The company behind oil production at Horse Hill in Surrey has announced plans to develop geothermal energy at the site.

UK Oil & Gas plc (UKOG) said it had signed an agreement with Ceraphi Energy Ltd with the aim to generate and supply more than 200,000 megawatt hours of energy a year.

In a statement this morning, UKOG said conceptual engineering design and preparation of a planning application were due to start in early 2022.

UKOG said the first phase would supply what it called “significant industrial end-users” near Horse Hill with heating and cooling, electricity and/or hydrogen.

The company said the project would use six new deep geothermal boreholes with downhole heat exchanger technology. This was designed to transfer heat from surrounding rocks via heat pumps to the surface, UKOG said.

Heat would be delivered to the user through a small diameter hot water pipe and heat pump system, the company said. More wells and sites could be added to supply additional users, it added.

Horse Hill currently produces under 100 barrels of oil per day from one well. It has planning permission for a further four production wells.

Today’s statement said:

“It is envisaged that current oil production at the site would continue to the end of economic life and then boreholes would be repurposed to add further geothermal baseload, transitioning the site into 100% renewable energy provision.”

UKOG’s chief executive, Stephen Sanderson, said:

“It makes perfect sense for the UK to harness the abundant green heat energy beneath our feet to heat, cool and power our homes and industry. The GeoHub’s weather independent target baseload is firmly in line with both the UK government’s “build back greener” strategy for net-zero and the Company’s ambition to transition its UK assets into sustainable green energy hubs.”

UKOG said the proposed geothermal system does not require injection or circulation of water within rocks, “eliminating the possibility of induced seismic activity”.

The area near Horse Hill experienced a series of earthquakes in 2018 and 2019, the largest of which measured 3.1ML. A workshop led by the Oil & Gas Authority concluded there was no evidence that oil and gas operations had triggered the earthquakes. But one geologist at the workshop said the Surrey earthquakes passed almost all the tests used to decide whether they had been induced by human activity.

Oil production at Horse Hill has attracted opposition. The ruling is expected soon in a legal challenge to Surrey County Council’s approval of long-term oil production and additional drilling at the site.

Earlier this year, IGas announced an agreement with Ceraphi Energy to develop geothermal energy projects at its existing oil and gas sites. The first site would be near Lincoln, the company said.

This month, IGas confirmed it was part of a consortium to turn exhausted oil and gas wells into test sites to bury carbon dioxide, store hydrogen and develop closed-loop geothermal technology. The Net Zero Rise initiative also involves Third Energy and universities at Newcastle, Oxford and Durham.