Kieran Mullan is the Conservative MP for Bexhill and Battle.
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I have been introduced to this technology because of its great potential locally in Cheshire, as we sit above the hot underground aquifer known as the Cheshire Basin. The possibility of a deep geothermal plant has been considered a number of times locally but never progressed to firm plans, so I began looking at how we might get there. As I learnt more about it, I saw the potential for not just my area but the whole country. I was therefore delighted to be asked by the then Prime Minister, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), to produce a review on the potential for making better use of deep geothermal energy as we strive for net zero. I was similarly pleased when the current Prime Minister asked me to continue that work.
My understanding is that the biggest difference between the UK and many of our neighbours is that Government support to help to get deep geothermal industries off the ground is widespread there. That consists of a mix of tariff guarantees, insurance support and grants. It is no surprise that investors will favour countries that are supporting an industry when it comes to deciding where to put their money. At one point, we did have a tariff guarantee for renewable heat. It was not taken up, but I think it was a matter of timing. It was ahead of the game—the game being the current huge appetite there is from investors and oil and gas to diversify on the way to net zero.
That is because getting to net zero by 2050 will require us to pull every possible lever. Transitioning our heating systems is a particular challenge. The UK has more than 28.5 million homes and 1.9 million other buildings—offices, hospitals, shops and warehouses. The majority of those are heated by gas boilers. Nearly a fifth of all the UK’s emissions come from buildings. Transitioning to an electric-based system of heating is expected to do the lion’s share, but while we can of course support the growth of skills and jobs for technologies dependent on electricity, we can see even now that the workforce and manufacturing capacity in this field creates challenges.
Deep geothermal plants would allow us to recruit from an entirely different workforce and existing part of the economy in delivering results, and this is a workforce that we already lead on. Our oil and gas industry is one of the best in the western world, with world-beating companies and workforces with a long history of success not just in the North sea but globally. Deep geothermal provides us with the opportunity to recruit that workforce into drilling for clean heat instead of fossil fuels. That will not only help us get to net zero, but help that industry, with all the jobs it currently holds, to be a positive part of the transition. It is clearly in our interests to ensure that the UK is an internationally competitive environment for deep geothermal.
In a report by the Association for Renewable Energy and Clean Technology and Arup, the ask from industry was for tariff support at £55 per megawatt-hour for 30 initial plants for 20 years. I saw with interest that that was the amount agreed by Government to support the green gas industry. That suggests to me that the Government consider it value for money.
Near to my constituency, in Stoke, there is planning permission and a funding application in for a deep geothermal plant, and I have been supporting Leighton Hospital in discussions about securing a plant to provide the heat that that hospital needs. There is a wider group of NHS trusts exploring that approach, working with the carbon and energy fund and seeking support from the public sector decarbonisation pot. I hope my hon. Friend the Member for Redcar (Jacob Young) can pass on to the Energy Minister that I hope he will look encouragingly at those applications for funding to the Department, because we know that if we drill in some places, it helps us to understand the wider geology in a way that can benefit the whole industry.
I hope that today I have been able to explain clearly the benefits and opportunities that deep geothermal presents, based on everything I learned in producing the review. I want to take a moment to thank some of those who helped me: I thank IGas Energy and GT Energy for facilitating and funding a visit to Pullach to view their deep geothermal network, and my right hon. Friend the Member for Bournemouth West (Conor Burns) for his advice on the conduct of a review. Thanks are also due to Professor Jon Gluyas and the Durham Energy Institute, the British Geological Survey, the Association for Renewable Energy and Clean Technology, the Coal Authority, the Eden Project, Pullach municipal council, the United Downs Deep Geothermal Power project, the Geothermal Energy Advancement Association, the Geological Society and the House of Commons Library.
Full debate: Deep Geothermal Energy
In the UK, perhaps because of our past success in drilling for oil and gas and our status as a world leader for cheap wind and solar, we have fallen further behind on geothermal. But getting to net zero by 2050 in such a way that we share the proceeds of investment and utilise as much of our existing skills and workforce as possible will require us to pull every lever, and deep geothermal is an important one that will help us in the transition from oil and gas with our existing industries.
Full debate: Energy Trilemma
I am conscious that Department for Business, Energy and Industrial Strategy colleagues are leading today’s debate, so I want to mention an area that will be important for job opportunities in Crewe and Nantwich, which I have been talking to the Secretary of State about—the geothermal industry. We saw earlier in the year the difficulties of over-relying on solar and wind power when it comes to our renewable energy drive. Geothermal is an under-utilised opportunity in this country. Unfortunately, earlier in the year, just as the industry wanted to invest, we removed the tariff that would give it a guaranteed return. That has obviously had a devastating impact on investment in geothermal. We see it rising across Europe and across the world, but it is not rising in this country because we do not have that guarantee. I will continue to work with BEIS colleagues to see whether we can do something about that.
Full debate: Income Tax (Charge)
I will also put on the record my thanks to the Minister for the time she has given to date to those of us who are interested in this issue. I have been very grateful for the interest that she has shown, because this really is a critical time for us to get things right in this country. We know that we have huge challenges when it comes to switching to renewable energy and, perhaps even more relevantly, switching to heating our homes in a greener way. There is no one-size-fits-all approach to getting this process right, but we will not deliver if we are not using all the tools in all the toolbox when it comes to going green, and I believe that geothermal is a vital tool in that toolbox, with huge potential in some parts of the UK to heat millions of homes and provide energy as well.
Full debate: Geothermal Energy