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Wednesday 25 April 2018
25 April 2018 - NEWS UPDATE
Renewable Energy

Geothermal decision disappoints Eden's Sir Tim

Eden Project chief executive Sir Tim Smit said he was 'disappointed' over the Coalition Government's lack of support for geothermal energy demonstrated by DECC's decision to freeze subsidies to develop new sources of clean energy from deep underground in Cornwall.

The long-awaited decision on new subsidies for renewable energy technologies was announced on July 25 2012 by Energy Secretary Ed Davey and will see the Renewable Obligation (RO) for deep geothermal remain unchanged.

The decision has left the UK's emerging sector with little prospects for development over this Parliament, despite explicit promises to support the sector by Prime Minister David Cameron before the election, said Dr Ryan Law, Chair of the Renewable Energy Association (REA) Deep Thermal Group.

The technology to generate power from deep geothermal has been available for over 100 years and the technology has been enjoying an international renaissance. Germany, which has similar sub-surface temperatures to the UK, is building 150 geothermal heat and power plants, representing a €4 billion investment and creating 9,000 jobs.

It is estimated the UK has enough deep geothermal resource to generate 20% of the UK's electricity demand and to provide 100 gigawatts of heat.

Dr Law, Chair added: "We are shocked by this announcement. We should be at the forefront of this industry, given the strength of British engineering skills. If the UK wants to seize a share of the booming global market for geothermal development we must prove our competence at home. The message today's announcement sends to the outside world is that the UK is closed for geothermal business."

There are huge synergies with the gas and oil industry in the deep geothermal sector, where the UK has established expertise. Dr Law added: "We are now watching from the side-lines while other countries forge ahead in a global market estimated to be worth $40 billion by 2020."


A geothermal plant in Iceland

A recent technical report on the potential to generate heat and electricity in the UK from deep geothermal by renowned engineering consultants Sinclair Knight Merz (SKM) in association with the REA, showed the UK's deep geothermal resources could provide 9.5GW of base-load renewable electricity – equivalent to nearly nine nuclear power stations – enough to generate 20% of the UK's current annual electricity consumption.

The industry was shocked by the initial proposals in the RO Banding Consultation to freeze support for deep geothermal power at 2 ROCs, a level too low to stimulate domestic investment. Lack of support has meant deep geothermal power plants have yet to be built in the UK.

However they only require a similar level of support to wave and tidal in its initial development phase. Despite the REA's demonstrating the technology's huge potential for the UK, the Coalition Government has decided not to back this proven technology in the UK.

Sir Tim Smit, Chief Executive and Co-founder of the Eden Project, added: "The recent SKM report stated 20% of UK electricity could be produced from deep geothermal. It is therefore very disappointing that ROCs have not been utilised sufficiently to encourage the required investment in this crucial industry. We are encouraged by the Government's statement around supporting deep geothermal in other ways and we will be pressing strongly to establish the detail behind this."

The Eden Project has partnered with with EGS Energy, a Penzance based company, to build one of the first geothermal power plants in the UK generating both heat and electricity.

With a capacity of 3-4MW electric and the ability to generate 95% of the time, it should produce enough electricity to supply Eden and around 3,500 households, as well as heating for the Biomes and possibly some district heating. It is hoped that power will be delivered from late 2013.

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

However Ed Davey, Secretary of State for Energy and Climate Change said changes to subsidies for renewable electricity could incentivise between £20 billion and £25 billion of new investment in the economy between 2013 and 2017.

The Banding Review for the Renewables Obligation will support jobs and deliver more clean power with a reduction in costs to consumers between 2013 and 2015, Ministers said.

Bandings have been set for renewable technologies under the Renewables Obligation – the Government's main mechanism for supporting large-scale renewables – for the period 2013-17 (2014-17 for offshore wind).

This comes ahead of the Government's Global Investment Conference and series of 17 business summits taking place at the British Business Embassy at Lancaster House during the Olympic Games, which aim to secure further investment into the UK.

Edward Davey, Secretary of State for Energy and Climate Change, said: "Renewable energy will create a multi-billion pound boom for the British economy, driving growth and supporting jobs across the country."

"The support we're setting out today will unlock investment decisions, help ensure that rapid growth in renewable energy continues and shows the key role of renewables for our energy security."

"Because value for money is vital, we will bring forward more renewable electricity while reducing the impact on consumer bills between 2013 and 2015, saving £6 off household energy bills next year and £5 the year after."

The Banding Review sets out that:

* Support for onshore wind from 2013-17 will be reduced by 10% to 0.9ROCs, as consulted on in Autumn 2011. This level is guaranteed until at least 2014 but could change after then if there is a significant change in generation costs. A call for evidence on onshore wind industry costs will be launched this Autumn and report in early 2013. If the findings identify a significant change, the Government will initiate an immediate review of ROC levels with any new support arrangements taking effect from April 2014, with grandfathering and grace periods for projects already committed. The call for evidence will also consider how local communities can have more of a say over, and receive greater economic benefit from, hosting onshore windfarms;

* Rates of support for offshore wind will reduce as the cost of the technology comes down during the decade;

* Support levels for certain marine energy technologies will more than double from 2ROCs to 5ROCs per MWh, subject to a 30MW limit per generating station;

* There will be a new band to support existing coal plant converting to sustainable biomass fuels. This will increase the amount of renewable energy produced at less cost to consumers; and

* There will be no immediate reduction in support for large-scale solar, but there will be a further consultation this year on reduced support levels given recent dramatic falls in costs.

By 2017, this package could deliver as much as 79 TWh of renewable electricity per annum in the UK - nearly three-quarters (74%) of the way towards the 108TWh of electricity needed to meet the UK's 2020 renewable energy target.

These proposals are expected to bring forward 11 TWh more renewable energy in 2016/17 than current bandings, and stimulate between £20bn and £25bn of new investment. The proposals also provide industry with the certainty needed to make near-term investment decisions.

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