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Energy Bill

moved Amendment No. 63B: 63B: Before Clause 80, insert the following new Clause— ““Heat from deep geothermal sources (1) Within two years of this Act receiving Royal Assent, the Secretary of State shall, after a period of consultation with industry, geological experts, local authorities, energy producers and other interested parties, put into place for the United Kingdom a licensing system for the exploitation of heat from deep geothermal sources for both the direct use of that heat and for the generation of electricity. (2) Licenses under subsection (1) shall relate to— (a) all those areas of the United Kingdom deemed by the Secretary of State to have potential for the exploitation of deep geothermal heat, (b) individual geographically delineated areas on land, to be known as ““tenements””, (c) heat from rocks greater than two kilometres below the surface of each tenement. (3) Once the licensing system is in place, the Secretary of State shall lay down regulations for the method of allocation of tenements to those organisations wishing to explore or exploit those resources (or both). (4) The Secretary of State shall undertake the first round of allocations within six months of the licensing regulations under subsection (1) being approved. (5) Any organisation already undertaking exploration or exploitation from geothermal sources within the United Kingdom, in that they have already undertaken at the time the licensing regime comes into force boring for the purpose of exploiting geothermal heat to below two kilometres, shall be entitled to hold the license for that tenement. (6) Any licence fee or other consideration for that tenement as a part of the licensing regime will then be determined by arbitration under rules determined by the Secretary of State reflecting the fees or other consideration paid for tenements deemed to have similar potential. (7) The holding of a licence for the exploration or exploitation of deep geothermal heat (or both) shall not convey any automatic rights in terms of planning permissions for surface development, or give any rights in terms of surface access.”” The noble Lord said: I will be a bit longer on this amendment. I do not want to go through all the arguments and descriptions that we went through in Committee last week. This is an important area in terms of renewable power. Geothermal energy is not a cranky technology, but is proven in surface and deep geology. As yet, the elements have not come together to be productive. The technology has been experimentally tested in the United Kingdom. To give Members of the Committee an idea, the power generated by a typical unit of geothermal energy is around 6 megawatts, and they are often clustered in groups of four or five, coming up to a 30 megawatt installation. They have a small footprint, and most people would probably not even notice where they were; they certainly do not emit noise or anything like that. This is becoming an active area of research and deployment. Deployment of geothermal at a shallow level operates worldwide; it works in New Zealand, Japan and Iceland, and is a successful form of renewable, non-carbon energy. Deep rocks technology is now being strongly explored in Australia, Germany and the United States. I have a document commissioned by the United States federal Government and produced by the Massachusetts Institute of Technology, with a number of British experts, on energy security issues and the implementation of hot rocks geothermal energy. The benefits to the UK of this technology are that is it non-carbon and renewable. It can be used for heating or electricity and has a very small ground footprint and significant generation capacity. If it was in the right place, once developed, it could supply large cities. I have tabled the amendment because there are high up-front costs, as with all renewable technologies, with investment—although the fuel is free once the system is developed. The hydro-carbon regime for licensing does not really work. There are all sorts of legal complications in British law with mineral and surface rights. Development will probably take 10 to 15 years before operation; it is similar in many ways to the nuclear power industry. It is also similar in that the technology produces a constant base-load of electricity. Unlike other renewables, it is not variable and is therefore particularly important in the renewable energy mix. The clear problem for this technology is legal certainty: mineral and surface rights—the minerals are not extracted; and who owns the heat generated, which has no physical quality but is a state described as a ““fugitive characteristic””. It also takes a major investment, something like £10 million, to put down a five-kilometre borehole to reach the necessary 200 degrees centigrade. That investment is not certain. Once it is proven that the resource is there and will work, another extractor can come along to the field next door and mine the same heat resource, prejudicing the first borehole, and the risk taken by the first party is not taken by the second. Hence, the amendment looks forward to a legal framework through which this important technology can be exploited within the United Kingdom by both foreign and domestic organisations that are into this technology. Without this legal framework, the technology cannot move forward. The amendment makes sure that the licensing regime is clearly below 2 kilometres, so that it does not get in the way of areas such as Southampton, which the Minister mentioned last week. It does not involve shallow waters, mine shafts or those sorts of areas. It keeps clear of all the rights above 2 kilometres. It in no way means that there is a right of access to the surface land, which would clearly be unacceptable; nor does it presume a planning permission right, which would have to go through the normal local authority procedures. This is an important amendment to enable a key area of base load renewable energy to be at least explored in the short term, and to lead in the medium and long term to an important potential source of renewable energy. Finally, I thank the Minister and his staff for already having entered into a conversation about this, which I think will be very productive. A meeting is arranged for July, where a number of experts and potential practitioners in the field will come together. It is appropriate that the next stage of the Bill will probably be after the Summer Recess. I beg to move.