Geothermal Engineering

Yesterday, the UK government published the Renewable Heat Incentive (RHI) policy document – a landmark moment for this country, which has never had an incentive scheme aimed solely at supporting ‘green’ heat before. For the UK’s deep geothermal industry, this is a promising start.

As the deep geothermal industry produces significant quantities of renewable heat an RHI tariff makes perfect sense. The more incentives we have to use renewable heat, the greater chance we have of meeting our 2020 carbon dioxide reduction targets. Without an incentive, it can be difficult to build a business case for localised heat distribution, and then communities lose the benefits that this heat can bring – whether it’s heating a local shopping centre; or helping farmers grow fruit and veg in geothermal-heated commercial greenhouses, the possibilities are so wide that both urban and rural towns can reap the rewards.  

The government has recognized that there is currently a financial barrier to renewable heat use, and has put forward a solution in the form of the RHI, and this is a great result for the industry. However, to show that the government is serious about using deep geothermal heat we really need to see a separate category and tariff within the RHI.

At the moment, Ground Source Heat Pumps (GSHPs) and deep geothermal technology is in the same tariff category – both are granted 3 pence per kWh. GSHPs typically go to depths of up to 100 metres below the Earth’s surface, while deep geothermal projects can reach three miles or more in depth – pricing their tariffs at the same rate is like pricing a luxury sedan and a basic hatchback at the same cost. The tariff categories come under review in 2012, so we hope that by then, more work has been done to correctly allocate each technology to an appropriate tariff.  

Overall, the geothermal industry should be feeling pretty pleased with the RHI policy document tariffs – it’s a step in the right direction and most importantly, a confidence boost for investors.