Cluff Geothermal welcome positive changes to Renewable Heat Incentive (RHI)

21st September 2012

The Government’s decision to introduce a dedicated RHI tariff for deep geothermal heat is warmly welcomed by Cluff Geothermal. The announcement was made as part of the consultation on the RHI published by DECC on 20 September 2012[1]; previously deep geothermal heat generation had been included in the same tariff as large scale ground source heat pumps, a completely different technology. The proposed new tariff of 5p per kilowatt hour of heat produced reflects the risk profile associated with deep geothermal projects and the very early stage of the sector in the UK.

The new tariff offers a positive incentive to deep geothermal developers such as Cluff Geothermal and will help attract additional investment into this exciting low carbon technology. Independent reports[2] estimate the UK’s deep geothermal heat potential at 100 GW or more, and rolling out the technology will enable the UK to meet a significant part of our total heat demand from this renewable, non-intrusive, sustainable and ultra-low carbon energy source. As production costs are expected to fall rapidly in the medium term, deep geothermal heat will also be a cost-effective way of achieving the UK’s targets on reducing carbon emissions and achieving energy security.

Cluff Managing Director George Percy said: “We greatly welcome the new RHI tariff. Heat from deep geothermal energy offers the UK a fantastic opportunity to decarbonise a large part of our heat use. It is low carbon, sustainable, can supply base load heat and only takes up a small surface footprint.  At the same time the sector is very new in the UK and by its nature presents a different risk profile to investors than other renewable heat technologies. DECC have acted imaginatively to set a dedicated deep geothermal heat tariff now to encourage the development of the first wave of projects. Cluff Geothermal are well placed to build these and we look forward to playing a leading role in the sector as deep geothermal energy becomes a mainstream energy technology into the medium and longer term.”