London (Platts)--22Oct2009/557 am EDT/957 GMT

The UK government will Thursday allocate GBP6 million ($9.9 million) for geothermal energy exploration, according to the country's department of energy and climate change.

The ministry said the funding would be available through DECC's lower carbon investment fund "to help companies carry out exploratory work needed to find viable sites for this technology."

The UK wants to explore the potential for using geothermal energy for producing non-intermittent power and heat. "Deep geothermal energy...could provide clean, low carbon and renewable power and heat for the UK," said energy and climate minister Philip Hunt. "We want to make sure that this energy resource can play a part in the future low carbon energy mix.

Deep geothermal power from the southwest of England alone could meet 2% of the UK's annual electricity demand, potentially creating thousands of jobs in the building and running of new power plants," said Hunt.

Projects in England, Scotland and Wales will all be eligible for the funding, which will be available in two tranches - GBP4 million by April 2010 and a further GBP2 million over the next financial year to April 2011. Bids are to assessed and managed by a panel established by DECC. The closing date for bids for the first round of the fund will be November 20 with the successful projects to be announced shortly after that.

DECC said that at present there was only one geothermal energy generating project in the UK, a district energy scheme in Southampton, which has used hot water from 1,800 meters below ground to supply the city's district heating network for over 20 years.

Other countries, notably the US, Australia and the Philippines have demonstrated the potential of geothermal to provide baseload, non-intermittent, heat and power.

--Paul Whitehead, paul_whitehead@platts.com