Geothermal Heat and Power

Lord Lennie Excerpts

Thursday 6th July 2023 Grand Committee

[Lord Lennie (Lab)]

My Lords, I, too, am grateful to the noble Lord, Lord Cameron, for setting up this debate. Geothermal energy offers opportunities as a sustainable and reliable energy solution. We all know that, with possibly one or two exceptions, a decarbonised power system is the key to us achieving net zero. This means that our Government, whoever they are, must give focus to different low-carbon solutions. The current Government are simply not doing enough of this.

One of the potential solutions is geothermal energy. It is regarded as environmentally friendly because of its lower greenhouse gas emissions compared with carbon-based sources, minimal air pollution, efficient energy conversion, lower water use than other conventional technologies and reduced land requirements. It is also considered a renewable source of energy that harnesses the earth’s natural heat to generate power. This heat is continually renewed through geological processes, such as radioactive decay, and residual heat from the planet’s formation.

It is argued that geothermal energy projects not only contribute to emissions reductions but provide job opportunities across the supply chain. As has been said, in Germany the geothermal industry has generated €14.9 billion for the economy and created 24,000 jobs this century. In the Netherlands, which was also cited by the noble Lord, Lord Cameron, there are claims that for each direct geothermal job a further two or three indirect jobs are also created. According to the International Energy Agency’s 2021 geothermal Annual Report, this country has an estimated 43,700 GSHP systems installed which generate approximately 1,330 gigawatt hours of energy per year, which is less than 0.3% of the annual UK heat demand. By comparison, Germany had more than 440,000 systems installed in 2020, while France had around 210,000 systems.

What is geothermal energy? We have heard that shallow geothermal systems typically involve the use of ground source heat pumps to modify the temperature obtained from the resource, but just last week it was reported that the Government’s boiler upgrade scheme managed to award only half the number of grants to help households it targeted switch from boilers to heat pumps. The £70 million left over from this policy due to grants not being issued cannot be used in future years and will be returned to the Treasury.

In order to meet the UK’s climate change targets, the Government want to install 600,000 low-carbon heat pumps annually, but the current rate is about one-ninth of that. In December 2022, the House of Lords Environment and Climate Change Committee launched an inquiry into the boiler upgrade scheme and found that the scheme was seriously failing to deliver on its objectives, with a disappointingly low take-up of grants. The committee called on the Government to take a number of steps: to provide clear guidance and information to industry and consumers regarding viable options for low-carbon home heating; to roll over the remaining budget from the first year of the scheme into the second year; and to establish a review to consider an extension to the scheme. Have the Government responded to these asks from the committee?

Deep geological systems are, as the name implies, at greater depth where the heat is more intense but cost significantly more to produce. By way of an example—we have also heard Redruth being cited—there is an active project in Auckland in the north-east of England. It will involve geothermal energy being sourced four miles underground. The water temperature is 73 degrees centigrade at Auckland Castle, and there is the aim of ensuring that Bishop Auckland becomes the first fully decarbonised town. That is exactly the sort of project the Government should be investing in if levelling up is to have a real practical meaning, particularly in former mining communities such as those in the north-east.

The House of Commons Environmental Audit Committee has judged that the Government have been slow to exploit the potential of geothermal energy and have not integrated it fully into the net-zero strategy. It went on to argue that the Government appear to be holding back a sector which could have a transformative effect upon the UK’s capacity to meet climate goals and grow the economy. With the Government missing their target towards achieving their aims, without a change of direction, geothermal energy will remain a peripheral influence.