'We're mining for heat in Cornwall'

Energy firm plans geothermal power plant to feed the UK grid and help regenerate a local community

In stark contrast to E.ON's postponement of a coal-fired power plant, a start-up energy company will tomorrow announce plans to build a geothermal power plant in Cornwall that could feed "green" power to the UK's commercial electricity grid by 2013.

The company, London-based Geothermal Engineering, would also use the plant to provide free heat to the local community near Redruth, as part of a regeneration scheme.

Geothermal's managing director, Ryan Law, told The Independent on Sunday that he has submitted preliminary plans to Cornwall County Council and hopes to apply for formal planning permission in December. If the council approves, Geothermal will start drilling to hot rocks three miles under the parish of Gwennap, near a disused tin mine, in June. Water, pumped down, would turn to steam, and be pumped back to the surface, driving generators and churning out 10 megawatts of electricity – small compared with traditional power facilities but big for geothermal, and large enough to contribute useful portions to the National Grid.

"It's an extension of the old mining industry. We're mining for heat this time," said Law, who is optimistic about receiving planning approval but calls it "the big unknown".

Cornwall councillor Mark Kaczmarek, a former tin miner who has reviewed the plans, said Cornwall supports the geothermal initiative as it has supported other alternative energy projects, such as wind and tidal energy. "I've spoken to a number of people who would be very supportive," he said, "but there are people out there who have big question marks about anything to do with government." He said distrust still exists from the 1980s, when Cornwall considered storing nuclear waste underground, a proposal that resurfaced unsuccessfully last year.

Kaczmarek, who worked at the South Crofty tin mine for 17 years before it closed in 1998, was upbeat about the chances that the untested technology would work. "We worked in 40C, and that's with ventilation," he said. "I lost a stone and half in two days. I know it's hot down there. Harnessing it would be a huge benefit to the economy."

Law bases his own optimism on a year of geological research in the area. He says that a naturally hot layer of granite – at 175C to 200C – makes the region a prime area for geothermal plants. He hopes to build another 25 in Devon and Cornwall over the next 20 years.

Another company, EGS, which is building a geothermal plant for the Eden Project in Cornwall, is also interested in feeding the grid.

Geothermal Engineering has scheduled a formal announcement of its plans for tomorrow, less than a week after E.ON's decision to delay the construction of a coal-fired electricity plant in Kent. Although E.ON said it was postponing the plant because demand for electricity is low, the coal-fuelled project had come under fire from green activists for its high carbon emissions.

Environmentalists regard geothermal as a green alternative, because it does not burn carbon fuel. "Geothermal has huge potential as a renewable source for heating and electricity," said Greenpeace spokeswoman Patrizia Cuonzo. Geothermal power also marks a step away from oil reliance. A UK Energy Research Centre report last week said the world's oil supply could peak by 2020. Also last week, regulator Ofgem warned of rocketing fuel bills, citing a "volatile global gas market and power stations nearing the end of their life".

Geothermal proponents also note that geothermal plants don't blight the landscape in the way some say Cornwall's wind turbines do. They present a relatively negligible eyesore, since much of the plant is underground. Law plans to squeeze his plant on to less than half an acre on Gwennap's battered United Downs industrial park – near a tip and banger car raceway.

One mark against geothermal plants is that the pumps could require as much electricity to operate as the plant will produce. But Law says that tends to occur at shallower plants that don't reach sources as hot as 175-200C. It helps that he has located a porous layer of loose rubble above the granite through which it is easier to pump.

Law says the engineering company Arup is interested in power from the plant for its UK offices. Geothermal would feed the grid through commercial deals with one of the UK's distributors, who would allocate it to Arup as green energy.

The plant will cost £40m to build. Law is raising funds through private equity with investment bank Nomura Code. He's also applying for a grant from the Government, which is making £6m available to deep-earth geothermal projects. Law will also apply for funds from the EU, which has a programme to back geothermal projects that produce between five and 10MW.