OMV to withdraw from geothermal heating project in Graz, Austria
View over Graz from Schlossberg to southwest (source: Isiwal, creative commons/ wikimedia)
Carlo Cariaga
11 Nov 2025
Citing the lack of liability guarantees from the city, OMV has expressed its withdrawal from the proposed geothermal heating project in Graz, Austria.
The OMV Group will be withdrawing from the geothermal district heating project that has been planned for the city of Graz in Austria, citing the lack of the necessary resolutions from the city to assume liabilities exceeding EUR 200 million. This was conveyed by a letter sent by OMV to project partners Energie Graz and Energie Steiermark.
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. The project had been set up as a joint venture between OMV Green Energy GmbH, Energie Graz, and Energie Steiermark. A recent update indicated that seismic surveys were to be conducted to characterize the geothermal resource by December 2025.
According to OMV, the project is being halted because of the lack of necessary resolutions from the city of Graz. 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.
As Mayor Elke Kahr stated in an official release, “The contract proposed by the partners would have meant that the City of Graz would merely have been the purchaser of district heating, but would have borne unlimited liability. This would not only drive up energy prices, but also jeopardize the existence of the municipal energy supplier. Moreover, the City of Graz’s statutes do not permit this course of action.”
Energie Steiermark also expressed concern over the cancellation of the project, pointing out that only about 10% of the current heat supply in Graz comes from renewable sources, making the city vulnerable to price fluctuations of international markets. The company also emphasized that the expansion of the district heating network in Graz will not continue without the geothermal project.
An offer to take over the district heating network
After the announcement of OMV’s withdrawal from the geothermal project, Energie Steiermerk submitted an offer to the city fo Graz to purchase the district heating network with an offer of EUR 120 million. This was framed as a way to continue with the project with OMV, in accordance with the previously planned scope and schedule.
The city, however, rejected the offer outright. “Selling the city’s district heating to Energie Steiermark is out of the question for us,” said Mayor Kahr, citing that the offer being made just hours after OMV’s announcement was surprising. The city of Graz has stated that it will submit alternative proposals to ensure the long-term expansion of the district heating network and its decarbonization.
Source: Kleine Zeitung (1 and 2), Energate Messenger, MeinBezirk, and SteierMark
