Potential for deep geothermal energy in Scotland: study volume 1

Executive Summary

The Scottish Government has identified deep geothermal energy as an important emerging renewable energy technology that could have the potential to play a significant role in Scotland's future energy provision.

To date, the extent and location of the potential deep geothermal resources has not been well defined. In addition, potential commercial investment in development of deep geothermal energy requires greater certainty regarding the current administrative framework, including clarification of legal ownership of resources legal ownership, resource licensing, planning and permitting regimes, and financing.

The aim of this study is to identify the steps necessary to take forward the commercialisation of deep geothermal energy in Scotland, including:

• Assessment of the areas most likely to hold deep geothermal resource based on existing geological data sets, and
• Identification of policy options and key actions that can be implemented by the Scottish Government to encourage commercial exploitation of the available geothermal resource.

How Deep is Deep?

There is currently no single agreed or accepted national or international definition of what depth constitutes 'deep' geothermal energy. This is partially due to the wide variations globally in the availability and depth of geothermal resources.

There is a gradation from the near surface, affected by solar radiation, to greater depths that are influenced only by heat from the earth's core ('true' geothermal energy). This study has only directly considered true geothermal energy. Shallow and generally small-scale ground source heat pump ( GSHP) developments, which exploit the temperature variation between the shallow sub-surface (which remains relatively constant) and the atmosphere, and extend only to relatively shallow depths, have not been considered.

In considering the requirements for a future potential licensing regime for exploiting geothermal energy, the depth of the resources that it would apply to needs to be considered and a depth of 200m has been recommended as the nominal division between generally shallower GSHP developments and 'deeper' geothermal developments.

The Geothermal Resource

Geothermal energy is the natural heat that exists within our planet. In Scotland there is little direct evidence at the surface of the vast reservoir of stored heat below and geothermal energy has remained largely untapped. Technologies and concepts for exploiting geothermal energy are developing rapidly along two lines: low temperature resources, which exploit warm water in the relatively shallow subsurface to provide heat either directly (as warm water) or indirectly (via heat exchange systems); and high temperature resources, which yield hot water, usually from greater depths, that can be used to generate electricity.

The geothermal heat resource beneath Scotland can be considered in terms of three main settings:

• abandoned mine workings (low temperature);
• hot sedimentary aquifers (low and possibly relatively high temperature); and
• hot dry rocks / petrothermal sources (relatively high temperature).

a) Abandoned Mine Workings

Scotland's Midland Valley is underlain in many parts by a network of abandoned mines. The now flooded mines could play an important role in future in energy supply, providing access to thermal reservoirs which could help to heat homes and other buildings, and contribute to the energy mix of a low carbon Scottish economy based substantially on renewable energy.

The mine workings have enhanced the permeability of the mined strata such that groundwater can be extracted at a greater rate than would otherwise be possible. The water, and the associated relatively high abstraction rates, provides significant potential for heat exchange, making them potentially suited to large, open-loop ground source heat pump ( GSHP) systems. It is estimated that the volume of the mine-worked strata is 600km ³.

The two key parameters which influence the potential for extracting heat from mine waters are the rate at which water can be abstracted from the subsurface without significantly depleting the resource, and the temperature of that water. It is estimated that, with re-injection, the groundwater could be exploited at a rate of 20 to 100l/s/km ² (litres per second per square kilometre). Recorded mine water temperatures for boreholes in the Midland Valley generally range from 12 to 21°C (mean 17°C). However, this may not accurately reflect the higher temperatures that may occur in some of the deepest mine workings.

It is estimated that some 2.5MW/km ² (megawatts per kilometre square) could be obtained on average using open-loop ground source heat systems in the mined areas of Scotland. Multiplying this value by the number of square kilometres in the mined area (4.8 x 10 ³km ²) gives a very approximate estimate of the maximum accessible heat resource of 12GW.

On this basis, mine waters could theoretically provide the equivalent of approximately one third of Scotland's heat demand. The actual contribution is likely to be significantly less because heat cannot be transported efficiently over large distances, a proportion of mine workings will not be suited to heat extraction and low-grade heat delivered by GSHP is most effectively used in well insulated (typically new-build) properties and existing building stock would likely require extensive upgrading to benefit.

If Scotland were able to access as much of the heat in the mine waters as possible, it may last for approximately 37 years. However, this ignores the reality that additional heat would flow into the mined areas from Earth's interior as well as the limitations on abstraction and use practicalities, meaning that it is unlikely to be possible to access the heat at or even near the maximum possible rate. The resource will therefore last much longer than the above estimate.

Preferred potential locations within the mined areas have not been identified specifically as local economic and technical factors are likely to play a significant role in site selection.

Two existing installations currently tap mine water in Scotland: Shettleston in east Glasgow and Lumphinnans in Fife. Both are small schemes, each serving less than 20 dwellings, and have been operating since approximately 2000. A much larger-scale scheme has been developed utilising water in abandoned mine workings at Heerlen in the Netherlands, funded by the European Commission, and mine water is used for sustainable heating and cooling within the town.

Mine water in abandoned workings in Scotland's Midland Valley therefore presents a potentially important geothermal resource. However, there are many assumptions and generalisations in this assessment and further work is recommended.

b) Hot Sedimentary Aquifers (hydrothermal resources)

Aquifers are bodies of permeable rock that can conduct significant quantities of groundwater. The largest and most conductive aquifers generally occur in sedimentary strata, and any of these that are hot enough and have sufficient productivity to constitute a potential geothermal resource can be termed a Hot Sedimentary Aquifer ( HSA). HSA resources are likely to exist, in general, down to depths of around 4km, and most will yield water in the temperature range 20 to 80°C. The hot water can be used for heating, either directly or indirectly (by heat exchange).

Most of Scotland (including much of the Highlands and Southern Uplands areas) is underlain by relatively impermeable rocks, which have no HSA potential. The Midland Valley is the largest onshore part of Scotland to be underlain by sedimentary strata, and the best HSA prospects are likely to be here. However, the Midland Valley is geologically complex, and it can be difficult to make geological correlations between boreholes and to extrapolate surface observations below the ground surface. Interpretation in some areas is complicated further by the influence on groundwater flow of abandoned and active coal mines.

The best HSA prospects in Scotland are probably in the sedimentary strata underlying the northern part of the Midland Valley and the southern onshore margin of the Moray Firth Basin, and in locally certain strata in parts of south-west Scotland. It is emphasised, however, that current understanding of the distribution and properties of aquifers in Scotland comes very largely from surface and near-surface observations, and relatively little is known about aquifer distributions and properties at depth. The ability of water to move through rocks can change significantly with depth, and testing in deep boreholes will be required to gauge the suitability at depth of any setting with HSA potential.

Relatively high temperatures at the bottom of some coastal boreholes suggest that hot water from offshore sedimentary aquifers may have migrated locally to shallower levels in onshore margins of the aquifers. It may prove possible in some places to access HSA prospects in offshore (near-shore) sedimentary basins by drilling inclined boreholes from onshore coastal locations. It is noted however that such schemes may not be economically viable due to the cost of directional drilling.

c) Hot Dry Rock (petrothermal resources)

In Hot Dry Rock ( HDR) resources, heat is extracted from rock at significant depth by fracturing them, injecting cool water into the hot fractured rock, and extracting the resulting hot water. It is noted that HDR is a concept and water may actually be present at depth ('Hot Wet Rock', HWR). These resources are alternatively called 'petrothermal' resources. This requires the development of an Enhanced (or Engineered) Geothermal System ( EGS). The EGS concept typically involves developing a 'loop' in the hot rock consisting of boreholes at either end of a network of connected and open induced fractures (enhancement of permeability), through which cold water is introduced and hot water is removed. HDR resources could typically yield water at 100 to 200°C which can be converted into electricity.

HDR projects are currently being developed in several parts of the world, and some of these have the potential to yield substantial amounts of energy but as yet none is being operated on a sustainable, commercial basis. Two projects to exploit HDR prospects are currently being developed in the UK, which are both in the granite intrusions of Cornwall.

The estimated geothermal gradient for Scotland suggests a temperature of 150°C may be reached at a between approximately 4km and 5km depth, which is within the apparent practical lower depth limit for exploiting HDR resources. The lack of temperature data for crystalline rocks in deep (>2km) onshore boreholes means that caution should be exercised in applying the regional temperature gradient to potential HDR locations.

The best HDR prospects in Scotland are likely to exist in geological settings where heat produced by radioactive decay of elements like uranium (radiogenic heat) in the crust augments the background heat flow, producing localised high-temperature anomalies. There are numerous exposed granite intrusions in Scotland, and a small proportion of these produce significant quantities of radiogenic heat. These 'High Heat Production' ( HHP) granites occur mainly in the East Grampians region and locally to the north of Inverness. A previous investigation of the HDR potential of the East Grampians HHP granites reported disappointingly low heat flow values, but this work predated the research described above showing that heat flow values in Scotland probably underestimate the size of the heat resource beneath the climate-affected zone. The possibility remains, therefore, that some of the exposed HHP granite intrusions in Scotland have HDR potential.

Granite intrusions can be buried beneath a thick cover of younger sedimentary rocks. Where HHP granite intrusions have been buried in this way, some of the heat passing through and generated within the granite may become trapped beneath the sedimentary rocks, particularly if they are poor heat conductors. Over geological time, large reservoirs of trapped heat can potentially develop in this way. Buried granite intrusions are inferred to exist in Caithness, beneath the East Grampians region, and in south-east Scotland, but to date no buried intrusions of HHP granite have been proved in Scotland. Based on the distribution of HHP granite at outcrop, intrusions of HHP granite sitting beneath thick piles of sedimentary rock may exist beneath the Moray Firth and its onshore fringes.

The evidence base for assessing the potential for Hot Dry Rock prospects in Scotland is far from adequate. Most significantly, the understanding of the distribution in Scotland of exposed and buried intrusions containing HHP granite needs to be improved.

Policy Options and Key Actions

Development of the deep geothermal energy sector in Scotland will require a strong partnership between the Scottish Government, government agencies and stakeholders. It is anticipated that the Scottish Government have a significant role to play in initially establishing the industry sector.

Key actions have been identified and it is recommended that these are undertaken to encourage and facilitate development of the deep geothermal energy sector.

A progressive approach to developing Scotland's geothermal resources is advocated to build confidence, reduce costs, and thereby encourage investment.

National Geothermal Energy Vision and Strategy for Scotland

It is recommended that development and implementation of a Vision Statement and a phased Strategy are required to steer and realise the development of the geothermal energy sector in Scotland. These will be directly linked to existing Scottish Government policies on renewable energy and heat (2020 Routemap, Outline Heat Vision, etc).

The Vision Statement will define the Scottish Government's ambition for geothermal energy development in Scotland, and to set goals to be reached at certain defined points in the future. Experience gained from development of progressively deeper schemes will increase market confidence, reduce costs, and thereby encourage investment.

It is anticipated that the Vision Statement will present a progressive approach to developing Scotland's geothermal resources with targets for:

• Short to medium term (say 0 to 10 years+) - developing the supply of heat from geothermal resources (e.g. abandoned mine workings) and allied technology and infrastructure.
• Medium term (say 5 to 10 years+) - potential development of deeper resources for heat and potentially generation of baseload electricity (e.g. Hot Sedimentary Aquifers).
• Medium to longer term (say 5 to 20 years+) - potential development of deeper Hot Dry Rock resources using Enhanced Geothermal Systems ( EGS) for generation of baseload electricity.

Experience gained from development of progressively deeper schemes will increase market confidence, reduce costs, and thereby encourage private investment.

The Strategy is the routemap that will outline how the Vision for geothermal energy development in Scotland will be realised. The Strategy will have several strands, technical, administrative, regulatory and commercial.

Geothermal Demonstrator Projects

In order to increase confidence in the geothermal resources and technologies, it is recommended that a initial geothermal demonstration and evaluation project (or projects) is developed and installed as soon as feasibly possible. This would be a full scale working scheme, supplying heat to an identified demand. The demonstrator should be a heat-only project most likely utilising abandoned mine workings as the geothermal resource. Potential opportunities are known to exist in and around Scotland's two largest conurbation areas; Glasgow and Edinburgh.

Following the implementation of the National Geothermal Exploration Programme (see below), it is anticipated that demonstrator projects may be required for deeper resources ( HSA and HDR). This is due to the high level of risk associated with such deep drilling. The opportunities for locating these initial projects can only be determined following the exploration programme.

National Geothermal Exploration Programme

Many of the barriers to development of the geothermal sector in Scotland centre around our current knowledge level of the resource. In particular, the geothermal gradients and heat flow is poorly understood and there is a poor understanding of potential Hot Sedimentary Aquifers ( HSA) and High Heat Production ( HHP) granites (' HDR') at depth. Both of these are primarily due to the lack of suitable deep onshore borehole data. To advance the development of deeper geothermal resources in Scotland, a National Geothermal Exploration Programme is recommended, comprising:

• Creation of a National Geothermal Database;
• Research programme for deeper prospects; and
• Physical exploration programme.

The linkages between this proposed programme to any other existing and planned investigation programmes is still to be established.

Resource Ownership & Licensing

The legal ownership of geothermal resources is not currently defined under existing legislation. The uncertainty of ownership of geothermal resources is a potential risk for individual projects, which along with risks associated with geological uncertainty, gives rise to increased cost and can make it difficult to obtain sufficient finance to develop deep geothermal projects. It is recommended that the legal ownership of geothermal energy resources should be established to allow a geothermal resource licensing system to be developed by amending existing primary legislation or introducing new primary legislation, potentially in the form a 'Geothermal Energy Act'.

It is recommended that the Scottish Government explores further with DECC how to establish legal ownership (and introduction of a licensing system) either as UK priority, or alternatively, how this can be undertaken unilaterally by the Scottish Government.

Due to the likely timescale in drafting new legislation, interim measures are required to encourage commercial investment in the short term and medium term. It may be appropriate to have a two stage approach, initially creating relatively simple interim exploration and development legislation, as an amendment to existing legislation, to be replaced at a later date with more comprehensive and stand-alone legislation, as the industry develops and matures.

In the intervening period it is recommended that geothermal development is controlled through the development management (planning) regime through the EIA process. Some changes to planning guidance would be required to enable this.

The enactment of geothermal resource licensing should be such so as not to inhibit the take-up of GSHP technology and it is recommended that resources shallower than 200m depth should be either exempted from future licensing or made subject to General Rules.

Environmental Regulation

Environmental legislation relating to assessment and consenting issues are based on various European Directives and associated UK and / or Scottish legislation or regulations and these are well established in Scotland. It is considered that the existing framework of legislation is complete and robust, should cover the likely types of deep geothermal projects likely to come forward in Scotland and significant changes to are unlikely to be required.

Consideration should be given to how deep geothermal energy is considered under the EIA Regulations 2011 and whether the full sub-surface extent of the geothermal developments should be considered regardless of the surface footprint of the development.

Geothermal projects are specially identified in Schedule 3 of the Water Environment (Controlled Activities) (Scotland) Regulations 2011 (' CAR'). It is recommended that SEPA should consider whether the application of the existing General Binding Rules is appropriate to future larger-scale geothermal developments which may be abstracting and re-injecting large volumes of water.

Heat is considered under CAR as a potential pollutant and it is recommended that SEPA should clarify what would constitute groundwater heating or cooling 'pollution' in relation to geothermal developments.

Planning Policy

It is important to create a supportive planning framework. Current planning applications can only be dealt with under existing planning policies and to deal with primary planning impacts in terms of policy context requires strategic level support.

A key challenge is including and promoting geothermal energy at national planning policy level as individual geothermal energy developments are likely be classified as 'Local Developments' under the Hierarchy Regulations, however, geothermal energy may become of national significance as an energy source in the future.

It is recommended that specifically including geothermal energy at national planning policy level in the revised SPP is considered. This could include a statement on a presumption in favour of geothermal developments. It is also recommended that geothermal energy is also specifically included in the current ongoing review of the NPF for NPF3. Policies on geothermal energy should be adopted by Planning Authorities in the next review of their Structure Plans, Strategic Development Plans and Local Plans;

The spatial distribution of deep geothermal resources should be provided to Planning Authorities so that it they can be combined with heat demand (identified from heat mapping) and so the two can be linked.

It is recommended that consideration should be given to policies that incentivise, encourage or compel the use of sustainable heat systems (for example district heating) and heat sources (for example geothermal heat).

Costs and Financing

There is a significant differential in technological, risk and costs uncertainty between relatively shallow heat-only developments and deeper primarily electricity-generating developments. It is anticipated that experience gained from the demonstrator project(s), and progressively deeper schemes will increase developer and investor confidence, reduce costs and thereby encourage development.

For heat-only developments, the proposed Renewable Heat Incentive ( RHI) is welcome support for deep geothermal and could help to start unlocking the geothermal development potential. The proposed level of 5p/kWh for 'deep' geothermal has been broadly welcomed by developers.

It is considered that for an emerging technology, with the potential to provide baseload electricity generation, the level of support for deep geothermal should be increased to between 4 and 5 ROCs.

Even with this level of support through ROCs, there is likely to be a significant funding gap and additional support is likely to be required to attract and encourage deep geothermal developments for electricity generation. Given the prevailing economic situation and significant competing demands it may be difficult for the government to commit any funding to cover this gap. However, costs should reduce over time as confidence increases and technology advances, and the funding gap should reduce.

It is recommended that the Scottish Government investigates how it can act to unilaterally to support deep geothermal projects in Scotland, potentially setting up a deep geothermal fund to provide support. Any government funding would be subject to State Aid regulations.

Geothermal exploration risk insurance has been requested by some potential geothermal developers to encourage otherwise risky investment. The Scottish Government have advised that this would be potentially difficult due to competing priorities.

It is recommended that the Scottish Government should investigate whether other institutions could provide exploration risk insurance (for example the Green Investment Bank or the commercial insurance sector). The European Geothermal Risk Insurance Fund ( EGRIF) proposed by the European Geothermal Energy Council ( EGEC) may also provide an alternative.