Jan. 25 (Bloomberg) — GT Energy, an EON SE-backed Irish
geothermal developer, expects to complete a fundraising for a
plant to heat homes in northwest England in coming weeks.
It’s raising about 2.6 million pounds ($4 million), partly
for a 17 million pound facility in Manchester being developed
with EON, Managing Director Padraig Hanly said by e-mail. The
project will be 50:50 funded with debt and equity, he said.
“We expect to close out in the coming weeks,” Hanly said.
“There is a good appetite for investing in projects. We’re
progressing the investment process with a number of investors
and expect to reach financial close towards the end of the
year” for the whole project. Potential investors aren’t only in
the U.K. and include infrastructure and venture funds, he said.
Heating makes up about 47 percent of U.K. carbon-dioxide
emissions and the nation plans to get 12 percent of its heat
from renewable sources by 2020. Operations such as Dublin-based
GT’s are able to get premium payments for their output for 20
years under the U.K.’s Renewable Heat Incentive. GT signed an
accord with EON in July to jointly explore geothermal energy.
“RHI support is welcome and is at the level recommended by
industry,” Hanly said. “That said, the industry needs
legislation to be put in place to create a licensing regime
similar to oil and gas. If we can get over the link, we would
expect to see European geothermal investors enter the U.K.”
The government has indicated a licensing regime won’t be
set up until the first geothermal plant is built, he said.
Planning consent for the Manchester plant, with thermal
capacity of about 10 megawatts, is expected to be decided in
April, Hanly said. GT received “very positive” feedback from
local residents, and construction should start early next year
and full operations in the middle of 2015, he said.
GT is talking with local councils showing “significant”
interest in geothermal in the U.K., Hanly said. The Manchester
site is part of the deal with EON that GT signed to deliver as
much as 140 million pounds of U.K. geothermal projects.
To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
