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Energy Bill

moved Amendment No. 4: 4: After Clause 37, insert the following new Clause— ““Heat from deep geothermal sources (1) The Secretary of State may make regulations putting 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) The licensing regime shall be determined after a period of consultation by the Secretary of State with industry, geological experts, local authorities, energy producers and other interested parties. (3) The licences shall relate to— (a) those areas of the United Kingdom deemed by the Secretary of State to have potential for the exploitation of deep geothermal heat, and (b) individual geographically delineated areas of land, to be known as ““tenements””.”” The noble Lord said: My Lords, I should like to make it clear, following the amendment proposed by my noble friend Lord Wallace of Tankerness, which was about ROCs, that when I mention rocks they are hot dry rocks, spelt in the normal way in which people in the street would understand it. I was grateful to the Government for their interest in Committee in hot rocks technology and geothermal power. The noble Lord, Lord Bach, enabled a number of representatives from the industry and other people who were interested in this area to meet the department to discuss a number of the issues so that the department could understand this area more and we could start to put it on an active agenda. Those meetings were constructive and, since then, the Government have concluded their renewable energy strategic review consultation period. A number of businesses and interested parties from the geothermal energy sector have contributed to that. If nothing else, we have already started to achieve things there. I thank the noble Lord, Lord Oxburgh, for his support and for being at those meetings. I do not want to go on at great length about the geothermal industry, because I went through that in Committee. However, I will point out that this is a genuine low-carbon or zero-carbon technology. Its unique aspect is that it provides a steady power source, unlike many other renewables. It is unobtrusive because its workings are underground, but the clever bits on the surface also tend to be low profile and hardly noticed by local residents. That is always good in terms of planning permission and the feelings of local people, which are always issues for renewable energy projects. There has been extensive use of geothermal energy where there are near-to-surface sources of hot water. Those are mainly in volcanic areas, such as Iceland, New Zealand and Japan, where these technologies are proven to work and provide a large amount of electricity. That is not of much use in non-volcanic areas, where the possibility of drilling down five or 10 kilometres is increasingly being looked at, so that water can be pumped down to hot rocks and hot water can be pumped back up. Although such technologies exist as a result of the oil prospecting industry and the present geothermal industry, they have not been put together in a commercial way. A demonstration project has just started in the Alsatian region of France at Soultz. A study by the Massachusetts Institute of Technology in the United States, which is spending a lot on research in this area, estimated that some 10 per cent of US electricity generation could be supplied by hot rocks geothermal energy within 50 years—although that is quite a long timeframe—at competitive prices, provided that there is reasonable investment in research and development. This amendment tries to address that area of research and development. My equivalent amendment in Committee was, I agree, prescriptive. It tried to move this issue forward by stating that the Secretary of State ““should”” consult and set up a system for producing a framework within which exploration and demonstration projects could take place. After listening to the Government and recognising their interest in the area and their positive response, in this amendment I want to give the Secretary of State powers to establish that system, although not to insist on it or give a timeframe. I am aware that it is unusual that someone from the Liberal Democrat Benches should push Secretaries of State to take powers to make regulations. However, given the urgent pace necessary in renewable energy, because of our timetables and targets, that sort of response is entirely necessary. The amendment would empower the Secretary of State to set up a licensing system for what I have called ““tenements””. That is a term used by the Australian industry, which is very much into research, development and technology exploration in this area and hopes to move forward to actual generation. The delineated areas of land are called tenements, for which there are licences, a little like those for North Sea oil and gas and, in renewable energy, wave hub areas. This is a standard model of permitting a monopoly to explore a particular area, after a tendering process. Why is that necessary? It is for the same reason that applies anywhere else. Although geologists are fairly sure where these areas are—at the moment the best areas are known to be in the south-west granite peninsular—a company has to invest many millions of pounds in test bores. If it is to make that investment, a company has to be sure that another contractor, after the source has been proven, does not come along, drill a hole 500 yards nearby and undermine the original investment. Certainly, two of the Australian companies that have met with DBERR, which looks after energy, made it very clear that for them to start investing in the United Kingdom in this important energy source some security for their investment in exploration was needed. The amendment would put into the Bill an important future renewables technology, one that is proven in most aspects of its operation but which still requires to be proven in terms of the specific technology. It would enable that exploration to take place within the legal framework and it would avoid putting unreasonable timescales on the Government as regards performance. On that basis and given the importance for the future, not just within the United Kingdom but beyond, for this technology and the way in which other economies are already developing in this area, I hope that the Government will be positive towards this approach. I beg to move.