonia comes mainly from domestic forest biomass. A study for Estonia's Ministry of Climate on carbon-neutral heating and cooling recommends reducing that dependence by electrifying district heating with large heat pumps and supplying networks with a mix of solar, geothermal and bioenergy. The same study lists geothermal energy among the most promising sources for carbon-neutral heating.
Open-loop geothermal fits that plan. It works well with heat pumps, provides steady baseload heat in any weather, and burns no fuel. For a small town with an ageing boiler, it could reduce reliance on both imported gas and wood chips.
Energy Security in a Changed Region
Energy security is another reason. Since 2022, it has become a top policy priority across Central and Eastern Europe. Heat from local aquifers cannot be cut off by a supplier, and its price does not follow international gas markets. For a country on the EU's eastern border, local renewable heat supports resilience as well as climate targets.
Other countries in the region are thinking the same way. Governments are investing in batteries, local solar, interconnectors and alternative heating sources. Geothermal heat gets less attention than a solar park or a wind farm. In countries with cold winters, where heating makes up much of energy demand, it can matter just as much.
What Comes Next
The next steps are clear, but the outcome is not. After drilling, the Geological Survey will analyse the geological cross-section at each site, run pumping tests to measure how much water the aquifers can deliver and how they respond, and then assess feasibility. Only then will authorities decide whether to build a pilot plant, as Gailan stressed.
Several questions will shape that decision:
Water yield: Can the aquifer supply enough water, steadily and over the long term, to meet a town's heating demand?
Reinjection: Can the water be returned underground without clogging the well or disturbing the aquifer?
Water chemistry: Will minerals or gases in the groundwater damage heat exchangers and pumps over time?
Economics: Will the cost of wells, heat pumps and network connections compete with biomass boilers or air-source heat pumps?
Groundwater protection: In many places, groundwater is also drinking water. Any open-loop system must show that it does not harm water quality or supply.
If the results are good, a pilot plant in southern Estonia would be the country's first new open-loop geothermal system since 2022 and a working example for others to follow. If some sites turn out to be unsuitable, that is still useful. Knowing where open-loop geothermal does not work helps future investors avoid costly mistakes.
Lessons Beyond Estonia
Estonia's approach is also a useful model for other regions, including those with very different geology. The country has not made big promises about geothermal power plants or volcanic heat it does not have. It is working step by step with the resources it actually has: modest temperatures, good groundwater and rock within practical drilling depth. It is combining those with heat pumps and the district heating networks it already has.
The state is also taking on the early risk, sharing the data and testing several technologies. These range from 500-metre closed loops in the north and coaxial boreholes at Arbavere to the open-loop sediment systems now being explored in the south. Public pilots like these prove what works and reduce uncertainty, which makes private and municipal investment more likely.
Conclusion
The rigs in Rõuge, Põlva and Tõrva are collecting data, and the results could matter far beyond these three towns. If southern Estonia's aquifers can support efficient open-loop geothermal systems, the country gains a new way to cut fossil fuel use and rely less on biomass in district heating. It would also strengthen its energy independence.
The Geological Survey of Estonia is right to be cautious. Geothermal projects depend on what lies underground, and only careful measurement can show what is there. Still, the direction is clear. Estonia treats underground heat as a national resource, and AVATAR will show whether its groundwater can carry that heat to homes, schools and public buildings in its small towns.
Source : Ceenergynews
Comments
Post a Comment