Geothermal Energy

Debate between Miatta Fahnbulleh and Kieran Mullan

Thursday 6th March 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)]

I thank the hon. Member for Bexhill and Battle (Dr Mullan) for bringing this important issue to the attention of the House. I also thank my hon. Friends for their contributions and for the valuable way in which they have engaged in this debate. The hon. Member for Bexhill and Battle has been a great champion of deep geothermal energy in recent years, and the role he has played in the formation of the all-party parliamentary group on deep geothermal is commendable. I was very pleased to attend its meeting in December, and I am grateful for the engaged and constructive discussion that we had.

I agree with the hon. Member that there is a huge opportunity here, and I echo his desire for action and pace; I will briefly say why I share that desire. He will know, as I do, that we are coming out of the worst cost of living crisis that we have seen in a generation, and energy has been at the very heart of that crisis. The reality is that energy is unaffordable for too many people and increasingly out of reach for people who absolutely rely on it as an essential good, and we as a Government are determined to fix that. That means that we need to take action to lower energy bills by breaking our reliance on international fossil fuel markets and sprinting towards clean, home-grown power. That is why the Government are so committed and why we are running at our clean power by 2030 mission, but it is also why our warm home plan is absolutely critical. I reassure the hon. Member that we see that geothermal power has a critical role to play in our energy mix, following its success in the fifth auction round of contracts for difference.

I agree that geothermal energy represents an important opportunity�if the hon. Member hears nothing else I say today, I ask him to hear that. It has the potential to deliver clean and secure energy and heat, reducing our reliance on fossil fuel markets. As he mentioned, we are acutely aware that geothermal energy could also support a just transition by creating thousands of jobs that use skills from our oil, gas and coalmining sectors. The Government provide financial support for geothermal projects today, and we will continue to do so. The critical thing is ensuring that this is done at an acceptable cost to consumers and in an environmentally friendly way.

As the hon. Member mentioned, the most widespread potential for deep geothermal in the UK is as a low-carbon heat source for heat networks. I am convinced that heat networks have a really important role to play as we roll out clean heat and upgrade millions of homes across the country. We have the opportunity to grow their market share from 3% today to 20% by 2050. One of my first visits as the Minister for energy consumers was to the Mersey heat network, where heat from the Leeds and Liverpool canal is being used to provide hot water and low-carbon power for thousands of people, thanks to a water source heat pump. That is a great example of how communities can benefit from local energy sources, which is what the hon. Member and my hon. Friends are advocating for in this debate. I completely commend that and support it.

There are significant geothermal success stories, such as in Gateshead, where the first mine water heat network to become operational in the UK received �5.9 million from our heat networks investment project. That money enabled the council and Gateshead Energy Company to install 5 km of new heat network pipes and a 6 MW water source heat pump. Today, that network heats 350 council homes and the Baltic arts centre, with 270 more homes to be added.

The hon. Member for Bexhill and Battle referred to the public sector scheme. Geothermal heat projects supplying public sector sites are eligible to apply for support provided that they meet that scheme�s eligibility criteria, and again, I agree with him that there is a big opportunity here. I would add, however, that any changes to the scheme would need to be considered once the current spending round is completed. That is what he would expect me to say, but I reassure him that I am very happy to meet him and members of the APPG to discuss their proposals.

[Dr Mullan]

The point to emphasise is that the current scheme is based on going project by project, which undermines our ability to bundle up the risk, which is so vital to deep geothermal. That is the key change we are looking for: the opportunity for a number of sites to be pulled together, which is what will be most attractive to investors.

[Miatta Fahnbulleh]

We want to think about creative ways in which we can unlock the potential for investment, so I am very keen to meet the hon. Member and members of the APPG so we can hear those proposals. I give him that reassurance.

Not just today but over recent years, the hon. Member has made a convincing case for the merits of pursuing deep geothermal. The Government remain committed to exploring the renewable energy opportunities afforded by our geography and geology. However, I hope the hon. Member will understand that the priority now�and the thing my boss has tasked me with�is developing the warm homes plan. It would be premature for the Government to set a geothermal strategy with detailed targets in advance of that plan. For us, it is a question of sequencing; for instance, if we are to make the most of geothermal�s potential, we need to start by creating an environment that enables the growth of heat networks and, crucially, protects consumers along the way.

To that end, the Department will bring forward a market regulatory framework in January 2026 to improve consumer protection. We are also consulting on heat network zoning, which is an essential part of our plan to establish and accelerate heat networks. We think that will significantly increase private sector investment and remove some of the barriers. We are committed to taking a long-term, strategic view, and we are trying to sequence this work so that we develop the warm homes plan and build the enabling environment. However, I absolutely recognise the need for us to set a policy framework in which geothermal energy can thrive.