EP 6: Money, Lithium & (Geothermal) Power
Geothermal Engineering Ltd (GEL) is poised to pioneer deep earth power in the UK. Can CEO Ryan Law tap environmentally sound lithium, too?
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GEL aims to produce ~280GWh electricity, ~90GWh heat while extracting ~23,000 tpa of ESG-compliant sourced, ultra-low carbon lithium by 2030 – ambitious targets that require pieces of different and complex puzzles to fall into place if they are to be achieved.
We hear from CEO Ryan Law, who founded GEL in 2008 after following the trail of a 2006 MIT “Future of Geothermal Energy” report and revisiting a geothermal trial conducted in Cornwall in the 1980s…
“When you’re presenting something that is a first, it’s difficult to convince investors that the technology has a future… The classic response was, go and drill your first deep well and come back to us when you’ve got the data, but I needed 10m quid to drill that first well.”
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Ryan recounts what it takes to get a geothermal power plant into the ground – framing estimates of hundreds of GW of resource in the reality of obtaining planning permission, finding a grid connection, getting a drill rig on site, and even deciding what to do after accidentally mapping potential archeological finds.
If you can navigate these constraints, the reward is beautifully consistent renewable baseload power that runs 95%+ over the course of a year, plus 2/3x renewable heat that facilitates innovative ground heat and power developments like Langarth Garden Village near Truro, Cornwall. That project, one of seven state-of-the-art heat network projects across England funded by a total £91m of Green Heat Network Fund cash, aims to supply geothermal heat to 3,800 homes with potential to supply additional heat to the western side of Truro. GEL’s United Downs geothermal power plant demo project, covered in the companion episode, will provide heat for about 4,000 homes, and with any luck the local hospital, too.
Ryan relays how across Europe, while the lens is often trained on decarbonising electricity, heating (and cooling) accounts for about half of primary energy usage, and here the picture is simply not as encouraging.
In the UK, the International Energy Agency’s 2021 geothermal annual report estimated the country had an estimated 43,700 Ground Source Heat Pump systems installed, which had generated approximately 1,330 gigawatt hours of energy per year, equivalent to just 0.3% percent of the UK’s annual heat demand.
That’s why GEL’s proposed heat network, estimated to save 5,000 tonnes per year of CO2 equivalent for Langarth Garden Village alone (compared to the alternative of an air source heat pump for each home) is likely to be a winner, and could set the stage for a geothermal project pile-on…
Regulatory hurdles
GEL in May 2024 submitted written evidence to parliament in a bid to assist with developing a UK geothermal strategy, and it can be hoped this document is not languishing in a desk drawer in the newly installed Secretary of State for Energy Security and Net Zero Ed Miliband’s office.
One of the challenges that strategy seeks to address is the absence of a geothermal licensing regime similar to that in place for carbon capture and storage, and traditional oil and gas development. Those who want to go deeper on geothermal regulation can read this paper.
“In the UK, it’s just going to be a race to get [geothermal] sites, not a lack of capital deployment.”
Ryan commends the work of the government’s Heat Networks Delivery Unit, which provides grant funding and guidance to local authorities in England and Wales for the heat networks necessary to absorb all the excess heat from geothermal wells.
Since its 2013 inception, HNDU has run 13 funding rounds, awarding £33.8m across 300+ projects in 188 local authorities – building from a tiny base of UK buildings benefitting from district heating to a target of 20% by 2050.
Zero-carbon mineral extraction
The global mining industry must cut emissions by 90% by 2050, while increasing production to meet demand, and geothermal offers a potential pathway to mine various metals in a much more sustainable way.
As we hear, in New Zealand and Iceland, the metal is silica, used amongst other things for enriching facial skincare products, while in Cornwall the primary resource that GEL has tapped into is lithium.
In a poly-crisis enveloped world, Europe is on the hunt for local sources of lithium, essential for lithium-ion batteries in fully electric and hybrid vehicles, as a means of improving its critical minerals supply chain resilience.
A paper from The Hague Centre, which maps out an agenda for the EU to strike strategic partnership deals with lithium-rich economies in Africa and Latin America, projects that “Europe would need up to 60 times more lithium in 2050, compared to 2020, to reach carbon neutrality by 2050.”
Returning to the target 23,000 tpa stated on GEL’s website, that would be enough to supply lithium necessary to power more than the 200,000 battery-electric vehicles bought in the UK in 2022.
Innovate UK’s Automotive Transformation Fund (ATF) is a believer, having in November delivered £1.8m for GEL to produce around 100 tonnes per annum (tpa) of Lithium Carbonate Equivalent (LCE) in late 2024, ramping up to at least 1,000 tpa from United Downs as early as 2026.
The UK and EU now have until end-2026 (pushed back from the start of 2024) before the imposition of so-called “rules of origin” red tape that will demand that EVs are substantially made in the UK or the EU to qualify for zero-tariffs in the bloc. That approaching deadline adds urgency to the idea that we need more lithium locally, now.
Thankfully for GEL, their deep geothermal power projects have been recognised by the British Government through the Contracts for Differences (CfD) scheme, awarding a guaranteed electricity price for United Downs, as well as two other permitted-but-yet-to-drill well sites – giving them the financial security to absorb the technology risk associated with an as yet unscaled membrane-based lithium extraction technology.
Who wants to back environmentally sound lithium?
GEL is seeking a partner or buyer with the technology to convert its high-quality lithium carbonate resource, notable for being among the highest concentrations yet discovered in any commercial project in Europe at 340 parts per million (ppm), into battery-grade lithium at scale.
Most lithium is extracted from hard rock mines or underground brine reservoirs, and much of the energy used to extract and process it comes from CO2-emitting fossil fuels. In hard rock mining, for every tonne of mined lithium, 15 tonnes of CO2 are emitted into the air, and most lithium mining also requires huge quantities of water, according to MIT Climate Portal.
“Sucking the silica out from the liquid made the system work better as well.”
If the company can prove its lithium extraction method works, it is exactly the kind of renewables project that international energy investors – often frozen out of immediately bankable large wind and solar projects by, er, banks and big energy – could gravitate towards.
This is our final podcast episode before a much needed summer break while we consider where we want to take the podcast next. At this point we would like to thank everyone who has helped us along the way since we got going at the start of this year, particularly those who gave us their time in Cornwall. If you have any interesting ideas or suggestions, please do get in touch—we’d love to hear from you.