UK Geothermal Investment Opportunity
Geothermal Could Provide 20 Percent of UK Power Demand
Geothermal energy has the ability to meet nearly a fifth of the UK’s energy demand.
As reported in the Guardian UK, the amount of energy that could be harnessed by geothermal energy would be the equivalent of nine nuclear power plants. However, there is a catch: the UK currently doesn’t have the subsidy regime and doesn’t provide the necessary incentive to further develop the technology – unlike nuclear, oil and gas.
The report—commissioned by the Renewable Energy Association (REA) and written by an engineering consultancy Sinclair Knight Merz—comes on the heels of Minister of State at the Department of Energy and Climate Change Charles Hendry went to Iceland to sign a “Memorandum of Understanding” with his Icelandic equivalent Oddný Harðardóttir about possibly creating an interconnector that could import geothermal electricity from the nation’s ever-active volcanoes.
In the UK, several sites have already been identified as possible geothermal hotspots. In addition, the report stated that geothermal could supply 9.5 GW of electricity as well as 100 GW of heat, which would be enough to provide for the space heating needs of all of the UK.
The wrinkle in all of this, however, is that geothermal has virtually no subsidy in the UK, even less than wave and tidal energy. Should subsidies be upped for geothermal, costs of developing geothermal sites would drop dramatically. Additionally, the report recommended a different subsidy system, one that would give much more support at the exploration drilling phase.
The REA’s chair of the deep geothermal group Ryan Law explained, “We don’t want to be left out of a global industry which is estimated to be worth $45.9 billion 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.”