Stay informed with free updates
Simply sign up to the Energy sector myFT Digest — delivered directly to your inbox.
The developer set to launch the UK’s first ever geothermal electricity plant — a new form of clean energy — in Cornwall is also planning to extract lithium as the race to cash in on the region’s mining revival gathers pace.
Geothermal Engineering Ltd (GEL) is seeking to raise £600mn to build multiple sites and diversify into lithium — a metal vital for electrification — by 2030.
In an initial round, it aims to raise debt and equity between £100-200mn to produce at least 1,000 tonnes of lithium at its flagship United Downs site in Cornwall, which it has already secured financing to produce geothermal power.
It will also use the money to produce geothermal power at two more locations in Cornwall.
The geothermal electricity will be produced by using hot water from deep underground to create steam that drives a turbine, creating clean power.
GEL joins a race with Cornish Lithium, Imerys British Lithium and others to revive Cornwall’s mining heritage as it hopes to capitalise on the shift to electric vehicles and clean power.
The group has hired Nomura Greentech as advisers to lead the fundraising, which forms the first step in the Cornish company’s aim to raise £600mn to develop a total of five geothermal power plants by 2030.
This would provide a total capacity of 25 megawatts of electricity, 100 megawatt hours of heat and 12,000 tonnes of lithium — enough heat and power for 70,000 homes and 250,000 electric cars.
“We’re out raising money right now,” said Ryan Law, founder and chief executive of GEL. “Power is our fundamental business and lithium is great to add in the process.”
The fundraising drive comes as the UK is starting to turn to geothermal power as a source of stable, around-the-clock power with very low carbon emissions.
Three of GEL’s developments became the first ever geothermal projects to be selected to receive contractual promises of guaranteed fixed prices for electricity produced in the government’s latest subsidy auction in September, which had no bids from offshore wind producers.
The huge challenge for geothermal power — and producing lithium as a byproduct — is the massive expense of drilling so deep compared with other sources of power.
GEL is racing to deliver electric power to the grid by the fourth quarter of 2024, which would make it the first in the UK to do so. Geothermal power has only provided heating so far in the UK.
Southampton started a district heating system in the 1980s, while the Eden Project, a visitor attraction and eco-park in Cornwall, switched on a geothermal heating system for its greenhouses in June.
However, the technology currently delivers less than 0.3 per cent of the UK’s annual heat demand, according to a UK parliamentary report published in April last year.
The company aims to produce about 100 tonnes per year of lithium in late 2024, rising to 1,000 tonnes as early as 2026. The UK is estimated to need 80,000 tonnes of lithium by 2030 to support an electric car industry.
It has discovered concentrations of lithium at 340 parts per million — a pittance compared with roughly 1,500 in the world’s best brines for lithium in Chile’s Salar de Atacama but among the best in Europe.
But there are concerns about the low and variable rate at which the brine flows, a critical measure for power generation and lithium production, as well as the feasibility of extracting lithium when brines that come from so deep are extremely hot.
Law said that the company was studying whether to source its technology to extract the lithium from the brine from Koch Industries, the second largest privately held US company, or from Puritech, the Belgium subsidiary of China’s Sunresin.