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(Sharecast News) - Star Energy announced on Tuesday that it has entered into a memorandum of understanding with French infrastructure conglomerate Veolia to jointly develop large-scale geothermal heating projects in the UK, targeting the decarbonisation of heat supply for district heating schemes, commercial properties, hospitals, education campuses and industrial processes.
The AIM-traded firm said the partnership marked a further step in its diversification strategy, leveraging its subsurface expertise to expand into geothermal energy.
For Veolia, the collaboration would support its global 'GreenUp' strategy to reduce emissions and combat climate change.
The companies would focus on deploying reliable, renewable geothermal heat as a substitute for fossil fuels.
With heating accounting for nearly a third of the UK's total energy consumption and over 40% of its carbon emissions, Star Energy said geothermal systems offered a long-term, cost-effective, and grid-resilient alternative to other low-carbon heating technologies.
Development work would include advanced simulation, hydrogeological and seismic studies, and directional drilling, using proven technology already deployed globally.
Many installations were expected to connect directly to existing heating networks with minimal infrastructure changes.
"Star Energy is playing a key role in the UK's transition to sustainable and predictable heat provision, and geothermal has an important role to play in the UK's energy transition by providing a home-grown, predictable, renewable heat option for businesses and households, contributing to the government's 2050 net-zero ambitions," said chief executive officer Ross Glover.
"We look forward to working with the Veolia teams, and developing new projects using our unique expertise, gained over decades in the energy sector.
"Through partnerships such as this, we fully expect our geothermal business to grow significantly as it delivers to customer requirements to secure and decarbonise their energy supply."
At 1036 BST, shares in Star Energy Group were up 1.71% at 6.92p.
Reporting by Josh White for Sharecast.com.
