Policy News

Thursday 22 October 2009

Lord Hunt said that geothermal energy was an exciting and innovative technology

A £6 million fund to help support the search for viable sites which can be used to harness natural energy under the ground, has been announced today (October 22) by the Department of Energy and Climate Change (DECC).

It aims to support companies looking to carry out the exploratory work needed to find potential locations for deep geothermal energy, which uses the natural heat from deep underground to turn water into steam. This can then be used to turn turbines, producing non-intermittent electricity and heat at the surface.

The Deep Geothermal Challenge Fund, which is part of the DECC low carbon investment fund, will involve £4 million being made available this year and £2 million next financial year, for projects in England, Scotland and Wales.

Project bids will be assessed and managed by a panel established by DECC. The closing date for bids for the first round of the fund is November 20, with the successful projects set to be announced shortly after that.

Geothermal Engineering Ltd, the company that announced plans for the UK's first commercial-scale geothermal power plant on Tuesday (see this NewEnergyFocus.com story) have already said they intend to apply for the funding.

Energy and climate change minister, Lord Hunt said that geothermal energy was an exciting and innovative technology that could provide clean, low carbon and renewable power and heat for the UK.

"We want to make sure that this energy resource can play a part in the future low carbon energy mix. Deep geothermal power from the South West of England alone could meet 2% of the UK's annual electricity demand, potentially creating thousands of jobs in the building and running of new power plants," he said.

Geothermal

Electricity generated from geothermal technology falls into the ‘innovative' technology band and is thus eligible for support at a rate of two Renewable Obligation Certificates (ROCs) per MWh generated. DECC said that heat from deep geothermal sources could also be eligible for support from the forthcoming Renewable Heat Incentive (RHI).

There is currently one geothermal energy station in the UK - the Southampton District Energy Scheme. The station uses hot water pumped from 1,800m below ground as part of the city's district heating network and has operated successfully for over 20 years, saving an estimated 11,000 tonnes of CO2 per year.

If cleared for planning and complete on schedule in 2013, Geothermal Energy's proposed plant at Redruth, Cornwall, would supply 10MW of base load electricity to the National Grid and up to 55MW of renewable heat for local use.

The company's managing director and founder Ryan Law said that the money announced today would help the UK keep up with the US and Germany, who are already pouring millions into the geothermal industry to help kick-start commercial production.

"The UK has a good deep geothermal resource but we have a long way to go before we realise its full potential. DECC's announcement is a step in the right direction and, for us, certainly a very welcome one. Geothermal energy is a renewable, green and economical power source and I'm absolutely convinced that this a resource we must develop if we're to meet the energy needs of the future," he said.