Hill of Banchory geothermal energy project: feasibility report

1. Introduction

Why deep geothermal energy?

Deep geothermal energy has the potential to provide some of the low carbon, sustainable energy that Scotland needs to meet its objective of a 42% reduction in greenhouse gases by 2020 compared to 1990 levels, as well as increasing energy security and combatting fuel poverty. The size of contribution the technology can make will depend on the geothermal potential of Scotland's deep geology and on the engineering and economic challenges in exploiting suitable geology. Our understanding of that potential is still at an early stage, as no deep geothermal boreholes have yet been drilled in Scotland.

Deep geothermal energy can in principle be tapped to provide power and / or heat. The former requires high rock temperatures: more than 130 °C, whereas successful heat-only geothermal systems can be based on temperatures of 60-70 °C. All indications to date are that the Scottish geothermal resource base is most likely to be a useful source of low carbon heat, with only limited and localised scope for combined heat and power ( CHP).

Identification of a substantial low-carbon heat source is good news, as the majority (55%) of Scotland's energy consumption is heat-related, and heat gives rise to more than half of our carbon emissions; hence it is essential that low carbon heat be rolled out at scale if our long-term climate change targets are to be met. Yet there are few low carbon heat technologies available at a large enough scale to really make a difference; hence, if it proves viable, deep geothermal heat could emerge as a significant source of decarbonised heat for Scottish homes and businesses.

Why Banchory?

Hill of Banchory has all the hallmarks of a potential deep geothermal demonstrator site, as it combines an apparently attractive geological setting with an existing, large-scale local heat customer.

As will be explained in Chapter 4, one obvious place to start looking for deep geothermal heat is the suite of granite 'plutons' - huge masses of largely subterranean rock - that form much of the Grampian mountain chain. Enormous amounts of heat are present in these plutons, both conducted from greater depths and produced in situ by the slow decay of radioactive elements. One such pluton, the 'Hill of Fare', is located just north of Banchory. Helpfully, this granite is exposed in several quarries on the flanks of the eponymous hill, making it easy to take samples.

The Hill of Banchory heat network, meanwhile, has been in operation since 2008, combusting locally-sourced wood chips to supply heat to houses and businesses on the north side of Banchory. The network has significant options for expansion both from the ongoing new development at Hill of Banchory and across the wider town, including from large public sector buildings. Its energy centre already features a 100 m ³ thermal store (a hot water tank) which would greatly assist in the efficient exploitation of a deep geothermal heat source: as heat would be produced continuously by geothermal boreholes, a heat store allows efficient smoothing of time-lags between peaks of heat demand and steady production (Kyriakis and Younger 2016). The Energy Centre also has back-up gas boilers already installed.

In short, the Hill of Fare may well possess suitable geology for geothermal heat production; and such heat, if produced, already has a large local heat customer in place. At this point in the history of low-carbon heat development, this is a highly unusual set of circumstances, not just for Scotland but for the wider UK, making Banchory an exceptional site for a deep geothermal demonstrator project.

The Project Team and timeline

The members of the Hill of Banchory Geothermal Energy Consortium brought together the academic and commercial skills required to assess the technical feasibility of a deep geothermal energy project at Banchory and the financial and regulatory knowledge to model its commercial viability. It comprised:

• HOBESCO/Jigsaw Energy, the owners and operators of the Hill of Banchory heat network;
• Leading academic experts in the fields of geology and deep geothermal energy from the Universities of Glasgow and Aberdeen;
• British Geological Survey - Scotland;
• Cluff Geothermal, a London-based deep geothermal company;
• Ramboll Energy, a global Energy Consultancy;
• Town Rock Energy, a Scottish deep geothermal consultancy; and
• Aberdeenshire Council.

The project team was assembled in March 2015 and, following the successful application to the Scottish Geothermal Energy Challenge Fund (part of the Low Carbon Infrastructure Transition Programme, LCITP), met again in late June 2015 to formulate a project plan. The team committed to deliver the following:

• a detailed geological assessment of Banchory as a location for a heat-only geothermal borehole doublet system;
• a detailed operational and financial model of the whole system, including provisional borehole design, an assessment of the potential heat production based on analysis of the local geology, a risk management strategy, and the extent to which the geothermal heat resource is complementary to the existing heat network;
• an estimate of potential carbon savings;
• a report on community attitudes towards a potential scheme; and
• a final feasibility study report.

The end-date for the project was expected to be early 2016. Initial fieldwork (gamma spectrometry and heat conductivity measurements) was carried out in July-August 2015, with a gravimetric survey carried out in October (when equipment became available).

The data collected were analysed in November and early December to produce an initial model of the sub-surface geology underlying Hill of Fare and Banchory. Drawing on this, the team also produced a provisional borehole plan, and commentary on the likely location for a drill site.

The financial model was developed over the period July-December 2015. Initial data from the geological fieldwork were used to make estimates of the cost of drilling, and the likely yield from the well (though until preliminary drilling takes place, this factor will remain subject to much uncertainty). This in turn allowed a financial model to be constructed of the likely cost of heat production from the geothermal well. In parallel, a financial model was constructed of the necessary price requirements of the Hill of Banchory heat network.

Integrating these two parts of the financial model answers, at least provisionally, a key question: could the geothermal well produce heat cheaply enough to be competitive with the current cost of heat to the heat network?

This analysis was complicated by the fact that the Hill of Banchory heat network utilises low-cost locally-sourced biomass. In the interests of producing a result that could inform thinking at most other locations, the decision was taken to consider natural gas as the competitor fuel.

A local community event held in November 2015 related to new housing developments in the area included information on the use of renewable energy to heat the properties provided an opportunity for people to learn of the project and to ask questions. Attendees' opinions were surveyed, as well as those of the existing customers of the Hill of Banchory Heat Network. As a member of the project team and a potential large user of heat in its own right, the views of Aberdeenshire Council were also extensively canvassed. Thirdly, local landowners were consulted and their support gained for the location of any potential future plant infrastructure.

The project team also carried out analysis on the likely carbon emissions reduction that would be delivered by a fully functioning deep geothermal heat network at Banchory. Again, this was done on the basis that natural gas is the fuel being replaced. As deep geothermal heat is an exceptionally low carbon technology, the potential carbon emissions savings versus fossil fuels are enormous.

Finally, the team produced a risk assessment for the geothermal well, and made recommendations on what the conclusions of this project imply for the wider deep geothermal energy potential of Scotland.

Purpose of this report

While this report primarily examines the feasibility of expanding the Hill of Banchory heat network by addition of a geothermal heat source, the conclusions and recommendations given in Chapter 14 have been drafted such that they might assist Scottish Government as it considers the future path of low carbon and renewable energy development.