Geothermal projects can avoid getting into hot water under England’s planning system

Amidst recent developments in the market that highlight the potential of geothermal energy, we look below at planning issues developers can expect to encounter when seeking consent – and how they can address them – and identify how the planning framework could be improved to support geothermal development.

The role geothermal can play in the energy mix

Geothermal energy is a term that describes the production of heat or generation of electricity using hot water or steam sourced from within the earth’s crust. It holds significant potential, because it can offer a constant source of renewably generated energy – unlike with wind or solar power, geothermal energy can, in a similar way to nuclear, provide a baseload of power to the electricity grid.

In the context of the current geopolitical environment, it make sense for policymakers globally to give serious consideration to the role geothermal energy can play in the energy mix in their countries. The pressures on the supply of energy and on associated price volatility arising from the Middle East conflict is sharpening the focus on domestic energy security around the world, so as to reduce dependency on sourcing energy from the international markets; tapping into geothermal energy can be part of the solution.

Equally, enabling the development of geothermal energy can also help policymakers globally to meet their climate commitments: heat from within the earth’s crust is a natural, renewable resource that offers a low-carbon solution for generating electricity and heating buildings.

The potential of geothermal energy in the UK was highlighted in a recent study fronted by Project InnerSpace (268-page / 58.8MB PDF), a non-profit organisation that promotes the development of geothermal energy.

According to the study, which benefited from the input of a range of academics and representatives from industry, geothermal energy has the potential to meet 75% of the UK’s electricity demand each year. It is also calculated that there is enough heat to be harnessed from within the earth’s crust to meet the UK’s current heating demand for over 1,000 years. However, while the report highlighted that use of naturally heated groundwater in the UK dates back nearly two millennia, to when the Romans harnessed it for hot baths, it remains a relatively untapped resource: geothermal projects met just 0.3% of annual heat demand in the UK in 2021.

Recently, in what constitutes a major milestone in the nascent UK geothermal market, Geothermal Engineering Ltd (GEL) began operating the UK’s first deep geothermal power plant. GEL dug a well at a site in Cornwall more than five kilometres into the ground, to surface geothermal fluid heated by the rocks deep underground. The company has struck a deal with Octopus Energy which will use the vapour to power turbines, which in turn will generate enough electricity to supply 10,000 homes.

Further to this, the water that GEL surfaces contains a high concentration of lithium carbonate equivalent. GEL has begun to process this with a view to supplying low-carbon lithium for use in battery electric vehicles. Within the decade, it intends to scale its operations to supply enough lithium for use in 250,000 electric vehicle batteries each year.

Planning issues relevant to geothermal projects

Like with any infrastructure project, obtaining planning permission for geothermal development is just one of the major milestones to be met for the project to reach a final investment decision before moving into construction and operation. However, the nature of geothermal projects means there are certain features of the planning and consenting regime that developers need to give special thought to.

The applicable consenting regime

A primary consideration is which consenting framework applies.

In England, developers promoting ‘nationally significant infrastructure projects’ (NSIP) can benefit from a streamlined consenting process introduced under the Planning Act 2008. Under that process, the Secretary of State is responsible for determining whether to grant projects a development consent order (DCO).

A series of national policy statements (NPS) govern how applications for DCOs are to be assessed. Which NPS applies depends on what type of infrastructure project is being promoted. There are multiple NPS for energy infrastructure – one overarching policy and a number of other, technology-specific, policies.

Geothermal projects are among those acknowledged in the overarching energy NPS as benefitting from the national policy support contained within that statement – if more than 50MW of electricity will be generated when operational.

However, beyond this, geothermal is barely referenced in the energy NPS. This means that, unlike other types of energy infrastructure – including nuclear, wind, solar, pumped hydro, and biomass projects – the need case for geothermal energy is not specifically stated and nor is it clear how factors or impacts that might arise from the development should be weighed in the decision-making process. This places a greater onus on developers behind geothermal projects to spell out their case for consent in detail – without the benefit of a clear benchmark.

In addition, the government, in its overarching energy NPS, has conferred ‘critical national priority’ (CNP) status on ‘nationally significant low carbon infrastructure’. With CNP status, there is a presumption that most impacts of the project – such as on the environment – are unlikely, in all but the most exceptional cases, to outweigh the need for development. This helps reduce consenting risk for developers. It is not clear from how ‘nationally significant low carbon infrastructure’ is defined that geothermal projects would be able to benefit from CNP status – it is something developers would have to argue for, again in contrast to certain other types of projects where there is greater certainty.

Where a geothermal project is granted a DCO, developers will have automatic access to powers to acquire land needed for their development. This is likely to be important for supporting infrastructure or connecting pipework to offtakers – organisations that agree to buy the power generated or the heat abstracted – and may be relevant for sub-surface rights which may be required over a larger area.

Where geothermal projects will generate less than 50MW of electricity when operational, consent applications are made under the Town and Country Planning Act 1990 (TCPA). Planning permission for these smaller-scale projects is determined by the relevant local planning authority, which must assess applications taking account of the local development plan policy documents and the National Planning Policy Framework (NPPF). The energy NPS are also material to be relevant to the decision.

With TCPA applications, developers can encounter significant variations in approach nationally, depending on the prevailing political environment locally. There is also likely to be limited prior knowledge of geothermal development within many local planning authorities, which may hamper consideration and determination of applications.

Whether geothermal development is specifically considered in local policy will vary, but in most cases, it is unlikely to be provided for at all or in detail. There are, however, features of the NPPF that are supportive of prospective geothermal development.

Among other things, the NPPF specifically requires local planning authorities to “consider identifying suitable areas for renewable and low carbon energy sources, and supporting infrastructure, where this would help secure their development”. It cites “deep geothermal heat” as an example of renewable and low carbon energy. In addition, local planning authorities must give significant weight to the benefits associated with the generation of renewable and low carbon energy in their planning decisions.

To better support large-scale geothermal projects, the UK government could revise the energy NPS to acknowledge the specific need for geothermal energy, in the same way as other energy technologies, as well as provide guidance to developers on how they might mitigate the impacts of projects when choosing sites and in the project design phase, to make clear to developers and communities what is expected in order for consent to be granted.

Considerations around biodiversity net gain

In England, developers of projects to be consented under the TCPA or (from November 2026) the Planning Act 2008 must deliver a minimum 10% ‘biodiversity net gain’ (BNG) in the context of their developments. There are a variety of ways developers can meet this requirement – such as planting trees or hedgerows, or installing ponds or bird-boxes on-site, or by investing in off‑site habitat creation or even purchasing biodiversity credits from the government.

In relation to geothermal projects, while development above ground may be confined to a relatively small area, the planning system takes account of the extent of underground infrastructure for the drawing of planning application boundaries. This means that developers’ BNG obligations are likely to be much more significant than they might at first think.

There is currently a lack of clarity, including in the latest information from the UK government on the BNG regime for NSIPs, as to whether, in BNG terms, developers would also have to consider the underground impacts of their development, such as on species that rely on groundwater tapped as a geothermal resource – and, if so, how those impacts would be measured for assessing the extent of associated BNG obligations.

BNG regulations could be better tailored to the specific features of geothermal projects – and other sub-surface projects – to increase clarity for and reduce the burdens on developers.

Learning from the experience with fracking

Developers behind geothermal projects can learn lessons from the controversies around ‘fracking’ for shale gas, to smooth the way to obtaining consent for development.

There is currently a moratorium on fracturing in England because the risks of seismic activity arising from fracturing cannot be reliably predicted. The UK government has pledged to introduce legislation that would convert the current moratorium into a permanent legal ban on fracturing.

Like fracking – where water is pumped at high pressure into shale rock to create narrow fractures which allow natural gas to flow and be captured – geothermal projects involve subsurface works. Developers should therefore expect significant scrutiny on whether their project is likely to cause seismic activity.

For proposed geothermal development in England, developers should build seismic risks into the site selection process and their pre-application engagement with stakeholders. Being able to explain the risk and mitigation to local communities will be a critical part of successfully bringing forward many geothermal projects.

Desktop mapping and testing exercises can be run to model whether, and the extent to which, drilling might impact on seismic activity, backed up with the latest scientific evidence. Seismicity should also be specifically acknowledged in environmental impact assessments. Developers should assume responsibility for seismic monitoring and could commit to operating a ‘traffic light’-style system for regulating their operations when seismic activity is identified.

In practice, there are similarities to be drawn between these requirements and the existing testing and evidence-gathering process that developers behind carbon capture and hydrogen projects engage in under the planning system, to show that they have taken account of the latest evidence on the effects of their novel technologies, as required by the NPS.