Geothermal Resources - Implications for Local Authorities


The Scottish Government has recently identified deep geothermal energy in Scotland as an important emerging renewable energy source. If it can be utilised, geothermal energy has the potential to contribute significantly to Scotland's future energy needs.

However, there are issues that have arisen regarding the extraction of this energy in the course of the Scottish Government's investigations.

Firstly there is currently no legal definition of the ownership of geothermal energy resources or the right to exploit such resources, both in Scotland and the rest of the UK.

Secondly, no formal licensing system is yet in place.

This distinct lack of clarity in this emerging industry is being seen as a potential barrier to those wishing to invest in the commercial exploration and development of deep geothermal projects.

The Scottish Government has consulted with the DECC and the following conclusions have been drawn:

The law is silent on the definition of geothermal heat and on the legal ownership of this. So, before any licensing procedure can be looked at, the term "geothermal energy" will need to be defined, including the depth of the resources it would apply to and how this relates to the rights of the land owner.
It is not clear whether the right to license this resource is devolved to the Scottish Government or not. Devolved matters include renewables and planning, however the matter of energy regulation in Scotland is reserved to Westminster.
A licensing regime may require primary legislation. The Scottish Government would have to select a licensing body and consider how any proposed regime would operate alongside the current planning regime.
Any interference with the property of third parties would need to be assessed to determine what rights may be given, the type of compensation which may be available, and other responsibilities that could arise within these rights, such as the possibility of subsidence.

Implications for Local Authorities

With both the 2020 Routemap for Renewable Energy in ScotlandRenewable Heat Action Plan and the setting out long term targets, alongside heat-mapping being carried out across local authority areas in Scotland, this is an area where potential developers and promoters of deep geothermal energy projects are seeking information.

Given that it is a national resource, the Scottish Government is keen to legally define geothermal energy through a statutory licensing regime, both to control and administrate geothermal development and to protect this resource. A consenting system by way of a planning and licensing regime must be put in place in order to encourage commercial development and give certainty in this growing field. In any prospective scheme local authorities will have a role through the planning system and potentially through any licensing and regulatory regimes.

Caution is therefore essential until the Scottish Government clarify the legal position surrounding ownership of this resource and confirm the appropriate consenting regimes which will be applied to its extraction.