WIREDGOV

Hunt is on for deep heat

News Release issued by the COI News Distribution Service on 22 October 2009

£6million is available from today to fund exploration for natural energy under the ground. Deep geothermal is a renewable energy that uses the natural heat from deep underground to produce non-intermittent electricity and heat at the surface.

£6million is available from today to fund exploration for natural energy under the ground. Deep geothermal is a renewable energy that uses the natural heat from deep underground to produce non-intermittent electricity and heat at the surface.

The fund, part of the Department of Energy and Climate Change low carbon investment fund will help companies carry out exploratory work needed to find viable sites for this technology.

Energy and Climate Change Minister, Lord Hunt said:

“Deep geothermal energy is 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.”

Many countries worldwide - including the US and Australia - are switching on to the potential for deep geothermal power to provide low carbon, non-intermittent energy. Power from deep geothermal would strengthen and diversify the UK’s energy mix and would lessen dependence on imported fossil fuels.

There is currently one geothermal energy station in the UK - the Southampton District Energy Scheme. The station uses hot water pumped from 1800m 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.

Projects in England, Scotland and Wales are eligible to bid to the fund. There will be £4 million available this year and £2 million next financial year.

Project bids will be assessed and managed by panel established by the Department of Energy and Climate Change. The closing date for bids for the first round of the fund will be 20 November 2009 with the successful projects to be announced shortly after that.

Notes to Editors

1. Potential bidders to the Deep Geothermal Challenge Fund can find out more about the bidding process, including the list of the criteria, at: www.decc.gov.uk/deepgeothermal

2. The fund is part of DECC’s low carbon investment fund. The timetable for the second round of funding will be confirmed later in the year, though provisionally we expect the deadline for bids to be end-march 2010.

3. Following the banding of the Renewables Obligation, which came into effect on 1 April 2009, electricity generated from geothermal technology falls into the ‘innovative’ technology band and is thus eligible for support at a rate of 2 Renewable Obligation Certificates (ROCs) per MWh generated. More detail about the Renewables Obligation can be found at: http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/policy/renew_obs/renew_obs.aspx

4. Heat generated from deep geothermal power would be renewable heat. DECC is developing the Renewable Heat Incentive (RHI), a financial support mechanism for renewable heat, and a consultation on the form of the RHI is due to be published before the end of this year. The consultation will cover the treatment of all forms of renewable heat, including heat from deep geothermal sources.

5. Support for power generated from deep geothermal energy is already available though the Renewables Obligation (at the highest band of 2 ROCs/MWh) and heat from deep geothermal sources could also be eligible for support from the forthcoming Renewable Heat Incentive.

6. DECC officials have been working with the emerging deep geothermal industry and are considering future regulatory aspects of the sector, such as possible systems for licensing the exploration and exploitation of deep geothermal heat.

7. Southampton City Council Press Office contact details: on Environment and Transport - Oliver Harry, 023 8083 2756 or oliver.harry@southampton.gov.uk

8. The Department of Energy and Climate Change is central to the UK Government’s leadership on climate change. We are pushing hard for an ambitious global deal in Copenhagen in December to avert the most dangerous impacts. Through our UK Low Carbon Transition Plan we are giving householders and businesses the incentives and advice they need to cut their emissions, we are enabling the energy sector’s shift to the trinity of renewables, new nuclear and clean coal, and we are stepping up the fight against fuel poverty.

Contacts:

Department of Energy and Climate Change
nds.decc@coi.gsi.gov.uk

Helen MacBain
Phone: 0300 068 5219
helen.macbain@decc.gsi.gov.uk