Geothermal Engineering Limited (GEL) has secured £12 million in funding from private-equity energy specialist firm Kerogen Capital.
- GEL has raised £15 million between Kerogen Capital and Thrive Renewables.
- It will use the cash to complete power production at its United Downs plant by 2024, as well as prepare new geothermal sites in Cornwall.
- Geothermal energy is a promising market in the UK, which could help the country reach its net zero goals.
A further £3 million will come from Thrive Renewables, subject to conditions, with the cash going to advance GEL’s flagship project at the United Downs site in Cornwall.
It will also be used to mature the company’s Geogen geothermal development portfolio.
In addition to its geothermal interests, Kerogen also has a stake in North Sea oil and gas firm Hurricane Energy (LON: HUR).
Previously the fund was the West of Shetland operator’s largest shareholder – it reduced its stake in the firm in 2019.
Kerogen also had Zennor Petroleum on its books, but sold the UK oil and gas firm to Neo Energy in 2021 for £450 million.
Jason Cheng, chief executive and co-founder of Kerogen, said: “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.
“We believe geothermal in the UK has enormous potential to create a new industry, grow a domestic supply chain and drive employment. 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.”
GEL intends to use the £15m to complete power production at its United Downs plant by 2024, as well as prepare new geothermal sites in Cornwall.
United Downs is on course to be the UK’s first integrated deep geothermal power and heat project.
It will deliver 2 megawatts equivalent (MWe) of baseload electricity, and up to 10MWth of zero carbon heat, which will be used in a local housing development.
Two wells have been successfully drilled and tested at the site, 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.
Ryan Law, managing director of GEL, said: “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.”
Graham Stuart, minister for energy security and net zero, said: “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.”