Innargi signs deal to build geothermal district heating plant

Innargi signs deal to build geothermal district heating plant

Shipping containers are transported by a Maersk Line vessel through the Suez Canal in Ismailia, Egypt on July 7, 2021. REUTERS Amr Abdallah Dalsh REUTERS

COPENHAGEN, Jan 14, Reuters -- Innargi, founded by the holding company behind shipping giant Maersk, on Friday signed a deal to build a geothermal district heating plant that will heat thousands of homes by harnessing heat from the earth's core.

Geothermal power has the advantage of being more stable than weather-dependent renewables, but as an expensive and not yet mature technology, it has not seen the explosive growth enjoyed by wind and solar power in Europe.

In a statement from Innargi, the Danish plant is expected to be completed in 2029 and will provide up to 20% of Denmark's second biggest city, Aarhus' district heating demand.

Water will be extracted two to three kilometres below the surface at a temperature of 60 -- 90 degrees Celsius. The heat of the water is captured and transferred to the district heating network, it said.

The firm was founded by the Maersk family's investment company, A.P. Moller Holding, which also controls A.P. Moller-Maersk MAERSKb. CO It raised capital from Denmark's largest pension fund ATP and Danish utility NRGi, which owns 37% and 20% of the market.

We see great opportunities for Innargi to develop green district heating for Aarhus and millions of homes in other cities in Europe, Chief Executive of A.P. In the statement, Moller Holding Robert M. Uggla said.

The capital expenditure for the plant will be 1.5 billion Danish crowns $231.17 million, a Innargi spokeswoman told Reuters.

Consumers' heating bills have been protected from record high wholesale energy prices seen across Europe, as district heating warms around 64 percent of Danish households and is largely immune to market fluctuations.

More than 1% of the district heating in Denmark comes from geothermal energy.