Government pumps fresh money into deep heat

The government has today invited applications for up to £6m of funding earmarked for firms working to identify suitable locations for geothermal power plants.

Projects have until 20 November to submit applications for the new funding, which forms part of the Department of Energy and Climate Change's (DECC) low-carbon investment fund.

DECC said it was looking for projects capable of delivering at least 2MW of geothermal electricity or 5MW of usable heat energy within the next five years. It added that bids must be backed by credible and experienced management teams and a robust business plan, and that there must be evidence that initial geological analysis has delivered promising results.

Projects in England, Scotland and Wales are eligible to bid to the fund, with up to £4m available this financial year and a further £2m earmarked for distribution next year.

The UK has only one geothermal power plant, drawing on hot rocks buried deep underground in the form of the Southampton District Energy Scheme. However, research suggests that large tracts of the South West could support geothermal power facilities, with some estimates claiming hot rocks could be tapped to provide as much as two per cent of the UK's energy.

Progress in the sector to date has been slow, given the difficulty raising finance for geological exploration projects that may not deliver the results required to justify further development. The government's new funding will be aimed firmly at that funding gap, while completed geothermal plants will then be able to access additional funding through the government's Renewables Obligation subsidy mechanism.

"Deep geothermal energy is an exciting and innovative technology that could provide clean, low-carbon and renewable power and heat for the UK," said energy and climate change minister Lord Hunt. "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 two per cent of the UK's annual electricity demand, potentially creating thousands of jobs in the building and running of new power plants."

Conservative leader David Cameron has also underlined his support for the sector, committing earlier this year to proposals for more generous geothermal energy subsidies.