IGas Energy is in “active discussions” with potential customers for 35 geothermal energy projects, according to a market update from the company and it is being approached by “numerous end-users – public sector and commercial”.
The company said it had made “significant progress” during the year and it expects to achieve financial close for its first geothermal project in Stoke-on-Trent and move into the execution phase during 2023. That depends on the result of a funding application to the Green Heat Network Fund Transition Scheme, a three year, £288 million capital grant fund that will support the commercialisation and construction of new low and zero carbon heat networks including deep geothermal wells and associated works.
IGas said it expects to put forward at least five additional projects at NHS sites in the second half of 2023, if it gains support from the Public Sector Decarbonisation Scheme (PSDS) for at least one of an initial group of five geothermal schemes at NHS Trusts. It applied for grant funding from the Scheme in partnership with the Carbon Energy Fund (CEF) for the five schemes in December 2022 and expects to hear the result in Q2 2023. Phase three of the PSDS, which provides grants for public sector bodies to fund site decarbonisation, was launched in September 2022 and will provide £1.425 billion of grant funding to 2024/25. IGas said a successful application would allow it to progress the projects to shovel ready stage.
IGas’s geothermal business is part of a diversification strategy in what is mainly an oil and gas business, which wrote down £30 million over the year as it had to abandon plans to produce shale gas via hydraulic fracturing. Chris Hopkinson, Interim Executive Chairman, said the company “has been reshaping its strategic direction to reflect the transition to a lower carbon economy” and as a result the would propose a change of name to Star Energy Group at the June AGM.