GEL receives £15 million funding for deep geothermal in UK
Geothermal Engineering Ltd. has secured financing from Kerogen Capital and Thrive Renewables to advance geothermal projects in the UK.
Geothermal Engineering Limited (GEL) has obtained £15 million funding from Kerogen Capital (£12 million) and Thrive Renewables PLC (£3 million), subject to conditions. This will advance both the flagship project at the United Downs site in Cornwall and its Geogen geothermal development portfolio.
The new funding will be used to complete power production at the United Downs plant by 2024, as well as prepare new geothermal sites in Cornwall which have recently received planning permission. In total, the investment will help to initiate 25 MWe of renewable electricity and 100 MWth of renewable heat across GEL’s portfolio by 2028.
Kerogen Capital, a private equity firm focused on international energy, will fund the investment through its dedicated energy transition platform, CelerateX. The investment is the latest in a string of investments it has made into geothermal developers and projects across Europe, building a leading portfolio in this emerging technology.
In addition to the current funding, renewable energy investment company, Thrive Renewables, made its first commercial investment of £3 million into United Downs in January 2020 to support final testing of wells at the site, as well as £0.47 million in 2021 to fund planning applications for additional potential geothermal sites.
United Downs and future projects
The United Downs project is expected to start producing power in 2024 and represents the UK’s first integrated deep geothermal power and heat project. The first plant will deliver 2MWe of baseload electricity and up to 10MWth of zero carbon heat to be used in a large housing development at Langarth, being developed by Cornwall Council.
GEL successfully drilled and tested two wells at United Downs in 2019 and 2020, including a production well drilled 5km underground. Beyond United Downs, GEL is also developing new geothermal projects across the county, each anticipated to deliver 5 MWe of baseload power and 20 MWth of renewable heat energy for the local area. The new plants will each take approximately 36 months to complete and together will produce enough electricity to power over 70,000 UK homes.
Geothermal in the UK
The UK has significant geothermal resources which, if harnessed, can play an important role in both the UK’s energy security and its transition to net zero. Geothermal technology offers a homegrown, low carbon and sustainable form of energy. Crucially, this technology is capable of generating 24/7 baseload power, enabling the UK to diversify its energy market whilst providing large scale and predictable capacity. Furthermore, the ability to feed into local heating networks for residents provides a solution to the UK’s longstanding challenge of decarbonising heat.
The development of the UK’s geothermal industry will benefit local communities by attracting new business, jobs and inward investment. The Renewable Energy Association and Arup have estimated (Gluyas et al., 2021) that the development of deep geothermal projects in the UK could fulfil the UKs entire residential demand for 100 years and create as many 10,000 direct and 25,000 indirect jobs by 2050.
GEL has also found significant concentrations of lithium within the deep geothermal fluid at United Downs and is working with partners to trial direct extraction (DLE) technology to extract this key battery mineral.
This discovery demonstrates the potential of geothermal to help drive the growth of a domestic lithium industry both unlocking the UK’s Net Zero goal and is aligned with the Government’s recent Critical Mineral Strategy.
“Geothermal resources have the potential to produce carbon free electricity and heat 24/7 within UK borders and we are delighted to welcome this further investment in our journey to realising the huge potential of this important renewable energy source. We are excited to work with both local and national Government to maximise this opportunity and make the UK a world leader in geothermal energy. With its mining and industrial heritage, and geological expertise the UK is well placed to succeed. Alongside geothermal power and heat production, our trials at site suggest that there is also the opportunity to develop a strong, zero carbon domestic lithium industry linked to the power plants.” said Ryan Law, Managing Director of GEL.
“Geothermal energy holds enormous untapped potential as a renewable energy source, with the ability to generate around-the-clock power and heat for UK households. This investment will help the UK realise the potential of this exciting resource, providing skilled green jobs and supporting local industry in Cornwall, while helping to deliver a cleaner energy future,” said Rt Hon Graham Stuart MP, Minister for Energy Security and Net Zero.
“We are very excited to be partnering with GEL which is developing the UK’s most advanced geothermal power and heat project. The UK has large geothermal natural resources with the potential to satisfy the UK’s entire heat demand, as well as playing a significant role in decarbonising heat and power. In addition, geothermal can provide security and independence from imported energy. The investment in GEL represents our third in the geothermal sector, following our backing of Yeager Energy (Netherlands) and GTML (Norway). Our in-house technical and commercial expertise position us uniquely to deploy in this exciting sector,” said Jason Cheng, CEO and Co-Founder of Kerogen Capital.
“Having provided the first commercial funding into United Downs, which has enabled it to reach the construction stage, we are delighted to make a further investment to get this ground-breaking project into operation. United Downs will provide vital renewable baseload power to replace coal and gas, reliable heat to the local community, and could be the start of a whole new sustainable industry across Cornwall bringing green jobs and investment into the county. As a pioneering clean energy investor, we are pleased to be part of this significant step in the UK’s transition to a cleaner energy system,” said Matthew Clayton, Managing Director at Thrive Renewables.
Source: Email correspondence