Sweden-based Climeon has been awarded a contract by German power producer Geoenergie Kirchweidach (GEK) to supply a modular heat power system for a geothermal plant in Bavaria, Germany.
The deal was initially agreed at the end of November 2017 with the signing of a letter of intent (LOI) by the two parties.
Climeon said that the contract marks a major step in replacing fossil fuels with a sustainable geothermal baseload.
GEK founder Wolfgang Hageleit said: “With this project we take an important step to begin providing clean Geothermal heat power to the beautiful municipality of Kirchweidach and later on to entire Germany.”
As per the contract, Climeon will supply a total of 16 heat power units for the project in the city of Kirchweidach as part of the first phase, which is expected to result in the delivery of 14,000MWh of electricity to the power grid per year.
Climeon plans to complete the equipment delivery within 12 months.
Additionally, GEK will have the option to order more units in a second phase of the scheme. This is expected to increase the generation capacity of the facility to over 20,000MWh annually.
Climeon founder and CEO Thomas Öström said: “Germany is leading renewable energy in Europe and geothermal heat power especially at low temperatures has every property to become the dominating source of renewable energy.”
Baseload Capital Sweden, a project financing company launched jointly by Climeon and investment firm Gullspang Invest, LMK Forward and Stockholm-based investor Blue, will take part in financing the contract.
Baseload Capital Sweden founding partner Magnus Brandberg said: “A long-term electricity contract (PPA) as strong financial base and a reliable 24/7 power production makes this an attractive and low risk project at the same time as we can accelerate the transformation from fossil to green energy.”