The UK could meet a fifth of its power needs – the equivalent of nine nuclear power stations – by exploiting geothermal power, a new report into the technology has found.
But the report found that the current subsidy regime does not provide sufficient incentive to develop the technology in the UK – even as Charles Hendry, minister of state at the Department of Energy and Climate Change, flew to Iceland on Wednesday afternoon and signed a Memorandum of Understanding with his Icelandic counterpart Oddný G. Harðardóttir to explore a possible new interconnector that could be used to import geothermal electricity from the country’s volcanoes.
Geothermal power stations use water pumped down to hot rocks under the earth that returns to the surface heated, fuelling electricity generation or to be used for space heating.
There are promising sites for geothermal power spread throughout the UK, from Cornwall to the Lake District, East Yorkshire, Northern Ireland and Scotland.
Another plus is that geothermal power, while renewable and low-carbon, can provide baseload electricity. That means it can be used to back up intermittent sources of renewable energy such as wind and sun. The study found geothermal could supply 9.5GW of electricity, about 20% of current demand, but also 100GW of heat, which would be enough for the whole of the UK’s space heating needs. The government has struggled to encourage the take-up of renewable forms of heat, such as wood-fired boilers and underground heat pumps.
However, geothermal power receives a relatively low level of subsidy – less than that offered to wave and tidal power, and less than that offered in rival countries such as Germany and Switzerland – according to the report, commissioned by the Renewable Energy Association and written by the engineering consultancy Sinclair Knight Merz. The study, published on Wednesday, found that subsidising geothermal technology initially would help to bring down costs rapidly as sites around the UK were developed. It recommended a different system of subsidy, targeting support at the exploration drilling phase.
Ryan Law, chair of the REA’s deep geothermal group, said: “We don’t want to be left out of a global industry which is estimated to be worth £30bn by 2020. We could be at the forefront of this industry given the strength of British engineering skills. If the UK wants to seize a share of this booming global market we must prove our competence at home. Clearly investment at home could also go a long way to meeting our future energy needs cleanly and safely.”
There are potential problems to be overcome, however. Geothermal technology is still expensive, can only work in certain sites and the process of drilling and pumping water to the underground rocks has been linked to seismic activity in some areas. The two small earthquakes that hit Blackpool following drilling in the area for shale gas exploration did not stop advisors recommending that ministers should allow shale drilling to go ahead – but local residents may have concerns.
Separately, the UK has been advised to extract as much of its remaining reserves of oil and gas as possible, in a report by the International Energy Agency. While praising the UK’s low-carbon strategy, the agency said oil and gas would still be needed and should be exploited.
Maria van der Hoeven, executive director of the IEA, said that the UK needed a more liquid wholesale electricity market, with more competition. She commended government plans for a “green deal” to encourage households to insulate their homes, but warned that its success would depend on making the public “sufficiently aware of its benefits”.
She also warned that plans for electricity market reform, which will include companies entering contracts to supply power at a price above the market rate, were “pioneering” and would be “closely observed by other countries in their efforts to ensure continuing reliability of electricity systems while promoting timely decarbonisation of electricity supplies”.