This is Cornwall --
A bid to construct the UK's first commercial geothermal power plant in West Cornwall has suffered a setback after the Government withdrew funding.
Geothermal Engineering Limited was awarded £6 million in 2011 from the Regional Growth Fund (RGF) for its "hot rocks" project at United Downs, between St Day and Carharrack.
But the company's failure to attract private investment for the £50 million scheme has led to the award being rescinded.
If built, the plant could generate up to 10MW of electricity – enough to power 20,000 homes – using rocks deep underground. It is one of two similar schemes in Cornwall, the other, being carried out in collaboration between the Eden Project and Penzance-based EGS Energy, is also still at the funding stage.
Ryan Law, managing director at Geothermal Engineering, said the withdrawal of the grant funding was expected.
He said: "This all stems back to last summer when the Government announced the new funding levels for renewable electricity generation.
"We were under the impression that, as deep geothermal electricity generation is a new technology in the UK, the sector would receive similar levels of support to wave and tidal. When this was not confirmed, our private investors started to get cold feet and questioned the intention of the Government to provide the support necessary for the sector to develop."
Geothermal energy schemes are popular elsewhere in Europe, in particular Germany, where the sector has created around 9,000 jobs.
Mr Law said there is still an opportunity to make the sector attractive to private investors by introducing a competitive tariff, new legislation for licensing and exploration risk insurance.
He said the company is still in talks with the Department of Energy and Climate Change (DECC) about funding.
Regional growth funding is awarded by the Department for Business Innovation and Skills and can be withdrawn if not enough private funding is received.
A department spokesman said: "We recognise that this news will be disappointing for the project and for the local area but we must ensure that all RGF projects represent a robust and effective scheme for the region – one that brings in private-sector investment, creates long-term jobs and represents value for the taxpayer."
Tony Bennett, operations manager at EGS Energy, said discussions were also underway with the DECC about securing some funding towards the £35 million Eden Deep Geothermal Project.
The DECC is expected to make further announcements in May. Reported by This is 5 hours ago.
A bid to construct the UK's first commercial geothermal power plant in West Cornwall has suffered a setback after the Government withdrew funding.
Geothermal Engineering Limited was awarded £6 million in 2011 from the Regional Growth Fund (RGF) for its "hot rocks" project at United Downs, between St Day and Carharrack.
But the company's failure to attract private investment for the £50 million scheme has led to the award being rescinded.
If built, the plant could generate up to 10MW of electricity – enough to power 20,000 homes – using rocks deep underground. It is one of two similar schemes in Cornwall, the other, being carried out in collaboration between the Eden Project and Penzance-based EGS Energy, is also still at the funding stage.
Ryan Law, managing director at Geothermal Engineering, said the withdrawal of the grant funding was expected.
He said: "This all stems back to last summer when the Government announced the new funding levels for renewable electricity generation.
"We were under the impression that, as deep geothermal electricity generation is a new technology in the UK, the sector would receive similar levels of support to wave and tidal. When this was not confirmed, our private investors started to get cold feet and questioned the intention of the Government to provide the support necessary for the sector to develop."
Geothermal energy schemes are popular elsewhere in Europe, in particular Germany, where the sector has created around 9,000 jobs.
Mr Law said there is still an opportunity to make the sector attractive to private investors by introducing a competitive tariff, new legislation for licensing and exploration risk insurance.
He said the company is still in talks with the Department of Energy and Climate Change (DECC) about funding.
Regional growth funding is awarded by the Department for Business Innovation and Skills and can be withdrawn if not enough private funding is received.
A department spokesman said: "We recognise that this news will be disappointing for the project and for the local area but we must ensure that all RGF projects represent a robust and effective scheme for the region – one that brings in private-sector investment, creates long-term jobs and represents value for the taxpayer."
Tony Bennett, operations manager at EGS Energy, said discussions were also underway with the DECC about securing some funding towards the £35 million Eden Deep Geothermal Project.
The DECC is expected to make further announcements in May. Reported by This is 5 hours ago.