United Downs, Manhay and Penhallow plants secure Contracts for Difference from the UK Government – a major milestone for low-carbon, 24/7, home-grown power and heat.
8th September 2023, Cornwall – Geothermal Engineering Limited (GEL), the UK’s leading developer and operator of geothermal plants, together with its investors Kerogen Capital and Thrive Renewables, is pleased to announce that it has been awarded Contracts for Difference (CfD) in the UK Allocation Round 5 (AR5) process for three projects.
These are the first ever CfDs allocated to geothermal. The contracts will run for 15 years and are underwritten by the UK Government.
The successful CfD allocations are a significant milestone for the company as it progresses its geothermal portfolio in Cornwall. GEL’s flagship site at United Downs is the first geothermal project in the UK, forecast to deliver electricity by 2025. GEL is targeting 25 MWe of baseload electricity and 100 MWh of heat energy across its geothermal portfolio by 2028, enough heat and power for 70,000 homes.
This increasing momentum in the UK’s geothermal industry will enable further innovation, cost reductions and crucially generate new highly skilled and green jobs, benefitting local communities. The Renewable Energy Association and Arup have estimated* that the development of deep geothermal projects in the UK could fulfil the UK’s entire residential heat demand for 100 years and create as many as 10,000 direct and 25,000 indirect jobs by 2050.
Today’s awards are a recognition that geothermal has an important role to play in meeting growing energy demands alongside the UK’s energy security strategy and decarbonisation ambitions. Geothermal can provide zero carbon, 24/7 electricity and heat, thereby bypassing intermittency issues faced by technologies such as wind and solar.
Commenting on the news, Ryan Law, Managing Director of Geothermal Engineering Ltd, said:
“We are very pleased for GEL to have been awarded CfDs and achieve another first for the company in the UK. This is a hugely significant milestone in our push to extend the boundaries of what’s possible with geothermal power and heat. Securing these CfDs will also provide the necessary financial foundation to allow more substantial investment in the multiple projects that we have planned in the UK. This is exciting news for the whole geothermal industry in the UK, and we look forward to playing our part in delivering much needed baseload power and heat at this crucial time.”
Jason Cheng, CEO and Co-Founder of Kerogen Capital, said:
“We are delighted that GEL has been successful in securing the CfDs and extend our congratulations to the whole team working on these industry-leading projects. As an investor in geothermal in the UK, we recognise the contribution this can make to the development of a low-carbon, home-grown and reliable energy source.
“Today’s news is a crucial first step in successfully scaling-up the industry to leverage the abundant and largely un-tapped source of geothermal energy in the UK. We are pleased to be part of this significant step in the UK’s transition to a cleaner energy system, in line with our mission to accelerate decarbonisation.”
Energy and Climate Change Minister Graham Stuart said:
“We are delighted that our first annual Contracts for Difference auction has seen a record number of successful projects across solar, onshore wind, tidal power and, for the first time, geo-thermal.
“This year’s record breaking CfD round builds on years of renewables growth under this government… and this first annual auction will allow us to go further in powering more of Britain from Britain.”
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Notes for Editors
* Gluyas et al., Keeping Warm: a review of deep geothermal potential of the UK, 2021
About Geothermal Engineering Ltd
Geothermal Engineering Ltd was established in 2008 to deliver deep geothermal heat and power projects in the UK. It consists of a team of specialised geologists and engineers focused on innovative methods of delivering sustainable energy that benefits local communities. This includes the United Downs Project and Jubilee Pool geothermal project at Penzance. The United Downs project is a £35m project part funded by the European Regional Development Fund, Cornwall Council, Kerogen Capital and Thrive Renewables plc.
About Kerogen Capital
Established in 2007, Kerogen Capital is an independent private equity fund manager focused on the international energy sector. Since inception, Kerogen has raised over $2 billion in private equity and co-investment funds. Kerogen’s investors comprise a range of blue-chip institutions including endowment funds, foundations, pension plans, fund of funds, international corporations and family offices. Kerogen committed to Net Zero Carbon in 2020 and formed CelerateX, a dedicated energy transition platform, including the former GE Equity business in Asia. CelerateX focuses on building speed and scale in the decarbonisation and sustainability sectors to accelerate the path to Net Zero.
For further information, please contact:
Geothermal Engineering Ltd
Sarah Mulder / Luke Watts
Fire on the Hill
+44 (0) 7720 401 466 / +44 (0) 7946288855
Tom Reynolds / Tilly Abraham
+44 (0) 791 779 6315/+44 (0) 7855 962564