Geothermal Needs a Business Plan That Lasts Longer Than the Funding Round.

Why commercial discipline, experienced teams and long-term customers must underpin geothermal development.

A commentary on the commercial future of geothermal energy.

This week’s news from Geretsried brings an uncomfortable but necessary question into focus: how do we turn geothermal potential into a dependable energy business?

According to Isar Loisach Naturwärme, Eavor announced on 13 October that it would withdraw its drilling rigs for the time being, delaying the second loop. The local district heating company says that while construction, financing and timing of the second loop remain open, it cannot give reliable statements on when district heating will start or be expanded at scale. Its 2024 heat supply agreement with Eavor rested on assumptions that have since changed, and it must now reassess the expected heat output and economic viability. [1]

Geretsried already had substantial institutional financing, public support and an offtake agreement. [2] These are important foundations, but delivery requires them to remain aligned with technical performance, construction costs and customer timelines throughout development. The wider industry should reflect on that challenge without presuming to know every internal decision behind this particular project. The points that follow are general, not a judgement on Eavor.

A geothermal business must ultimately be sustained by the energy it delivers.

That principle should shape the business plan from the beginning. Who will buy the energy? What do they need, at what price, and for how long? What will it cost to deliver it? Who carries the development risks? And does the project remain viable if drilling takes longer, output is lower or financing becomes more expensive?

A credible business plan connects those answers. It follows the project through development, construction, commissioning, operation, maintenance and eventual decommissioning. It includes realistic contingencies and clear decisions on when to proceed, redesign or stop. It must remain useful when conditions become difficult.

Public funding can make a valuable contribution, particularly where early projects generate knowledge that benefits the wider industry. However, the commercial ambition should be to develop projects capable of attracting capital and sustaining operations through customer revenues, with a credible route to independence from subsidies.

For projects presented as commercially mature, economics without grants should be tested explicitly. Where public support remains essential, that dependency should be transparent. An anticipated grant should never quietly become the answer to an unresolved funding gap.

A serious geothermal energy business must be commercially viable without government funding.

That means a business plan that works on private capital and customer revenues alone, covering development, construction, operations, maintenance, debt service and an appropriate return. Government grants and subsidies may be accepted where available, but they must be optional: the project must still work if no public funding is awarded. A business model that only works with government support does not meet the standard of an independently viable energy business.

Public money also carries the same obligation to deliver as private capital. Whether a budget is financed by shareholders, lenders or government programmes, it requires disciplined procurement, realistic scheduling, cost control and accountability. The source of the money does not change the engineering challenge or the customer’s need for reliable energy.

Commercial independence also requires clarity about what “self-funded” means. Major geothermal developments usually need external capital. The objective is a business financed through committed equity, suitable financial partners and debt introduced when the risks and revenues support it. Once operational, cash flow should fund maintenance, reserves, debt service and a reasonable return, with reinvestment supporting further growth.

That requires financial professionals who have financed complex businesses before: people who understand construction exposure, delayed revenues, lender requirements and the consequences of changing technical assumptions. A financial model becomes useful when it translates those realities into decisions.

Long-term offtake belongs at the centre of this process.

Industrial facilities, data centres, district heating companies and other substantial users should help define the project from an early stage. Their demand, creditworthiness, connection requirements and operating schedules influence what should be built and when.

A useful offtake strategy goes beyond securing a signature. It aligns contracted volumes, pricing, delivery dates, ramp-up, availability obligations and contingency arrangements with what the facility can realistically provide. It also addresses what happens if the customer’s premises, the heat network or the generating plant is delayed.

A twenty-year contract has limited value if the infrastructure required to fulfil it remains unfunded. Equally, a completed plant cannot create the expected revenues if its customer or connection is not ready.

This is why geothermal needs leadership that thinks in decades.

The sector should have little patience for incentives that reward raising money and announcing projects while leaving delivery obligations to someone else. Development expertise deserves compensation, and investors deserve returns. Those rewards should reflect genuine progress, risks resolved and durable value created.

A short-term cash-in mentality is fundamentally unsuited to an asset with decades of obligations.

The strongest businesses will align management, investors and delivery partners around successful commissioning and sustained operating performance. Their strategy must extend well beyond the next funding round.

Above all, execution depends on the team — from A to Z.

Geologists and subsurface specialists must understand the resource and its uncertainties. Drilling and completion professionals need practical field experience, including experience of what goes wrong. Engineers must integrate wells, surface facilities and customer connections. Commercial specialists must secure workable contracts. Finance leaders must fund the entire development sequence. Operators must be involved early enough to ensure the asset can be maintained and run economically.

Oilfield experience offers a substantial foundation. The International Energy Agency identifies strong overlap with geothermal in subsurface evaluation, drilling, completions, project management, construction and operations. Applying that experience effectively also requires understanding geothermal temperatures, thermal behaviour and operating economics. [3]

The same scrutiny belongs in partner selection. A recognised company name is useful; the assigned team, available equipment, delivery capacity and contractual commitments determine what happens on site. Partners should demonstrate how they will meet the programme and budget, manage interfaces and respond when performance falls short.

Reliable data supports every one of these decisions. Subsurface information, well records, temperature measurements, drilling performance and operating results must inform both engineering and economics. Proprietary datasets can provide an advantage when they are relevant, reliable and correctly interpreted. Digital tools and AI should strengthen professional judgement, preserve lessons and expose weak assumptions.

Technology must serve this commercial and operational purpose.

Geothermal developers should use proven equipment, established methods and repeatable designs wherever the application allows. Complexity needs to earn its place through measurable improvements in performance, cost or risk. An energy project should not depend on several breakthroughs arriving simultaneously.

Innovation remains essential, but new configurations require validation. Proven components do not automatically make an entire system proven at commercial scale. Technology development needs explicit budgets, testing milestones and capital prepared to accept that risk. Customer delivery commitments must reflect the evidence available.

At Catoxy Energy, our guiding principle is straightforward: we are an energy company, not a technology company.

Our focus is on selecting and integrating the technologies, expertise, financial partnerships and customer relationships needed to deliver geothermal energy economically over the long term. That means judging opportunities by their ability to become dependable operating businesses, and building the organisation around that responsibility.

Geothermal earns lasting confidence when customers receive the energy they contracted for, capital providers see disciplined stewardship, and the business can maintain and improve its assets year after year through the revenues it generates.

A geothermal energy business that wants to be taken seriously must be able to finance, build and operate its projects without government funding. Its viability must come from private investment, sound economics and long-term customer revenues. Public support may improve the investment case; it must never determine whether the business case exists at all.

That is the standard our industry should build for.