Vulcan’s Long-Term Heat Contract Hinges on Permits and ESW Investment Decisions

A Strategic Partnership for Renewable Heat

Vulcan Energy, an ASX-listed company pioneering carbon-neutral lithium and renewable energy production, has formalised a significant 35-year heat offtake agreement with German municipal energy supplier EnergieSüdwest AG (ESW). This deal secures the supply of geothermal heat from Vulcan’s Lionheart Phase One Project to various districts in the Landau region, underscoring a growing commitment to sustainable, local energy solutions in Germany.

The agreement was celebrated in a ceremony attended by representatives from Vulcan, ESW, and the Mayor of Landau, Dr Dominik Geißler, highlighting the regional importance of this collaboration. It follows the commencement of renewable heat supply earlier this year, delivered directly from Vulcan’s existing geothermal wells into ESW’s heating network.

Supporting Germany’s Energy Transition

This long-term contract is a cornerstone of Vulcan’s integrated approach, combining lithium extraction with renewable energy production. It aligns closely with Germany’s broader energy transition goals, particularly the forthcoming Geothermal Acceleration Act, which aims to fast-track geothermal projects to meet ambitious targets of 10 terawatt-hours of geothermal energy by 2030 and 300 terawatt-hours by 2050. These targets are critical to reducing fossil fuel dependence and achieving Europe’s climate protection objectives.

Vulcan’s Managing Director, Cris Moreno, emphasised the agreement’s role in fostering regional energy independence and reducing carbon emissions. The initiative is expected to set a precedent for other communities considering geothermal solutions for district heating.

Expanding Capacity with EU Support

To scale up renewable heat supply, Vulcan plans to develop five additional production well sites under the HEAT4LANDAU Project, backed by a €100 million grant from the German Federal Ministry of Economics and Climate Protection and funded by the European Union’s NextGenerationEU program. This expansion will enable Vulcan to supply heat to more households and businesses, increasing from an initial 25 gigawatt-hours to a potential 595 gigawatt-hours by 2042.

The agreement includes supply of three heat products at varying temperatures, standard district heating at 95°C, high-temperature heat at 150°C for special applications, and low-temperature heat at 60°C, demonstrating flexibility to meet diverse energy needs.

Conditions and Future Outlook

While the deal is robust, certain conditions remain, including Vulcan’s acquisition of land at the D12 industrial site and obtaining necessary building permits for the Geothermal and Lithium Extraction Plant (G-LEP). Additionally, ESW’s investment decision and successful commissioning of infrastructure are prerequisites for expanding heat supply from the new site.

A non-binding cooperation framework was also signed, laying the groundwork for future heat offtake agreements with neighbouring municipalities, indicating Vulcan’s ambition to broaden its geothermal footprint in the region.

Overall, this agreement not only secures a long-term revenue stream for Vulcan but also reinforces its position as a key player in Europe’s renewable energy landscape, blending lithium production with sustainable heat supply.