Out-Law / Your Daily Need-To-Know

New plan could help unlock ‘enormous’ potential of UK geothermal energy

04 Aug 2023, 9:29 am

Proposals to boost the economic viability of geothermal energy projects could help the UK catch up with its European neighbours, according to an energy law expert.

Geothermal energy is the energy generated and stored in the form of heat beneath the surface of the earth, which can provide an ultra-low-carbon source for heating, cooling and power generation. However, exploitation of deep geothermal systems can require drilling of wells to reach higher temperature heat sources at depths of more than 500 metres.

A new policy paper (17 pages / 2.88MB PDF), funded by the Department for Energy Security and Net Zero along with the North East and Yorkshire Net Zero Hub, said that while the UK’s geothermal energy potential is “enormous”, the current high costs of drilling restrict its economic viability.

The regulatory framework for geothermal energy is severely lacking: there is no regulator, no licencing regime, no incentive schemes and no specific regulation

Becca Aspinwall of Pinsent Masons said: “It is encouraging to see real attention being paid to a natural resource that has not yet had much support or development in the UK – especially when compared to other European countries with similar geology, such as France, Germany, Belgium and the Netherlands.”

The report recommended that the government undertake a review of financial support for geothermal energy and clearly outline the role of geothermal energy in the UK’s net zero efforts. It also advised ministers to improve data availability and accessibility and review the legal status, regulation and licencing of geothermal energy.

The report also urged the government to develop an understanding of the public perception of geothermal energy and to support communication between stakeholder groups.

“With heat networks and heat zoning regulation on the horizon via the Energy Bill, which is currently expected to be enacted later this year, there will be a push to encourage decarbonised heat sources. The white paper highlights that the regulatory framework for geothermal energy is severely lacking: there is no regulator, no licencing regime, no incentive schemes and no specific regulation,” Aspinwall said.

She added: “This will all need to be developed to increase developer and investor confidence and to allow the market to come forward in a way that can contribute to net zero and heat decarbonisation across the UK.”