The UK Government has set a strike price of £140/MWh for geothermal projects with or without combined heat and power (CHP).
It follows a consultation launched last year when the government outlined plans for £580 million of funding for the Contracts for Difference (CfD) scheme.
Under the auction, low carbon generators are incentivised for the power they produce.
The strike price is for both delivery years 2021/22 and 2022/23.
Other technologies being supported are offshore wind, advanced conversion technologies, anaerobic digestion, biomass with CHP, wave and tidal.
The document states: “As there has been no deployment of deep geothermal power projects in the UK, we do not expect there to have been any reductions in generation costs for this technology.
“We do however, accept that costs may fall over time, once deployment commences, including through improvements in borehole drilling so we intend to keep this assumption under review.”
The application process for the CfD allocation round will open on 3rd April.
