The Environmental Audit Committee (EAC) has today published a
letter from the Minister for Business, Energy and Corporate
Responsibility responding to its findings and recommendations on
the potential of geothermal technologies.
Following the EAC’s intervention, the Minister has confirmed that
geothermal technologies which generate electricity will be
eligible for the next allocation round of the Contracts for
Difference scheme. The scheme is the government’s main mechanism
for supporting low-carbon electricity generation. The fifth
allocation round is expected to open to new applicants in March
2023: the auction parameters for the round will be announced in
January 2023. In practice these parameters will determine whether
any geothermal power projects will be in a position to apply. The
Government has not yet indicated whether a ringfenced pot is to
be made available for geothermal power.
It was also confirmed in the letter that the Government continues
to monitor progress of geothermal heating technologies, to
understand better its potential as part of the UK’s energy mix.
On conclusion of EAC’s work examining this issue, Members argued
that there is the potential to fulfil much of the UK’s heating
needs using geothermal energy.
Environmental Audit Committee Chairman, Rt Hon MP, said:
“As the UK re-examines its energy mix in an effort to reduce
dependence on fossil fuels, it is promising to have confirmation
that the Government is open to supporting geothermal
technologies. The Committee heard that geothermal energy could
potentially fulfil much of the UK’s heating and power needs
without damaging emissions of oil and gas.
“The Committee voiced concerns that the Government was failing to
send the right signals to industry about its overall backing for
geothermal technologies. In April’s British Energy Security
Strategy the Government said it would ‘aggressively explore’ the
renewable opportunities, including geothermal, provided by the
UK’s geography and geology. But the letter we publish today
does not on its own send a particularly encouraging message to
the sector.
“While it is encouraging to learn that geothermal power is in the
mix for the next round of Contracts for Difference auctions, in
practice the auction parameters will determine whether geothermal
power projects will actually benefit from this support. The
announcement of these parameters early in 2023 will be a litmus
test of the Government’s commitment to supporting geothermal
power by establishing a ringfenced pot for electricity generated
from geothermal.
“Current Government support for small-scale geothermal heating,
in the form of domestic heat pumps, is welcome: but Ministers
must now accelerate the pace at which they are evaluating the
potential for large-scale geothermal to contribute to the
nation’s heating needs.”
