Hot or not? Cor­nish geo­ther­mal project hopes to raise £5m

Al­ways-on power source could be run­ning by 2020 County has po­ten­tial to be en­ergy in­de­pen­dent

The Guardian - - FINANCIAL - Adam Vaughan

A pi­o­neer­ing project to pro­duce power from hot rocks sev­eral kilo­me­tres un­der the ground in Corn­wall will be­gin drilling early next year if a mul­ti­mil­lion-pound fundrais­ing drive suc­ceeds.

Abun­dance, a crowd­fund­ing plat­form over­seen by the main City reg­u­la­tor, will this week launch a bond to raise £5m for Bri­tain’s first com­mer­cial geo­ther­mal power sta­tion, lo­cated near Re­druth.

Ice­land is the world leader in geo­ther­mal power, where deep holes are drilled to reach hot rocks, wa­ter is pumped down, heated and re­turned to the sur­face for gen­er­at­ing elec­tric­ity or pro­vid­ing heat­ing.

Corn­wall’s ex­ten­sive gran­ite mean it has long been seen as the most promis­ing part of Bri­tain for the tech­nol­ogy, which one study found could pro­vide a fifth of the coun­try’s power.

How­ever, pre­vi­ous plans for geo­ther­mal plants in the county have fal­tered on fi­nanc­ing and risk-averse in­vestors. The Eden Project, for ex­am­ple, has wanted to ex­ploit the rocks be­neath it since 2009 but failed to win Euro­pean fund­ing.

The £18m United Downs Deep Geo­ther­mal project near Re­druth, by con­trast, has al­ready se­cured £13m in pub­lic fund­ing, £10.6m from the Euro­pean Re­gional De­vel­op­ment Fund and £2.4m from Corn­wall county coun­cil.

Ryan Law, man­ag­ing di­rec­tor of Geo­ther­mal En­gi­neer­ing Ltd, the Bri­tish com­pany be­hind the project, said: “The big prob­lem is be­cause noth­ing has been done in the UK be­fore it’s quite high risk. Find­ing fund­ing for that risk is ex­tremely dif­fi­cult.” Abun­dance is con­fi­dent it will raise the fi­nal £5m needed, hav­ing raised £50m from in­di­vid­u­als for re­new­able en­ergy pro­jects since it started five years ago, and £7m in the last two months alone.

In­vestors can ex­pect a 12% re­turn on the bond, which has an 18-month term, and will have their cap­i­tal re­turned to them if the geo­ther­mal plan does not go ahead. Bruce Davis, the in­vest­ment plat­form’s man­ag­ing di­rec­tor, said: “Geo­ther­mal tech­nol­ogy is proven to work in Italy and Ice­land but hasn’t so far been used in the UK to gen­er­ate elec­tric­ity. This is a ground-break­ing project.”

Drilling should be­gin in the first quar­ter of 2018 and take about five months as Geo­ther­mal En­gi­neer­ing Ltd drills a well 2.5km down, fol­lowed by a sec­ond, deeper one of 4.5km, cre­at­ing a cir­cuit for wa­ter.

If all goes as planned, the Re­druth oper­a­tion could be oper­a­tional in 2020.

The amount of power the wells are ex­pected to pro­duce is small, from 1 to 3 megawatts (MW) – enough to power 1,500-4,500 homes), sim­i­lar to a sin­gle on­shore wind tur­bine – but geo­ther­mal has one big ad­van­tage: un­like wind and so­lar, it can pro­vide con­stant power, like a nu­clear power sta­tion.

Chris Goodall, an en­ergy ex­pert and au­thor, said geo­ther­mal power would add to the rich re­new­able en­ergy re­sources that the county al­ready en­joys: “En­ergy in­de­pen­dence for Corn­wall is a re­al­is­tic, cost-ef­fec­tive ob­jec­tive for the county coun­cil. This is a first-rate project.” Per­haps most im­por­tantly, the suc­cess of the project could pave the way for geo­ther­mal en­ergy fi­nally tak­ing off across Corn­wall. Tony Batch­e­lor, known as the grand­fa­ther of geo­ther­mal in Corn­wall for his test re­search and drilling in the county dur­ing the 1970s and 1980s, told the Guardian: “This £18m is ba­si­cally our chip in the game. Then we look at de­liv­er­ing big­ger and bet­ter pro­jects.”

Ul­ti­mately geo­ther­mal could pro­vide as much as 1,000MW of ca­pac­ity, said Batch­e­lor, an ad­viser to Geo­ther­mal En­gi­neer­ing Ltd and chair­man of Earth sciences con­sul­tancy Geo­science. While not a huge amount na­tion­ally, it would be sig­nif­i­cant for Corn­wall. “It’s great that geo­ther­mal in Corn­wall can at last get go­ing,” a spokesman for the Eden Project said of the United Downs project. Eden added that it hoped to make an an­nounce­ment of its own within two months. How­ever, Goodall cau­tioned that this lat­est ef­fort at mak­ing geo­ther­mal work in Corn­wall was by no means guar­an­teed.

“Pretty much ev­ery­one agrees there is a lot of heat down there. But one of the rea­sons pro­jects have strug­gled to get fund­ing is it’s highly frac­tured and it’s not a given [that it will work]. No one has yet been pre­pared to put in the highly risky cap­i­tal to do this,” he said.

Bob Eger­ton, a coun­cil­lor at Corn­wall county coun­cil, said he was scep­ti­cal about how big the re­source was – but it was im­por­tant to try to ex­ploit it. “The more we can pro­duce from th­ese sort of re­sources rather than hy­dro­car­bons has got to be a good thing,” he said.

Pho­to­graph: Frank Bienewald/ LightRocket/ Getty Im­ages

The Bag­nore 3 geo­ther­mal power sta­tion in Tus­cany, one of a num­ber show­ing the tech­nol­ogy works

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