Geothermal Energy

Claire Perry Excerpts

Tuesday 19th June 2018 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing this important debate and on putting her case with such clarity and precision. After what she found out about geothermal during her research for this debate, I am sure she will agree with me that it is indeed Britain’s forgotten renewable. It is not forgotten because it is not feasible or because it does not bring tremendous benefits. It is forgotten simply because no one has done much about it, even though that resource is under our feet in many parts of the country and is relatively easy to access. When that resource is accessed and developed, it provides potential free heat and power, probably for 100 to 150 years, as a result of a single borehole drilled down into the ground to unleash it.

Why it should be forgotten is a source of puzzlement to me, because it is a universal and beneficial renewable. Some people may regard deep geothermal as not quite renewable, in that if there is drilling into a deep geothermal aquifer, the aquifer, in theory, depletes over time. However, if water is being raised from the aquifer at the typical temperature level in the UK of about 73° or 74° Celsius, that resource will deplete at only 1° in heat per 100 years. Yes, it depletes a bit, but it is not exactly calamitous—unlike, one might say, drilling a fracking well, where the well depletes after about eight years.

[The Minister for Energy and Clean Growth (Claire Perry)]

Such a fact-free debate.

[Dr Whitehead]

No, it is a very factual debate—that is the difference.

The geothermal potential of the country is enormous, and the hon. Member for Falkirk (John Mc Nally) set out what the potential would be, in electricity and heat, for the UK were we to proceed seriously with geothermal energy. Perhaps a limiting factor is the fact that geothermal energy is not available everywhere in the country. We need to be clear about the fact that deep geothermal is available on the basis of three different kinds of site. Basins with very ancient water at the bottom are one kind of site. Another kind, which require slightly different technology, are areas with radiothermal granite batholiths. I believe that the Minister, as a first-rate geographer in her time, will know all about batholiths and lopoliths and various other things. We have quite a lot of radiothermal batholiths in the UK, with naturally occurring radioactive-based heat coming from deep within the earth’s crust. Another kind of site relies on the availability of technology to release heat by putting water down one pipe and up another, giving geothermal as a result.

As my hon. Friend the Member for Bishop Auckland mentioned, lower-temperature geothermal resources arise from abandoned mine workings. With heat-concentration techniques that is not a problem, in terms of concentrating the heat to get into production either for heat distribution or, indeed, for making steam to generate electricity.

As hon. Members have kindly mentioned, I have an interest in the debate because I think I can claim to be the only sitting Member of Parliament who has directly set up a geothermal energy scheme. I know a little, therefore, about how it all works. That scheme is based, as has been mentioned, in the middle of Southampton in a not particularly prepossessing shed, with a small wellhead in the carpark of the former Toys R Us store. That unprepossessing setting hides a well, drilled to about 1,800 metres. Water comes up at just over 70° Celsius and is converted into the material for a district heating scheme by a heat exchanger and concentrator. Now Southampton has a city centre district heating scheme with some 17 km of pipes, covering the university, the civic centre, the country’s only geothermally heated hypermarket and a five-star hotel. In other words, there is a complete city centre arrangement, heated substantially by geothermal energy. Not only that, but it has been heated in that way on an untroubled basis since 1987, and will continue to be so until 2087 on present estimates of what may be available. That is the potential, in practice, for geothermal energy.

--- Later in debate ---

[The Minister for Energy and Clean Growth (Claire Perry)]

It is a great pleasure, as always, to serve under your chairmanship, Mr Evans. We have had a brilliant and fascinating debate, and I commend the hon. Member for Bishop Auckland (Helen Goodman) for an extremely thoughtful, excellent, fact-filled and numerical brief. It is always music to my ears to hear about net present values, particularly when they involve a £7 billion greater turnover for an industry, and the opportunity to create billions of pounds of gross value added and provide many jobs. I thank her for putting the debate in that context. I also thank, as she did, the Coal Authority and Durham University for providing an excellent backdrop to the debate.

As the hon. Lady pointed out, 25% of housing stock in her constituency sits on top of coal workings, which were dug out at exceptional, personal cost by men working in the most horrific conditions, with heat often being one of the worst things they had to deal with. It should therefore come as no surprise that the areas that have been allowed to flood are hot areas, and it would be great to think that at the Durham miners’ gala on 14 July, the topic might be how the legacy that was so painfully won by the shovels and picks of so many men could be used to create something positive for our low-carbon future.

The hon. Member for Southampton, Test (Dr Whitehead) is always good at explaining these issues. I will not run through the batholiths argument again, but we have a long history of exploiting our various deep-geothermal sources. Like many other places, Bath, which is close to my constituency, was built on the thermal springs that were a happy by-product of those hot-spots. It was a pleasure to hear the hon. Gentleman describe the scheme in the city of Southampton, which was the first of its kind in the UK. The important thing about that example is that it shows when it works. This sort of heating works well when there is year-round take-up. One of the issues with such schemes is that they do not work terribly well when people need heating at just one time of the year, because the economics are not attractive. The hon. Gentleman said that an entire ecosystem was constructed around that heat, so that is a really good example. Of course, the water is 76°, so it comes up pretty hot. As the hon. Member for Bishop Auckland knows, the Eastgate renewable energy village, near her constituency, is the first eco-village in the UK. It was funded as way to explore this technology, and it provides heat from geothermal sources.

This is an incredibly exciting time to come together to talk about this issue. In 2013, we commissioned a review of the opportunities for geothermal, both heat and energy—I will talk about the distinction in a moment—and we mapped out the relevant parts of the UK. We have to pick through the issue of geothermal for energy and heat carefully. Iceland sits on the spot where the mid-Atlantic ridge breaks apart, which is not necessarily the most geologically stable place to be, so massive amounts of geothermal energy come to the surface, and islands are created overnight. I am very interested in the Icelandic interconnector project, which has the opportunity to create jobs in a cable factory where the interconnector makes landfall, and is a very interesting opportunity to bring in power generated by high levels of geothermal energy.

Unlike Iceland, we have relatively few opportunities to generate geothermal energy easily and cost effectively. The hon. Member for Falkirk (John Mc Nally) asked whether any projects have received a CFD, but none have bid in. Given what has happened to the cost of renewables—we have led the world in developing an offshore wind industry, and we are buying renewable energy at low prices that we could not have imagined even a few years ago—it is difficult for geothermal electricity to compete for CFDs. Arguably, the opportunities for heat are much more local and interesting.

Hon. Members have talked about the challenge of shallow geothermal, and we think that the most promising area is the low-temperature applications, such as district heating schemes. As the hon. Member for Bishop Auckland said, the water in her constituency is 30° C and shallow, so we do not need an incredibly difficult boring process to get it. We have heard from all parts of the UK, which is refreshing, about the opportunities for such heat schemes. I found the hon. Lady’s point about creating an export industry fascinating, because of course it was the mining industry that created the beam engine. The newcomer Watt engines, which pumped water out of the mines, led directly to the industrial revolution and our global leadership in technology. It is fascinating to think about how we can extract heat from those mines and create export industries across the UK.

The British Geological Survey, which is a marvellous institution, has surveyed the UK. We know about the opportunities both for deep geothermal heat and for shallow geothermal heat extraction, which is very widely distributed. Every investment we make has to pass a triple test: it has to deliver decarbonisation, it has to be deliverable at the right cost for consumers, and it has to create economic value added, as the hon. Lady expounded eloquently. That is the filter through which we review these schemes.

The hon. Member for Falkirk asked me several questions, which I shall try to answer. One was about the CFD—hopefully he is satisfied with my answer. Secondly, he said that the Government are not doing anything, but I am afraid I have to reject that. Heat is a devolved matter in Scotland, as he knows, but that has not prevented the UK Government from providing £4.5 million for the deep geothermal challenge scheme. The £250,000 he referred to was a welcome addition, but most of the funding was provided by UK-wide taxpayers. He talked about the HALO project, which I believe has been funded to the tune of £1.8 million by the Scottish Government and £3.5 million by the UK Government. I do not like to make political points; I find it much better to talk about investing in our UK-wide resources for the benefit of UK consumers and taxpayers. We have to go through the technological process and ensure these projects are economically effective so we do not burden taxpayers and bill payers unnecessarily, and we have to innovate.

Most houses—although not in rural areas—are on the gas grid, so when we invest we have to think hard about the cost trajectory vis-à-vis the fully costed position of being on gas heating. On the issue of rural homes, I am pleased to see my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) here because, like him, I represent a very rural constituency, in which more than 40,000 homes, including mine, are not on grid. The challenge of decarbonising those homes and reducing our dependency on heating oil, which the hon. Member for Strangford (Jim Shannon) mentioned, is live. In our clean growth strategy, we set out our intention to ensure that no new buildings in rural areas use fossil fuel sources of heat by 2025. We are determined to get to that level and to encourage innovation of the kind that my hon. Friend the Member for Central Suffolk and North Ipswich talked about.

How do we innovate, drive down the cost of extraction and use that heat to the maximum effect to ensure that these projects are economically viable? We are working with the Natural Environmental Research Council and the BGS, and are funding a £9 million geothermal research facility—the UK geoenergy observatory—to study low-temperature geothermal energy in former mines in Glasgow. We also have a number of other innovation programmes and are working with the industry.

I want to flag up a possible route to funding, because I want to ensure that some of these schemes are developed. Phase 7 of the industrial strategy challenge fund, with £10 million of funding, is open for bids. The launch event for it is on 4 July. It would be great to see whether we can create a bid for an innovative scheme to produce a working, cost-effective scheme. As the hon. Member for Ogmore (Chris Elmore) said, we have the heat networks investment project, with more than £300 million of funding. I commend the Welsh Government, Bridgend County Borough Council and the hon. Gentleman’s efforts in creating that scheme, which has bid into the heat networks scheme. Although this is a devolved matter in Wales, as always I think we are better when we work together. This is an opportunity to bring forward innovation and create a scheme that can be incorporated into heat networks. I would be absolutely delighted to meet the Coal Authority or anybody else who is willing to help us think about how we can pull such a scheme together, because I want to see innovation proceed. Given the constituency interest of the hon. Member for Bishop Auckland, perhaps she is the person to lead that delegation.

We have the innovation route to market and the heat networks scheme. I have been given a number of “go away and look at them” actions, including looking at risk insurance and planning. As I said about the clean growth strategy, our building regulations must ensure that we do not put up new builds in off-grid areas that are dependent on current forms of fossil fuel heating.

We have an opportunity to make this very large latent resource, which was won so painfully over many years, part of our low-carbon future. We have spent tens of millions of pounds in this area. The UK is in a fortunate situation, because our renewables industry is powering ahead. Other countries look with envy at what we have delivered through other renewable sources of energy. We are one of two countries in the world doing enough to meet even a 2° rise in climate, due to what we have done in our energy industry. The opportunity to decarbonise heat, create local productivity and resource, and generate innovation that we can export elsewhere in the world is incredibly interesting.

Once again, I congratulate the hon. Member for Bishop Auckland on securing this debate. I thank all other Members who spoke—we had a marvellous conversation about the opportunities in the constituency of my hon. Friend the Member for Ochil and South Perthshire (Luke Graham). This is a very opportune time: there are routes to innovation, such as the heat networks investment, and I am in the lucky position of being able to make investment. I would like to see some of this innovation coming forward.