Geothermal energy is becoming an increasingly popular way to heat homes and buildings across Europe. Efficient use of this renewable energy source not only significantly lowers heating costs compared to gas-based systems, but also reduces greenhouse gas emissions and improves urban air quality.
Teofil Lata, Coal campaigner | 27 January 2025

In western Romania’s Bihor County, the municipalities of Oradea and Beiuș are spearheading this transition. Since the country’s accession to the EU, they have invested more than EUR 45 million in geothermal energy, primarily with the help of EU funds. This vital support has enabled them to adopt best practices and collaborate with specialists from within Romania and abroad.
Western Romania boasts the country’s most abundant geothermal resources. Recognising these valuable local assets, cities in the region have begun to incorporate geothermal energy into their district heating systems, moving beyond their traditional use in the spa and wellness tourism industry.
How did it all begin?
The nationwide exploration of geothermal resources for energy purposes began in the early 1960s. Over the following years, more than 250 wells were drilled, with depths ranging between 800 and 3,500 metres. These excavations revealed the presence of ‘low-enthalpy’ geothermal resources, characterised by relatively low temperatures ranging from 40 to 120 degrees Celsius. This led to the identification of several geothermal zones, mainly in the western part of the country and three areas in the south.
Initially, geothermal energy found applications within industries and the agricultural sector. However, following the fall of the communist regime in the 1990s, the pursuit of geothermal energy in western Romania gained momentum as the region recognised the need to seek alternatives to its costly and polluting coal-fired power plants. This resulted in the gradual adoption of geothermal energy for use in district heating systems, marking a shift towards more sustainable practices.
Geothermal energy in Oradea
One of western Romania’s most notable success stories is Oradea. Over the years, the city has been integrating geothermal energy into its district heating system. In 2020, geothermal energy accounted for 5 per cent of the total energy used. With continued investments and the completion of ongoing projects, this share is expected to rise to 15 per cent of the city’s total thermal energy by early 2025.
In the Oradea area, geothermal energy is primarily harnessed for direct applications such as heating residential and industrial spaces, producing hot water, industrial processes, greenhouse heating, and spa facilities.
Oradea is also home to the first geothermal water-based heating station in Romania. Completed in 2023, the station serves the multipurpose Oradea sports arena and over 1,500 homes across two neighbourhoods. The construction of the project was financed by amounting to a total investment of EUR 3.8 million.
Another project, completed in 2024, supplies geothermal-based heating to over 6,000 apartments in the Nufărul 1 neighbourhood of Oradea. This EUR 19 million investment, supported with EUR 15 million in EU funding, has led to an increase in the utilisation of local geothermal energy resources, including the local geothermal reservoir, for the production of heating and hot water.
The project was carried out in three phases, including the reinjection of geothermal water through a separate well. Additionally, a new 11.2-kilometre network was constructed to transport primary thermal energy, supplying over 200 heat modules at the building scale and replacing traditional heat distribution nodes.
These innovative projects are part of a programme involving the local administration and researchers from the University of Oradea. The programme aims to gradually increase the utilisation of geothermal energy within the city’s centralised heating system. This collaborative effort has also benefitted from valuable contributions from experts in France, Iceland, and Hungary.
The cheapest heating in the country
About 60 kilometres southeast of Oradea lies Beiuș, where Romania’s first geothermal well was drilled in 1996, reaching a depth of 2,500 metres. A pump installed in 1999 extracts up to 45 litres of geothermal water per second at a temperature of 83 degrees Celsius. A second well was drilled in 2004, followed by a third in 2010 with EU funding, specifically for reinjecting geothermal water back into the reservoir.
Since 2008, the municipality’s efforts to prioritise sustainable development have been successful in attracting over EUR 20 million in EU grants. This geothermal resource is now integrated into the city’s district heating system, serving over 1,600 apartments, 300 individual households, local government buildings, schools, the hospital, and the city’s emergency services.
Despite a modest increase in heating costs this winter to EUR 31.60 per megawatt hour (MWh) for the production, distribution, and supply of geothermal-based thermal energy, this outlay remains significantly more affordable compared to other cities in the region.
For instance, in 2022, Timișoara, whose heating system exclusively relies on gas and coal, faced a substantial increase EUR 149 per MWh (excluding VAT). This figure includes a local subsidy of approximately EUR 100 per MWh (excluding VAT), leaving subscribers to pay a net price of EUR 61 per MWh. This considerable cost difference illustrates the major economic advantage of geothermal energy over fossil fuel-based systems.
In light of the rising heating costs, Beiuș City Hall has promised new investments in district heating infrastructure. By the end of this year, the city, in collaboration with the Icelandic National Energy Authority, will develop a 3D model of the geothermal reservoir, utilising drilling data to accurately assess its potential.
The project also includes an energy efficiency study for the transport and distribution system, an analysis of closed-loop geothermal systems, and an evaluation of the suitability of heat pump applications for large consumers. Funded by Innovation Norway, the project will result in a feasibility study necessary for securing additional EU funding.
The geothermal future
Western Romania possesses significant potential for developing geothermal energy projects for district heating. This natural resource offers multiple benefits: economic efficiency through low operating and maintenance costs, minimal environmental impact compared to traditional fuels, and a consistent energy supply, provided the balance between extraction and reinjection is maintained.
Implementing these projects requires strong political will and courage at both the local and national levels, along with the continuation of financial support from a variety of sources. The recent proposal by Dan Jørgensen, the new European Commissioner for Energy and Housing, to develop a geothermal strategy aimed at supporting the EU’s heating needs is a welcome step.
Drawing on the successful examples from Bihor County and numerous other projects already implemented across Europe, western Romania can successfully leverage the potential of this economical and sustainable resource.
Never miss an update
We expose the risks of international public finance and bring critical updates from the ground – straight to your inbox.
Theme: Geothermal | District heating
Project: District heating