Following a period of dispute over liabilities, the deep geothermal project in Graz, Austria appears to be progressing with a comprehensive agreement reached by all project partners. With a planned annual production volume of around 500 GWh, the “Deep Power – Geothermal Energy from Styria” / “Tiefenkraft – Geothermie aus Steiermark” project is positioned to be the most significant individual project in the decarbonization plan of local utility Energie Graz.
First announced in early 2025, the project envisions a 140 MWth geothermal facility that will supply 400 to 500 GWh of heating per year, covering eastern Styria to the greater Graz area starting 2030/2031.
In November 2025, we reported unfortunate news about the geothermal project in Graz with the withdrawal of the OMV Group, citing the refusal of the city of Graz to assume liabilities for the project. The city had previously stated that it could not issue a hard guarantee because of the excessive liability risks and that the liability distribution was unfavorable for Energie Graz. The situation at the time was emblematic of a commonly encountered bottleneck in geothermal development – the disconnect between municipal bodies wanting to retain control of local utilities, but limiting their exposure to project risks.
However, a surprising positive development was reported just earlier this year with the start of a seismic data acquisition campaign by OMV. According to the report, the upfront costs of the campaign was provided by state energy company Energie Steiermark (Energy Styria). This campaign is still ongoing and is nearing completion.
Through constructive discussions between Energie Steiermark, Holding Graz, and Energie Graz, a comprehensive contractual framework has been agreed upon for the project, with every detail meticulously negotiated. The current concept ensures that no guarantees or guarantees are required from the City of Graz. Instead, Energie Graz has paid a risk premium to Energie Steiermark, thus creating the necessary stability for the city and its companies and laying the foundation for long-term cooperation.
All upcoming investments will be made through a joint venture between OMV and Energie Steiermark. This joint company will then supply around half of the district heating needs of Graz with geothermal energy. The long-term supply agreement is designed to provide price-stable heat for a period of about 40 years.
Source: Graz Holding and Kronen Zeitung
