Developers given chance to shape geothermal regulation in Northern Ireland

Developers have until 7 August 2026 to input to the proposals (58-page / 6.8MB PDF) via a consultation being run by the Department for the Economy (DfE).

Experts at Pinsent Masons said geothermal energy is a largely untapped resource in Northern Ireland but has enormous potential.

Belfast-based regulatory expert Matthew McMurray said: “Geothermal energy can play a meaningful role in decarbonising heat, particularly where deployed alongside heat networks, while also enhancing security of supply through a stable, non‑weather or imported fossil fuel dependent resource.”

“Importantly, geothermal is not an untested solution. There are established deployment models in comparable European jurisdictions, demonstrating that there is a clear pathway to scale where appropriate regulatory and market frameworks are in place. Northern Ireland should look to adopt best practice from other markets, adapted for local implementation,” he said.

Planning expert Matt Fox, who earlier this year wrote about the potential for more geothermal development in England, added: “The introduction of a proportionate licensing regime represents a critical policy intervention. By clarifying ownership, setting technical and environmental standards, and introducing structured oversight, the proposed framework has the potential to provide the regulatory certainty needed to unlock private investment and support the development of a geothermal sector in Northern Ireland.”

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. Northern Ireland has been identified by the British Geological Survey as a “geological super region” well suited for geothermal development.

However, according to the DfE, the current market is “very small”. It views the introduction of a regulatory framework for geothermal projects as essential for promoting the investment needed for the market to grow to the point that geothermal energy can play a significant role in meeting future demand for heating in the country in a sustainable way and at a cost that is affordable to homeowners and businesses. The DfE does not propose to establish grants or subsidies alongside the new framework.

The new regulatory regime would only apply to geothermal heat below 100 metres in depth, meaning most small domestic geothermal installations would not require a licence. However, the DfE said developers behind “larger or more complex geothermal developments” as well as “deep geothermal developments” would need a licence for those projects.

Where a licence is required, developers would be expected to apply to the DfE for one and submit “detailed operator, financial, geological, technical, and operational data” in support of their applications.

The applications would be subject to review by both the DfE and the Geological Survey of Northern Ireland (GSNI) – the DfE would assess “the technical capability and financial capacity of the operator”, while the GSNI would assess “the technical feasibility and sustainability of the proposed geothermal system, including geological risks and potential interactions with other subsurface activities”. Projects would further be subject to public consultation and environmental assessment.

All geothermal licences issued would set out “conditions tailored to the scale, design and environmental risk of the proposed system”, the DfE said, which would “form the basis for ongoing monitoring and compliance activities”.

The DfE said the planned new regulatory and licensing regime would operate alongside existing requirements geothermal developers are required to meet for their projects, which include securing planning permission, environmental permits, and water licences. Fox noted that the DfE will need to work closely with organisations such as NIEA to enable the re-use of information for the different consenting regimes and recommended that it consider if there may be scope for disapplication of the need for certain existing consents if consents under the new regime have been obtained.

Under the DfE’s proposals, geothermal heat below 100 metres in depth would be said to be owned by the state. The Netherlands and France use a similar model of public ownership, the DfE said, citing how the model would allow it to act as a “steward” over “how much heat can be taken from the ground” in Northern Ireland “so the resource will be available for future generations”.

A separate regulatory framework for heat networks is also currently under development in Northern Ireland. The DfE said it “will ensure the cost of any geothermal or other heat sold to customers on those networks will be calculated transparently and fairly”.

The plans form part of a broader decarbonisation agenda in Northern Ireland, under which the country has set a legally binding target of ‘net zero’ emissions by 2050.

Pinsent Masons is hosting a roundtable discussion on the new geothermal licensing proposals in Northern Ireland, in partnership with the DfE. The event is being held in Belfast on Tuesday 21 July 2026. For more information about the event and to register your interest in attending, please contact Matthew McMurray of Pinsent Masons.