Potential for deep geothermal energy in Scotland: study volume 1

5 The Environmental Regulatory Regime for Deep Geothermal Energy Developments

5.1 Introduction

Commercial confidence and therefore investment in development can be affected by uncertainty surrounding the legislative regime applicable to development activities and real (or perceived) restrictions imposed by such legislation.

In order to identify relevant legislation and increase certainty regarding its application, a review of existing environmental legislation and permitting requirements applicable to deep geothermal energy developments in Scotland has been undertaken. This will assist in ensuring that exploitation of deep geothermal resources complies with existing environmental legislation and environmental permitting requirements is of fundamental importance.

An assessment of the adequacy and applicability of the existing environmental legislation and permitting requirements in controlling deep geothermal energy developments in Scotland has also been undertaken, in order to determine whether these are overly or under-restrictive and whether new or amended legislation is required.

This section of the report therefore presents a review of relevant environmental legislation and permitting (consenting) requirements and briefly summarises the key environmental legislation relevant to deep geothermal activities, comments on its current relevance to likely activities and where necessary makes recommendations for new or revised legislation and policy changes where applicable.

This review is presented as an examination of the principal environmental provisions as well as making reference to legislation that deals specifically with terrestrial or marine exploitation scenarios, as appropriate.

Reference to the term 'Licence' in this section, unless otherwise stated, refers to regulatory licences, permits, consents or other permissions and does not imply legal ownership or a right to exploit.

5.2 Review of Environmental Regulations Applicable to Deep Geothermal Energy Developments

Table 5.1 summarises the key European, UK and Scottish environmental protection legislation that could potentially be applicable to on-shore deep geothermal energy developments in Scotland are listed in Tables 5.1 and 5.2. (both after DECC "Environmental legislation applicable to the onshore hydrocarbon industry (England, Scotland and Wales)", undated). Applicable legislation is discussed in the following sections.

Table 5.1 Key European, UK and Scottish Environmental Legislation (after DECC)

EC Legislation	Associated UK / Scottish Legislation	Main Requirements	Regulator	Comment
EC Directive 2001/42/ EC: 'Strategic Environmental Assessment' and EC Directive (85/337/ EEC) Environmental Impact Assessment: Assessment of the effects of certain public and private projects on the environment	Environmental Impact Assessment (Scotland) Regulations 1999	Requires certain developments to prepare an Environmental Statement as part of the planning approval process.	Local Authorities
EC Directive (92/43/ EEC) Habitats Directive: Conservation of natural habitats and of wild fauna and flora.	Conservation (Natural Habitats) Regulations 1994	Requires developments to take account of Special Areas of Conservation in their environmental impact assessment. Approvals granted via the above Regulations.	SEPA or Scottish Natural Heritage
EC Directive (96/82/ EC): Control of major accident hazards	Planning (Hazardous Substances) (Scotland) Act 1997 and Planning (Control of Major Accident Hazards) (Scotland) Regulations 2000	Authorisation is required for storage of listed hazardous substances. Requires operators to implement certain management practices and report to the competent authorities.	SEPA & Local Authorities, Scotland	Considered unlikely to apply to geothermal developments.
Water Framework Directive	The Water Environment (Controlled Activities) (Scotland) Regulations 2011	Prevent deterioration and achieve good status for all water bodies, reduce pollution from priority substances in surface waters , reverse significant and sustained upward trends in concentrations of pollutants in groundwater, prevent or limit inputs of pollutants to groundwater.	SEPA
EC Directive (80/68/ EEC) old Groundwater Directive (in force till Dec 2013); and (2006/118/ EC) Groundwater Daughter Directive and; EC Directives 2006/118/ EC and 2008/105/ EC	The Water Environment (Controlled Activities) (Scotland) Regulations 2011	Systems of permits and registrations to control inputs of pollutants to the water environment	SEPA
Directive 2004/35/ EC on environmental liability with regard to the prevention and remedying of environmental damage	The Environmental Liability (Scotland) Regulations 2009	To introduce a system of reporting and management of significant releases of pollutants to land and the water environment.	SEPA
EC Regulation (259/93): Supervision and control of shipments of waste within, into and out of the European Community	Transfrontier Shipment of Waste Regulations 1994	A licence is required to control the transport and disposal of movement and disposal of hazardous waste	SEPA	Considered unlikely to apply to geothermal developments.
EC Regulation (3093/94): Substances that deplete the ozone layer	Environmental Protection (Controls on Substances that Deplete the Ozone Layer) Regulations 1996 Ozone Depleting Substances (Qualifications) Regulations 2006 SI 1510 Fluorinated Greenhouse Gases Regulations 2008 (S.I No 41)	A licence is required for the production, supply, use, trading and emission of certain "controlled substances" that deplete the ozone layer.	DEFRA	Considered unlikely to apply to geothermal developments.
EC Directive 96/61/ EC: Integrated pollution prevention and control	The Pollution Prevention and Control (Scotland) Regulations 2000 (as amended)	Control of emissions from industrial premises through requirement to apply Best Available Technology and Permitting	SEPA
EC Directive 2010/75/ EU: Industrial Emissions Directive	Currently proposed to be transposed by means of new Pollution Prevention and Control (Scotland) Regulations, replacing the previous version dating from 2000.	Brings together previous Directives on IPPC, WID, LCP, SED and TiO2 into single text.		Considered unlikely to apply to geothermal developments.
EC Directive 2009/31/ EC: Carbon Capture and Storage Directive 2009	UK Energy Act 2008, The Energy Act 2008 (Storage of Carbon Dioxide) (Scotland) Regulations 2011, The Storage of Carbon Dioxide (Licensing etc) (Scotland) Regulations 2011, The Environmental Liability (Scotland) Amendment Regulations 2011	Sets out requirements for carbon capture and geological storage		Considered unlikely to apply to geothermal developments.

Table 5.2 Key UK and Scottish Environmental Legislation (after DECC)

UK Legislation	Main Requirements	Regulator	Comment
Town and Country Planning (Scotland) Act 1997 as amended by the Planning etc (Scotland) Act 2006 Planning and Compensation Act 1991 (as amended) ;and Environment Act 1995 (as amended).	Planning permission is likely to be required for deep geothermal developments.	Local authorities	See Planning Assessment
Pipelines Act 1962; and Pipe-line Works (Environmental Impact Assessment) Regulations 2000	Requires pipelines over 16 km in length to prepare an Environmental Statement as part of the approval process.	DECC	Pipelines for transfer of heat from deep geothermal energy are unlikely to exceed 16km in length so this is unlikely to apply.
Environmental Protection Act 1990, Part II	Most wastes may only be disposed of at a facility operated by the holder of a suitable permit.	SEPA	Unlikely to apply.
Environmental Protection Act 1990, Part III	Statutory nuisance (i.e. non-regulated activities), noise, odour, antisocial behaviour, etc	Local authorities	Likely to be controlled through Planning Conditions
Energy Act 1976; and The Petroleum Act 1998	Consent is required for flaring or venting of hydrocarbon gas. Requires licensees of an onshore field to ensure that petroleum is contained both above and below ground.	DECC	Could potentially apply to certain geothermal developments during construction (drilling).
The Air Quality Standards (Scotland) Regulations 2007. Scottish Statutory Instrument No. 182; The Air Quality Standards (Scotland) Regulations 2010. Air Quality (Scotland) Regulations 2000. Scottish Statutory Instrument No. 97. The Air Quality (Scotland) Amendment Regulations 2002	Set emission limits for certain substances and requires authorities to take action where quality parameters are exceeded. Provides SEPA with reserve powers to improve AQ by LAs where not being achieved.	Local authorities, SEPA
Control of Pollution Act 1974, Part III; Environmental Protection Act 1990, Part III; and Environment Act 1995, Part V.	Requires local authorities to take action where noise limits are exceeded.	Local authorities	Likely to be controlled through Planning Conditions
Environmental Protection Act 1990, Part I; Environmental Protection (Prescribed Processes and Substances) Regulations 1991	Requirement to license certain potentially polluting processes. Industries must demonstrate environmental management through Best Available Technology Not Entailing Excessive Cost ( BATNEEC) for IPC	SEPA & Local Authorities	Considered unlikely to apply to geothermal developments. The IPC regime is now superseded by the PPC regime, the 2012 Regulations which also enact the requirements of IED.
The Management of Extractive Waste (Scotland) Regulations 2010		Local Authorities
Electricity Works (Environmental Impact Assessment) (Scotland) Regulations 2000	Application in Scotland under section 36 of the Electricity Act 1989.	The Scottish Ministers	For generation with output >300MW, so unlikely to apply to deep geothermal developments (maximum 10s of MW).
Marine (Scotland) Act 2010 and the Marine and Coastal Access Act 2009 ( MCAA)	Marine planning regime for the Scottish marine area.	Marine Scotland
Radioactive Substances Act 1993	Control of radioactive substances	SEPA	Drilling fluids, geothermal fluids or hydraulic fracturing flow-back fluids may contain Naturally Occurring Radioactive Materials ( NORM).
The Management of Extractive Wastes (Scotland) Regulations 2010	Key objective is to ensure that the management of extractive waste is undertaken in a way which prevents, or reduces as far as possible, the risk of adverse effects on the environment and human health.	SEPA
Water Environment and Water Services (Scotland) Act 2003	The WEWS Act gave Scottish ministers powers to introduce regulatory controls over water activities, in order to protect, improve and promote sustainable use of Scotland's water environment. This includes wetlands, rivers, lochs, transitional waters (estuaries), coastal waters and groundwater.	SEPA

5.3 Strategic Environmental Assessment ( SEA) Directive

The requirement for the assessment of plans, programmes and strategies is set out in EU Directive 2001/42/ EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment. This has been transposed into Scots Law through the Environmental Assessment (Scotland) Act 2005.

An SEA is mandatory for plans/programmes which are prepared for agriculture, forestry, fisheries, energy, industry, transport, waste/water management, telecommunications, tourism, town & country planning or land use and which set the framework for future development consent of projects listed in the EIA Directive or have been determined to require an assessment under the Habitats Directive (see below).

As it stands, it is considered that the legislation already covers the energy sector (including deep geothermal developments) and other land use and planning issues and therefore it is considered that this legislation has been drafted broadly enough so that it does not need to be amended to specifically mention deep geothermal developments.

In addition, the SEA legislation has, in recent years, been widely applied to marine renewable energy plans and strategies and therefore it will also be applicable to plans or strategies relating to any exploitation of offshore deep geothermal developments should these be brought forward.

5.4 Environmental Impact Assessment ( EIA) Directive

The EIA Directive (85/337/ EEC) on the assessment of the effects of certain public and private projects on the environment came into force in 1985. The directive has been amended three times, in 1997, in 2003 and in 2009. Directive 97/11/ EC brought the Directive in line with the UN ECE Espoo Convention on EIA in a Transboundary Context and widened the scope of the EIA Directive by the increasing the number and types of Annex I projects and providing for new screening arrangements, criteria and minimum information requirements for Annex II projects.

Subsequently, Directive 2003/35/ EC sought to align the provisions on public participation with the Aarhus Convention on public participation in decision-making and access to justice in environmental matters and Directive 2009/31/ EC amended Annexes I and II of the EIA Directive, by adding projects related to the transport, capture and storage of carbon dioxide (CO ₂). The initial Directive of 1985 and its three subsequent amendments have been codified by Directive 2011/92/ EU of 13 December 2011.

In Scotland, the EIA Directive as amended has been transposed into Scots Law by the Environmental Impact Assessment (Scotland) Regulations 2011 (superseding the original 1999 EIA Regulations). Procedures for applying the EIA process to projects are therefore well established in Scotland and this applies to terrestrial and certain offshore projects.

With regard to application of the Schedules to the Regulations, EIA is mandatory for projects identified in Schedule 1 but is at the discretion of the Planning Authority in relation to Schedule 2 (dependent on the outcome of a Scoping enquiry for the project).

5.4.1 EIA Regulations 2011, Schedule 1

In addition, projects identified in Schedule 1 of the EIA Regulations may be relevant in some circumstances, for example, large scale or more complex projects, as follows:

11. Groundwater abstraction or artificial groundwater recharge schemes where the annual volume of water abstracted or recharged is equivalent to or exceeds 10 million cubic metres.

12. - (1) Works for the transfer of water resources, other than piped drinking water, between river basins where the transfer aims at preventing possible shortages of water and where the amount of water transferred exceeds 100 million cubic metres per year.

(2) In all other cases, works for the transfer of water resources, other than piped drinking water, between river basins where the multi annual average flow of the basin of abstraction exceeds 2,000 million cubic metres per year and where the amount of water transferred exceeds 5% of this flow.

However, it is likely that most deep geothermal projects would be dealt with under on or other of the descriptions given in Schedule 2.

On the basis of the current specific reference to geothermal drilling projects within the EIA Regulations 2011 particularly within Schedule 2, it is considered that this regulatory aspect relating to EIA is adequately covered by current legislation and no recommendations are made for changes to legislation or policy.

However, although technically, if the project is a Schedule 2 project (which it will be) and is less than 0.5 hectare, then it does not require to be Screened for EIA. However, the local authority may decide to consider that the effective footprint is larger than the surface installation (usually based on the red line planning boundary).

Environmental issues would be addressed through planning conditions and CAR where no EIA is undertaken.

5.5 EIA Regulations 2011, Schedule 2

With regard to reference in the Regulations to deep geothermal projects, these were included in the original 1999 regulations and have been retained within the existing EIA regime, under Schedule 2 of the Regulations, as follows:

Description of the Development	Applicable thresholds and criteria
2. Extractive Industry (d) Deep drillings, in particular - (i) Geothermal drilling; (ii) Drilling for the storage of nuclear waste material; (iii) Drilling for water supplies;- with the exception of drillings for investigating the stability of the soil.	(i) in relation to any type of drilling, the area of the works exceeds 1 hectare; or (ii) in relation to geothermal drilling and drilling for the storage of nuclear waste material, the drilling is within 100 metres of any controlled waters.

And also under:

3. Energy industry
(a) Industrial installations for the production of electricity, steam and hot water (unless included in Schedule 1);	The area of the development exceeds 0.5 hectare.

The area of 'development' threshold for carrying out an EIA of 0.5 hectare for an energy industry development is currently generally taken as referring to the surface extent, and not the sub-surface extent, of the development.

Geothermal developments could effect a much wider sub-surface extent than the extent of the surface development footprint (compound for drilling and the permanent installation). Indeed, such compounds may be deliberately kept below the threshold to avoid the requirement for an EIA.

Consideration and clarification should be given by Regulators as to whether the EIA threshold for geothermal developments should apply to the surface or sub-surface extent of the development. The Habitats Directive (and The Birds Directive)

Council Directive 92/43/ EEC on the Conservation of natural habitats and of wild fauna and flora, known as the Habitats Directive, was adopted in 1992. The Directive is the means by which the European Union meets its obligations under the Bern Convention. The main aim of the Habitats Directive is to promote the maintenance of biodiversity by requiring Member States to take measures to maintain or restore natural habitats and wild species listed on the Annexes to the Directive at a favourable conservation status, introducing robust protection for those habitats and species of European importance. The main provisions of the Directive are to:

• Maintain or restore European protected habitats and species listed in the Annexes at a favourable conservation status as defined in Articles 1 and 2;
• Contribute to a coherent European ecological network of protected sites by designating Special Areas of Conservation ( SACs) for habitats listed on Annex I and for species listed on Annex II. These measures are also to be applied to Special Protection Areas ( SPAs) classified under Article 4 of the Birds Directive 1979; and
• Ensure conservation measures are in place to manage SACs appropriately and to ensure appropriate assessment of plans and projects likely to have a significant effect on the integrity of an SAC.

The Birds Directive has been extensively amended (mainly due to the on-going accession of new member states) and has now been consolidated into Council Directive 2009/147/ EC of 30 November 2009 on the conservation of wild birds.

The Habitats Directive is transposed into UK law primarily through The Conservation (Natural Habitats, &c.) Regulations 1994 (as amended). The Regulations apply to land and to territorial waters out to 12 nautical miles from the coast. In Scotland the Habitats Directive is transposed through a combination of the Habitats Regulations 2010 (in relation to reserved matters) and the 1994 Regulations.

In addition, for UK offshore waters (i.e. from 12 nautical miles from the coast out to 200nm or to the limit of the UK Continental Shelf Designated Area), the Habitats Directive is transposed into UK law by the Offshore Marine Conservation (Natural Habitats & c.) Regulations 2007 (as amended).

Again, these regulations have been implemented successfully numerous times with regard to terrestrial and marine projects, and it is considered that they are adequate to cover the likely effects that may arise with regard to on-shore and off-shore deep geothermal developments, on European protected habitats and species.

5.6 Planning (Control of Major-Accident Hazards) (Scotland) Regulations 2000

COMAH primarily applies to chemical, refining and petro-chemical industries, and also to storage or use of dangerous substances, as identified in the Regulations. The regulations require operators to take measures to prevent major accidents, with emphasis on the protection of human health and the environment.

It is considered that the COMAH regulations would generally not apply to geothermal developments, as storage of large quantities of the prescribed dangerous substances is unlikely.

5.7 Water Framework Directive and Groundwater Directives

The Water Framework Directive (the Directive) came into force in 2000 and establishes a legal framework for the protection, improvement and sustainable use of all water bodies in the environment across Europe, covering all rivers, canals, lochs, estuaries, wetlands and coastal waters as well as groundwater. In Scotland the Directive was transposed into Scots Law through the Water Environment and Water Services (Scotland) Act 2003 (the WEWS Act). Amongst other powers the Act provides for new controls over activities such as abstraction, impoundment, engineering, point and diffuse source pollution which directly affect the water environment in the terrestrial environment.

Groundwater is specifically protected by EC Directive 80/68/ EEC, the 'old' Groundwater Directive which is in force until December 2013, and runs in parallel with EC Directive 2006/118/ EC the Groundwater Daughter Directive in the interim.

These controls are implemented by The Water Environment (Controlled Activities) (Scotland) Regulations 2011 and apply to various activities that may affect the water environment including groundwater. It is likely that any deep geothermal project will require authorisation under these Regulations as such developments may involve for example groundwater abstraction, borehole construction and the introduction of hazardous substances or pollutants.

The introduction of heat into the water environment is included in "pollution" as defined in the WEWS Act. In their Supporting Guidance for Groundwater Abstractions - Geothermal Energy (WAT-SG-62), SEPA state that there are environmental impacts in terms of heat addition or loss to groundwater from both systems although there is greater potential for pollution to the water environment and disruption to flow in the water environment from open loop systems. This is because water from open loop systems is removed, potentially changing its chemical composition, and the water may then be discharged in a location different to that from which it was abstracted (including at a different level within an aquifer).

It is considered that this legislation and regime is well established and understood and already considers the implications on controlled waters of deep geothermal projects. Therefore no recommendations for legislation or policy changes are required.

5.8 The Environmental Liability (Scotland) Regulations 2009

The Environmental Liability (Scotland) Regulations 2009 ( ELR) place operators of a wide range of activities, including those requiring a requiring a licence under CAR or a PPC permit under obligations to take preventive measures where there is an imminent threat of environmental damage and to take remedial measures where their activities have caused environmental damage. Operators must notify SEPA if they have caused land or water damage or if there is an imminent threat of such damage. Scottish Natural Heritage ( SNH) (or Marine Scotland for the marine environment) should be notified in cases where the damage is likely to affect protected species and natural habitats ( SEPA, 2012).

Certain activities associated with geothermal energy developments are likely to come within the scope of ELR.

5.9 The Pollution Prevention and Control (Scotland) Regulations 2012

The PPC Regulations are not considered to be relevant to geothermal energy developments.

5.10 The Air Quality Standards (Scotland) Regulations 2007. Scottish Statutory Instrument No. 182 and The Air Quality Standards (Scotland) Regulations 2010

Geothermal energy developments generally do not have significant emissions and are unlikely to contravene the air quality standard regulations.

5.11 The Management of Extractive Waste (Scotland) Regulations 2010

SEPA's Regulatory Guidance on coal bed methane and shale gas (November 2012) states that the production of "flow-back" fluid (recovered fracturing fluids) from hydraulic fracturing is a mining waste activity. It is considered that the regulations would also apply to deep geothermal developments if similar techniques were used to enhance or engineer the geothermal reservoir.

SEPA state that these activities will be controlled through planning permission for the site through an agreed waste management plan. Operators will need to have a waste management plan in place, and be able to demonstrate to planning authorities how they will store and dispose of wastes safely without causing pollution to the environment. This may include a requirement to have a CAR authorisation for any discharge of any pollutants to the water environment.

SEPA also state that waste from "prospecting" may not be a mining waste activity and the storage of waste at the site of production, prior to onward transfer for recovery or disposal is automatically covered by a Paragraph 41 Waste Management Licence Exemption, which does not need to be registered.

5.12 Electricity Works (Environmental Impact Assessment) (Scotland) Regulations 2000

These regulations relate to any application in Scotland under section 36 of the Electricity Act 1989 for consent to construct, extend or operate a generating station (also any application under section 37 of the Act for consent to install or keep installed an electric line above ground).

Section 36 of the Electricity Act 1989 refers to all non-nuclear generating stations with an output in excess of 300 megawatts. It is unlikely that a deep geothermal project would generate enough power to be subject to a Section 36 consent, but this legislation is included for completeness.

Overall, the EIA approach included in these Regulations conforms to the requirements of the EIA Directive. It is therefore considered that the existing environmental impact assessment regime is currently adequate to deal with deep geothermal projects in Scotland.

5.13 Marine (Scotland) Act 2010

The Marine (Scotland) Act 2010 and the Marine and Coastal Access Act 2009 ( MCAA) have introduced a marine planning regime for the UK marine area. The Scottish Government has responsibility for marine planning within both STW (0 -12nm), and devolved powers for marine planning matters within the Scottish REZ (12 - 200nm).

The Marine (Scotland) Act 2010 and MCAA provide for the creation of Marine Protection Areas ( MPAs), which will be afforded particular protection on account of their nature conservation, historic or research and development value.

At such time as any deep geothermal projects in the marine environment are brought forward, these marine planning issues and any MPAs will be taken into consideration in the consenting process.

5.14 Radioactive Substances Act 1993

The Radioactive Substances Act 1993 (' RSA93') controls of radioactive substances, including Naturally Occurring Radioactive Materials ( NORM).

NORM Industrial Activities are cited in the Radioactive Substances Act 1993 Amendment (Scotland) Regulations 2011 and specifically include production of oil and gas; activities related to coal mine de-watering plants; and water treatment associated with provision of drinking water and remediation of past work activities. Geothermal energy is not currently listed as a NORM Industrial Activity, however, there is the potential for drilling fluids, geothermal fluids or hydraulic fracturing flow-back fluids may contain NORM.

It is recommended that geothermal energy should be listed as a NORM Industrial Activity in a future revision of the Regulations. In the interim, good practice would dictate that developers should adhere to the Regulations as if geothermal energy was included.

5.15 Consenting of Onshore Deep Geothermal Energy Developments

5.15.1 The Water Environment (Controlled Activities) (Scotland) Regulations 2011

SEPA has produced specific Supporting Guidance for Groundwater Abstractions - Geothermal Energy (Ref. WAT-SG-62, v3.0, February 2013).

Geothermal energy is included as a controlled activity (specified in column 1 of Part 1 of Schedule 3), authorised under the Regulations if it is carried out in accordance with the rules of general application ("general binding rules") specified for that activity in column 2 of that Schedule.

• GBR3 applies to boreholes constructed for the purpose of supplying geothermal energy by means of a closed loop system.
• GBR17 applies to open loop geothermal systems (i.e. abstraction and subsequent reinjection of groundwater for the purposes of extracting geothermal energy from the abstracted water).

Table 5.3 General Binding Rules applicable to Deep Geothermal Energy ( CAR Schedule 3)

Column 1 Activity	Rules
3. The construction or extension of any well, borehole or other works by which water may be abstracted, or the installation or modification of any machinery or apparatus by which additional quantities of water may be abstracted, if such works are - a) not intended for the purpose of abstraction b) intended for the abstraction of less than 10 m³ of water in anyone day; c) intended for the abstraction of less than 150 m³ of water in any period of one year, and the purpose of the abstraction is either - i. to test for the yield of the borehole or well or the hydraulic properties of the aquifer; or ii. to sample the water quality; d) intended to dewater one or more excavations at - iii. construction site for roads, buildings, pipelines, or other built developments; or i. a site at which the maintenance of such developments is being undertaken; e) intended for the purpose of undertaking activity 17.	(a) Subject to paragraphs (b) and (c), the construction of the well or borehole must be such as to avoid the entry of pollutants or water of a different chemical composition into the body of groundwater (b) drilling fluids may be introduced into the well or borehole if necessary to facilitate the drilling of the well or borehole provided this does not result in pollution of the water environment; (c) potable water may be introduced into the well or borehole to test the hydraulic properties of the aquifer; and (d) when the well or borehole is not being used for abstraction, it must be back filled or sealed to the extent necessary to avoid loss of groundwater from any aquifer
17. The abstraction and subsequent return of groundwater for the purpose of extracting geothermal energy from the abstracted water.	(a) The abstracted water must be returned to the same geological formation from which it was abstracted; (b) any volume of water may be abstracted but the volume of water abstracted and not returned must not exceed 10m 3 per day; (c) the chemical composition of the abstracted water must not be altered prior to its return to the geological formation; (d) there must be a means of demonstrating that the net abstraction is not more than 10m 3 in any one day; and (e) water leakage must be kept to a minimum by ensuring that all pipe work, storage tanks and other equipment associated with the abstraction and use of the water are maintained in a good state of repair.

Regulation 10 gives SEPA the power to impose authorise additional measures for controlled activities authorised under Regulation 6 General Binding Rules if it considers that additional measures are necessary to protect the water environment. This allows SEPA to request any further information required to inform the determination process for an authorisation application, including such other information specified in Annex IV of the EIA Directive considered relevant to determination of the application.

Further guidance is provided in the following SEPA documents

• The Water Environment (Controlled Activities) (Scotland) Regulations 2011, A Practical Guide
• Supporting Guidance (WAT - SG - 62) Groundwater Abstractions - Geothermal Energy

In relation to GBR17 (abstraction for geothermal energy and subsequent return of groundwater) - new rules clarify that any volume of water may be abstracted but that the volume of water abstracted and not returned must not exceed 10m ³ per day.

The guidance sets out the levels of licence complexity based on increasing abstraction rates and also provides some information on how to consider the environmental impacts of geothermal energy systems in order to prevent pollution of the water environment and operate in an effective way.

5.15.2 CAR Complex Licence for Borehole Construction

From 1st April 2013 a CAR complex licence is required to allow deep boreholes (>200m) to be constructed and also conditions any maintenance or monitoring required to ensure that the borehole does not result in contamination of groundwater. Once the borehole has been decommissioned to SEPA's satisfaction, the licence can be surrendered.

Further information is available in SEPA's Regulatory Method (WAT-RM-11) Licensing Groundwater Abstractions including Dewatering, v4, February 2013.

5.15.3 Other Relevant SEPA Regulatory Guidance

SEPA's Regulatory Guidance on coal bed methane and shale gas (November 2012) covers several activities that are may be applicable to particular deep geothermal energy developments, including the following:

Injection of fluid (including fluid for hydraulic fracturing), if applicable

Authorisation for injection is required from SEPA. Monitoring of groundwater will be a condition of authorisation.

Abstraction of water for injection purposes, if applicable

Where water is abstracted from the water environment to be used for example during fracturing, an application for authorisation must be submitted to SEPA, unless the abstraction falls within the scope of Activities 2 or 4 of Schedule 3 of CAR16.

Where the water intended for fracturing is supplied by a water provider who abstracts that water from the water environment and the abstraction is not authorised via a GBR, the supplier must hold an appropriate SEPA authorisation.

Abstraction of flow-back fluid, if applicable

Where flow-back fluid (recovered fracturing fluids) and/or groundwater are abstracted from the borehole, an application for authorisation should be submitted to SEPA, unless the activity falls under Activities 2 or 4 of Schedule 3 of CAR and the abstraction meets all the General Binding Rules for that activity.

Management of abstracted fluids, if applicable

Discharges that are likely to have an impact on the water environment require prior authorisation under CAR. Re-injection of flow-back fluid is not capable of authorisation under CAR; flow-back water is classed as extractive waste and is regulated by the local authority through planning controls and the Extractive Waste Regulations.

5.15.4 SEPA's Remit

As noted in Regulatory Guidance on coal bed methane and shale gas (November 2012), SEPA do not have a remit to regulate the fracturing of rock, and as such do not issue licences for fracturing. SEPA's role is to control the impacts on the water environment.

Similarly, SEPA do not currently have a specific direct remit to licence extraction of geothermal heat however they do regulate the Water Environment (including groundwater) and heat is considered a potential groundwater pollutant. They could use their powers under CAR to protect an abstraction from heat and, potentially, loss of heat (to an adjacent geothermal development).

5.16 Issues Around Stimulation for Development Geothermal Resources

In the future, Enhanced Geothermal Systems ( EGS) may be used for extracting heat for electricity generation (and heat production) from deep petrothermal sources. Developing EGS requires the use of hydraulic fracturing to artificially increase the mass permeability of the source zone such that injected fluid can flow readily from the injection well(s) to the extraction / production well(s). EGS is still an emerging technology and commercial application of such systems in Scotland may still be some way off.

In 2012 there was much public concern was expressed in the UK regarding hydraulic fracturing ('fracking') for shale gas extraction. This followed suspension of hydraulic fracturing operations in May 2011, pending the investigation of two seismic tremors experienced near Preese Hall, Lancashire. Part of the public concern stems from reported groundwater pollution and gas emissions incidents during hydraulic fracturing / shale gas extraction in the USA.

Following expert review, DECC has now implemented a requirement for seismic risk assessment to be undertaken to assess the risks from hydraulic fracturing for shale gas extraction, with approval required prior to commencement of operations.

There are some marked distinctions between hydraulic fracturing for EGS and that undertaken for shale gas extraction, as described below, and it is important that these are conveyed to the public to ensure that public and political opinion of all geothermal energy remains positive. Clear communication of the issues involved and the distinctions between hydraulic fracturing.

The differences (and similarities) in the requirements have been summarised in a fact sheet prepared by the European Geothermal Energy Council ( EGEC, 2013).

Hydraulic fracturing may induce seismic events but the scale of these will vary dependent on the situation. For EGS, hydraulic fracturing is only likely to be undertaken for projects for extracting heat for electricity generation (and heat production) from deep petrothermal sources and not for projects that only produce heat. Because the required temperatures for electricity production are only available at significant depth, any required hydraulic fracturing is only likely to be undertaken at depths of greater than 4km in crystalline rocks. This is at greater than the depths from which shale gas is extracted, which is typically from depths of 2 to 3km.

The crystalline rock used as a source of geothermal heat does not contain organic material and therefore will not release methane and other organic gases. This is also well below the depth of potable groundwater supplies (it is anticipated that there will be no groundwater at these depths) so there is no risk of potable groundwater contamination directly from hydraulic fracturing.

Hydraulic fracturing has already been used successfully used in the Highlands of Scotland to increase the yield from public water supply boreholes, including at relatively shallow depth (<100m) (Cobbing and Ó Dochartaigh, 2007) and their has been little public concern over induced seismicity prior to the negative publicity surrounding shale gas extraction.

It is recommended that as part of operators seeking consent under a licensing process, a seismic risk assessment would be carried out for all deep geothermal projects. It is anticipated that this will follow a similar form to those now required for hydraulic fracturing for shale gas, comprising:

• Conduct a prior review of information on seismic risks and the existence of faults in the area;
• Submit to DECC a hydraulic fracturing plan showing how any seismic risks are to be addressed;
• Carry out seismic monitoring before, during and after the hydraulic fracturing; and
• Implement a "traffic light" system which will be used to identify unusual seismic activity requiring reassessment, or halting, of operations.

5.17 Consenting for Off-Shore Geothermal

A study on the "Consenting, EIA and HRA Guidance for Marine Renewable Energy Developments in Scotland", Parts 1 to 4 ( EMEC and Xodus Aurora, April 2010) undertaken for the Scottish Government describes the streamlined consenting process for marine renewable energy developments and introduces a single point of access for consents and licensing. It sets out the applicable legislation and regulatory bodies. While the guidance is aimed at Marine Renewables (wave and tidal energy), it is considered that the proposed approach it could equally be applied to the development of offshore geothermal developments. Consideration should therefore be given to inclusion of offshore deep geothermal development within this guidance and consenting process.

5.18 Discussion and Conclusions

Environmental legislation relating to assessment and consenting issues in relation to deep geothermal projects has been reviewed. These legislative regimes are mainly based on various European Directives and associated UK and / or Scottish legislation or regulations. These are generally well established in Scotland.

In particular, activities relating to deep geothermal projects are specially identified in Schedule 2 of the EIA Regulations 2011 and may be covered by other environmental consenting processes depending on their scale and whether they would be located on-shore or off-shore.

It is noted however that under the existing Regulations, EIA for deep geothermal development is only likely to be required if the surface footprint of the development is greater than 0.5 hectares, regardless of the sub-surface extent of the geothermal developments. A planning authority could, however, potentially take the view that the whole (sub-surface) area effected by the geothermal energy development and require an EIA, as the effected area is likely to be larger than the red line boundary. There is therefore potential for inconsistency in application of the Regulations for EIA.

Existing environmental permitting legislation has been reviewed in relation to deep geothermal projects. These legislative regimes are based on the European Water Framework Directive, enacting legislation for which is well established in Scotland. In particular, activities relating to geothermal projects are specially identified in Schedule 3 of the Water Environment (Controlled Activities) (Scotland) Regulations 2011, with further discussion provided in relevant SEPA guidance notes.

It is noted that regardless of the capacity of an (open loop) geothermal energy development, in terms of volume of extracted groundwater, as long as the volume of water abstracted was no more than 10m ³ than the volume re-injected (as would normally be the case) then the development would be covered by GBR17 and SEPA would not currently need to be consulted (other than a as a Statutory Consultee in any planning permission required). The CAR Complex Licence required for all boreholes >200m deep from 1st April 2013 only applies to the construction of the borehole in relation to prevention of contamination between aquifers etc and would not necessarily consider the function of the geothermal development itself. This is notwithstanding the fact that heat is defined under legislation as a potential pollutant. Clarification of these issues could be presented by SEPA in revised Regulatory Guidance for geothermal energy.

Concern was expressed during the stakeholder workshop over potential standards for re-injection of groundwater following heat extraction, potentially to Drinking Water Standards ( DWSs) and / or Environmental Quality Standards ( EQSs) which could be overly onerous and may inhibit development of geothermal resources, particularly those in areas of poor or marginal groundwater quality such as many former mining areas.

Hydraulic fracturing is unlikely to be required for the development of geothermal resources to extract heat only. Hydraulic fracturing may, in the future, be required to develop deep engineered/enhanced geothermal systems ( EGS) for electricity and heat production from deeper resources. Hydraulic fracturing for unconventional gas development is covered by Petroleum Exploration and Development Licensing ( PEDL) and following review of procedures in 2012, additional seismic risk assessment is now required by DECC in the consenting process.

Although, the existing framework of legislation could control geothermal development in Scotland, some changes to the legislation should be considered.

5.19 Recommendations

The following recommendations are made in relation to the environmental regulatory regime for deep geothermal energy.

• A review of current EIA regulations in relation to considering the surface or sub-surface extent of potential geothermal developments should be considered by the Scottish Government and advice issued accordingly.
• Specific reference to "deep geothermal" or "geothermal" when drafting future environmental legislation would provide clarity and assist potential developers of geothermal energy projects and should be considered by the Scottish Government.
• Clear guidance on the application of relevant environmental legislation would be beneficial for potential developers of geothermal energy projects and production of a specific Regulatory Guidance document for deep geothermal development, similar to the Regulatory Guidance for coal bed methane and shale gas by SEPA, is recommended.
• In particular, it is recommended that SEPA should consider and produce revised guidance on whether the application of GBR's is appropriate in all cases and what constitutes groundwater heating or cooling pollution in relation to geothermal developments.
• It is considered that the approach outlined in a recent Scottish Government study for the streamlined consenting process for Marine Renewables (wave and tidal) could equally be applied to the development of offshore geothermal developments and inclusion of offshore deep geothermal development within this guidance and consenting process should therefore be considered for potential future offshore geothermal developments.
• Water quality could actually be improved by geothermal heat extraction treating extracted water before discharge or re-injection, including removing iron from ferrous-rich mine waters. The Coal Authority has a pilot scheme for pumping, treating and extracting heat from mine water discharge at Dawden in Co. Durham. It is recommended that the results of this study are considered for future mine water geothermal projects.
• It is recommended that geothermal energy should be listed as a NORM Industrial Activity in a future revision of the Regulations. In the interim, good practice would dictate that developers should adhere to the Regulations as if geothermal energy was included.
• Any resource licensing system developed for deep geothermal energy should include the potential for hydraulic fracturing potentially required for enhanced geothermal systems ( EGS) for electricity and heat production from deep petrothermal resources (see Section 3 - The Ownership of Geothermal Resources in Scotland). It is recommended that operators seeking consent under a new licensing process, would be required to carry out a seismic risk assessment for all deep geothermal projects. It is anticipated that this will follow a similar form to those now required by DECC for consenting of hydraulic fracturing for shale gas developments.