Renewable Energy Association
Press Release
IMMEDIATE RELEASE
30th May 2012

REA [1] and Tim Smit urge Government to back ‘birth of a new industry’

A new independent technical report on the potential to generate heat and electricity in the UK from deep geothermal is published today by renowned engineering consultants Sinclair Knight Merz (SKM) [2]. The report features a preface by Dr Ryan Law, Chair of the REA Deep Geothermal Sector Group, and a foreword by Tim Smit, co-founder and Chief Executive, Development, of the Eden Project.

Key findings include:

• The resource is widely spread around the UK with ‘hotspots’ in Cornwall, Weardale, Lake District, East Yorkshire, Lincolnshire, Cheshire, Worcester, Dorset, Hampshire, Northern Ireland and Scotland;
• Cost reduction potential is exceptionally high;
• Deep geothermal resources could provide 9.5GW of baseload renewable electricity – equivalent to nearly nine nuclear power stations – which could generate 20% of the UK’s current annual electricity consumption;
• Deep geothermal resources could provide over 100GW of heat, which could supply sufficient heat to meet the space heating demand in the UK;
• Despite this significant potential, the UK support regime is uncompetitive with other European countries.

The SKM report is published as the geothermal power industry awaits the Renewables Obligation (RO) Banding Review. This will determine whether or not the Coalition Government will back the UK industry. The industry has been shocked by initial proposals to freeze support for deep geothermal power at 2 ROCs, a level too low to stimulate domestic investment. Deep geothermal power is a new technology in the UK and it requires similar support to wave and tidal in its initial development phase. The sector is now growing rapidly internationally and support in the UK must be comparable to other countries in order to attract investment.

On account of the exploration risk inherent with geothermal projects, targeted support at the exploration drilling phase has the potential to stimulate the industry much more cost effectively than a high electricity revenue alone. SKM’s report states that: “risk reduction support is the most critical in developing a cost effective large utilisation of the geothermal resources in the UK. This is particularly needed to enable the early development of sedimentary aquifers for direct heat use as this offers the potential for the most significant and early contribution to meeting the UK commitments to the EU’s Renewable Energy Directive.”

Dr Ryan Law, Chair of the REA Deep Geothermal Group said;

“We don’t want to be left out of a global industry which is estimated to be worth £30 billion by 2020. We could be at the forefront of this industry given the strength of British engineering skills. If the UK wants to seize a share of this booming global market we must prove our competence at home. Clearly investment at home could also go a long way to meeting our future energy needs cleanly and safely.”

Adequate support for the domestic deep geothermal industry will foster valuable synergies with the oil and gas industry with potentially very large commercial rewards. The neglect of deep geothermal power in energy policy is surprising because the Prime Minister himself outlined before the election the strong jobs and security reasons for supporting its expansion [3].

Tim Smit, a passionate supporter of the industry, writes in his foreword to the report;

“Every politician of whatever hue should read this report because it is much more than a case for siloed activity to build a power or heat plant; it is the platform for the birth of a new industry.”

Smit, who is planning to build a geothermal heat and power station at the Eden Project, believes the UK needs to renew its vision for its economy and says;

“Deep geothermal is part of that vision; for a small investment today we could be creating something that our grandchildren will thank us for.”

The UK industry has only around half the levels of support seen in Germany and Switzerland. As a result of support in Germany, the deep geothermal industry now employs 6,000 people and has attracted €4 billion of investment.

The REA estimates the increase in costs associated with raising support for geothermal power to match levels proposed for wave and tidal will be less than £11 million per annum.

The support needs for deep geothermal heat are within a similar range to other renewable heat technologies. A dedicated tariff for deep geothermal heat is expected in the forthcoming RHI Phase 2 consultation this September for implementation next summer. Again, the associated financial commitment is modest – the REA estimates the additional annual cost of increasing the level of RHI for deep geothermal heat under the RHI will be £1.3 million.

Leonie Greene, Head of External Affairs for the REA, said;

“The investment needed to kick-start this very promising industry is very modest indeed. Isn’t this exactly the kind of investment the UK Government should be making today to secure our future prosperity?”

ENDS

For further information or to request an interview or copy of the report, please contact:

REA Press Office: +44 (0)2079 810 856, or:

Name: Leonie Greene
Title: Head of External Affairs, REA
Tel: +44 (0)7932 720 091

Name: Dr Ryan Law
Title: Chair, REA Deep Geothermal Sector Group
Tel: +44 (0)7792 953925

Name: David Rowe
Title: Head of Media, Eden Project
Tel: +44 (0)7813 041 923

Name: Katie Lee
Title: Marketing Manager, Sinclair Knight Merz
Tel: +44 (0)7736 056 592

Notes to Editors

1. The Renewable Energy Association represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and renewable gas. It is the largest renewable trade association in the UK, with over 900 members, ranging from major multinationals to sole traders. For more information, see: www.r-e-a.net

2. SKM: ‘Geothermal potential in Great Britain and Northern Ireland,’ 29th May 2012. Copies of the report can be requested via enquiries@globalskm.com or by visiting www.globalskm.com

The resource set out in the report has been summarised by Cluff Geothermal as:
Cornwall and the South West
HEAT: 13,000 MWth - 6.5 million homes annual heat demand
POWER: 4,000 MWe (equivalent to 3.3 nuclear power plants)

The North East
HEAT: 9,000 MWth - 4.5 million homes annual heat demand
POWER: 4,000 MWe (equivalent to 3.3 nuclear power plants)

The Lake District
HEAT: 8,000 MWth 4 million homes
POWER: 2,300 MWe (equivalent to 1.9 nuclear power plants)

Wessex Basin
HEAT: 33,000 MWth 16.5 million homes

Cheshire Basin
HEAT: 14,000 MWth 7 million homes

East of England*
HEAT: 12,000 MWth 6 million homes

Worcester Basin*
HEAT: 6,700 MWth 3.35 million homes

Larne Basin
HEAT: 1,000 MWth 500,000 homes
*With heat pump.

3. This Is Cornwall: ‘Tories back geothermal energy,’ 15th May 2009. Available at: http://www.thisiscornwall.co.uk/Tories-heat-chance-fuel-UK/story-11381375-detail/story.html

The Conservative Party presentation ‘The potential for using deep geothermal energy in the UK’ promises “we will introduce incentives to kick-start this technology”. Available at: http://static.slidesharecdn.com/swf/ssplayer2.swf?doc=cdocumentsandsettingstedmondsmydocumentsdeepgeothermalenergy-090514102503-phpapp02&rel=0&stripped_title=the-potential-of-deep-geothermal-energy